Tis the Season…of Scams

The Holiday Season seems to bring out the best and worst of human nature.  On the worst side are the scams that are designed to cheat honest people out of their money.  As we get closer to Christmas and as the economy worsens, it is important that we all be aware that scammers are keeping busy. 

Some of the more common scams that we see include:

  1. Lottery Scam: This is one of the most popular counterfeit check scams because it is successful. The victim will receive a letter or e-mail informing them that they have won a lottery or sweepstakes.  They are given a counterfeit check to finance the taxes and fees associated with collecting the prize.  They are asked to cash or deposit the check and wire the money to an individual who is collecting the “tax”.  It is difficult to detect this scam because the checks are usually lower dollar amounts (less than $3,000) and technology makes it easy to counterfeit real bank checks.  The victims are also told not to disclose their good fortune until they collect their grand prize. The reason this is so successful is that it plays on an American dream. If you receive one of these letters and checks, ask someone at your bank before you fall victim.
  2. Internet Auction Scam: In this scam, the victim places an item for sale on the Internet (not necessarily on e-bay, often on local classified websites). The winning bidder contacts them to arrange payment, but there is a catch. The buyer is overseas and shipping needs to be arranged. Payment is sent in the form of a counterfeit check for thousands of dollars in excess of the purchase price. The buyer is asked to wire the excess money to the buyer’s shipper who will arrange pickup of the item (they are often told that there is a little extra money for them to keep for their trouble to sweeten the deal). The money is wired before the check comes back, leaving the victim out the money.
  3. Internet Auction Scam 2: In this scam, the victim receives counterfeit money orders for their items.  In most cases, the item is sent before the counterfeit is detected and the victim is out the money and they item that they were selling.  Most money orders have instructions for validating their authenticity.  For example, some have a circle on each of the money orders that will change colors if you rub it, or they have a telephone number to call.  Postal money orders can be verified by calling 1-866-459-7822.

These scams are always evolving and we see new twists all of the time.  Education is the best form of scam prevention. Just remember if it seems too good to be true it probably is. Have a safe and happy holiday season.

Winning Ticket

 

I almost won the lottery last night. I’m not kidding.  I bought my very first lottery ticket ever, I was nice to people all day and in my head I promised to give the nice man who sold me the ticket 5K of the winnings. Karma was on my side, I was going to win!


I’ve never played the lottery before and I wasn’t quite sure of all the details. So I got on the Kansas Lottery website, found out when the winning numbers would be posted and how to claim my prize when I won.

When 9:10pm rolled around I was hitting refresh on my computer screen frantically waiting for my winning numbers. It was a rush I had spent all evening calculating all the money left over after paying off my bills. I was even taking out 40% for the taxes I would have to pay. I’m realistic I knew Uncle Sam would want his share, but I’m not greedy.  


I was going to be responsible with my lottery money. I was only going to give myself one good shopping day and after that putting the rest away for my son’s college and retirement. I wasn’t going to buy a new house or new car just pay off the ones I have and debt free I would get to DECIDE if I wanted to have a job!!


Sigh. Needless to say as I write this I didn’t win the lottery. I didn’t even get two numbers right that would have won me my dollar back that I spent. The numbers were posted at 9:16pm and they were not my numbers. I was a little disappointed that karma did not pull thru for me but I also hope that the winner somewhere out there would have been as responsible as me.


If this turbulent year in politics and finance has taught me anything it has been pay off the good times you already had so in the future you can have interest free good times. (I think those will feel better!)

 My short term goals have changed from leave the state of Kansas to live a fabulous life in Paris or Toronto to drive my car until it is paid off, then keep driving it until I can buy my next car with cash.


But one thing is for sure, someday I will buy another lottery ticket. All that dreaming was worth the dollar I paid for it!

Save Now, Get Rewarded Later

I recently told my friend about a great auto rate at CNB. He bought a Prius a year ago and has a loan with a 7.5% interest rate. I crunched some numbers to show him what his payments would be and the amount of money he’d save in interest if he was approved to be refinanced at 4.74% APY*.

Over a five year period, he would save almost $2,000. No brainer, right? He ended up passing on it.

You see, he lives out of state and to get the deal he had to agree to open a checking account and have the payments automatically deducted. He thought it would be too difficult to have a checking account out of state. I told him he could use his current bank’s online bill pay and send the payment amount to his checking account each month, but he still thought it too troublesome.

When you look at his savings in the long run and what that 2K could do in a Roth IRA, look at the possible returns:

  • Roth IRA in 10 years at 5%…$3,257 at 8%…$4,317
  • Roth IRA in 20 years at 5%…$5,306 at 8%…$9,322

My friend falls into the way numerous members of Generation Y behave financially. Many of us don’t like to think about how much we could have in the future if we looked into ways we could save today.

Instant gratification surrounds us everywhere we go; 0% down, no monthly payments for a year, no interest for three years. All of these deals are thrown at us and we feel like they are too good to pass up. Look at some of these statements members of Gen Y make when it comes to saving:

  • “I can’t socialize and save.”
  • “Why save when you can reverse save?” Reverse saving: spend today, pay tomorrow
  • “When I settle down, I’ll save.” Saving is for older and married people
  • “I love spending money; what else am I going to do with it?”
  • “I just know something great is going to happen to me.”
  • “Banks only care about people with money.”

The skewed view that you can spend now and worry about your nest egg later is one reason all generations are contributing to a negative savings rate. It’s also the reason it is going to get harder and harder for people to truly retire. Do your future self a favor and talk to someone about the benefits of putting money away, and refinancing high interest debt.

The early bird gets the worm, and the early saver gets to enjoy the golden years w/o having to have a part time job!

* Annual percentage rate quoted above available for loan amounts $30,000 or greater for borrowers who meet credit qualifications. APR will be adjusted for different loan amounts. Loan fees and certain restrictions may apply. Auto loans subject to qualifications. Member FDIC.

August Already!!

As another page turns on the calendar it is time to make the most of the remaining weeks of the summer. Some out there are just trying to use the warm weekends while they have them, others need to go all out before it is time for school again!

 

So make your list and start checking off the things that make a summer complete!!

  • Baseball Game
  • Day at the pool or Water park
  • BBQ
  • Plant a flower or vegetable
  • Wash windows (not fun but easier now than with a foot of snow on the ground :-)
  • Have A Yard Sale
  • Go to A Yard Sale
  • Day trip to the lake or a night camping outside

These are just the things that make up my perfect summer but with limited time left I better get busy!!


Confessions of a Spender; Saving without Sacrificing

I admit it, I’m a shopper! I like browsing and if something catches my fancy browsing often turns to buying. I have clothes in my closet I will never wear and enough candles to light my house for the next year. I’m afraid to say Clothes, Purses, and Candles are my weaknesses!!

 

I have tried to tame my spending ways but trying to stop cold turkey just makes me want to spend even more! What’s a shopper to do?

 

So with the economy not looking so bright and the whole world telling me to save I had to come up with a plan of action. For the sake of getting to retire some day and my marriage! (How spenders end up marrying savers I’ll never know.)

 

First plan of attack was a budget. When I saw how much I was spending with help from the free website mint.com it shocked me into some reality. I exceeded my monthly shopping budget in the first week I used the site.

 

It helps to see it on paper and mint.com connects with my on-line banking and tells me right away were my cash is going. Then I try to stick to the budget so I save the same every month for my emergency fund.

My next little plan of action is what I am most excited to share. Second Hand shops! I am one of those shoppers that can’t resist a bargain and when I first discovered second hand shops I was in heaven! I like the ones that specialize in gently used name brand clothing. I have picked up shoes, tops, and dress pants, all with store tags still attached. And for some of those clothes I know I’m not wearing again I can sell them to the store or get store credit.

 

For furniture and home décor my new friend is craigslist.com and my old reliable friend is yard sales. A little imagination and a lot of determination you can change any space with limited funds. I also like the idea that I am saving things from the landfill and giving them a new home.

 

If you have more tips for shop-a-holics out there please leave them in the comment section. Times are tight and shoppers have to stick together!

Improving Your Credit Score

This is the second article in a two-part series about credit score information. Our previous post showed you what information is included in a credit score.

Now that you know a little more of what goes into your credit score you may wonder what you can do to improve it. Here are a few simple tips:

Pay Your Bills!

The first and foremost thing is to pay your bills ON TIME, EVERY TIME. Pay them a little early to make sure they process on time. Being even one or two days late affects your score the same as being 30 days late. Once you are over 30 days late you are hurting your score even more.

If you can afford it, try and make more than the minimum monthly payment on your credit cards. It will save you money in the long run because you will pay less interest, and it will show lenders that you take your debt seriously and work hard to repay it.

Close Unused Accounts

Close unused accounts. If you have paid off a loan or a high interest credit card and you no longer intend to use it, close it. You do not want to close every line of credit offered to you as another thing credit bureaus look at is your used credit versus your available credit but if it is a card with a high rate have it closed.

Get a Free Credit Report

You can always get a free copy of your credit report every year from all three bureaus. Simply call and request your report so you know what lenders are looking at when they evaluate you as a borrower. Looking at your free credit report can also help you evaluate where you can improve.

To request a free credit report, visit http://www.annualcreditreport.com.

Gas Saving Tips

As of today (June 5, 2008), the average cost of gas in Kansas is $3.85/gallon and the national average gas price is more than $3.96/gallon!  Here are a few tips to help improve your mpg so you will not have to take out a loan next time you need to fill up.

 

Maintenance – Your vehicle manual should have a maintenance schedule.  Read over it and try to follow it regularly.  A maintained car is an efficient car.

 

Give it Air – Fuel economy can increase by almost 5% if you keep your tires inflated to the recommended pressure.

 

Take Your Time – Let’s be honest; who doesn’t go over the speed limit every now and then?  Speeding takes a hit on your fuel efficiency.  Try to slow down and enjoy the drive, by doing so you will also enjoy filling up less often.

 

Get Off My Back – Don’t tailgate! Lengthen the room between your car and the one in front of you.  This will allow you to brake less and coast more.

 

Cool Off – Try rolling down your windows when traveling at low speeds.  If you are going over 50 miles per hour, it is more cost-effective to turn on the AC.

 

Lighten Up – Get rid of any extra junk in your trunk.  If you don’t need it, why pay to drive it around?

 

Buy Smart – Look for cars that good gas mileage. With gas almost $4/gallon, the extra price of a hybrid is almost offset by the amount you will save at the pump.  Also, they are better for the environment.

 

If you have any further tips that would be beneficial for everyone, please share in the comments section below.

Rule of 219

It’s that wonderful time of year again, TAX TIME!  Hopefully those of you who will be receiving a refund have a plan in mind for your money, if not, I recently heard some figures that will definitely make one stop and think.  At last week’s bank meeting, one of our financial advisors told us about the ‘Rule of 219.’  This rule involves determining the cost of eating for two people during retirement.  Let’s say two people eat three meals a day during retirement and each meal costs $5.  You then take that times 365 days a year, then multiply that by 20 years of retirement.  Here’s the math;

2 x 3 x 5 x 365 x 20 = 219,000

In this situation, it will cost two people $219,000 to eat during retirement. This doesn’t even factor in dessert! Throw in other costs, such as bills, transportation, travel, etc… and the number grows even greater.  One may argue that it will not cost $5 per meal for them, but even at $3 a meal, two people’s cost of eating would be $131,400!  Also, note that this is estimating for only 20 years of retirement.  With life expectancy increasing, it’s easy to raise that number another 10-15 years.

So when sitting down to determine what to do with your tax refund, it may be helpful to visit with a professional.  A financial advisor can help you reach your long term financial goals. They can assist you in making sure you get to spend your golden years eating steak instead of reverting back to the college days of ramen noodles.

 

New Opportunity Checking

If yourself or someone you know has opened a new checking account recently at a new bank they probably ran into a process called ChexSystems. ChexSystems is a service that became available to banks in 1971, letting financial institutions run reports on prospective customers to find out if they have had undesirable account history in the past.

The down side to this is if you have ever made an honest mistake with a bank account in the past you are marked by ChexSystems for five years. Most banks will not open a savings account for someone with a history on ChexSystems much less a checking account.

Since many people on ChexSystems did not open their accounts with that intention it can be like a 5 year punishment imposed by banks. If you do not have a bank account you are forced to pay to have your checks cashed, purchase money orders, and pay fees for prepaid Visa cards.

Central National Bank has a new account that can help the majority of people who have been turned down by ChexSystems in the past. New Opportunity Checking is a real checking account with a debit card, checks, and ability to have direct deposit to the account.

There are restrictions on the account like no overdraft protection and a monthly fee for the account. But the good news is that after 12 months of good account standing the customer is eligible for a regular Free Checking account with Central National Bank. There are other restrictions to the account that a Central National representative would be happy to discuss with a potential customer as well as see if they qualify for New Opportunity Checking.

Bad things happen to good people and Central National is recognizing the need to have products that can serve a wider population of customers. Please come in today and inquire about New Opportunity Checking at a branch near you or give us a call.