IOUs: ‘There’s an app for that!’

It’s a common joke, but it seems to be holding true.  We use apps to share pictures, check e-mail, and chat with friends—now, we have the ability to transfer money to our friends and family, regardless of our location or which financial institution we belong to.  Cash may have been king in the past, but it’s looking more like our smartphones are king today.

Have you heard of Venmo? Squarecash? These are just a few of the apps that allow you to send money to anyone, anywhere, anytime.  From a convenience standpoint, these advances are amazing—but what are the costs of convenience?

You may still think of identity theft as the result of sneaky thieves rummaging through your trash, gathering bank statements and those annoying credit card offers you threw out last week.  While this method is still common, it’s only one of the ways that thieves steal financial information today.  Why go dumpster diving when you can use hacking to gather financial information and access money electronically?

Creepy.

It’s important to protect your sensitive information regardless of whether you have $20 in the bank or $2,000 in the bank. Identity theft can damage not only your liquid assets (cash in your checking or savings account), but your credit scores as well. Even your criminal record can be affected by identity theft. Sounds crazy, but you could be arrested for a crime someone else commits while pretending to be you.  Every time you link your personal information to a website or an app, there’s a chance that information can be accessed and abused, so it’s important that you protect yourself.

Here are some tips to assess security risks of peer-to-peer transfer apps:

The Federal Trade Commission recommends that you look for three factors to help make your account(s) less vulnerable:

  • Two-factor authentication: This requires you to enter a password plus something else — like a code sent to your phone —  to prove it’s really you.
  • Pin code: Look at creating a pin to send a payment — like a pin you might use at an ATM.
  • Social media permissions: If a payment service is linked to social media, it could broadcast your payment history to your network so make sure you check those permissions.

Additionally, think about the protections built into your financial accounts. For example, some apps may charge you for using a credit card, but if something goes wrong you have more protection under the law by using a credit card than if you use a debit card or link a checking account directly.  To learn more about protections under the law for credit and debit cards, watch the Staying on Good Terms: Credit & Debt Webinar HERE.  Take the quiz to work towards your Borrowing Badge!

Know what happens if something goes wrong–will you get an e-mail explaining a new recipient, access from a new location/device or if your account information, like your associated e-mail, is changed?

Learning more about security features may not be fun, but 5 minutes could save you from identity theft which can take months or years to recover from.  Remember, knowledge is power!

Sources:

FTC Tips, 2015: https://www.consumer.ftc.gov/blog/paying-your-friends-through-app-read-0

More Information: Citizens Utility Board, 2013 http://www.citizensutilityboard.org/pdfs/ConsumerInfo/P2P.pdf

Written by Carol Brobeck, University of Illinois USFSCO Student Money Management Center

Choosing a Financial Professional

Managing money is not an innate skill and often it makes sense to turn to expert help. Whether you’re looking for help with your taxes, choosing investments for your retirement savings, or managing multiple saving goals, financial professionals can help you explore alternatives and strategies to best manage your finances.

However, choosing a financial professional is a scary proposition for many people. It can be hard to decide who you want to trust with your money and your future dreams. Unfortunately, government regulations do not protect the consumer very well in this area. Anyone can call themselves a financial adviser. Taking a little time to investigate financial professionals before you begin working with someone will allow you to make an informed decision.

First, think about what services do you need. This will help you identify a financial professional who has experience and education that matches your need. For example, if you are 24-years-old and are looking for investment advice, then you may not want to choose someone who specializes in estate planning for 80-year-olds. Or, if you need advice about filing taxes for your small business, then you need someone with tax expertise.

Are you puzzled by all the initials following financial professionals’ names? University of Illinois Extension’s website, Choosing a Financial Professional, includes a Guide to Financial Credentials. This in-depth table lists many financial credentials and information such as the education required to receive the credential. You may want to start your research into financial professionals here.

At this website there are also links to several online searches that can connect you with financial professionals in your community. You may also want to ask friends or other acquaintances for suggestions of financial professionals.

However, no matter who refers you to a financial professional, take the time to interview two or three people to find one that is a good match for you. Ask specific questions such as how much and what type of continuing education does the person you’re interviewing engage in on a regular basis? The financial world, and related laws and products, change at a rapid pace; continuing education is essential. How is the financial professional paid? Is the financial professional’s income fee-based or commission-based? You have the right to know how much financial services will cost and how they will be calculated. At the Choosing a Financial Professional website you can download a free Interview Guide to help you think of questions to ask.

Even if someone is the perfect match for your Uncle Fred, it doesn’t mean that they are the right financial professional for you. Be sure you’re comfortable asking questions and talking to the financial professional. You want someone who can explain things in a way that makes sense to you.

One last, but important, step: Once you narrow your choices, check the financial professional’s background and references. In Illinois, check a person’s licenses and disciplinary records by calling the Illinois Securities Department, toll-free 1-800-628-7937. If someone is helping you buy or sell investments, you do want to be sure that they are licensed to do so in Illinois.

If you have more questions about choosing a financial professional or other financial matters, please visit our Plan Well, Retire Well blog, or contact us at FinancialWellnessUIE@gmail.com or call (217) 333-7672 for more information.

Written by Kathy Sweedler, Consumer Economics Educator, University of Illinois Extension

iGrad

Personal finance is a more complicated topic than many realize. A recent study noted that most people in the world cannot answer three simple personal finance questions correctly. It also has become necessary to educate ourselves on personal finance on a continual basis due to the new tools and technology introduced in financial markets every day.

Fortunately, the University of Illinois has partnered with iGrad to provide a resource for you to expand your knowledge of financial topics. iGrad is an online financial literacy platform with a nine-module financial literacy course covering the following topics:

  • Financial Health
  • Smart Spending
  • Student Loans
  • Banking
  • Credit Cards
  • Credit Reports
  • Identity Theft
  • Your Paycheck
  • Investing

In addition to having a robust financial literacy course, iGrad contains hundreds of articles, infographics, resources, tools and videos to help you make a variety of financial decisions. Use your Illinois NetID and Enterprise password to get started.

iGrad link opens in new window/tab

Written by Andrea Pellegrini, University of Illinois USFSCO Student Money Management Center

Get your deposit back!

When moving out of your apartment, the most common issue you might encounter is with the security or damage deposit refund. Cleaning the apartment thoroughly upon move out and taking pictures will help save you money. Sometimes landlords keep the entire deposit and charge the tenants more! Protect your money and CLEAN! CLEAN! CLEAN! & snap pictures of the condition that you’ve left the apartment in. If the landlord does not provide you with an itemized list of damages before deducting from your deposit, and/or provides you with a refund check that is less than the full amount, do not cash the check.

Have questions? Contact the Tenant Union by submitting an information request form: http://tenantunion.illinois.edu/RequestInfo.aspx.

Happy saving!

Written by Tanisha King-Taylor, Tenant Union

What is my credit score? Why is it important? How do I check my credit report?

What is a credit score?

A credit score is typically a three-digit number based on your financial history to analyze and determine your creditworthiness. The higher your score, the better off you are! Credit scores are used by lenders (banks, credit card companies, etc) to gage your financial responsibility based on your past financial behaviors. Credit scores are calculated from information in your credit report. Things that affect your credit score, both positively and negatively, are paying bills late or on time, the type of credit you use, how much credit you have available to you, how much you owe on your credit cards and loans, how long you’ve held outstanding credit (how long you’ve had a credit card, for example), and whether you’ve had a lot of inquiries from prospective lenders.
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