Author: Bruce Lund

Whether it’s excitement over a fake prize, fear from a supposed government official, or affection for someone you’ve connected with online, scammers count on urgency and emotional pressure to lower your defenses. Understanding how these scams work is the first step to safeguard yourself and your loved ones against them.

• Lottery or prize scams: Never provide personal or financial information if you’ve been contacted about winning a prize, especially if you didn’t enter to win one. Scammers may try to get you to pay an upfront fee or taxes before receiving the “prize,” or they may ask for your account information––that way they can “deposit the money.”
• Imposter scams: This is when a scammer pretends to be someone else, such as a government official, police officer, credit union or bank employee, friend, or family member––with the intention of obtaining your money or personal information.
• Wire or money transfer fraud: Never transfer money to someone you don’t know. If you are asked to send a payment via a wire transfer, prepaid card, or cryptocurrency, do not do it. These methods are nearly untraceable, and once the money is sent, it’s usually gone for good.
• Check scams: If you’re selling something, do not accept a check for more than the requested amount. After the sale, scammers will ask you to send back the difference they “mistakenly” overpaid. The check will later bounce, and you’ve lost both the money and whatever item you sold.
• Romance scams: These are deceptive schemes where scammers create fake online personas, pretending to be potential romantic partners, to exploit individuals looking for love or companionship. After building emotional connections with their victims over time, they gain their trust and affection. Once that trust is established, they ask for money.
• Charity scams: Always verify that a charity is legitimate before donating. Check their website, look for reviews, and never donate if you’re feeling pressured. You should also be suspicious if a charity asks you to make a donation via cash or wire transfer.
• Debt settlement or relief scams: Don’t pay upfront fees to any company that guarantees they can settle or eliminate your debts. Scammers will promise to negotiate with creditors on your behalf to settle your debts for a fraction of the amount owed or even wipe the debt out entirely. They charge an upfront fee but fail to deliver on their promise, leaving you in a worse financial situation and without any real debt relief.

Remember, if something feels off––whether it’s an unexpected prize, an urgent request for money, or a plea from someone you’ve never met in person––take a step back and verify the situation. Thoroughly thinking things through or researching claims can make all the difference in protecting your finances and personal information.

Plant Your Roots!

Do you own a home or do you plan to? Set up a garden with strong roots! We can help you renovate your home or buy a new one with the garden of your dreams.

Starting a small home garden in the spring is a rewarding way to grow fresh vegetables while keeping maintenance easy. Raised beds offer better soil drainage, prevent soil compaction, and help control weeds more effectively. Plus, you don’t have to lean over to tend to your plants! To get started, choose a sunny location that receives at least 6–8 hours of direct sunlight daily. Construct raised beds using untreated wood, bricks, or metal, ensuring they are at least 12 inches deep for healthy root growth.

Fill the beds with a high-quality soil mix containing compost, topsoil, and organic matter to provide essential nutrients. Adding mulch on top helps retain moisture and regulate soil temperature.

Want to plant that garden? We can help you! Become a member and belong to a credit union that is deeply rooted in the community.

Every year, scammers prey on senior Americans with all kinds of fraudulent schemes.

Be wary of emails requesting personal information. Scammers send bogus emails that look like they come from a company you recognize. They include the company’s branding and logo so you think it’s legitimate. These scams are designed to trick you into providing your username and password. Do not click on any links in the email. Contact the company directly through their website by typing the web address yourself. You can also call the phone number that you have on file or the number listed on their website.

Crooks like to create fake websites that look genuine. They can be very impressive to deceive you into thinking it’s real. Then, they try and trick you into providing your debit/credit card number or your username and password. The best thing to do is go directly to the website by typing the web address yourself rather than from the link. Look at the website address and make sure it matches the site you’re trying to access.

Tip: Scammers usually misspell or add an extra letter to the website address. An example is Amazon becoming “Amazone” or “Amazne.”

Fraudsters con people every year. It can be difficult for some to admit they may have been victimized. Here are several telltale signs to watch for:

1. Money and valuables are disappearing for no good reason.
2. Bills aren’t paid, and a parent seems confused about finances.
3. They are being secretive about money and asking for more. There may be strange credit card charges.
4. A family member won’t answer questions about your parent’s money.
5. Someone new befriends your parent and manages to take joint title to accounts and property.

To help keep our seniors safe, the Consumer Financial Protection Bureau has created some free materials at www.consumerfinance.gov.

For additional tips, visit https://compassccu.org/securitytips/

While it is an essential purchase for most of us, it’s never an easy decision to make. New or used? Red or blue? Car or truck? While we can’t answer all of these questions for you, we can provide you with some things to think about when buying a car.

Benefits of Purchasing Used

• Avoid depreciation – Cars are not an investment. In the first two years of ownership alone, a new car will depreciate about 30%. Looking ahead to when it’s time to sell your used vehicle, less money is lost on resale than had you purchased new, largely due to avoiding the initial depreciation.
• Wider selection – While you may not get to choose features a la carte like you can in a new car purchase, you do end up with more choices overall.
• Lower Price – The nature of used cars is that they are less expensive. Used doesn’t necessarily mean worn out. Looking for features such as low mileage and recent model years can increase your buying power, and more bang for your buck.

Do Your Homework if Purchasing New

• If you decide now is the time to buy a new car, be sure to do your homework!
• Decide on your price range – Before you get to the lot, before you are wooed by a car that is outside of your budget, decide what you are willing to spend. Crunch the numbers to know what monthly payment you can comfortably afford and what your overall sticker price cap is. Don’t forget to include fees such as insurance and repairs!
• Get preapproved from Compass for financing – Before you scour online sources or visit a vehicle lot, talk to us about getting preapproved for your auto loan. This will also help you know how much you can afford.
• Read the reviews – Once you’ve decided on the type of vehicle you want to purchase, read reviews at sites such as consumerreports.org, Edmunds.com, and kbb.com. From recalls to the pros and cons of each make and model, these sites are dedicated to providing you with knowledge about the vehicles you are considering.

The Art of the Sale

• Negotiate your offer – Offer 15% below the asking price. There’s about 20% gross margin in the asking price. Offering 15% below allows the salesperson to still make a profit while you get the vehicle you want at a fair price.
• Turn down add-ons – If a used-car dealer tries to get you to add on products and services, decline. These are likely offered at a less expensive rate elsewhere.

Being prepared helps take the stress out of car buying. Compass is here to help with any additional questions you have!

Do you have drawers and filing cabinets full of tax returns, bills, and bank statements? Here are some tips on exactly how long you should hold on to old financial records.

Papers you only need for one-two years

• Receipts: These can be shredded, if you keep an accurate checkbook ledger, there is no need to keep receipts unless you are using them as back up information for tax purposes.
• Credit Card Bills: After you have checked your credit card statements you can shred your credit card bills. The only time you might need to keep a statement is if it shows a warranty or if you charge a deductible item.
• Checking Account Statements: Once you reconcile your statements they can be shredded; as with credit card bills, you need to keep them if you are taking a deduction. A better option is to enroll in e-statements. You have them at your fingertips when you need them and don’t need to store paper copies.
• Investment Statements: Monthly and Quarterly statements can be shredded when you receive the new statement. ConsumerReports.org recommends keeping annual investment statements until you sell the investment.
• Insurance Policies: You only need to keep the updated policy renewal; you can shred old policy documents.

Papers you should keep for seven years

• Tax Records: The I.R.S. requires that individuals be able to produce records for at least three years from the date of return, any of your tax returns in the last three years are subject to random audit. You should keep copies of your tax returns with all of their supporting documents.

Paper to keep indefinitely (preferably in a safe or fire-proof cabinet)

• Loan Documents: Keep all loan documents until the loan is paid off. Once the loan is paid off keep the most recent documents to prove that the loans were fully paid.
• Retirement Statements: Bankrate.com suggests keeping your annual 401(k) statements and any nondeductible IRA contributions. Including information from current and past employers.
• Life Insurance Policies: Life insurance policy documents should be kept until the covered person dies, or until you cash in the policy. Term life policies only need to be kept until the term expires or the covered person dies.
• Estate Documents: Any documents related to estate planning; wills, trusts, powers of attorney etc. should be kept for as long as they are in effect. You should also have copies for your attorney and for your executor.

When you choose to get rid of your documents do so carefully, as to avoid potential identity theft. Proper shredding and filing are easy ways to protect yourself against identity theft.

SAVE THE DATE: Free member paper shred day – Saturday, March 8, 2025; 10am-noon. Compass headquarters, located at 321 Wabash Ave, Eureka (corner of Wabash & E Street).

With the holidays quickly approaching, criminals are looking for ways to trick unsuspecting people. Many individuals might be increasing their shipping activity, which could make a text message asking you to verify your package with UPS or USPS seem valid. While the message might look fairly legitimate at first glance, there are several red flags that scream “fraud”. First, look at the link to see if it is suspicious. Never click on a link without knowing it’s 100% reliable. Secondly, ask yourself if the additional instructions for how to activate the link are reasonable. Be on guard! The objective from the criminal is all the same, to obtain your personal information or to get you to send money. If you receive a text with a link or instructions on how to activate the link, do not click on the link nor respond. Instead, look up the number and call to verify. While it might take a few extra steps, it will save you a lot of time and headaches in the end.

An individual’s personal and financial information is a valuable commodity, and protecting it is key to maintaining financial security. Being able to recognize the signs and understand the differences between frauds and scams is essential in safeguarding oneself from having their hard-earned money taken away by scammers and fraudsters. Here are the differences and some practical tips to help people avoid falling victim to deceitful practices.

Fraud:

Fraud is financial theft without one’s permission or knowledge. Fraud refers to the deceptive and dishonest activities carried out with the intention of gaining financial or personal benefits––all while breaking the law. Examples of fraud include unauthorized use of someone’s credit or debit card, stealing someone’s identity and opening accounts in their name, and taking over an unsuspecting person’s financial accounts. Fraud is more difficult to protect oneself from than scams, as it happens without people knowing about it. However, regularly keeping an eye on financial accounts for suspicious activity is key to spotting it quickly.

Scams:

A scam is financial theft with one’s permission or knowledge. It’s a trick that is designed to persuade people into believing false information or promises, with the goal of gaining their money, personal information, or other valuables. Scammers often manipulate their victims by exploiting their trust. Examples of scams include people pretending to be debt collectors, offering fake investment opportunities, or promising fake lottery or prize winnings. For example, a scammer could mail, call, text, or email someone to tell them they’ve won a prize through a lottery or sweepstakes and then ask them to pay an upfront fee to receive the rest of the money. There is no prize. The scammer simply wanted quick payment from the victim. One of the most important ways people can avoid falling victim to scams is by staying informed about the latest scams––that way they spot that something is suspicious before they agree to take action.

Tips to Avoid Becoming a Victim:

Be Caution When Sharing Information – People should be cautious about sharing personal or financial information, whether online or offline. They should avoid revealing sensitive information, such as banking information, passwords, Social Security numbers, addresses, and phone numbers to unfamiliar callers, email senders, or unfamiliar websites.

Strengthen Online Security – People should use strong, unique passwords for each online account and use two-factor authentication whenever possible. Two-factor authentication is an extra security step in the process of logging into an account. As usual, people enter either their username or email address––followed by their password. However, instead of being granted access to their account after entering the password, the user needs to confirm their identity via another specified method. For example, the user may receive a text message or an email with a one-time code that must be entered to complete the login process. Other two-factor authentication methods include biometric information, such as fingerprint or facial recognition scanning.

Resist Pressure to Take Immediate Action – Acting in urgency is a warning sign of a scam. Scammers want people to act quickly and make payments without taking the time to think the situation through. Honest organizations will give people time to make a decision.

Avoid Unusual Payment Methods – If someone is asked by an unfamiliar person or business to send a payment via a wire transfer, prepaid card, or cryptocurrency, they should not do it. These methods are nearly untraceable, and once the money is sent, it’s usually gone for good.

Develop Awareness – People should regularly educate themselves about the latest tactics being used by fraudsters and scammers. Common frauds and scams are regularly shared on the Consumer Financial Protection Bureau’s website. This can help people spot common warning signs and red flags that might indicate a fraudulent attempt to obtain their financial or personal information before it happens.

Trust Any Instincts – If something seems too good to be true, it probably is. If someone is suspicious about something, they should talk with a trusted friend, family, or their financial institution before taking action.

The Bottom Line:

Knowing the difference between frauds and scams is an important part of understanding the full picture in regard to the deceptive practices that exist in today’s world. By educating themselves and being prepared to spot the red flags, people can avoid falling victim to fraudsters and scammers.

Wants are things someone would like to have but can live without. Needs are things someone must have to survive, such as food, water, or shelter. When learning the differences between the two, people are often told the key to budgeting is simply spending money on needs instead of wants. While needs are more important and should be prioritized, it’s okay to spend money on wants––as long as one’s necessities, savings, and debt repayment plans aren’t impacted. By following the popular 50/30/20 model, people can budget for both wants and needs!

First, what is a budget? It’s a plan that outlines where each dollar someone has will go. However, if a budget is too complicated or overwhelming to follow, people may decide to stop referencing it. The 50/30/20 budget model is a simplified budgeting method that is easy to follow and stay committed to. In addition to being easy to follow, it’s an effective financial strategy. People following the 50/30/20 model divide their take-home income into three categories: 50% for needs, 30% for wants, and 20% for savings and debt repayment.

People should begin by determining what their take-home income is each month. This is what they earn for income after the deductions of taxes, benefits, or contributions from a paycheck. Next, they should write a list of all the things they pay for each month. That means everything from hand soap to health insurance. After all the expenses have been listed, people must decide whether each expense is a want or a need. Most expenditures may be obvious and easy to categorize, but others may be more difficult. For example, water is a need. However, seltzer water is a want. As another example, someone commuting from outside the city would categorize a vehicle as a need. For someone living in the city with access to public transportation, a vehicle may be a want. After the expenses have been categorized, the 50/30/20 model can be used to budget upcoming expenditures.

Needs: 50%

These are expenses that are essential for people to be able to live and work. Some common expenses may include:

• Rent or Mortgage
• Transportation (personal vehicle or transit pass)
• Groceries
• Basic utilities
• Insurance
• Loan payments
• Childcare

Wants: 30%

These are expenses that aren’t essential to living and working. They’re luxury items, not necessities. Some examples of wants include:

• Video game consoles
• Coffeehouse drinks
• The latest iPhone
• Designer clothing
• Cable or streaming subscriptions
• Gym memberships

Savings and Debt Repayment: 20%

The final 20% in the 50/30/20 model is reserved for savings and paying down extra on any debt. Examples could include:

• Starting an emergency fund (people should aim to save away at least 3 months’ worth of expenses)
• Investments
• Saving for retirement
• Paying off debt (loan payments are categorized as needs, but extra payments should be factored in here)

Using the 50/30/20 model, someone taking home $3,000 a month would budget for spending $1,500 (50%) on needs, $900 (30%) on wants, and $600 (20%) on savings and debt repayment.

While calculating the 50/30/20 rule can be done on paper, an online 50/30/20 budget calculator provides people with access to an easy, streamlined budgeting strategy that can help them stay on top of their finances. Find it at https://moneyfit.org/50-30-20-budget-calculator.

A home is often considered a person’s most valuable asset. But what happens to your home after you die? Estate planning is an important and often overlooked process that can greatly benefit you and your loved ones once you’ve passed away. Here is a checklist to help:

• Itemize your inventory
• Follow with non-physical assets
• Assemble a list of debts
• Make a list of memberships
• Make copies of your lists
• Review your retirement accounts
• Update your insurance
• Assign transfer on death designations
• Select a responsible estate administrator
• Draft a will
• Regularly review your documents
• Visit an estate attorney and/or financial planner
• Simplify your finances
• Complete other important documents
  • Power of attorney
  • Healthcare proxy
  • Living will/Trust
• Take advantage of college funding accounts for your grandchildren

Estate planning is never easy and often overwhelming. However, it’s best not to put this off. Set time aside to tackle this so you will have the peace of mind knowing you are prepared.