Plan Now to Save Your Refund!

"Mental Accounting" is a very cool economic concept, created by Richard Thaler, which basically says that we tend to put our current, and future, money into certain "buckets" or accounts. Once we put money in these mental accounts, we tend not to take them out. For example, we know what paycheck our mortgage or rent comes out of and we don't take from that money. Similarly, and sometimes to our detriment, we put money into grocery or clothing categories. Even if the electric bill went up this month, we have a hard time reallocating money from the grocery or clothing accounts to cover the higher electric bill.

Many of us start planning in November for whatever holiday we celebrate and thinking of the gifts we would like to buy friends and family. If we haven't been saving for these expenses throughout the year, we buy them anyway knowing that there's a tax refund coming early next year. We have already put that refund into a mental account to pay for holiday bills.

I'd like to propose a different idea. Start now in November and put at least half of that expected refund into a mental account for savings. It's the one time in a year where a chunk of money comes our way and having some put away for an emergency will result in a lot less stress when that emergency, invariably, comes our way. Take a look at your holiday expenses and find creative ways to reduce them so you don't wake up in January with a "hangover" of bills and regret.

Using the "Mental Accounting" concept can help us change our financial decisions to help us reach our financial goals and stress less over money.

"Free" Credit Scores Aren't Always Free

Hopefully you know that you can get a free credit report from each of the three large credit reporting agencies for free under federal law. If you live in Maryland, you can also get a free credit report from each bureau under Maryland law. But you may not know that credit scores are not free under federal law. However, you've probably seen the ads that offer to give  you your credit score for free. Be careful, most of the sites that offer this are credit monitoring services which charge you a monthly fee for various services around protecting your credit. Watch this video from the Federal Trade Commission on free credit reports that are not free. Other sites give you a credit score from one bureau, not a combined score, and are riddled with advertisements and "personal offers" for credit cards or loans from their paid sponsors. Always find out how such a website or company is funded and what they do with your personal information that you enter to get your "free" score. One option to consider is using the FICO Score Estimator and Calculator. You do not enter in any personal data like your social security number. You answer questions about your use of credit and it estimates a score for you. It's pretty close to what you would get from private sites and you aren't allowing anyone to use/sell/trade your personal information.

Hurricane Season Doesn't Have to Wipe You Out

Hurricane Season for those of us on the east coast and around the gulf states in the United States runs from June 1st to November 30th. We've already seen one so far this year and while we were fortunate that it didn't cause widespread damage, it does serve as an alert to us to be prepared in the event of a major hurricane. Some items on the check list are:

• Have food on hand that you can eat without much preparation and extra water for drinking/washing hands. 
• Fill up bath tubs for water to flush toilets.
• Ensure you have safe ways of having light such as battery lanterns or flashlights, not candles. 
• Trim your trees so that branches will be less of a hazard during a storm. 
• Consider buying a crank emergency radio that also charges cell phones.
• If you have a generator, make sure you have gas on hand before the storm, properly stored and that the wiring for the generator has been installed/inspected by a licensed electrician.  
• If you have a pet, have extra food and water for them. Make a plan for how they will go to the bathroom during the storm when they can not go outside. 
• Once a storm is heading your way, be sure to move outside items that could be blown into your windows, house, car etc by the heavy winds. 
• Identify a room with fewer windows to hang out in during the storm in case of debris breaking through a window. 
• Turn off any propane tanks.
• Know food safety tips for eating food from a refrigerator which has experienced lack of power.

Being prepared for a hurricane will help you minimize the damage and effect of the storm on you and your family. Check out more tips on the Federal Gov't website, www.ready.gov

MCRC announces Tips on Avoiding Ticket Scams

Have you ever purchased tickets to a concert or sporting event and then had a change in plans which lead to you trying to exchange the tickets or trying to transfer the tickets to a friend? Ever felt that the actual price of a ticket wasn't disclosed, due to all the add on fees? Going to a concerts or sporting events is supposed to be fun but the experience can be tainted by the ticketing buying/selling process.

Maryland Consumer Rights Coalition, (MCRC), a non-profit organization that advances and protects fairness and justice for Maryland consumers through research, education, and advocacy has issued a helpful "Summer Concert Ticket Guide" featuring six key tips on how to avoid ticket scams. Check it out and enjoy those concerts/events by being a smart consumer!

Summer Safety Tips

Memorial Day is the unofficial start of summer for the U.S., a.k.a our excuse to lengthen the summer season. Summer brings longer sunlight days, warmer weather, outdoor activities and vacations. We want to enjoy these benefits of summer but also need to think about some safety tips to make sure the memories of summer are fond, not tragic.

• Never leave a young child in a car unattended.  Also, remember to lock your car doors when your car is in your driveway. Safe Kids Worldwide put out an alert last week of the 5th heatstroke death of 2014. The boy tragically passed away May 3rd, four days after being found in his car seat in the family car outside his home in Bakersfield, CA.  The boy, who suffered from autism, wandered away from his grandparents’ supervision and climbed into the car. This is now the second time this year that a child has gained entry to a vehicle on its own and then died. Watch this simulation from Safe Kids Worldwide about how quickly the temperature in a car can increase.  
• Never leave your pet in a car on hot days.
• Always wear certified helmets when doing activities that involve moving faster than you can run: biking, roller skating; skateboarding or horseback riding are a few.
• Watch children around the pool, young ones are certainly at risk for drowning if they can't swim and older ones are at risk for serious injury while attempting to impress their friends with jumping on a moving raft or other unsafe activities.
• If your child is going to camp this summer, ask the staff what their safety policies are and inspect the camp yourself for any hazards.
• Be aware of how much time you spend out in the yard working and ensure you don't get dehydrated or sunburnt. If your pets are outside with you, put out a bowl of water in the shade and make sure they have a place in the shade to rest.
• If you are entertaining this summer, keep the food on ice or refrigerated as long as possible before serving and follow the general guideline of not having food sit out for more than 3 hours.
• Keep an eye on the weather at home and on vacation so you aren't ambushed by a dangerous summer storm.

For more safety tips, see Safe Kids website. If you are involved in Montgomery County, MD and would like to either find a local event where safety topics will be displayed, have your car seat checked or join the local chapter of Safe Kids, click here.

$April is National Financial Education Month$

How do we learn how to handle money? Where to put it--bank, credit union or alternative financial services? How to pay bills? How to spend it? How to save and grow it?  If you're like most people, you learned the hard way, making mistakes and changing your behavior as needed. However, in order to highlight the need for financial education, the U.S. passed legislation designating April as National Financial Education Month (ok, it's actually called National Financial Literacy Month but I am one of many who feel that the word "literacy"has a negative ring to--who wants to be financially illiterate?). There are a ton of resources, both online and often in-person classes to learn how to handle money. In Maryland, there's the MD CASH Academy, a program of the MD CASH (Creating Assets, Savings and Hope) Campaign, where I am lucky enough to be their Director of Financial Education. The CASH Academy is a calendar and registration tool for the in-person, free, in-person classes which use fact based, non-biased curriculum. There is no selling of products and services. Community colleges often have non-credit classes and do most states' Extension Services. Some great online resources are:

• Federal Government's website on money--MyMoney.gov
• MD Public Television's $mart Thinking About Your Money site
• How Stuff Works site on creating a Spending Plan
• National Endowment for Financial Education® site SmartAboutMoney

Whichever website or class you go to, just be sure to find out how they are funded to do this work to ensure you are not getting advice/tips that are framed in a way to get you to buy a service or product.
Take a class, spend 10 mins a day on learning about managing your money, so you can tell your money where to go, versus it just going.........

Tax ID Theft

Maryland, where I call home, is a great state with beaches, mountains, top notch schools and a wide variety of rural vs urban living options. Unfortunately, Maryland also is one of the top states for Tax ID Theft, where someone files a tax return using someone else's name and social security number, usually receiving a hefty refund. Most people don't know about it until they go to file taxes and find out that a return has already been filed.

According to the Federal Trade Commission,  here’s what you can do to lessen the chance you’ll be a victim:  

• File your tax return early in the tax season, if you can.

• Use a secure internet connection if you file electronically, or mail your tax return directly from the post office.

• Shred copies of your tax return, drafts, or calculation sheets you no longer need.

• Respond to all mail from the IRS as soon as possible.

• Know the IRS won’t contact you by email, text, or social media. If the IRS needs information, it will contact you by mail.

• Don’t give out your Social Security number (SSN) unless necessary.

• Research a tax preparer thoroughly before you hand over personal information. If you qualify, use the free tax preparation sites which MD CASH Campaign, the non-profit I work for, supports in Maryland. If you use a paid tax preparer, make sure they are registered with the MD Department of Labor, Licensing and Regulation. 

• If your SSN has been compromised, contact the IRS ID Theft Protection Specialized Unit at 1-800-908-4490.

• Check your credit report at least once a year for free at annualcreditreport.com to make sure no other accounts have been opened in your name.

What if you’re a victim? Tax identity theft victims typically find out about the crime when they get a letter from the IRS saying that more than one tax return was filed in the their name, or IRS records show they received wages from an employer they don’t know. If you get a letter like this, don’t panic. Contact the IRS Identity Protection Specialized Unit at 1-800-908-4490. 

More information about tax identity theft is available from the FTC or the IRS. 

Vacation Rental Scam--I don't think so!

One of the many Key West Roosters

My family loves Key West, FL. We happened upon it during a cruise where the only thing going well was that we were with a bunch of great friends (who would have imagined eight foot waves in the Bahamas?). Our day trip in Key West, on my birthday to boot, was the salvation of that vacation. We have been back several times, always staying at the Sheraton Suites, which is a nice hotel, but not close to Duval Street.  In October, we decided to go to Key West for New Years Eve and to rent an apartment within walking distance of downtown. We are not novices to renting apartments for vacation, having done this our recent two-week vacation in three different European countries. And, my 19 years as a Consumer Protection Investigator taught me to triple check any contract.

We were surprised how incredibly popular Key West is for New Years. Most of the places we contacted politely controlled their laughter while letting us know that they are booked for New Years by July. Undaunted, we continued to look and found a perfect place-3 bedrooms, close to downtown, modern beautiful decor and a reasonable price. What's not to like? We had done it--found a "perfect" place in spite of the competitive demand (Sign #1). The emails had some misspelling (Sign #2) but were very courteous and professional. They had a website with two other properties so seemed to be a business. Racing off to work, I implored my husband to make the Paypal deposit as directed by the "business" and use a credit card of course. When he went to make the deposit, he noticed that the email address was a personal gmail address, not a business email address (Sign #3). Luckily, that sent up a alert for him and he called Key West City government to see if they required a license for rentals and if this "business" had one. The answer was yes followed by a no (Sign #4). Since we had been provided with an actual property address, I then found the owner of the property and called her. I was surprised that she actually picked up the phone and then not surprised when she immediately told me not to make any payment, and this was the second call she had had in a week on the scam.

Disgusted but determined, we continued our search. I was impressed by the helpful nature of all the condo owners we called--truly in the Key West spirit--they were tremendously helpful by giving me referrals which resulted in finding rooms in a wonderful hotel, The Palms Hotel, and having an amazing New Years trip.

Thinking of renting an apartment for a vacation? Do it! It's a great way to integrate into an area and have more space/amenities than some hotels. But be cautious and do your research:

• It it sounds too good to be true, it is. Look somewhere else.
• Check the rental licensing laws and make sure your company has one.
• Check the property records to locate the owner of the property. These records are generally public information and can be found by searching property tax records.
• If the name of the owner is not the same as the company, try to locate the owner and ask if the rental is legitimate.
• Check complaint records on larger rental companies to ensure they don't have a negative history. 
• Check out the rentals on the larger, well known sites such as TripAdvisor, VRBO and Airbnb and be aware that CraigsList, while a good site overall, contains a lot of vacation rental scams. 
• Use a credit card, not your debit card and by no means pay by cash, money order or check until you get to the rental and inspect it. 
• We saw 4 classic signs of a scam before confirming that it was indeed a scam. If you see 3, cut your lost time and look for another place.