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Last Edited on 05-16-2017

Enjoy Your Summer Vacation — Without Maxing Out Your Credit Cards

By Eric Jorgensen

Learn more about Eric on NerdWallet's Ask an Advisor

School is out, and summer is upon us. It's time to let loose and have some fun. That sounds great in theory, but it can be horrible for our finances if we aren't careful — especially when it comes to taking summer vacations.

For many people, travel is a significant part of their summer budget, but reckless spending while on vacation can wreak havoc on their finances. People often spend more when on vacation, perhaps because they get caught up in the moment or simply because things are more expensive than at home.

So what can you do this summer to make sure you don't end up with a financial hangover, wondering where the money went or how the credit card bills got so high? Here are a few tips to help you enjoy your summer vacation without derailing your finances.

Make a plan 

It helps to start with a plan for your summer vacations. You don't have to rule out spontaneity entirely, but having an overview of when and where you'd like to go, what you'd like to do and how much it will cost gets you started off on the right foot.

You can also do some research to identify deals ahead of time. Many hotels offer discounts during offseasons, and some airlines have lower fares when you fly during off-peak times. Services like Airbnb offer competitive prices for lodging and may help you reduce expenses if you eat some meals in instead of going out.

Set up a ‘fun fund'

With a plan in place, you can start saving for your trip. Creating a separate “fun fund” helps cement why you're saving the money and can help you keep your eye on the big prize when lesser temptations, like a new TV, arise.

To determine how much you need to save each month, divide the cost of the trip by the number of months you'll be saving. Major trips, such as to a Disney location or overseas, may require significant planning and a longer time horizon to save. For instance, taking a $6,000 trip every three years would require you to save around $170 a month. If you wanted to do this more frequently, you'd have to save even more.

If “staycations” or weekend getaways are more your speed, you may not need to save as aggressively or as long. You can build these trips into your spending plan by setting aside an extra 5% or 10% from your check each pay period.

You can also get the whole family involved by encouraging your children to set aside a portion of the money they receive from birthdays and allowances for parent-free spending while on vacation.

Know your limits

Set a daily spending budget for your trip and don't exceed it. Include what you'll spend on food, activities, lodging and anything else that might come up. You can also get your children involved in the planning, having them participate in the family's budgeting. Even young children will benefit as they are exposed to responsible spending.      

But remember, setting these spending limits means being realistic. If you have to budget $500 a day for a five-day trip because you plan to eat at restaurants for every meal and you want to bring souvenirs home to friends and family, so be it. It's more important to be realistic about what you'll spend and to save for it than it is to convince yourself you won't spend much and go two or three times above what you budgeted.

Stay disciplined

Once you've settled on how much you'll spend, stick to it. It's easy to talk yourself into not counting little purchases like a coffee here or mouse ears there, but those little purchases add up and can have a significant impact on your vacation fund. Give yourself a 3% to 5% buffer in your budget for the “Oh, that's so cute” and “Man, I just need to have that” moments — we've all had them.

With practice, you'll get better at estimating how much you'll need each day, but having a cushion can help in case you underestimate.

Have fun

Most of us aren't going to plan a vacation down to the minute, but with money saved up in a “fun fund” and a cap on your daily spending, you can enjoy yourself and avoid maxing out your credit cards.

Eric Jorgensen is a fee-only financial planner with MainStreet Financial Planning in Silver Spring, Maryland.

The article Enjoy Your Summer Vacation — Without Maxing Out Your Credit Cards originally appeared on NerdWallet.

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WVU blog

Last Edited on 02-07-2017

Preventing Tax Return Fraud

Identity theft continues to be a booming business: In 2014, 17.6 million Americans fell victim, and cybercriminals made off with $15.4 billion. And tax refund theft remains a lucrative piece of that business, despite the IRS' efforts to stamp it out.

How do hackers do it? In one scam, they filed bogus returns with information harvested from the IRS' own files or by using Social Security numbers.

Then they waited for the direct-deposit refunds to flow in. Victims usually didn't know anything was wrong until the IRS refused to accept their tax returns.

Here are some of the defenses that the IRS, state tax agencies and the e-filing industry are building to combat scammers:

Quicker responses to warnings. Thanks to technological enhancements, the IRS now receives warnings if a large number of returns come from a single computer address within a short period of time.

Delaying refunds. This allows the IRS time to recognize that more than one return has been filed for the same Social Security number. Previously, the IRS issued e-file refunds seven to 10 days after it received a return. The new target is 21 days.

Earlier filings of W2 forms. Businesses had been required to issue wage and payment statements to workers by Feb. 1, but didn't need to file them with the IRS until June. Now both will be due by Jan. 31.

Sharing information: Intuit, which makes TurboTax, and H&R Block have agreed to share more information more promptly with the IRS about filings they consider suspicious.

Safety begins at home, of course. The IRS also has advice for taxpayers on identifying — and more importantly, avoiding — tax refund fraud:

Always use security software with firewall and anti-virus protections, as well as strong passwords.

Learn to recognize phishing emails, calls and texts from thieves posing as legitimate organizations, such as your bank, credit card company and even the IRS. The IRS will never try to contact you via phone or email.

Don't click on links or download attachments from emails if you don't recognize the sender.

Protect your personal data. Don't routinely carry your Social Security card, and make sure your tax records are secure.

If you think someone used your information to file a return, contact the IRS immediately. Specialists will help you file your tax return, receive any refund you're due, and protect your account from identity thieves in the future.

© Copyright 2016 NerdWallet, Inc. All Rights Reserved


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Last Edited on 12-14-2016

How to Avoid the Busy Holiday Scamming Season

You’re not the only one joyfully anticipating the holiday season. Cyber criminals are all aflutter, too, as they look forward to the killing they’ll make ripping off innocent shoppers like you. Here are some of the most common ways these thieves operate, because awareness can help you avoid becoming yet another victim.

Antisocial media

Beware those enticing ads that turn up on Facebook and other social media sites offering vouchers, gift cards and deep discounts, as well as the online surveys these ads often link to. These offers are often only empty promises designed to steal your personal information.

Additionally, if you receive concert, theater or sporting event tickets as a gift, never post pictures of them online. Cyber thieves spend lots of time monitoring social media, just waiting for the opportunity to create phony tickets they can resell from your barcode image. If your ticket is resold, you might just find yourself out of a seat on the night of your event. It’s also unwise to post live from an event that gives criminals a heads-up that your home is empty and ripe for picking. Better to wait until the next day to post about the wonderful time you had.

Pandora’s inbox

It may be a mystery to you how cyber thieves got your private email address, but it’s chillingly clear they’re up to no good. Your inbox may fill up with all kinds of legitimate-looking product offers and delivery notices this holiday season, but clicking on links of bogus ones or entering personal information on the linked sites can provide criminals with the opportunity to steal your identity.

Apps are far from immune

With mobile apps available for just about everything, it’s a sad sign of the times that certain free mobile apps (often disguised as games) have been specifically designed to steal personal information from your phone. This is a particularly scary development since many people use their phones to secure their cars and homes. For this reason, only install apps from familiar companies and, at the very least, find a third-party review from a trusted site if you’re interested in an app from an unfamiliar source.

USB Trojan horses

Lots of people use portable USB drives, which makes it all the more important to avoid those being distributed as giveaways this holiday season unless they’re from a trusted source. These innocent-looking devices are often used as a method of introducing malware to computers.

Gifts that keep on giving … to criminals

A spirit of generosity is traditional at holiday time, but if you’re not careful, your donations may never make it to the needy. Fake charities that skillfully tug at your heartstrings abound at this time of year, just waiting for you to willingly give your hard-earned cash to scammers. Before donating, be sure to check out charities thoroughly, to make sure that they’re not only legitimate, but also that they allocate the bulk of funds toward their causes rather than “administrative costs.”

Tips to avoid holiday scams

These strategies will also help keep you a step ahead of scammers:

  • Only shop online with reputable businesses you trust, using secure websites with an address that begins with https.
  • Don’t shop or bank over public Wi-Fi.
  • Protect your credit card privacy by covering your account number with your hand when shopping in public.
  • Don’t respond to suspicious unsolicited calls or emails. Only open email attachments from senders you trust, and contact businesses only through their official websites, phone numbers or email addresses.
  • Monitor your credit to catch fraud at its earliest stages.

Scammers may be smart, but you can still outsmart them. A little foreknowledge and caution go a long way toward ensuring you’ll enjoy a safe and memorable holiday season.

© Copyright 2016 NerdWallet, Inc. All Rights Reserved


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Last Edited on 10-27-2016

Mobile Apps Make Depositing Checks a Snap

As routine financial tasks move online, you may have fallen out of the habit of banking at a branch office. If so, receiving a paper check can be a hassle, requiring a special trip just to deposit it.

Thankfully, mobile depositing is now widely offered by banks and credit unions, allowing you to put that refund from the cable company or birthday check from your uncle into your account without having to go to a branch.

How it works

Financial institutions that offer remote depositing generally do so through smartphone apps. Although the procedure can vary, in most cases you start by endorsing the back of the check, the same way you would if you were depositing it with a teller or at an ATM. The app prompts you to snap photos of both the front and back of the check and send them through the phone to your account provider.

If you have multiple accounts at the same institution, you’ll need to select the one you want to receive the money. Most of the time, you’ll be asked to enter the amount you’re putting in. The app usually has software designed to read important information from the photos, such as account and routing numbers and the amount of the check. But having you punch in the dollar figure reduces the chance of a software error that accidentally moves $20 into your account when the check was for $200, for example.

Is it risky?

Ideally, the same privacy and security safeguards are in place whether you’re conducting a transaction online with your computer or logging in with a mobile app. Depositing a check by phone is no different. Financial institutions are refining and improving online security practices all the time, and their customer service departments can answer questions if you’re concerned.

You can decrease your risk of having your personal financial data stolen by changing your passwords frequently, using an authentication code on any mobile device you use to access your financial accounts, and avoiding using unsecured Wi-Fi networks at cafes, hotels and other public places.

What’s the downside?

If the camera on your phone isn’t of good quality, it may be hard to take a clear enough picture. To improve your chances, lay the check on a flat surface like a table, and make sure it’s well-lit. Some apps require the image to include all four corners of the check, so make sure you’re not cutting off part of it when you take the photo. To be safe, allow a small margin around it.

In many cases, there are restrictions placed on money deposited by mobile app. Some financial institutions limit the total dollar amount you can put in this way each month, or won’t accept individual checks over a certain amount. Sometimes, these limits are lower if you’re a new customer, and you’re allowed greater freedom to deposit checks with the mobile app after you’ve had your account for a while.

Although paper checks are becoming less common, you may still receive them from time to time. Having the option to deposit them with your smartphone eliminates a lot of the associated inconvenience. This will only be more true as the technology improves.

© Copyright 2016 NerdWallet, Inc. All Rights Reserved


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Last Edited on 09-26-2016

How Debit Card Fraud Happens — and How to Avoid It

For many people, debit cards are the perfect plastic. They offer most of the conveniences of credit cards with no risk of accumulating debt.

But like credit cards, debit cards are vulnerable to rip-off artists. And debit card fraud is particularly scary because thieves can withdraw money directly from your checking account.

Here’s how debit fraud happens and how to protect yourself.

How identity thieves operate

Debit card fraud can be sophisticated or old-school. Thieves use techniques including:

  • Hacking. When you bank or shop on public Wi-Fi networks, hackers can use keylogging software to capture everything you type, including your name, debit card account number and PIN.
  • Phishing. Be wary of messages soliciting your account information. Emails can look like they’re from legitimate sources but actually be from scammers. If you click on an embedded link and enter your personal information, that data can go straight to criminals.
  • Skimming. Identity thieves can retrieve account data from your card’s magnetic strip using a device called a skimmer, which they can stash in ATMs and store card readers. They can then use that data to produce counterfeit cards. EMV chip cards, which are replacing magnetic strip cards, can reduce this risk.
  • Spying. Plain old spying is still going strong. Criminals can plant cameras near ATMs or simply look over your shoulder as you take out your card and enter your PIN. They can also pretend to be good Samaritans, offering to help you remove a stuck card from an ATM slot.

Smart ways to protect yourself

Adopt these simple habits to greatly reduce your odds of falling victim to debit card fraud:

  • Be careful online. Shop and bank on secure websites with private Wi-Fi. If you must shop or bank in public, download a virtual private network to protect your privacy.
  • Monitor your accounts. Review your statements and sign up for text or email alerts so you can catch debit card fraud attempts early.
  • Don’t ignore data breach notifications. The majority of identity theft victims received warnings that their accounts might have been breached but did nothing. If you get one of these messages, change your PIN and ask your provider to change your debit card number. You can also ask one of the major credit card bureaus to place a fraud alert on your file.
  • Inspect card readers and ATMs. Don’t use card slots that look dirty or show evidence of tampering, such as scratches, glue or debris. And steer clear of machines with strange instructions, such as “Enter PIN twice.”
  • Cover your card. When using your debit card or typing your PIN at an ATM, block the view with your other hand. Go to a different location entirely if suspicious people are hanging around the ATM, and if your card gets stuck, notify the financial institution directly rather than accepting “help” from strangers.

Even if you’ve taken precautions, debit card fraud can still happen. If your card gets hacked, don’t panic. Tell your bank or credit union right away so you won’t be held responsible for unauthorized charges, and file a complaint with the Federal Trade Commission.

© Copyright 2016 NerdWallet, Inc. All Rights Reserved


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Last Edited on 08-29-2016

Is A Personal Loan The Answer To My Urgent Money Need?

 Q: I need to get money together in a hurry. What can I do? Help!        


A:
There are times in your life when you need cash fast. It may be hospital bills, car trouble or crushing debt. A personal loan is for times like these. Personal loans range from $250 to more than $10,000, and are not secured with collateral. That means there's no property that backs the value of the loan. Personal loans may seem attractive, but they do come with some downsides. Is a personal loan right for you? And if so, how do you go about getting one?

Let's take a look at four critical questions to ask before getting a personal loan.

1) How's my credit score?

Closely examine your credit score. You can check your credit score once a year at annualcreditreport.com. If your credit score is above average, finding a personal loan with a reasonable interest rate is easier. If your score is lower than you'd like, try a secured loan. Rates on secured loans are usually lower. You provide collateral as insurance if you can't pay it back on time. In many cases, you can use your savings account as collateral, but be sure to pay on time!

A big downside of a personal loan is the higher interest rates. You can keep your interest rate down by limiting the amount you borrow, using a shorter repayment period or securing your loan with personal property. If none of these strategies can get the interest rate down to an affordable level, a personal loan may not be for you.

2) How do I apply?

The application process varies. Some take weeks, and some hours. Some have application fees, and some don't. The interest rates and limitations on uses for the money vary as well.

You'll always need a form of identification, usually a Social Security card or a state-issued ID. You'll need to show proof of income, usually in the form of W-2 forms, bank statements or paycheck stubs. If you're self-employed, income statements or another proof of payment can be used. If you've recently lost your job, be upfront. Otherwise, you may end up with more loan than you can afford. You'll also need proof of address such as recent mail or the lease for the property.

3) What do I need to watch out for?

Scammers prey on desperation. Be careful. The classic phishing scam is when scammers pretend to be legitimate loan companies. You apply for that loan and give them all the information they need to steal your identity. Advance fee loan scammers trick you into paying a "loan fee" prior to receiving money, and then disappear.

4) Where do I go?

Always deal with a company you trust. Don't fall for large final payments, early payment penalties or other unfavorable terms. Be wary of scammers.

WVU Employees' Federal Credit Union offers personal loans with competitive interest rates. If you're in the market for a personal loan, come speak with one of our member service representatives or apply online at wvucu.com. Call, click, or stop by WVU Employees' Federal Credit Union today!


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