July 1, 2022
A Time To Review Our Finances

A Time To Review Our Finances

I started out years ago giving a talk to a group of senior citizens.  The point of the talk was to remind them to review their financial situation and to beware of the many “good deals” that target them as a group.  Maybe it is time to run through some of these points again for “all of us.”

  • Banks are not your friend regardless of what their advertising says.  A credit union is a better bet.  Banks make most of their money in two ways: interest on their loans and fee income for just about everything they do.  At a bank, there truly is no “free lunch.”
  • Beware of store charge accounts.  The average interest rate is now 24.99% and that interest rate can skyrocket to 39% for any number of reasons including a late payment, a missed payment, being over your dollar limit, and on and on.  Most stores accept Visa and Master Card – use these cards.
  • Limit the number of credit cards that you have and monitor them.  There is no real financial advantage to having five credit cards.  You just have five of the same thing.  Monitor your expenses.  Make sure that everything on your statement belongs to you.
  • Use some cash especially when you are out of town or in an area that you do not know.  Some consumers have gone crazy trying to secure miles on their credit card.  It is easy to obtain credit card information illegally especially with cell phones that have a camera capability.
  • Watch your mail.  Your name is circulated in hundreds of ways.  Go on the Do Not Call and a Do Not Mail list whenever you can.  Do not accept the fact that there is nothing that you can do about incoming mail.  Refuse packages that you have not ordered.  Write refused on the face of the package and cross out your address.  The United States Postal Service will send it back at no charge to you.
  • Be Internet smart.  Do not open and do not respond to any email that you do not know the sender.  Just delete it.  A normal scam email generates about 35,000,000 million emails.  Most come from overseas.  Many contain what is called malware – a virus.  Almost 99% are scams.  Many are clever like “you have a package waiting for you at the Post Office.”  I especially like the one that comes from a “special FBI Agent.”
  • Never respond to any inquiry from a bank or credit card asking for a verification of information. When in doubt call your bank first.  Never give out any personal or financial information.
  • Never answer random telephone calls – leave them ring.  If the call is important, they will leave a message.  A recent practice is called “robo calling” which is nothing more than a computer dialing sequential numbers.  An operator sits behind a telephone bank and waits for the auto-dialer to keep dialing hoping for a pickup.
  • Be very selective in answering your telephone.  Ask for any information that the caller says is important to be sent to you in writing.  A popular scam is the announcement of a “you have just won a….”  Usually, it is a trip, a PC, or money.  You will eventually get nothing and any information that you give out will be used to steal your identity.
  • Invest through a reputable broker.  The larger firms have controls and reviews that prevent the theft of assets by a financial advisor.  Be very cautious on the invitation to “join me for a free lunch and then you can sign over all your money to me to manage.”
  • Change your investment strategy as you age.  You should become more conservative as you advance in years with less and less investments that have a high risky return and more that guarantee a solid payback mainly due to the fact that you have less years to recoup any losses.
  • Keep a small liquid money account to cover emergencies.  This account should represent at least a minimum of three to six months of your daily expenses.  Avoid whipping out the Master Card when the hot water tank dies or you need tires on the car.  This is how many folks get into financial trouble as it takes time to pay the credit card company back especially as the unpaid monthly balance incurs that 24.99%  interest rate.
  • Please make sure that both you and/or your spouse both have a will.  Whether you establish a trust or not is dependent upon a lot of factors.  If you are considering a trust, consult a good attorney that is a specialist in trusts.
  • Please make sure that both you and/or your spouse have a durable power of attorney especially as it relates to medical matters.  A severe illness can make you unable to direct your care and any critical decisions that are part of that care.
  • Do not have a charity guilt trip.  Select a charity that you like and support it as best you can.  There are hundreds of good charities but few of us have the financial ability to support them all.  There is nothing wrong with not supporting all the charities that solicit your help.  Keep your local parish in mind as this should be high on your list.
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Written by
Donald Wittmer