light@2x

May – June 2018

PCC Home

What's in this issue

Don't Lose your Mind

It seems that people are depending more on plastic each day, so it can be a nightmare if your credit or debit card ends up lost or stolen. There are steps that you can take to help you minimize the negative effects this can have on your finances.

 

You will want to start off retracing your steps. If it is only your card that is missing go back to the last place where you used it and see if it has been turned in. You may get lucky and have had an honest person turn in your card. Contact the card company and have them monitor any suspicious activity with your card. Your card was out of your possession and someone could have easily written down your information and left the card.

 

If it was a purse or wallet that was missing or stolen and you believe that you can not recover it then you will want to contact the customer service department of each one of your cards. This can be extremely challenging if you have more than one bank or credit card. It is important that you keep a record of all of your cards that includes the number and expiration date, PIN, 800 numbers that you can contact, and your account number. This should obviously be kept in a safe and secure place away from the cards themselves, and not just stashed in a dresser drawer.

 

The FTC suggests that you contact the card issuers as soon as possible and that you follow up your phone call with a letter that includes your account number when you noticed your card was missing and the date that you first reported the loss.

stolen card

With a lost or stolen credit card your maximum liability is $50 per card if your card has unauthorized charges on it before you report it missing. If your credit cards are used after you have already reported them lost or stolen than you cannot be held responsible for those charges. You will have to file a claim to your issuer if there are unauthorized charges on your statement. Send them a letter that includes the disputed charges and dates that you first reported the disputes.

 

You have different liabilities when it comes to disputed charges with a check or ATM card. Again, if you report the card missing before there are unauthorized charges then you cannot be held responsible. However, if there are charges on your card before you report it then you can be liable for some if not all the charges. If you report the lost card within two business days after you realized it was missing then you may be responsible for no more than $50. If you wait more than two business days then you could lose up to 500 dollars in charges. If you do not report the card missing within 60 days after your bank statement containing the unauthorized charges are sent to you then you risk having to pay back everything that was charged.

 

Look on the back page for more tips on how to prevent someone from using your lost or stolen credit card numbers.

Budget Boosters

Tax season is over for now. Are you sitting on a refund that has been burning a hole in your pocket? There are plenty of responsible things that you can do with it to help you the rest of the year and further on down the road.

 

The best thing that you could do is to commit a portion of it to your savings or emergency fund. A high yield savings account will provide interest to help your contribution grow. You really should consider your savings above all other priorities, as this is your safety net if something were to go wrong.

If you have your savings lined up then you can go after some lingering stingy debt. It is a good idea to go after the ones that have the highest interest rate. More than likely these are going to be credit card debt. You may have multiple balances with different cards. If there is a smaller balance left on one of the cards it may be a good idea to pay it off in full.

 

Credit cards may not be the only other debts that need to be taken care of. You can make extra payments on doctor or hospital bills, student loans, or personal bank loans to name a few. Another option that some people decide to do is to make an extra car payment in hopes of paying it off sooner and saving themselves some interest.

 

This may be a good time to invest the money. You can set up a meeting with someone at your banking institution that can help inform you on plans that may suit you. This is a good way to help you out in the future. There are many investment and retirement solutions that may be hard to jump into without a healthy initial investment that you may get from your tax return.

 

If you have taken care of those other priorities then you can look at other ways to effectively use your return. You can take the opportunity to do some home improvement work that you may have been putting off. You are increasing the value of your home if you decide to do some landscaping, update a room, or even apply a fresh coat of paint.

 

Why not use the extra money to help you advance your career skills. You could use your return to attend a seminar or business class so you may be able to receive certification. If you are looking to change jobs you can have someone help you revamp your resume and get copies printed up.

 

You can always take a portion of your return and donate it to your favorite charity, or a little something for a few. It’s always a good feeling knowing that you are helping others and you may even be able to deduct it on next year’s taxes.

 

If you have your finances in check or to where you are a little more than comfortable you may want to use some of your return on yourself or your family. You can put it away and save it for a summer vacation or weekend getaway. It’s not always a bad idea to treat ourselves to something nice every once in a while.

Penny Pinchers Club

Are you the type of person that comes up with terrific ways to Pinch Pennies? If so please email us and share your ideas.

HERE IS OUR PENNY PINCHER FOR THIS MONTH

My wife and I were looking to refinance our home for a better interest rate. We used our tax return to take care of all of the fees that are associated with refinancing and got a better deal with little money out of our pocket.

 

-Ken D. IN

Digging Out of Debt

Most of us can agree that getting out of debt is a major priority. We strive to provide valuable information to help you achieve that and yet there are still many mistakes that can be made when there were the best of intentions. Here are some misconceptions some may have when trying to pay down their debt.

 

A popular choice that many people have made is to try and pay off their homes more quickly. Either by making any extra payment when they can or by signing up for the bi-monthly payment plan where you end up making a total of 14 monthly payments as compared to 12 per year. This helps you pay off your home earlier and saves you in interest costs.

 

The problem is if you have other debts such as credit cards or personal loans, you are much better off using that extra money to pay off those debts. Personal loans and credit cards generally have higher interest rates and are not deductible on your taxes like mortgage interest is.

 

Another mistake that many people make is by trying to pay off their debts before they pay themselves. It is important to keep making payments on all of your debts but if you are making double payments or extra payments without putting money into your savings then you are taking a huge risk that can leave you broke.

 

You may pay off your loans faster and save some money in interest but you can easily negate that if you run into a problem or emergency with no savings to recoup those losses you are going to be right where you left off, with a lot of debt.

Take your time with paying off student loans. The interest can be deducted from your taxes and student loans usually have some of the lowest interest rates. Instead, make sure you are padding your savings. If something happens you can use your savings to recover and can defer your loans until you are back on your feet.

 

Some parents may feel the responsibility of providing for their children’s college education. This is all fine and good as long as they are taking care of themselves first. Too many parents strive to save for college and neglect to put money away for their own retirement.

 

It may be tough but your kids may have to get their own money for education. Not to worry though cause there are plenty of loans, scholarships, and grants available for them and you can’t take out a loan for your retirement.

 

As tempting as it may be, make sure that you are taking care of yourself before you commit any money to your kid’s college. It may sound selfish but it is a wise money move.

 

Another way to jeopardize your retirement money is to take a loan out against a 401(k) plan. You may be offered this option in hopes of paying off that stubborn credit card bill. Many 401(k) plans have penalties and fees for borrowing money from it. You will also have to pay an additional tax when you start to repay the 401(k) loan. Original contributions to your 401(k) are not taxed.

 

A lot of people swear off credit cards once they have them paid off. If you close all of your accounts you could actually be hurting your credit. You need credit in order to repair or maintain a good credit rating.

 

You need your credit rating in order to receive more credit as in buying a car or home or taking out a personal loan with the bank. If you can’t have an open credit card without being tempted to use it, then you may want to seek some assistance for compulsive spending.

 

Everyone wants to be debt free and there is a lot of advice out there to digest. You have to be careful that your best intentions don’t come back to get you in the end. When you are digging out of your debt, you will probably have more than one hole dug, just make sure the dirt from one hole isn’t filling up with the dirt from another hole.

 

RESOURCES:

www.moneycentral.msn.com – Features many articles that will help guide you through the right ways to pay down your debt without hurting your other financial obligations.

 

www.bankrate.com – Another great online resource with tons of useful articles from personal financing to investment strategies.

Home Equity Line of Credit

Many people choose to use the equity they have built in their homes to help them with financial dilemmas. A home equity line of credit or a HELOC is another form of borrowing against your home.

A HELOC is different from a home equity loan because you do not receive the entire amount at once but instead have an open line of credit with a maximum amount. It is more similar to a credit card than a loan. You use however much you need in increments and pay back what you have borrowed plus interest. You will then have to make monthly payments. If you make the minimum monthly payment you will start by just paying the interest and then eventually get to the principal balance. Some HELOCs will have a large balloon payment to pay off the principal, while others may allow you to keep making payments.

You can also make larger payments and specify that the extra amounts go towards the principal balance. You will want to read the terms thoroughly, because you may be penalized for early payoff.

 

Many lenders choose the credit limit on a HELOC by taking a certain percentage of the home’s appraised value and subtracting from that the balance owed on the existing mortgage. When a lender determines what your credit limit will be, they will also consider your ability to repay by looking at your current income, other debts, and your credit history.

Many home equity lines of credit have an agreed-upon fixed period that allows you to borrow as much as you need without going over a certain figure. The period that you are allowed to borrow money from your credit line is called the draw period.

 

After the draw period, you may be allowed to renew or extend the drawing time. If you do not renew then you are done being able to borrow any more from your line of credit. At the end of the drawing period, you may need to pay off your principal amount borrowed. Most plans have you making interest payments during the draw period. Some plans allow you to make payments after the draw period has ended.

 

Many home equity loans have a fixed interest rate. Interest rates for a HELOC are variable and based on a specific index. This means that you can get into one for a lower interest rate but chances are that the rate will not stay there for the duration of your term.

 

Some costs come with opening a home equity line of credit. Many of these costs are similar to those that come when you first buy a home. You will need to get a property appraisal and estimate for your home’s value. You will need to fill out applications and pay fees for them to be processed. There are closing costs that include attorney fees, title search, mortgage preparation and filing, property and title insurance, and taxes.

 

Once you are approved for a HELOC you will be able to use special checks to draw from your credit line. Many lenders are now going to a credit card for you to use the money.

 

If you are considering a home equity line of credit you must look at different lenders and examine all the offers that will best suit your needs and that have good interest rates.

 

If you were looking for a larger amount of money for a one-time project or payment (such as home improvement) then you may want to consider a home equity loan. This is a lump sum of money borrowed against your home’s equity and paid off in monthly installments.

 

Remember, whenever you are borrowing money against your home’s equity, your home becomes collateral. You must take the time and consideration before you decide to commit to a HELOC. Any troubles down the road could wind up costing you your house if you can’t come up with payments. As always, ask many questions and shop around until you can find the situation that you are comfortable with.

 

Resources:

http://www.federalreserve.gov/pubs/homeline/ – The government website that helps further explain the details of a Home Equity Loan.

 

 

If you do not have a copy of our FREE “Simplified Guide to Financial Life Skills” workbook, contact us and we will ship one to you at – NO COST! –

Pioneer Credit Counseling Clients receive The Pioneer Pilot for FREE. If you are not a client of Pioneer Credit Counseling, and would like a subscription to our monthly newsletter discounted to only $30 per year (a $60 per year value), please send a check or money order to:

Pioneer Credit Counseling

Attn: Newsletter Subscription

PO Box 6860

Rapid City, SD 57709

1.800.888.1596

Pioneer is not responsible for any advice given in The Pioneer Pilot. Everyone has a different set of circumstances that would determine if an idea or plan is the best one for them. Information provided should not be intended as legal advice.

PIONEER NOW OFFERS
PRE & POST BANKRUPTCY COUNSELING

 

CALL TODAY!
1.800.888.1596

Step by step instructions provided at NO COST! These sheets are provided to bankruptcy attorneys for a fast easy to follow guide through Pioneer’s Bankruptcy Counseling.

My Financial Journal

We’re on the verge of summer and I can hardly wait for the longer days, grilling out camping, and baseball. I’m sure you all have something that you love about the summertime.

 

Let’s get down to business. While I was researching some of the scams that are directed toward the elderly I was reminded of how foolish I felt when I fell for such an obvious blunder.

 

While in college I was a member of one of those CD music clubs. I was usually pleased with their services and never had any issues with them. With their monthly mailers, there would be plenty of coupons, advertisement deals, and flyers for other companies.

One day I received my mailer and sorted through all the trash until I found this bright fluorescent coupon that said Congratulations. There was a bunch of other wording on it describing how I was a valued customer and was automatically registered in a contest. My prize was a brand new 35 mm automatic camera with flash. Woo Hoo! I won a camera. So I filled out the information and sent the $15 for them to ship it to me.

 

Well, after a month or so I had completely forgotten about it until I received a package in the mail. To my surprise, I opened the package to find the most pathetic excuse for a camera I have ever seen. It was worse than a convenience store disposable camera. I couldn’t even find the type of film you needed for this to work.

 

The best part was there was another form along with the camera saying that I could purchase accessories for my camera. I am pretty sure that the camera ended up in the garbage along with the money I sent them to send it to me, which I’m sure cost no more than a couple of bucks. Every couple of months after that, I would receive the same Congratulatory coupon, and my roommates and I would have a good laugh.

 

My wife and I received our tax return a short time after we filed and had to make the decision on what would be the best way to use it. With my wife being a teacher we have to adjust our income for the summer months when she isn’t receiving a paycheck. She doesn’t have a summer job lined up yet and is going to take classes toward her Master’s Degree. So we contributed some of our return to the summer savings so we can get our bills paid.

 

We had a personal loan from the bank that we were really close to paying off. Even though it wasn’t our highest interest loan, it was the only one that we could pay off in full. So we paid it off and now have that extra money that we can use to help us with other bills or can put into savings.

 

I have been fortunate enough to have never lost my wallet and credit/check cards. (Knock on wood) It’s a pretty good feeling to know that if I did I wouldn’t have to have a panic attack. I think that it’s important that these companies are willing to protect you against theft and fraud. However, I do not think that people should be complacent about it. It is still a big deal and a hassle to have to cancel and then re-order all of your cards and information.

I hope that the upcoming summer brings you happiness. Have fun and good luck.

Looking out for those who looked out for you

In the upcoming years, many people can expect to have to assist with their elderly parent’s affairs. It may be a hard subject to talk about but odds are that you are going to have to help and any information you know beforehand can make it that much easier down the road.

 

It is important that you have regular conversations with your parents that involve discussions on what their wishes are. No matter if they like it or not this is information that will make things a lot easier down the road.

 

Determine what their wishes are if they needed long-term health care or were in the hospital and incapacitated. You may even want to help them with their will or at least ask them to include those details in their will, so it will help ease the legal aspects down the road.

 

f they are worried about their finances you may need to help them. They will need to inform their creditors and allow them to disclose information to you.

 

Most parents have spent their lives giving you advice, whether you wanted it or not. Well, now it’s your turn to help them with advice. I’m sure that many of your parents realize that there are scams out there and that they may be the targets. But, the scamming business is very advanced and each day there is a new one that looks the entire bit legitimate.

 

There are plenty of scams that prey on the elderly and can cost them their life savings. They can come from any angle and use scare tactics to take advantage of naïve elderly citizens. Here are some of the more popular schemes that are being attempted every day.

 

By keeping your older family members informed you may help them to save a lot of their hard-earned money.

 

Many scams are aimed at taking advantage of elderly concerns like their health and well-being. They should thoroughly review any offers that they receive that promise better rates on insurance or prescriptions. Many times the coverage that is promised is unnecessary or is the same that they already receive but costs them more. In extreme conditions, there is no coverage at all as the company is non-existent.

 

They will feed their fears that they do not have enough coverage in the event that they need medical attention and will be a burden to their kids. They do the same with life and funeral insurance. It is important that they do have proper care and coverage from a legitimate company.

 

Telemarketers spend hours each day targeting those who are more vulnerable to their schemes. Be leery of anyone claiming that you won a “free” gift or vacation. They will usually ask that you pay them for the shipping and handling and then they will send you your “prize.” Many times you will receive nothing or a gift that is considerably less than what it cost you to have it shipped to you.

 

In the best cases, you may actually receive a vacation package, but it is far from the marvelous conditions that were promised.

 

Other warning signs that should trigger your suspicions are if they need you to “Act Now” before the one-time offer expires. Other times you may be asked to invest in a company that they have valuable information on.

 

When it comes to the future of your parents it can be uncomfortable to approach them on this matter, but it really will make it easier for everyone in the long run. If done with respect, all parties can feel secure and ease your worries.

 

Resources:
www.ftc.gov – The government website where you can file complaints against companies you believe are breaking consumer laws.

www.bbb.org – The Better Business Bureau shows current scams and fraud that may target honest consumers.

Tiny Tikes

Saving for Summer

Swimming lessons, summer camp, baseball, and ice cream trucks are just a few of the things that you can expect to pay for this summer.

 

If you already haven’t done so, start putting a little bit extra away to help you pay for these summer activities.

 

Many activities require that you pay for them ahead of time, but on top of those initial fees comes spending that will last all summer.

 

How many times have you been at the ball field and either you or your child wanted a snack?

 

See how quickly it can all add up.