February 6, 2018 Beth Ann Tabak See all posts in Fraud and Identity Theft See all posts in KOFE Five money mistakes and how to fix them Working to achieve your financial goals can be a delicate balancing act, and even when you make your best effort, mistakes can happen. Let’s face it – we’re only human. What you don’t want is to let a mistake go uncorrected because it can have serious repercussions down the road. Let’s review five common money mistakes and their fixes. Mistake 1: I’m in over my head on credit card debt This can happen easily – a meal out here, a new pair of shoes there, and suddenly you’ve taken your credit card to the limit. Paying down your balance can seem overwhelming when you’re watching interest accumulate, but you can get there in just a few steps. First, avoid getting more credit cards at this time. This will prevent you from feeling like you have more money to spend. Next, see if you can negotiate a lowered interest rate with your card issuer. Then, if you have multiple cards, prioritize your payments in terms of interest rate on the balance. Focus your larger payments on the higher interest card while continuing to make minimum payments on the lower interest ones. Once you have enough open credit, consider transferring the high interest card’s balance to the low interest card to consolidate your payments. Be mindful to review the transfer fees, and weigh whether or not the savings in interest could be canceled by those fees. Of course, the best advice when it comes to credit cards is to never charge more than you can pay off at the end of the month. Mistake 2: I missed a mortgage payment This is a big one. While your mortgage payment should be your number one priority when paying your bills, mistakes can happen. Though your lender won’t foreclose immediately, you should contact them as soon as possible to let them know what happened, whether it was a banking error, not having the funds or simply forgetting. Then, work with your lender to correct it. Some lenders will allow you to make up the funds in incremental payments over a set period of time. If it was forgetting to pay, see if your lender has an automatic payment option that will allow you to draft the payment from your account each month without having to remember it. If you do find that you are in danger of being late or unable to pay every month because of a financial emergency such as job loss or sickness, be sure to work with your lender to see if there are alternatives available to you to make your payments more affordable. Mistake 3: I overdrafted my checking account Ever have that moment when you think you have a certain amount of money in your account, only to discover you were, well, wrong? We all have and it’s often the result of simple oversight. If you do overdraft your account, be sure to transfer money from a funded account in order to avoid further fees. To avoid an overdraft in the future, look into an overdraft protection service. For example, 7 17 Credit Union offers Overdraft Protection, which allows you to designate up to five accounts as overdraft sources that can be drawn on when your primary account is insufficient. For each instance that it draws from an overdraft source, there is a small fee.* 7 17’s Courtesy Pay and Courtesy Pay Plus, which requires that you opt-in, provide further coverage, for a fee*, when funds are unavailable in your checking account or your designated overdraft protection sources. You can also consider setting up account alerts to notify you when your balance is low. 7 17 allows you to create these directly through NetWorth24 Online Banking, and they can be sent via text, email or both. Mistake 4: I forgot to pay a bill, and I received a collections notice Chances are that if you have been contacted by a collections agency, then you did not respond to the original lender. Once you have received a collections notice, document it and respond with payment. If you are unable to make the payment in full at that time, see if there is a way that you can work out a payment agreement with the agency. Be sure to document each interaction you have. Remember that a late payment will begin to show on your credit report as soon as it reaches 30 days of delinquency. It will show the full period of time that the payment was late, and it will not be purged from your credit report for a period of seven years. While not required to, some lenders will agree to remove the late payment from your credit report for specific circumstances, such as a documented hospital stay, a natural disaster or if you otherwise make payments on time. Mistake 5: I was careless with my financial information and I am a victim of identity theft Unfortunately, identity theft has become more prevalent, making it essential to enlist as many safeguards for our identities as possible. Sometimes even the most careful person can become a victim. If you do suspect that you have become a victim of identity theft, you can establish a fraud alert or a credit freeze for yourself with each of the three credit bureaus – Experian, Equifax and TransUnion. You’ll want to report any fraudulent activity on your accounts with the Federal Trade Commission, and in some cases, file a police report. Continue to monitor your accounts and your credit report for any activity that you didn’t make. For a more in-depth look at Money Mistakes, please visit www.717cu.com/KOFE. Once you access the KOFE site, select financial publications from the KOFE Table drop-down menu. 7 17 has partnered with KOFE (Knowledge of Financial Education) to provide free financial education tools to help support members’ long-term financial health. Resources include publications, videos and more. Plus, you have free access to financial coaches, seven days a week! *See Service Charge Schedule.