By JJ Montanaro, CERTIFIED FINANCIAL PLANNER™ Practitioner
The cool winds of fall remind me that it’s time to dig into my personal finance bag of tricks and treats to help you steer clear of scary money problems.
Account takeovers. Costume parties aren’t the only places where alternate identities lurk. Crooks disguised as you can steal your identity and open new accounts in your name before you can say, “Boo!”
Losses from this type of new account fraud surged 13% last year, resulting in $3.4 billion in losses, according to Javelin Strategy & Research’s 2018 Identity Fraud Study™
How can you protect yourself?
• Check your credit report at least quarterly.
• Safeguard your personal data, usernames and passwords by shredding or safely storing the information.
• Avoid using public Wi-Fi to access online accounts or sites.
• Monitor your accounts vigilantly.
While you probably don’t check your long-term investments daily, you may need to adopt a vigilant approach with your bank and credit accounts. If you see any discrepancies, notify your financial institution.
Credit card debt. Americans are ringing up credit card debt at an unprecedented pace. This summer the Federal Reserve reported a 4.6% increase of this type of debt over the same time last year. And at $1.071 trillion, revolving debt continues to break new heights after hitting $1 trillion in 2017.Don’t fall into this dangerous trap. Develop a plan to knock out your debt and get help if you need it.
Car loans. After encountering a dozen or so ghosts and ghouls on Halloween, you can become numb to the spectacle. That’s how I feel about the length of car loans. They seem to keep getting longer. Experian’s State of the Automotive Finance Market (Q1, 2019) put the average new-car loan length at just over 69 months—almost six years. If you can’t afford the car you want with a loan of 60 months or less, look for a more affordable option.
Wages are growing. This is like reaching into your goody bag and finding all your favorite treats.
In July, the Atlanta Federal Reserve’s Wage Growth Tracker put wage growth for people ages 16 – 24 at a year-over-year clip of 7.4%; for ages 25 – 54, it was 3.9%. While a bigger salary can mean a better lifestyle, it also can help you pay down debt, build savings and invest for the future.
Savings rate nears 10%. Savings rate nears 10%. Americans saved 8.1% of disposable income in June, according to a report from the Bureau of Economic Analysis. Although that’s below the 10% USAA recommends folks sock away for retirement early in their careers, I still think this belongs in the “treat” category. Under the military’s new Blended Retirement System, participants will need to put at least 5% into the Thrift Savings Plan to receive the maximum government contribution. So, while 5% shouldn’t be your goal, it should be the minimum if you’re part of the BRS.
Credit scores on the rise. FICO reported in its 2019 State of Credit, Experian reported that the average VantageScore increased to 680. This is a good trend. But don’t let it lull you into a false sense of security. Just because you can borrow doesn’t mean you should. After carefully reviewing your finances, make borrowing decisions in the context of what you know makes sense — not what some financial institution offers.
Safety guidelines are not intended to be all inclusive, but are provided for your consideration. Please use your own judgment to determine what safety features/procedures should be used in each unique situation.
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