Don’t lose money on prepaid debit cards!


debit-cards

Prepaid cards are popular because they are easy to get, you can avoid cash and you don’t need a bank account to get one. Plus, because they are debit cards and not credit cards, you only spend up to what is loaded on the card. They are popular for everything from gift cards to paychecks — and re-loadable prepaid cards are increasingly popular for travel and as a funding source for kids going away to college.

But – and there is a huge butnot all prepaid cards are created equal. If you are not careful, you can wind up paying outrageous fees and charges to buy the card, to use the card, to add money to the card, and more. Plus, not all prepaid cards are backed by the FDIC, so if they are lost, tough luck (although you might check with your agent to see if your Homeowners policy will cover a cash loss up to a limit – typically no more than $200). To make matters worse, prepaid card scams are proliferating so you need to be on the alert.

While prepaid cards can be a good choice in some circumstances, It’s really important to be a smart consumer and to educate yourself about the pros and cons before you buy. Here’s a quick video from consumer.gov that talks about how you can lose money.

And here are a few good resources to educate yourself about prepaid cards and how to be an smart consumer.

Deferring Social Security can yield higher monthly benefits


Waiting to take Social Security benefits after your full retirement age will increase your monthly benefits as much as 76 percent, according to the nonpartisan National Academy of Social Insurance (NASI). This short video explains why.

Here’s an example of how claiming benefits earlier or later would affect  someone who would be earning $1000 at the normal retirement age.

social security exampleNASI says offers this advice:

  • If you need Social Security to make ends meet, take it. You’ve earned it.
  • If you can wait, even a year or two, your monthly benefit will be higher – for the rest of your life.
  • If you are married, you have two lives to plan for. If you are the higher earner, waiting to take Social Security means a higher survivor benefit for your spouse if she or he outlives you.

You can visit Social Security to get an estimate of your retirement benefits. Once on Social Security, can you expect benefits to go up? Most years, there is a small increase called a cost of living adjustments (COLA). To see how much Social Security benefits have increased over the years, see this chart on COLA increases from 1975-2013.

April is Financial Literacy Month: Test your money smarts


POP quiz, financial wizards: If you could have $1 million right now or a penny doubled every day for a month, which would you pick?

To learn the answer, take this quiz to test your financial savvy – it’s got a few tricky questions so you will probably learn something. And if you haven’t already taken the Financial Literacy Quiz in our post from last month, try that one too. You can compare your results to others in your state and in the nation.

April is Financial Literacy Month.

The National Foundation for Credit Counseling (NFCC) recently released results of its 2014 Financial Literacy Survey conducted by Harris Poll among more than 2,000 U.S. adults ages 18+. Of the survey respondents:

  • 61% admit to not having a budget
  • 41% graded their financial knowledge as C, D or F
  • 60% have not reviewed their credit score and 65% their credit report within the past 12 months
  • The top worries were insufficient “rainy day” savings for an emergency and retiring without having enough money set aside
  • 32% do not save any portion of their annual income for retirement

financial literacyClick the graphic to access the full NFCC infographic and to use interactive features.

Here are some other great free tools for learning more about money management.

MyMoney.Gov – Making the most of your money starts with five building blocks for managing and growing your money. MyMoney.Gov offers tools and information on five key areas of money management: Earnings; Saving & investing; Protecting; Spending; and Borrowing.

360 Degrees of Financial Literacy – A free program by the nation’s certified public accountants to help Americans understand personal finances through every stage of life.

Insure U – Unbiased insurance information for consumers sponsored by the National Association of Insurance Commissioners (NAIC). Information is organized by life stage and lines of coverage: auto insurance, home insurance, health insurance and life insurance.

Your Life, Your Money – a PBS special featuring real-life stories of young people facing and overcoming economic challenges. It offers sound, simple financial advice – raising awareness on banking, credit, investments, budgeting, insurance, self-employment, and more.

Jump$tart Coalition for Personal Financial Literacy – a national non-profit organization
of about 150 national organizations and entities from the corporate, non-profit, academic, government and other sectors that share an interest in advancing financial literacy among students in pre-kindergarten through college. Check out their site for tools and information – or check out your state coalition.

Take This Quick Financial Literacy Quiz & See How You Compare


taking-financial-quiz

How savvy are you about money? Think you can beat the national average? Take the quick 5 question Financial Literacy Quiz – then check back to see how you compare to the national average or to people who took the quiz in your state. Here’s how people across the nation fared:

Financial Literacy Quiz

And here’s the average number of correct answers nationally and for New England states:

  • US 2.88
  • CT 2.90
  • MA 3.01
  • ME 3.01
  • NH 3.12
  • RI  2.83
  • VT 3.01

See the findings of the 2012 National Financial Capability Study report by the FINRA Investor Education Foundation in four key areas: Making Ends Meet, Planning Ahead, Managing Financial Products; and Financial Knowledge and Decision-Making.

Here are some great free tools for learning more about money management.

MyMoney.Gov
Making the most of your money starts with five building blocks for managing and growing your money. MyMoney.Gov offers tools and information on five key areas of money management: Earnings; Saving & investing; Protecting; Spending; and Borrowing.

360 Degrees of Financial Literacy
A free program by the nation’s certified public accountants to help Americans understand personal finances through every stage of life.

Insure U
Unbiased insurance information for consumers sponsored by the National Association of Insurance Commissioners (NAIC). Information is organized by life stage and lines of coverage: auto insurance, home insurance, health insurance and life insurance.

Are you financially literate? Take these short quizzes to see


OK, tax day is over – you can breathe a sigh of relief.
But wait – don’t relax yet. April is Financial Literacy month – just how savvy are you about your finances? You can test your knowledge with these financial literacy quizzes and see how you stack up compared to based on high-school seniors across the country. The quizzes are part of the Jump$tart
Coalition for Personal Financial Literacy, a nonprofit dedicated to advancing financial literacy among students in pre-kindergarten through college.
If your scores are embarrassing, don’t despair. There are some excellent consumer tools to help you get your financial house in order. Here are a few:

  • As part of Financial Literacy Month, the nonprofit Consumer Federation of America would like to help motivate you to save. To sweeten the pot, they are giving away $500 to help one person reach their savings goal. Pledge to save by signing up to receive periodic text tips on saving, and you might win. You must sign up between April 1 and April 30, 2013 and you must be 18 years of age or older to win. Plus, standard text messaging rates might apply, depending on your plan.
  • MyMoney.gov – a resource brought to you by 20 agencies and bureaus of the U.S. Federal government that work on improving financial literacy and education. It includes great tools, such as Budgeting Worksheets, Calculators, and Checklists.