County Savings Bank

Table of Contents

· Common Mistakes People Make With Their Money

Common Mistakes People Make With Their Money

Everybody makes mistakes with their money. The important thing is to keep them to a minimum and to learn from them. Here is our list of the top mistakes that people make everyday.

Buying items you don’t need…and paying extra for them in interest. Every time you have an urge to do a little “impulse buying” and you use your credit card but you don’t pay in full by the due date, you could be paying interest on that purchase for months or years to come. Research major purchases and comparison shop before you buy. Ask yourself if you really need the item and then pay off the credit card the first month the bill comes in to avoid paying the high rate of interest.

Getting too deeply in debt. Being able to borrow allows us to buy clothes or computers, take a vacation or purchase a home or a car. But taking on too much debt can be a problem, and each year millions of adults of all ages find themselves struggling to pay their loans, credit cards and other bills. Learn to recognize the warning signs of a serious debt problem. These may include borrowing money to make payments on loans you already have, deliberately paying bills late, and putting off doctor visits or other important activities because you think you don’t have enough money.

Paying bills late or otherwise tarnishing your reputation. Companies called credit bureaus prepare credit reports for use by lenders, employers, insurance companies, landlords and others who need to know someone’s financial reliability, based largely on each person’s track record paying bills and debts. While one or two late payments on your loans or other regular commitments over a long period may not seriously damage your credit record, making a habit of it will count against you. So, pay your monthly bills on time.

Having too many credit cards. Two to four credit cards (including any from department stores, oil companies and other retailers) are the right number for most adults. The more credit cards you carry, the more inclined you may be to use them for costly impulse buying. In addition, each card you own represents money that you could borrow up to the card’s spending limit. If you apply for new credit you will be seen as someone who, in theory, could get much deeper in debt and you may only qualify for a smaller or costlier loan.

Not watching your expenses. It is very easy to overspend in some areas and take away from other priorities, including your long term savings. Our suggestion is to try any system that will help you keep track of your spending each month and enable you to set and stick to limits you consider appropriate. A budget doesn’t have to be complicated, intimidating or painful – just something that works for you in getting a handle on your spending.

Not saving for your retirement. We know it can be tough to scrape together enough money to pay for a place to live, a car and other expenses each month. But it is important to save money for your long term goals too. Start by paying yourself first. That means even before you pay your bills each month you should put money into savings for your future. Often the simplest way is to arrange with your bank or employer to automatically transfer a certain amount each month to a savings account.

A Guide For Young Adults

Ages and Stages of Money Management: A To Do List

To successfully reach your financial goals, a lot depends on what you do and when. Here are just a few ideas young adults can consider at key stages of their life.

You’re in High School

Consider earning money outside of your home. A job can provide a sense of accomplishment and responsibility.
Learn the concept of “paying yourself first”, that is automatically putting some money into savings or investments before you are tempted to spend it.
Consider opening a bank account. It is a good way to learn about managing money.
Take a personal finance class or join an investment club at school.

You’re in College

Realize that as you pay bills and debts on your own you are building a “credit record” that could be important when you apply for a loan or a job in the future.
If you decide to get a credit card, take your time and shop wisely. Understand the risks as well as the rewards.
Protect your Social Security number, credit card numbers and other personal information from thieves who use someone else’s identity to commit fraud.
Consider a paying job or even an unpaid internship at a workplace related to a career you are considering.
If possible, set aside money into savings and investments.
Try to take a class in personal finance.

You’re Starting a Career

Keep your credit card and other debts manageable. Maintain a good credit record.
Save money for both short-term and long-term goals.
Do your best to stick to a budget and control your spending.
Think about disability insurance. You just need one accident to wipe you out financially.

You’re Starting a Family

Continue savings and investing money, including in retirement accounts.
If you don’t already own a home, research to see if this is a good option for you.
Make sure you are properly insured, including life, health, disability and home owner’s or renter’s insurance.
Talk with an attorney about the legal documents you should have to protect your loved ones if you become seriously ill or die. These documents typically include a will, a “durable power of attorney” and a “living will”.

Free Credit Reports Now Available

As permitted by the FACT ACT, consumers can now request a free annual credit report from the three consumer reporting companies – Equifax, Experian, and TransUnion. Consumers in the first 13 eligible states (AK, AZ, CA, CO, HI, ID, MT, NV, NM, OR, UT, WA, WY) have been able to order reports since December 1, 2004.

Free annual reports will be phased in across the country from west to east over a nine-month period. Midwestern states will be able to order their free reports beginning March 1, 2005. That would be IL, IN, IA, KS, MI, MN, MO, NE, OH, SD, WI.

Southern states will be eligible starting June 1, 2005, including AL, AR, FL, GA, KY, LA, MS, OK, SC, TN, TX.

The last section of the country, our section, can order theirs beginning September 1, 2005. That would include CT, DE, ME, MD, MA, NH, NJ, NY, NC, PA, RI, VT, VA, WV. The District of Columbia, Puerto Rico and all U.S. territories can also order theirs at that time.

Free credit reports can ONLY be requested by visiting www.annualcreditreport.com; or by calling (877) 322-8228; or by mailing a standardized form to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. If requested online, the report should be available immediately unless more information on the consumer is needed. Requests by phone or mail should be received in 15 days. The consumer will be able to get a copy from each of the three companies. FTC suggests staggering the request for copies over the year in order to keep tabs on activity on the records. According to the three companies, the credit reports should be easily understood.

After September 1, 2005, all U.S. consumers will be eligible to request a free report. Annualcreditreport.com is the only authorized source for consumers to access their credit reports online for free. The FTC cautions consumers not to contact the credit companies directly for their report. It is only free through the web site, the toll free number or with the application. If ordered from the company, there is a $9 charge in most states.

They also warn that none of the credit reporting companies will send out emails or call the consumer asking for information. To order the credit report the consumer will have to give personal information, such as name, address, social security number, date of birth, and, if the person moved in the past two years, the previous address. The FTC is aware of the opportunity for phishing because of the information requested.

To inform consumers about their state’s eligibility and help answer questions they may have about the consumer reporting companies’ new service, the Federal Trade Commission has published a new Facts for Consumers brochure, “Your Access to Free Credit Reports.” The alert explains why it is important for consumers to monitor their credit history, how to request a report and how to dispute any errors. The FTC’s alert is available at www.ftc.gov/bcp/online/pubs/credit/freereports.htm. For more information, visit www.ftc.gov/credit.

Email Scams

It has been reported that there has been a vast increase in fraudulent emails, also know as phishing. Phishing is the practice of sending legitimate-looking email to Internet users that directs them to a site that looks like a real one, but is fake. Victims are usually asked to go to the site to update personal information that is then used by the criminals to make online financial transactions.

In one scheme the consumer receives a forged email that pretends to be from a bank. The email says the recipient must verify his or her email address by clicking on the link. The link opens the user’s browser and replaces the real address bar with the fake one while taking the user to the fake site. The user thinks it’s a real address not just because it looks the same as the legitimate site but because the address bar (which is now fake) has a legitimate address. The only ways to tell the difference are:

1. There is no SSL security lock padlock in the lower corner of the browser.

2. When the user types a different URL address, the browser title does not change from the fake “welcome” message.

The Federal Deposit Insurance Corporation (FDIC) warns of emails being sent to consumers purportedly from the FDIC. The email informs the recipient that his or her bank account has been temporarily closed because of fraudulent activity. The email directs the recipient to review the contents of an embedded attached file for details related to the fraudulent activity as well as for information on how to contact the FDIC. This email was not sent by the FDIC and could be a fraudulent attempt to obtain personal information or to implant a virus. Do Not access the link or the attached files provided within the body of the email. Never, under any circumstances provide any personal information to unknown sources.

For more information on phishing and a list of phishing scams, please visit the Anti-Phishing Working Group at www.antiphishing.org.