5 Money Mistakes to Avoid

Here the top 5 Money Mistakes to Avoid.  Trust me ... I speak from experience.  #IJS

Avoid impulse shopping.  Make shopping a planned activity with a list or a budgeted amount.  Unplanned or impulse shopping may sabotage your spending plan / budget.  If you really want to purchase the item, give yourself 24 to 48 hours to shop for a better deal, figure out if you really want it and can afford it. You’ll be glad you waited.

 

Avoid retail therapy.  When you are emotionally down or distraught, avoid shopping or making any large purchases.  We are less financially objective when our emotions cloud our judgment.  Do something that doesn’t cost anything or very little, like go for a walk, spend time with family or friends, etc. 

 

Avoid overdraft protection.  Overdraft or “Courtesy Pay” will allow you to you overspend and charge you a fee for letting the debit card transaction go through. A fee of $27 up to $35 will be charged for every overdraft, even if the bill runs just $1 or $5 over the amount you have in your account. Some banks charge the fee if you're a penny over. Essentially, you're getting very short-term credit at effective interest rates that reach the high triple digits. Now was that cup of coffee really worth $40? 

  

Avoid savings tampering.  If you have to tap into your savings to make a purchase, you may not be able to afford the purchase.  Establish a savings account that is not easily accessible with a certain amount directly deposited every pay period. Savings accounts are supposed to grow, not be chiseled away. 

Avoid financial promiscuity. Financial Promiscuity is when we use unsecured revolving credit (credit cards) for small purchases when cash should be used.  Avoid using credit to purchase that "value meal" or anything less than $50.  This will ensure that we do not slowly acquire Financial STDs (Substantially Tremendous Debt).

 

Contact Madam Money for more helpful money and credit tips at www.TarraJackson.com.

Survey about Financial Tip

First, we wish you and your family a happy holiday season from all of us at the University of Missouri.

 

Second, we are looking for some feedback from you, our readers. We have put together a small survey that asks some simple questions. All feedback is a gift; we would like to know what you want to read more about, what format you would like the information in, and, finally, anything else you would like to pass on to us.

 

Here is the survey: http://goo.gl/PcZ8I

 

Thank you for reading our tips this year, and we look forward to offering even more in the New Year based on your feedback.

 

Personal Financial Planning Department

University of Missouri

Safe Holiday Shopping Online

By Ryan Law

 

Black Friday and Cyber Monday have come and gone and according to the stats, it appears it was (another) record-breaking weekend:

 

·         The National Retail Federation reports that we spent about $52 billion on Black Friday.[i]

·         IBM, who tracks online transaction sales, reported that we spent between $1.5 and $2 billion on Cyber Monday.[ii]

I personally am not a big fan of Black Friday, especially now that it is creeping onto Thanksgiving. I went through the ads and nothing really jumped out at me (except a ShopVac that I bought from Lowe’s, on Black Friday, but I purchased it online and they shipped it for free to my house), and I am not a fan of standing in line for hours in the cold or being trampled or assaulted by people fighting over a phone, but that’s beside the point.

 

Today’s Tip is about the remaining shopping that you will be doing. A lot of people will shop online for gifts, and I want to make sure you do so safely.

 

Here are five tips for sale holiday online shopping:

 

1.       Be sure the website’s purchase page is secure. It doesn’t matter if the rest of the site is secure or not, but be sure the page where you enter your credit card is secure. Here’s how you can tell – the browser should say https instead of http, and you should see a lock icon somewhere on the page. Here is what the Amazon.com sales page looks like:

 

 

You can see both the https and the lock icon, which means it is a secure page.

2.       Don’t purchase items from e-mails unless you can verify where they came from. I get deals in my inbox from Walmart, Target, Amazon and many other reputable companies. E-mail marketing is cheap and effective. However, I also get deals like this one:

“Get the New 32GB iPad Sold for $31.08!”

This is from an e-mail send by “Adison Greg” from some website that no one has ever heard of. When you get those emails don’t click any links in them, including the “unsubscribe” link. Delete them immediately! They are Spam and many have some kind of virus. If you don’t click on them you will be safe.

3.       Use your credit card to purchase online. Never trust a website that doesn’t accept credit cards, or that encourages you to pay using Western Union or something like that. Your credit card has protection built in, as do websites like PayPal. If you never receive the item, you can file a dispute and your credit card company won’t charge you for the item.

4.       This is a tip I almost learned the hard way – I got an email saying that my purchase of 2 Nexus 7 tablets being sent to California from Walmart had been cancelled because they couldn’t verify the shipping address.  Concerned, I logged into my Walmart account and sure enough, there was an order for two Nexus 7 tablets that were scheduled to be sent to some random address in California. After doing some research I found that this isn’t uncommon – hackers get into the databases of these websites and can try to order things using your account. This only works if your credit card is stored on the website. Walmart.com, for example, stores your card without asking if you want it stored – they do it automatically.

I immediately changed my password and deleted my credit card from their system. I no longer store credit cards on any websites – it only takes a minute to enter the card number and I feel more secure that way. Each time I purchase on Walmart.com now I immediately go to my account and delete the credit card number.

5.       Consider purchasing pre-paid shopping cards to purchase online. I know some people don’t like to use their personal credit card online, so they purchase pre-paid shopping cards and use that for all their Holiday shopping. A bonus is that you can set your limit and not spend any more than that.

Like many of you I do quite a bit of online shopping and will continue to do so. If you will follow today’s tips (especially tips 1-4) you can shop online with confidence.

 

Ryan H. Law, M.S., CFP®, AFC®

 

Personal Financial Planning Department

Office for Financial Success Director

University of Missouri Center on Economic Education Director

 

162 Stanley Hall

University of Missouri

Columbia, MO 65211

 

573.882.9211 (office)

573.884.8389 (fax)

 

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[i] http://www.nrf.com/modules.php?name=News&op=viewlive&sp_id=1260

[ii] http://www.pfsweb.com/blog/cyber-monday-2012-the-results/