New Law Allows You to Freeze Your Credit for Free

In response to the massive data breech last year at Equifax, a new federal law will allow you to place a freeze on your credit file at no cost. Currently, you must pay a fee to do so. The law takes effect September 21, 2018.

Equifax, Experian and Transunion are the three major credit reporting agencies in the United States. They gather personal and loan payment information on anyone with credit. This data is factored into decisions such as whether you receive loans or credit cards, your credit limits, your interest rates, and the cost of your insurance premiums.

It was estimated about 143 million Americans – about half the population of the United States – had their personal information stolen during the 2017 Equifax data breech. This information, including names, social security numbers, birthdates, and some driver’s license numbers, is in the hands of thieves, available for them to use at any time – now or in the future.

One way to protect yourself is to place a credit freeze on your credit file at each of the three credit reporting agencies. A credit freeze restricts access to your credit file. Most creditors look at your credit report before they approve a new account or loan. If they don’t have access to your file, they may not extend the credit, making it more difficult for a thief to open an account in your name.

Currently, there is a fee, determined by each state, to place a freeze on your credit file. You need to pay this fee to each agency. And, when you want to temporarily lift the freeze to apply for a new loan, you pay another fee.

Beginning September 21, Equifax, Experian and TransUnion may no longer charge fees to place and lift a freeze on your credit file. Each agency is required to set up a webpage for requesting fraud alerts and credit freezes.

The new law, called the Economic Growth, Regulatory Relief, and Consumer Protection Act, also:

  • Allows you to place a place a credit freeze on a child’s credit file, regardless of where you live. This applies to children under age 16. Currently, only some states allow you to freeze a child’s credit file.
  • Changes the length of an initial fraud alert to one year. A fraud alert is a note in your credit file warning creditors that you may be an identity theft victim and that they should verify that anyone seeking credit in your name really is you. Currently the initial fraud alert only lasts for 90 days, after which you need to extend it for another 90 days. There are no fees for a fraud alert. If your identity has been stolen and you have filed a report with the Federal Trade Commission, you can still place an extended fraud alert on your file which lasts for seven years.
  • Requires the three credit reporting agencies to offer free electronic credit monitoring to all active duty military members.

The web addresses for each credit reporting agency are:

When you set up your credit freeze, each agency will give you a PIN which you will need to lift the freeze in the future. Keep the PINs in a safe place.

When you sign up for a credit freeze online, you will be asked a series of questions based on the information the credit reporting agency has in your file. Many of my clients have been unable to answer the questions, usually because they can’t remember the details of past loans. I have found it helpful to have a copy of a recent credit report on hand. The answers can usually be found in the reports.

To request a credit report visit annualcreditreport.com. You can also call 1-877-322-8228 or request reports by mail using the Annual Credit Report Request Form. Click here to access this form.

If you would like information on additional ways to project your personal information, read my blog post How to Protect Yourself Following the Equifax Security Breach.

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

Five Ways to Help Your Parents Keep Their Financial House in Order

Many times, our parents don’t need (or want!) someone to completely take over their checkbook. Sometimes all they need is a little help. If they are willing to share information with you, here are five ways you can provide assistance while helping your senior maintain independence.

1. Review the incoming mail with your parents. Many times, seniors need reassurance and assistance to sort the junk from the real mail.

2. Respect your parents’ comfort level with on-line banking. Many older seniors have never used a computer and neither understand nor trust the internet and the web. Others have fully embraced these tools. If computers are out, keep with what your parents are comfortable – most often paper checks and paper statements. With proper documents (i.e. a power of attorney), you may be able to have on-line access to their accounts to help keep track of their transactions.

3. Ask your parents to record every check in their register including the payee, purpose and amount. If this is difficult, have them use check carbons and make notes in the memo line. This helps keep track of how money is spent and spot potential financial abuse.

4. Assist with maintaining their checkbook register. Verify all checks and deposits are recorded. Check that the math is correct. Reconciling is the best way to confirm the register balance is accurate and to locate any bank mistakes.

5. Review monthly bank and credit card statements together. This will help protect your parents from fraud and unintentional purchases.

These money management practices will help your parents keep their financial house in order. These are good techniques – for anyone of any age – to maintain an accurate checking register, and to help protect themselves from fraud and abuse.

 

This blog is published to provide you with general information only and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

Five Tips to Help Your Parents with Technology

Adult children frequently assist their parents with choosing and setting up computers, cell phones, and other electronic devices.  Sometimes this is successful for the senior. Other times it’s not.

More than once I have witnessed an older client’s family member help the client select or set up a device. After the family leaves, the client can’t use it.

This happened recently with Sarah who is in her eighties. When Sarah’s daughter visited recently, she helped her purchase a smart phone. Sarah told me her daughter loves this particular phone. She travels internationally for work, and her phone, I’m sure, is an essential business tool. Sarah, however, doesn’t need or want all the functions her daughter uses. Although she only wants to make phone calls, she can’t use her new phone. Sarah has two obstacles: her arthritic fingers make it a challenge to press the buttons and swipe in the right places, and, she can’t remember the steps to make a call or look up a contact.

Another client, Janet who suffers from the early stages of dementia, wants to e-mail her friends. Her son set up e-mail on her laptop in such a way that Janet first needs to open an internet browser, then locate her e-mail program. Janet can’t do this. If the e-mail program doesn’t launch immediately when she opens her browser, she cannot remember how to navigate to it.

I believe my clients’ family members mean well and are truly trying to help. They haven’t considered, however, their parents’ needs and abilities.

If you find yourself helping an elder with technology, I encourage you to keep these five thoughts in mind:

1. Understand many older adults are uncomfortable with technology – even when they already use it. To many people, computers are not at all intuitive, and they fear what will happen if they press the wrong button. (This isn’t true of every senior. I have met 90-year-olds who solve tech problems and teach people thirty years their junior how to use cell phones and computers.)

2. Be clear on what your loved one needs the device to do. While you may be transferring money, checking your home alarm system, or sending photos to a note taking program, your senior may only want to make phone calls, type letters, or send e-mail.

3. Take into consideration your loved one’s physical and cognitive limitations, and help him choose a device appropriate for his needs and abilities. Consider computers and phones designed specifically for seniors.

4. Set up the most direct path to the programs she wants to use. If you don’t know how to do this, seek out someone who can help.

5. Plan to spend time teaching or find someone who can teach your loved one to use his technology.

I believe it is important to be selective when choosing a helper or teacher. Many of my clients have experienced the exasperation of technology-savvy helpers when my clients do not “get it” on the first try. (This is especially true when they go to tech support offered at many stores.) A good helper understands seniors did not grow up with computers, many don’t have an intuitive sense on how to use them, and, if they are experiencing memory decline, need to be shown and be able to practice over and over again.

The names of the individuals in this article have been changed to protect their privacy. This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

What to Know About Your New Medicare Card

If there is a way to scam you out of money, thieves will be all over it. Unfortunately this is happening with the rollout of the new Medicare cards.

Medicare is removing Social Security numbers from Medicare cards. By April 2019, all Medicare participants will receive a replacement insurance card with a new, unique number. This move is expected to reduce medical identity theft for Medicare beneficiaries. It is also expected to decrease the amount of Medicare fraud, saving the government and taxpayers money. (See my January blog post, Social Security Numbers to be Jettisoned from Medicare Cards.)

As soon as Medicare began mailing the new cards in April, scammers started tricking people into divulging sensitive information or paying money. Some of the ways the thieves are doing this are telling Medicare beneficiaries that in order to receive their card they need to pay money, give their Social Security number, or provide bank account information.

This is all false. The new cards do not cost anything. They will arrive in the mail. Beneficiaries are not required to give out any personal or bank information. Medicare already has your Social Security number and does not need to verify it. Medicare does not want or need your bank account information.

If you or your loved one has not yet received your new card, don’t panic. Medicare is randomizing the mailings by geographic location, sending them in batches between April 2018 and April 2019. All beneficiaries should have their new card by April 2019.

By visiting Medicare.gov ,you can sign up for an e-mail to alert you when your card is in the mail. You can also see what the new card will look like, and view a map of the status of the mailings.

Until April 2019, Medicare will process claims using either your new or old number. You do not need to call your providers to give them your new number. Once you have your new card, simply bring it with you to your next appointment. Medicare will also notify your providers of your new number after it processes your claim. If the claim is processed under the old number, Medicare will give your provider the new one.

For more information, visit the Centers for Medicare and Medicaid Services website, www.smc.gov.

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice. Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

Guest Blog – Caring Professionals

This week’s blog is a guest blog from my friend and colleague, Barbara Boustead of Madison, Wisconsin. Barbara serves with me on the board of directors of the American Association of Daily Money Managers. 

This is an exciting time for daily money managers in Wisconsin and across the nation! We’re adding professionals to our industry in record numbers, and the AADMM Annual Conference in San Diego in November had the largest turnout ever! The conference itself was top notch in not only educational content, but also in opportunities to network and meet other DMMs.

As the AADMM Regional Coordinator for Southern Wisconsin, I had the privilege of welcoming several new DMMs to the group this year. It’s great to collaborate and support DMMs in WI and elsewhere. Many DMMs work remotely with their clients who may reside in different states.

I have received several referrals of clients who live locally while their adult children live in another state. It is heartwarming to know that these families are able to enjoy their visits with their loved ones without worrying about paying the bills or opening stacks of mail.

Daily money managers are becoming better known by other professionals and are being utilized as a valuable addition to a client’s financial team.

However, there is more work to be done to raise awareness about DMMs and the valuable work they do.

My Top 3 Reasons to increase Public Awareness about Daily Money Management

1. The increase in fraudulent activity and scams occurring against seniors and other vulnerable populations is at an all-time high and continues to grow. Often these crimes are committed by family members who take advantage of the people in their care. Increasing public awareness of DMMs can help to reduce these crimes by introducing a 3rd party, such as a daily money manager who will adhere to the standards of practice  and ethics as outlined in AADMM.

2. Busy professionals, frequent travelers, and growing families are often unable to keep up with their financial matters; as a result, bills go unpaid, interest and penalties add up, and they become overwhelmed with the amount of paperwork in their lives. DMMs assist these individuals by taking over the burden of bill paying and financial organization. People are able to live their lives to the fullest without worrying about their money matters.

3. Finally, I have a very personal reason for wanting more people to join AADMM and the DMM profession.I hope to age in place in my own home and want to be assured that if I need financial assistance over the next 20 years or so, I will know exactly who to call!

THANK YOU!

Barbara Boustead is a Licensed Clinical Social Worker and a Daily Money Manager. She is the Founder of Mary’s Daughter, LLC and provides daily money management services to older adults and veterans. Please visit her at https://www.marysdaughterllc.com.

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

Should I Still Save My Donation Receipts?

By now you may be familiar with the basic changes in the new tax law passed by the US Congress in December. While there are many facets to the new tax bill, I see four changes that have the potential to change many families and individuals’ income taxes:

1. The tax rates were lowered for most of the seven existing tax brackets

2. The personal exemption was eliminated

3. The standard deduction roughly doubled

4. Many popular deductions were tweaked, eliminated or capped

For many taxpayers, it will no longer be worthwhile to itemize deductions on their tax returns. The new higher standard deduction, for many, will be more than their combined deductions such as mortgage interest, charitable contributions and state and local taxes. Currently, 70 percent of U.S. households claim the standard deduction. The US Congress Joint Committee on Taxation estimates this will increase to 94 percent in 2018.

Given these changes, should you save your charitable donation and other tax deduction bills and receipts? The accountants with whom I have spoken advise that you do. When you have the information on the 2018 expenses and contributions you otherwise would have deducted, you can more easily determine how the new tax law will impact you.

Your tax preparer may have done a 2018 tax projection when he or she prepared your 2017 tax returns. If not, or if you have had or expect significant changes this year, I recommend you meet with your accountant for a mid-year tax impact analysis. If you anticipate your taxes will increase, having this information now rather than next winter will give you time to prepare. If you expect your taxes will decrease, you can start redirecting those funds now.

Everyone’s tax situation is different. There may be one provision in the new tax law that lowers your taxes and another one that increases it. Until you have an idea of what your tax liability may be for 2018, I recommend you document as you have in past years and consult with your CPA sooner rather than later.

The Motley Fool has a good, easy-to-understand summary of the tax law changes. To read that article, click HERE.

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

 

Who Needs Your Social Security Number? (And When to Refuse to Give it Out)

Recently, as my daughter was deciding which college she will attend next fall, I was looking over the various schools’ acceptance forms. Many asked for her Social Security number.  I told Gabriella not to give the school her number. “Why?” she asked. “Because they have no legal right to it,” I said.

Your Social Security number is a golden key. With it, thieves can take out credit and commit other identify theft in your name. The best protection we have is to give our Social Security numbers only when absolutely necessary.

When are you required to give your number? There are essentially two situations:

  • You are doing something that is reportable to the IRS or your state’s tax department; and/or
  • You are engaged in a financial transaction that is subject to the Customer Identification Program. This is a provision of the USA Patriot Act which requires financial institutions to verify your identity.

You do need to give your Social Security number (SSN) to:

  • Companies from which you are applying for credit: credit cards, loans of any type, cell phone service
  • Your department of motor vehicles
  • Employers
  • The three main credit reporting agencies: Equifax, Experian, and TransUnion
  • Federal and state agencies when applying for benefits: Social Security, Medicare, disability, Medicaid, and other aid programs`
  • Investment advisors and brokerage houses
  • Banks
  • Companies with which you have a cash transaction of $10,000 or more: car dealerships, RV and boat dealerships, etc.
  • Companies facilitating real estate transactions

Many organizations ask for your Social Security numbers out of habit. Some want to use it as your identification number or to be able to collect if you don’t pay them. I have heard some medical providers want your number in case you die. (If this happens, your emergency contact can provide it.)

Most places are not required to collect, and, therefore, should not have possession of your Social Security number. These include:

  • Colleges and universities
  • The College Board
  • Hospitals
  • Medical offices
  • Health insurers
  • Other medical businesses
  • Primary and secondary schools
  • Summer camps
  • Retailers and grocery stores (some want to write it on checks presented for payment)
  • Government agencies at all levels except when they are required to obtain it
  • Charities (Some may want your number to run a background check. You have to decide whether it is worth the risk.)
  • Service providers (I recently helped a client call her trash hauling service. They wanted her SSN in case she doesn’t pay. With her SSN they can turn her over to a collection agency.)
  • Anyone who contacts you by phone, official looking mail, or text asking (or demanding) your Social Security number. Only give it out when you initiate the contact and only when it is necessary.

We need to be vigilant about giving out our numbers. Don’t automatically give it out when asked. Instead, stop and think. If in doubt, you can:

  • Ask the name of the law which requires the organization to collect it and for an explanation of that law.
  • Request an identification number that is not your SSN.
  • Ask to have your identity verified by another means.
  • Inquire what measures and procedures are in place to keep your number safe. Is it stored on portable devices, especially ones that leave the office? Is it encrypted? Which staff members have access to it, and do they need access to perform their duties? If the SSN is on paper, is the paper shredded and how secure is that paper before it is shredded?
  • Refuse to give it out. Be aware, however, companies and other organizations can elect to not provide you service if you refuse.

Finally, don’t automatically fill in your SSN on forms. My daughter skipped this on the form for the college she will be attending. Nobody from the school said a word.

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

 

Your Eighteen-Year-Old Needs a Will (and Other Legal Documents)

I am getting ready to “launch” my daughter as she heads off to college next fall. She is an adult. Although my husband and I will still support her, we no longer have any legal authority to access her financial accounts, health information, and even her grades. It does not matter that we are her parents. Our legal right to make decisions for her or obtain her information – be it financial, health or anything else – terminated when she turned 18.

Legal Documents

All adults aged 18 and older need to have key legal documents in place. These allow another responsible adult to act on their behalf should they not be able. Your child could be traveling abroad or simply be too busy. Unfortunately, some young people experience incapacitating injuries or die.

While we hope this never happens to our children, every adult regardless of their age should have these documents in place:

  • Durable financial power of attorney

In this document your child names an “agent” to act on her behalf for financial, legal or other personal matters.  With such a document in place, the agent can sign checks, transfer money, file tax returns, manage student loans, and take care of other financial tasks on your child’s behalf.  A financial power of attorney does not cover medical matters.

  • Living will, also called a health care directive or medical power of attorney

Different states have different names for this document. In it your child names one or more people to make medical decisions on his behalf should he be unable. He should state in this document what type of medical interventions and treatments he wants and does not want. Without such a document in place, should he become severely ill, you would need to go to court to get permission to gain access to his medical information and to make decisions for your adult child.  It is important your child name an agent who he trusts to carry out his wishes, not the agent’s wishes.

  • HIPPA release

The Health Information Portability and Accountability Act prevents medical providers from sharing a patient’s health information, even with her parents, without the patient’s written consent. This means, unless your child has signed a HIPPA release authorizing medical practitioners to give you her health information, you won’t have access. If your child wants you to be able to receive this information, she should sign the release.

  • Will

Your child may not have any assets now beyond a bank account, but he may acquire some over the next few years. A will “catches” any assets or property without named beneficiaries, and leaves instructions on to how your child wants this property to be distributed.  Any assets distributed under a will go through the court probate process. To close even a single bank account with a small balance, his account would need to go through probate.

Avoiding Probate

Probate costs money and takes a few, if not many, months. It is also public record. There are ways to avoid probate. When titled in certain ways, property can pass directly to your child’s chosen heir:

  • Joint bank accounts

If your child has a bank account for day-to-day expenses, a parent or another trusted adult can be a joint owner on the account. This makes it easier to write checks on your child’s behalf, deposit funds, and monitor the account balance. If your child should die, the co-owner immediately owns the account. There are drawbacks to joint bank accounts. To read about these click here.

  • Transferable on Death accounts and property

If your child does not want a joint owner, she can make the account TOD – transferable upon death, which names a direct beneficiary for the account. The same can be done for cars, provided your child holds the title to the car. The beneficiary needs to be named on the title. Contact your department of motor vehicles to learn how to do this.

  • Mutual funds and retirement accounts

Direct beneficiaries can be named for these assets.

Social Media

Have your child write down the logins and passwords for all his social media, e-mail and other digital accounts, and store the list in a safe place. He should tell a trusted person where to locate this information. Otherwise, should the accounts need to be close and he can’t do it himself, it will be a hassle to shut them down.

Access to Grades

If your child is over 18, the Family Education Rights and Privacy Act (FERPS) prevents other people, including parents, from seeing her grades. If your child wants you to have access to them, she will need to sign a waiver.

All these documents will need to be updated as your child’s situation changes: moves to another state, gets a job, acquires more assets, gets married, etc.

Preparing legal documents for an eighteen-year-old may seem extreme. If the worse should happen, however, you will be glad they are in place. I have witnessed parents become angry with disbelief when they learn they can’t just go to the bank and access their child’s account or are told by a healthcare provider they can’t have the results of their child’s doctor visit.

Have a talk with your child about these documents. Have her meet with an attorney. Remember, it isn’t just about death and serious illness. Young people are mobile. They go to school in other states, they travel, and they study abroad. Even in this day of swift electronic communication, having someone at home who can act on their behalf when a student loan agreement needs to be signed can save a lot of expense and logistical hassle.

This blog is published to provide you with general information only and is not intended to provide specific or comprehensive advice.  Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.

 

Teach Your Kids About Money: Advice from an 18-Year-Old

When thinking about a blog topic for this month, I decided to focus on April 20th, National Teach Children to Save Day. As I began to write, it occurred to me I should consult my in-house expert, my daughter, Gabriella. She, after all, has been the recipient of her parents’ attempt to teach her financial literacy. She was more than willing to give me her opinion.

Gabriella and her friends, most of whom are high school seniors, compare notes about how their parents handle money – especially as it relates to them. Gabriella has observed that every family has their own approach. Drawing on what she has learned from her friends and from her own experience, here is Gabriella’s advice to parents: 

“Talk about money. But, don’t sit your kids down and say, ‘Let’s talk about money.’  And don’t lecture.” Gabriella said my husband and I talk about money around the house, and, while she may not be part of the conversation, she is listening. “I hear you talk about the budget or the 401(K),” she said. “And sometimes money things come up at dinner.” 

“Give your kids money regularly. Don’t just give them money when they ask.”  I learned in a parenting class years ago to give your child a weekly allowance untied to chores. The amount was one dollar for each year the child is old until they turn twelve. At twelve the allowance is cut in half; the child is now old enough to earn money from pet sitting, babysitting, mowing lawns, and other teenage jobs. We implemented this plan.

My husband and I give Gabriella a regular allowance the same day each week, like a pay check. And, we make the effort to give her cash. I think it is important to have children start with cash before moving them to debit cards and other “invisible” forms of electronic payment. Having cash provides your child with the opportunity to hold, feel and use bills and coins. Money then becomes real. There is a greater sense of gain when receiving cash, and there is a greater sense of loss when handing it over to buy something. Only when she was older and understood the concept of exchanging money did we help Gabriella get a bank debit card. 

“Younger kids are more receptive than older kids.” In other words, if you have young children, don’t wait. Take advantage of the ages when your kids willingly listen to your advice. Children as young as five can receive an allowance and start learning basic financial concepts.

When she was younger, I talked to Gabriella about money “in the moment.” In the grocery store we discussed how to compare prices and products. At the mall I explained, in simple terms, why I turned down store charge card offers.

Teach your kids how to use their money and require them to buy stuff themselves.” My husband and I have two rules:

Rule 1: Allowance and money earned is divided into three jars: Spending, Savings and Share.

  • Gabriella can spend her spending money as she chooses. We do not set restrictions and we let her make mistakes.
  • Savings is reserved for larger, planned purchases. Gabriella’s savings grew to the point where we helped her open a savings account. A few years ago, we bought her a horse. We paid for the horse and she bought the saddles and other equipment. Gabriella had the money saved, and she carefully shopped around for the best used equipment she could find. (It was her money, after all.)
  • Gabriella is able to choose to which charities she wants to give her share funds. We match her gift.

Now that Gabriella is, 18 we no longer oversee her money. I asked her whether this system worked. She said, “Yes. I still divide my money into parts. If I had all my money in one big pile, I would spend it all.”

Rule 2: Gabriella pays for her own “stuff.”

“Stuff” is fun, discretionary, personal spending. Gabriella also uses her own money when going out with friends, and she pays for birthday gifts for her friends.

“My friends always have to ask their parents for money,” She said. “I always have my own. This amazes them.”

The financial skills young people learn early in life stay with them forever. Most children learn how to handle money from their parents. It is never too early to teach good money habits.

As parents, we don’t always know everything about money. There are some excellent books available to help you increase your knowledge and to help teach your children financial literacy. Titles to consider are:

  • The Money Savvy Student by Adam Carroll
  • Not Your Parents’ Money Book by Jean Chatzky
  • Money Rules: The Simple Path to Lifelong Security by Jean Chatzky
  • The Richest Man in Babylon by George S. Clason
  • Save Wisely Spend Happily by Sharon L. Lechter, CPA
  • Loaded: Money, Psychology, and How to Get Ahead Without Leaving Your Values Behind by Sarah Newcomb
  • What All Kids Should Know About Saving and Investing by Rob Pivnick
  • Smart Money, Smart Kids by Dave Ramsey and Rachel Cruze
  • The Giving Book: Open the Door to a Lifetime of Giving by Ellen Sabin

This blog is published to provide you with general information only, and is not intended to provide specific or comprehensive advice. Money Care, LLC encourages individuals to seek advice from competent professionals when appropriate.