Money Management

Don’t trust everything you read online. Some scammers are targeting Facebook community groups. Find out what to watch out for so you don’t fall victim. 

Many people use social media sites and apps regularly. Apps like Facebook make it easier to stay in touch with friends and family. But when using these digital platforms, it’s essential to be aware of potential scams so you don’t put yourself at risk of losing your hard-earned money.

Unfortunately, online fraudsters constantly find new ways to exploit people for their own gain. If you’re not careful, you could fall for a costly scam that drains your bank account. Here are some of the ways scammers are targeting users who belong to Facebook community groups.

Fake posts about lost or injured pets

One of the more common ways that scammers are trying to trick people is by making fake posts about lost or injured pets. The poster will include photos and details about the pretend pet to tug at the heartstrings of Facebook users and get them to share the post with their network.

But once the post gets more traction after being reshared, the poster will edit the original post. They will update the post with entirely different content and will include scammy text and suspicious links in hopes that users will be tricked into parting ways with their money.

These posts have become more frequent in recent months and often appear in local groups. Before you share posts about lost or injured pets on social media, take a few extra moments to determine if the post is legitimate or not. The last thing you want to do is spread misinformation that causes well-meaning social media users to get scammed.

As an animal lover, I’ve previously shared posts like these, assuming they were real. I now know to do more thorough research before sharing them. This scam is a good reminder that not everything we see online is factual. It’s always best to double-check before sharing anything.

Posts from users pretending to be contractors

Unsurprisingly, many people look to community groups on social media for contractor recommendations. Whether they need a new roof, their walls painted, or a plumbing fix, getting recommendations from other neighbors can be a great way to avoid problem businesses.

In addition to community members sharing their recommendations, some business owners promote their services in these groups. Before messaging a potential contractor or clicking on a link, ensure it was posted by a legitimate professional — otherwise, you may get scammed.

I’ve noticed more posts from Facebook users pretending to be general contractors. These posts usually include a personal story about how they recently took steps to start a business and that they’re looking for new customers to give them a try. But the users aren’t legitimate contractors.

Usually, the posts are lengthy and include a phone number from an area code that is not local. I’ve also noticed they’re from users who joined within the last few days. Luckily, I’ve seen them get deleted quickly by group moderators. But I still want to warn others so they don’t get conned.

It pays to practice extra caution on social media

The last thing you want to do is end up with a fraudulent credit card charge due to falling for an online scam. When using social media platforms like Facebook, it’s necessary to practice extra caution. Fraudsters are developing new and elaborate ways to trick users like you. If you’re not careful, your personal finances could be impacted.

Review all posts carefully before sharing them with others. If you’re considering hiring someone on social media, review their profile to ensure they’re an actual human. Be wary if the user doesn’t have a profile photo, it’s a brand-new account, or their messages seem scammy. Above all else, remember to trust your gut, especially when you’re online.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.

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Thanksgiving is almost here, and there’s plenty to be grateful for. Check out a few financial tips that will help set you on the right track. 

We’re approaching that time of year when we acknowledge all the things we’re grateful for. There are the big ones, of course, like good health, loving family, and supportive friends. And there are the smaller things, like beautiful displays of fall color, a cozy reading nook, or one last surprise weekend of warm weather.

As I think of my own gratitude list this year, I’ve started adding a few new items that I never considered before, but that have made a big impact on me. Here’s a look at the financial lessons I’m grateful I learned early in life.

1. Set aside savings first

I’ve always been a natural saver, so I was lucky that this one came easily to me. But it’s still an important lesson to keep practicing. By setting some money aside in a savings account as soon as you get paid, you’re not giving yourself the chance to spend it on something frivolous.

This can allow you to build an emergency fund, which is an important safety net to have in case of any bumps in the road. It can also allow you to put away money for a big purchase in the future, whether that’s a long vacation, a down payment on a home, or funds for a business you want to get off the ground.

You don’t need to gut your discretionary spending entirely, but you can set up a budget tailored to your earnings that allows you to put some money aside each month. Consider using the 50/30/20 rule to get started, where 50% of your take-home pay goes toward essential bills, 30% goes toward non-essential wants, and 20% goes to savings.

2. Fund a retirement account

I’ll admit that I didn’t jump on this advice right away when I began working, and I wish I had. That’s because the sooner you begin investing money in a retirement account, the more time your money has to grow. And thanks to compound interest, the money you earn on your retirement savings will also grow, snowballing into what’s ideally a generous nest egg when you’re ready to leave the workforce.

According to the Economic Policy Institute, the median savings in both employer-sponsored and individual retirement accounts for all working-age households is around $95,776. That’s a great cushion to have, and if you can reach a similar number earlier in your career, you’re giving that money a chance to grow exponentially over your remaining working years.

3. Avoid unhealthy debt

Not all debt is considered dangerous. For example, taking out a mortgage on a home means taking on debt. But as long as you can afford your monthly payments, you should be building equity in a property that will gain value over the time you own it. That should leave you in a great financial position when you eventually own the home free and clear.

Using credit cards is also a way to take on debt. But again, as long as you’re responsible with your spending so that you can pay off your credit card bill each month, you’ll avoid paying interest. Credit card interest is what makes this type of spending so potentially dangerous. Interest rates on credit cards can be very high (the current average is 28.05%, according to Forbes) so if you carry over any unpaid amount month to month, it will make your purchases much more expensive in the long run. And credit card debt can be a difficult hole to dig out of.

Giving thanks for financial health

It may be considered tacky to discuss money around the holiday table, but sharing sound financial advice is always in good taste. No matter where your personal finances are this Thanksgiving season, take stock of the lessons you follow, or perhaps would like to start following, that can put you in a stronger financial position. Your future self will thank you.

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I’ve made some smart decisions about shopping this Christmas, including avoiding overspending on my kids. Take a look at what else I’m doing to save money. 

Consumers plan to spend an average of $1,652 on holiday shopping this year. I will not be one of them. I’m pretty much done with my holiday shopping, and I’ve saved more than $1,000 compared to how much I spent in previous years.

Here’s how I made that happen, without sacrificing any festive fun for the sake of my personal finances.

I slashed my spending on gifts

The biggest reduction in my holiday spending this year comes from a change in the way I shop for my kids. While I splurged in the past and charged $800 on my credit cards buying toys for my toddler, our family has now implemented a simple rule called Want, Need, Wear, Read.

With this rule in place, each of my kids is getting something they want, something they need, something to wear, and something to read. They’ll be getting all four of these things from my husband and I and from Santa, so they’ll end up with eight things to open (plus Dollar Tree stocking stuffers). This will avoid overwhelming them with stuff, as has happened in the past.

In past years, I also waited until the holiday season to buy their gifts and purchased them new, but I took a different approach this year. I visited consignment sales (like the Just Between Friends sale) throughout the year and I already bought these items. I went to the sale on half-price days and was able to buy games, books, clothing, and toys for a small fraction of what I’d have spent on new items.

Thanks to shopping in advance, I was able to get great stuff for both kids for less than $200. That’s $600 in savings right there compared to previous years, and a lot of extra money left in my bank account. Other parents may also want to consider doing the same since it may be more fun for children to get a few quality items they can focus on rather than so much stuff they don’t know what to play with first.

We’re prioritizing shared experiences, not things

The rest of my savings comes from cutting the $600 I previously spent on gifts for my husband and my other close family members.

In past years, it’s been a challenge to find things that we actually wanted or needed. And we’ve exchanged toys with young cousins who live far away, even though all of the children involved have more stuff than they need.

This year, we’re taking a different approach. Instead of buying each other gifts, my husband and I are planning a date night to an escape room as our gifts to each other. This will cost about $50 instead of the $200 we usually spend on gifts for each other.

The cousins will exchange video messages instead of gifts, and we’ll be going out for a special dinner with all family members. Each of us will pay our own way instead of spending the money on gifts for each other that will just gather dust.

Chances are that there are a lot of people in your life who you exchange gifts with out of habit or obligation or because you want to show your love — but those who you’re buying stuff for may not actually need or want the items. It’s worth having a conversation about how you can better spend the money to enjoy each other rather than add to clutter.

These steps have helped me save money, and I’m looking forward to a holiday season free of financial stress because of it.

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No college plans? No problem. Read on for options when your child no longer needs the funds in your 529 plan for education. 

Many parents are motivated to save and invest money for college, so their children can avoid debt when getting a degree. If you’ve been hustling to set aside funds for your child’s education, you may have opted to open a 529 plan.

The upside of saving for college in a 529 plan is that investment gains in these accounts are tax-free, as are withdrawals taken to pay for qualified education expenses. So let’s say you manage to pump $40,000 into a 529 plan through the years, only thanks to your investments, you wind up with a balance of $90,000 by the time your child is ready to head to college. In that case, you’re looking at $50,000 in gains you don’t have to pay any taxes on.

But what if your child decides to opt out of college? Maybe they want to work full-time right away or start a small business.

You may not want to simply hand them the money in their 529 plan, as doing so could mean facing a costly 10% penalty (though to be fair, that penalty applies only to gains in a 529 plan, not principal contributions, since those go in on an after-tax basis). Plus, you’ll also be taxed on those gains, and that’s another expense you may not want to deal with. But here are some other options you can consider instead.

1. Switch your beneficiary

Just because one child of yours has opted out of college doesn’t mean your remaining children will follow their lead. With a 529 plan, you can switch beneficiaries easily. So if you have another child who intends to go to college, you can simply hand that money over to them.

You can also designate a 529 plan beneficiary that isn’t your child. Let’s say you only have one child, but you’re close to your niece and nephew. You could designate them beneficiaries of your account if you no longer need it to pay for your own child’s education.

2. Roll up to $35,000 into a Roth IRA

Saving money in a Roth IRA is a great way to grow retirement wealth. Starting next year, you have the option to roll up to $35,000 in unused 529 plan funds into a Roth IRA without penalty. So if your child decides to opt out of college but you still want them to have the money you were saving for their education, you can roll it into a Roth IRA and reserve it for their retirement.

The one drawback of saving for college in a 529 plan is that taking withdrawals for non-education purposes could have negative financial consequences. But thankfully, you have options for putting that money to good use, even if your intended beneficiary decides to opt out of college. So if that’s the boat you’re in, think through your choices carefully, but know that you’re not doomed to be penalized on the money you’ve worked hard to save.

That said, it’s always a good idea to discuss your child’s wishes for college once they’re old enough to get a handle on them. That could help you avoid having to scramble to find a good use for your 529 funds.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
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Finding and applying for the right mortgage loan takes time. Keep reading to learn what to expect. 

Recently, I applied for a mortgage. I’m buying a house, and I needed to borrow to be able to afford to do so — just like most people do.

I have always found getting a home loan to be a huge hassle that takes tons of time. So this time, I kept track of exactly how long I spent on the process. It ended up taking me just over six hours.

Here’s how that breaks down, so you can have a better idea of what to expect when you’re applying for a loan of your own.

Shopping around for mortgage quotes: 55 minutes

I wanted to make sure I was getting the best possible interest rate on my mortgage, so I spent a good amount of time comparing loan options and getting mortgage quotes — 55 minutes to be exact.

Many mortgage lenders provide quick online quotes, but you still need to provide some basic financial information to get them. Since I got several quotes from banks, brokerage firms, and online credit unions — and since I wanted to compare costs on different kinds of loans including 30-year fixed-rate mortgages and adjustable-rate mortgages — it took me a while to go through this process.

I also made a spreadsheet comparing fees, interest rate, and total borrowing costs for each loan, so I could do an apples-to-apples comparison.

While it was time consuming, it was also worth it. The interest rate you pay on your home loan can make a huge difference in monthly payments and total borrowing costs. In fact, going from a 7.00% rate to a 7.50% rate could cost you an extra $33.91 per month and $12,208.32 in interest costs per $100,000 borrowed over the life of the loan if you take out a 30-year mortgage.

If you’re shopping for a loan, be sure to allow yourself time to get these online quotes and really consider which lender will provide the best overall loan terms.

Filling out an application: 40 minutes

Once I had decided on a lender, it took me about 40 minutes to actually complete the application. That’s because I had to provide a good amount of information about my finances and about the home I was buying. It took a while to look up all the numbers and make sure I got everything right.

If you want to make this process easier — if not necessarily faster — you may want to work with a lender offering in-person or telephone customer service to help. Working with someone can make the process simpler, although if you have to see them in person, it may take more time in the end once you factor in time to get to their office.

Gathering documents: 2 hours

My lender — like most lenders — required a good amount of financial information to be submitted when I applied. This included:

My real estate sales contact for the house I was buying and for the home I’d recently soldThree months of bank statementsPersonal and business tax returnsOther asset statements, such as brokerage account balances to show I have money in reserve

I had to gather all of this paperwork, and it took two hours to put it all together, scan documents I only had paper copies of, and submit everything.

It’s best to start this process early, because you’ll need many of these forms to get pre-approved and will definitely need them for final approval. I created a folder on my computer desktop to collect all of the forms, and you may want to do the same.

Responding to underwriter requests: 2.5 hours

Finally, responding to requests from the underwriter took me 2.5 hours. An underwriter reviews the loan documents after pre-approval to assess the risk for the lender. They want all the i’s dotted and t’s crossed, and they’ll likely ask for things you didn’t submit.

In my case, I had tons of requests because I’m self-employed and we own businesses in different states. I had to get a letter from my CPA about my business funds, provide an occupancy letter detailing what house I planned to live in, and more. It felt like it took forever.

Once you’ve submitted your forms, don’t assume you’re done. Until the underwriter signs off and you’re clear to close on your loan, you may still have work to do.

If you’re applying for a home loan, now you have a better idea of what to expect. It may take you less time — especially if your financial life is simpler than mine — but it could also take you more. So, do what you need to set yourself up for success (like assembling documents in advance) and prepare to be in this for the long haul.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool has a disclosure policy.

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