Good Bye MyRA

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MyRA was a program started to help young people and the working poor invest for retirement. Contributions could be as low as $5. The hope that young people and people with few resources could take part in investing for retirement (because we all know Social Security isn’t gonna be enough) was a lofty goal. This may have been especially helpful for people of color since we’ve all read the studies about net worth and cycles of poverty.

Unfortunately, the MyRA program will be stopped under the Trump administration. It was never really given the resources to take off. That was the main reason given for its close. The working poor don’t have lots of options to move up the socio-economic ladder and now they’ll have one less option.

Why Your Emergency Fund Needs $500

“If you are human, have a pet, kids, a house or a place to live, something is going to happen that will cost you money,” said Cornfield.

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Traditional wisdom says one needs about 6 months of income squirreled away in an emergency fund to be in good financial shape. For many, that number seems astronomical and folks don’t even start because it seems like a battle they can’t win. Though more money is usually better, I’m gonna buck conventional wisdom and say that if six months’ income seems too steep a hill to climb, perhaps your goal should be $500.

*clutches pearls*

It’s not as crazy as it sounds. Every year the Federal Reserve puts out a research study about the financial state of American households. This year, the board found out that the average American wouldn’t have $500 for an emergency. Of course, there are larger emergencies out there but for many people an unexpected expense might be a blown tire, automotive engine work, a broken appliance, or some other emergency expense that might cost around …  you guessed it …  $500.

From The Atlantic:

” …. what was happening to me was also happening to millions of other Americans, and not just the poorest among us, who, by definition, struggle to make ends meet. It was, according to that Fed survey and other surveys, happening to middle-class professionals and even to those in the upper class. It was happening to the soon-to-retire as well as the soon-to-begin. It was happening to college grads as well as high-school dropouts. It was happening all across the country, including places where you might least expect to see such problems. I knew that I wouldn’t have $400 in an emergency. What I hadn’t known, couldn’t have conceived, was that so many other Americans wouldn’t have the money available to them, either.”

 

Obviously, having $500 won’t solve all of your problems but “I’d rather be caught with it”. * in my Xzibit voice*

If you haven’t started an emergency fund, head over to your credit union and open a savings account asap.

 

FREE Workshop: Paying for College

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There have been some changes to the way high school students apply to FAFSA. Families need to know what the changes are, what the important dates not to miss are, and how to get students graduated from college not mired in debt.

Financial education speaker and the author of “10 Things College Students Need to Know About Money” Shay Olivarria will be facilitating a FREE workshop in San Diego, CA to help families figure it all out.

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In this dynamic one hour workshop students and parents will learn about the changes to the FAFSA application, scholarships, student loan types, and repayment options.

Families will leave with a handout of important terms, tips, and dates. Graduating from college is not just about having the grades to get in. It’s about finding a school that’s a good fit, paying for it without going broke, and creating a network to build a career.

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FAQs

What can I bring into the event?

Bring a pen or pencil. This is a workshop (you’ll be engaged) not a lecture.

How can I contact the organizer with any questions?

Call (323) 596-1843

What’s the refund policy?

Early Bird ticket holders will receive a free copy of “10 Things College Students Need to Know About College” at the event. If you don’t show, you don’t get your copy. Books will NOT be shipped.

Do I have to bring my printed ticket to the event?

Yes. Seating is very limited so tickets will be necessary. Showing your ticket on your phone also works (save a tree).

Is it ok if the name on my ticket or registration doesn’t match the person who attends?

Yes. Whoever shows up needs access to a ticket. If you booked a ticket for yourself and now your cousin wants to come instead, that’s fine.

 

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Shay Olivarria is the most dynamic financial education speaker working today. Previous clients include: SCE Credit Union, American Airlines Credit Union, the Yorba Linda Water District, Verizon, among others. She has written three books on personal finance, including Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook”. Shay has been quoted on Bankrate.com, FoxBusiness.com, NBC Latino and The Credit Union Times.The 2nd edition of “10 Things College Students Need to Know About Money” is available now.

 

 

Wells Fargo Customers to See Money from Fraud Settlement

Wells Fargo Sign and Logo

You may remember the scandal involving national bank Wells Fargo opening accounts (checking, saving, credit cards, etc.) for people that had no idea those accounts had been opened. If you have no idea what I’m talking about read this article. As more people come to understand that the Consumer Financial Protection Bureau is a great tool to help resolve complaints with large financial services companies (they also work to help with mortgage companies and credit card companies) complaints against banks are skyrocketing (which is why I advocate for using credit unions, but I digress).

If you were a Wells Fargo customer between May 2002 and April 2017, you may be owed some money (if not for them opening a fraudulent account for you, perhaps for charging you ridiculous fees on your mortgage). The types of accounts that were opened include:

  • Checking accounts
  • Savings accounts
  • Credit cards
  • Lines of credit
  • Identity theft protection

Some customers have already been refunded for fees associated with the fraudulent accounts (the Los Angeles times says around $3.2M so far) but others have yet to be contacted. Notices for customers that have already been identified should be mailed out toward the end of September. Customers that have not yet been identified should visit the Wells Fargo settlement website: https://wfsettlement.com/

The money probably won’t be out until 2018 as the judge has to approve all the settlements. The scheduled court date is January 4th. To find out more about the Wells Fargo settlement read “Wells Fargo’s $142-million sham accounts settlement: What you need to know” from the Los Angeles Times.

 

FREE Webinar for College Freshman

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Have a high school grad that’s headed to college? Did you learn some financial lessons the hard way and prefer that your child not make the same mistakes? You’re in luck! This September financial education speaker and author Shay Olivarria is hosting a FREE (yes, that’s f-r-e-e) webinar to give college freshman a leg up.

 

Freshman Facts: 5 Things College Freshman Should Do to Build Wealth

 

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Engage in this dynamic, fast-paced webinar with financial
education speaker and author Shay Olivarria. Participants will learn:

– Where to put financial aid money for best money management practices.                           – How to spend money, have fun, and be responsible.
– What accounts to open to build credit scores.
– Where to put your pennies to become wealthy.
– Pros and cons of available personal finance apps to leverage your current behaviors.

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Shay Olivarria is the most dynamic financial education speaker working today. Previous clients include: SCE Credit Union, American Airlines Credit Union, the Yorba Linda Water District, Verizon, among others. She has written three books on personal finance, including Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook”. Shay has been quoted on Bankrate.com, FoxBusiness.com, NBC Latino and The Credit Union Times.The 2nd edition of “10 Things College Students Need to Know About Money” is available now.

 

8 – 13 Year Olds Can Win $1,000

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Kids are learning every day. Alongside reading, writing, and arithmetic it’s important that children learn about money and financial management. OneUnited Bank and the BMe Community are giving kids a gentle nudge in that direction. This summer, kids between 8 and 12 years old have the opportunity win $1,000 savings account by writing or drawing about a financial education concept they learned from the book, “I Got Bank!” or another financial education book.

From the website:

OneUnited Bank and BMe Community are sponsoring the seventh annual financial literacy contest for youth between the ages of 8 – 12 years old. Simply either write and submit a 250 word essay or create and submit an art project about what you learned from the book “I Got Bank!” (or from another financial literacy book available in your library or home) and how you can use what you learned in your life or the life of your family.

You must have your parents’ permission to participate. Your essay or art project may be published by OneUnited Bank and BMe Community. All submissions must be postmarked or emailed by June 15, 2017. (Children of employees of OneUnited Bank or BMe Community are ineligible to participate.) Winners will be selected by OneUnited Bank in our sole discretion. Ten (10) winners will receive a $1,000 savings account by August 31, 2017 (with cooperation from parents). One winner will be selected from each of the following eight cities (Akron, Baltimore, Boston, Detroit, Los Angeles, Miami, Philadelphia and Pittsburgh) and two will be selected from other locations in the U.S

Winners will be announced by August 31, 2017.

The deadline is June 15th so make sure to visit the OneUnited website and get your entry in before then.

 

 

$100 for Teen Drivers With AAA

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If you have a teen driver between 15 and 19 that is covered by your AAA auto policy, then that teen could earn a $100 gift card by taking 8 to 10 hours of online auto training.

Your teen will need to complete three training exercises online (no download required). Here’s a brief overview of the exercises:

  • Andromedus X: Keep track of moving objects in the center of your vision while staying alert to potential hazards on the periphery
  • Hazard Highway: Make rapid decisions as an object approaches at various speeds, while staying alert to common road hazards
  • Hey Rube!: Rapidly move your eyes around a scene while challenging your visual memory

 

To find out more about AAA’s InGear brain training program, click here.

$5,000 Scholarship for Black Farmers

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I read this from Soul Fire Farm this morning:

Help spread the word: These scholarships are open to any applicants who self-identify as Black farmers or aspiring growers at any scale, or their dependents. No need to have land to apply, and there are many eligible fields of study.

Application deadline is April 28 for scholarships of up to $5,000 through the National Black Farmers Association for students/aspiring students who “plan to enroll or are enrolled in agriculture-related study at an accredited two-year or four-year college, university or vocational-technical school.” Any field related to agriculture could be supported (including business, engineering, animal science, marketing, mechanics, environmental science, agribusiness, food sciences, biology, holistic nutrition, urban farming, veterinary science, and many others!)

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More details and application here: https://www.scholarsapply.org/blackfarmersassociation/

 

Credit Scores Could Rise This Fall

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This fall credit scores across the country may rise. There are four new changes to the VantageScore  (a new thing created by the big 3 credit bureaus) that may increase credit scores for those that need it most. Unfortunately for those looking to buy a home the FICO scoring model will not be effected.

KETV says, “The new method is being implemented later this year by VantageScore, a company created by the credit bureaus Experian, TransUnion and Equifax. It’s not as well-known as Fair Isaac Corp., whose FICO score is used for the vast majority of mortgages. But VantageScore handled 8 billion account applications last year, so if you applied for a credit card, that score was likely used to approve or deny you.”

The changes include:

Trended data CNBC says, “Using what’s known as trended data is the biggest change. The phrase means credit scores will take into account the trajectory of a borrower’s debts on a month-to-month basis. So a person who is paying down debt is now likely to be scored better than a person who is making minimum monthly payments but has been slowly accumulating credit card debt.”

Legal data – Civil judgments, medical debt and tax liens will no longer affect your score. Mortgages are still primarily using FICO scores so don’t get too excited but for other types of loans (credit cards, auto loans, etc.) this could really help some folks out.

High Limits – the debt ratio portion of scoring for VantageScore is about to be turned on it’s head. Instead of the lower the debt ration, the better people with “excessive” credit card limits could be hurt. the rational is that those with higher limits could rack up more debt, faster.

Less Robust History – According to the Motley Fool those that have fewer items on their credit histories may also see an increase in their score due to, “The model will examine thousands of various consumer behaviors in an effort to identify those who have a propensity to pay their bills on time, because these are the people that lenders want to attract.

Some changes may help and some may hurt depending on what’s going on with your credit scores right now. Motley Fool gives the easiest explanation of the biggest changes. Read more here.

 

ShayOlivarriaHeadshotShay Olivarria is the most dynamic financial education speaker working today. Previous clients include: the Yorba Linda Water District, Verizon, and Friends of Allensworth, among others. She has written three books on personal finance, including Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook”. Shay has been quoted on Bankrate.com, FoxBusiness.com, NBC Latino and The Credit Union Times.The 2nd edition of “10 Things College Students Need to Know About Money” is available now.

Shay Olivarria Slated to Present Two Sessions at Adelante Mujer Latina Conference.

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Financial education speaker Shay Olivarria will be presenting two sessions of “Goal Boarding Your Financial Future” at Adelante Mujer Latina 2017. The 10am and 11am sessions will teach participants learn 5 vital personal finance concepts and help participants create an executable plan for reaching the financial goals she sets for herself.

The conference will take place at Pasadena City College in southern California.

 

Call (323) 596-1843 to talk with Shay Olivarria about setting up a financial education workshop for your group.

ShayOlivarriaHeadshotShay Olivarria is the most dynamic financial education speaker working today. Previous clients include: the Yorba Linda Water District, Verizon, and Friends of Allensworth, among others. She has written three books on personal finance, including Amazon Best Seller “Money Matters: The Get It Done in 1 Minute Workbook”. Shay has been quoted on Bankrate.com, FoxBusiness.com, NBC Latino and The Credit Union Times.

 

 

New CA Bill Forces All Employees to Invest for Retirement

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Senate leader Kevin de León has put forth a bill that would require all California companies, that have at least five employees, to offer their own retirement investment plan or enroll workers in the new California Secure Choice Retirement Savings Program. Though employees could always invest for retirement using an IRA, while getting almost the exact same benefits of the Secure Choice program, many people haven’t taken advantage. As Time Magazine says, ” .. when it comes to putting money away, an employer nudge really matters: 90% of those with workplace plans save for retirement vs. only 20% of those without one.”

What bill does:

  • Requires that employers with more than 5 employees offer some kind of retirement investment plan to employees.
  • Offers a way for employees to invest for retirement directly from their paycheck.
  • Starts employee contributions at between 2% and 5% of their paychecks (the exact details haven’t been hammered out yet).
  • Automatically enrolls employees (about 6.8 Californians) unless the employee chooses to opt out.

What the bill doesn’t do:

  • Does not require employers to “match” contributions or provide funds for the retirement of employees.
  • Does not assume the risk of investing (investors could lose money).
  • This program does NOT provide assured payouts during retirement (it is NOT a pension plan).

San Jose’s Mercury News:

At first the money would be invested in safe, low-yield U.S. Treasury notes. After three years, the funds would likely shift to a diverse portfolio of stocks and bounds. These options would be developed by the Secure Choice Retirement Savings Investment Board. The accounts would likely be Roth IRAs, a mode that allows for tax-free withdrawals upon retirement.

The amount of money deducted from a worker’s payroll would escalate over time, up to 10 percent, but employees would be able to set the amount themselves.

Time Magazine:

All told, at least 30 states are in various stages of setting up retirement plans—some mandatory for employers and some voluntary—according to the Georgetown University Center for Retirement Initiatives.

At any rate, the Secure Choice Retirement Savings Plan is heading to an employer near you. I’m waiting to hear more about the specific details but this is coming. Do you think it will encourage more employees to invest for retirement? Head over to the Bigger Than Your Block Facebook page and give your opinion.

 

 

 

 

CFPB Forces TransUnion and Equifax to Return $17.6 million to Customers

Consumer Financial Protection Bureau

The Consumer Financial Protection Bureau strikes again!

When the Consumer Financial Protection Bureau was created in 2011, its whole goal was to help the American consumer.

In July 2010, Congress passed and President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Act created the Consumer Financial Protection Bureau (CFPB). The CFPB consolidates most Federal consumer financial protection authority in one place. The consumer bureau is focused on one goal: watching out for American consumers in the market for consumer financial products and services.

It seems to be doing it’s job. From helping Wells Fargo customers and military families to pawn shop consumers. Now, the Consumer Financial Protection Bureau is helping TransUnion and Equifax customers:

Equifax, Inc., TransUnion, and their subsidiaries for deceiving consumers about the usefulness and actual cost of credit scores they sold to consumers. The companies also lured consumers into costly recurring payments for credit-related products with false promises. The CFPB ordered TransUnion and Equifax to truthfully represent the value of the credit scores they provide and the cost of obtaining those credit scores and other services.

It’s good to know that the Consumer Financial Protection Bureau is on the job.

 

myRA Might Be the Solution for High School and College Students

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If you’ve read “10 Things College Students Need to Know About Money” you know that I am a HUGE advocate of young people investing from retirement as soon as they have earned income. For many people that time is while in high school or college while you’re working part-time or eeking a living out of financial aid. Often, young people don’t know how to open an Individual Retirement Account (IRA) or don’t think they have enough money to open one (get my list of investment accounts you can open for less than $100 here).

The United States government is here to help with the new myRA (my retirement account, get it?). According to the U.S. Treasury,  these accounts are:

  • Easy to set up (you can have the money deducted from your payroll check if you wish)
  • Designed to help people with little money or no access to a retirement plan from work.
  • No risk of losing money (funds are invested in a Thrift Savings Plan-like account)
  • The funds you invest are NOT tax-deductible but you also can take them out whenever you like without penalty.

The best part? There is no minimum amount required to start an account and according to Forbes, ” additional contributions only have a minimum of $5.” The goal is really to get you into the habit of investing when you are young and have few dollars. The return isn’t great (think 1% or 2% per year) compared to a regular traditional or Roth IRA or 401(k)/403(b) but starting now with a few dollars and little interest is better than not doing anything.

Fool.com also notes:

Account holders can contribute up to $5,500 per year ($6,500 if over 50) and may continue to contribute until their total account balance reaches $15,000. All funds are invested in a newly created Treasury bond

Once you’ve grown a nest egg big enough to open a traditional or Roth IRA, or you have a job that provides a 401(k) or 401(b) hopefully with matching, you can roll the money over into a new account.

Click here to find out more about myRA accounts.