Top Financial Terms Everyone Should Know

Do you feel your eyes starting to glaze over when people use terms like “equity,” “variable rate,” or “EMV?” Well, we’re about to change that! 

Learning the meaning of common terms used in finance (including “equity” and “EMV”) will not only make it more exciting to be part of financial conversations, but also start you on the road toward your better financial future… today!

Financial Terms Everyone Should Know

  1. Investment: This is an asset which has the potential to grow in value, such as real estate, stocks, certificates, and bonds. (Cars, unless antique and collectible, are not investments because they depreciate.) You can also invest in yourself by taking a class or learning a new skill that gives you the potential to earn more money in the future.
  2. Interest: This is the cost of borrowing money. When you make a deposit to a financial institution, you are lending them your money. Borrowing money from the same place you deposit your money is the best way to maximize the benefit of both. Credit unions are best at doing this because they are owned by their depositors. 
  3. Dividends: This is the portion of a company’s profits which are distributed to the company’s shareholders. Credit unions pay dividends because members are owners.  However, these earnings are considered to be ‘interest’ by the IRS. This means it is treated as regular income and not subject to capital gains taxes.
  4. Equity and Stock: These terms are often used interchangeably to represent partial ownership in a company. However, stock is a legal document representing a specific portion of ownership of (common shares) or rights to the earnings (preferred shares) of a company. Equity is the portion of an investment or asset that is free from the claims of others. If you own a house, for example, you may often hear phrases like, “I have 20% equity in the home.” This means that the amount you owe on the home is only 80% of its current value.
  5. Bonds: Most often used by governmental organizations (federal, state, municipalities, and school districts), bonds are a special kind of loan where you only receive interest payments over a specific period. Then, at maturity, the principal is repaid to you.
  6. Tax-deferred: This implies that money in an account will be taxed later when you take the money out. For example, funds going into your 401(k) or a traditional IRA are not taxed at the time of contribution, but will be taxed as you withdraw from it during retirement.
  7. Annual Percentage Rate (APR): The yearly cost of borrowing money through a loan. The APR, or interest, represents the percentage of the loan principal that you’re expected to pay back in addition to the loan amount.
  8. Annual Percentage Yield (APY): The interest you will earn back yearly on a savings or investment account.
  9. Automated Clearing House (ACH): A nationwide network that handles participating financial institutions’ transactions. You may see ACH in front of transaction details on your account statement, meaning they handled the transfer.
  10. EMV or Chip Technology: Every time you use a chip-enabled card at a terminal, the embedded chip generates a unique transaction code to prevent stolen data. Tip: Set up alerts for your debit and credit cards in AirTeller to protect yourself from card fraud.
  11. Direct Deposit: A service commonly used by employers to deposit regular monthly payments directly into your chosen account, rather than receiving a check. Most often, direct deposit is processed via ACH, and it is the safest and quickest way to get paid.
  12. Routing Transit Number (RTN): A 9-digit number that identifies a specific financial institution during a transaction.
  13. Share Account: This is a term specific to credit unions. A share account is a standard savings account, but it also represents your ownership, or share, in the credit union as a member.
  14. Variable Rate: This interest rate on a loan or certificate will adjust up or down after the initial period determined by the financial institution. After that initial period, it will continually fluctuate in intervals set by the financial institution, whether that be monthly, yearly, etc.
  15. FICO or Credit Score: This is a measure of your creditworthiness that tells lenders how well you manage debts and how likely you are to make on-time payments. FICO scores range from 300-850, and borrowers with scores above 670 are generally considered more reliable. Tip: Using My Credit Manager in AirTeller can help you better understand and control your FICO score.
  16. Bankruptcy: This is a legal process that lets you discharge, or clear, past-due debts. You can also use bankruptcy to protect your property as you enter into a legally-binding payment plan with your debt issuers.  Bankruptcy has serious and long-lasting impacts to your finances, so it’s typically used as a last resort, and you should always talk to your creditors before taking this step.

How many of these terms were you already familiar with before you read this blog? Comment and let us know!

Cyber-Safe Travel Tips

Summer is a popular time to travel, whether for a relaxing overnight or a week spent exploring a new destination. You’ll likely be taking along your smartphone or other device to assist with directions, locating or identifying points of interest, and capturing that special photo.

Practicing good cyber hygiene before, during, and after your trip will help secure your devices and allow you to connect with confidence when you’re away from home!

Before You Travel

Update your devices. Updating devices will fix security flaws and help keep you protected. Whether it’s your computer, smartphone, or gaming device, be sure to update your operating system, applications, antivirus and malware software, and the like. If you haven’t already turned on automatic updates, now is a good time to consider doing so.

Back up your devices. Back up information such as contacts, financial data, photos, videos, and other data in case a device is compromised during travel and you have to reset it to factory settings.

Lock your device. Make sure to lock your device when you are not using it. Set your devices to lock after a period of time and use strong PINs and passwords. 

Enable multi-factor authentication (MFA). Add an extra layer of protection so that the only person who has access to your account is you. For more information on MFA, see https://www.cisa.gov/mfa.

During Your Travel

Guard your devices. Your devices are valuable, but your sensitive information is as well. Always keep your devices close at hand and secure in taxis, security checkpoints, airplanes, rentals homes, and hotel rooms. 

Securely recharge. Never plug your phone into a public USB charging station—such as those in the airport or in hotel room lamp or clock radio inputs—as these cannot be trusted. Malicious individuals can hijack your session or install malware on your device through those seemingly-harmless means. Always connect using your own power adapter connected to a power outlet.

Delete data from your rental car. If you connect your phone to a rental car for navigation or other purpose, be sure to securely remove the device so that other individuals do not have access to your address book, device name, text messages (hands free calling), or other sensitive information. 

Avoid public Wi-Fi. While public networks are convenient, they are a security risk. Avoid connecting to public Wi-Fi unless absolutely necessary. Instead, consider using your phone carrier’s internet connection or use your phone as a personal hotspot if your plan allows. 

If you do need to connect to public Wi-Fi, verify with the establishment the name of the network and use a virtual private network (VPN), software that will encrypt your internet traffic and prevent others from stealing your data. Verifying the network name is important as often times malicious individuals create similar connection points with a slight misspelling, hoping you will instead connect to their network. 

Turn off auto connect. While auto connect is enabled, devices will seek out and connect to available networks or Bluetooth devices. This could allow cyber criminals to access your device without you knowing it. Disable auto connect, Bluetooth connectivity and near field communication (NFC), like airdrop, so that you can select the network and you can control the connection.

Limit what you share. Limit the information you share on social media while on vacation and consider posting updates about your trip after you return. Revealing too much information while away can put you and others at risk. Criminals can gain useful information from such posts, like knowing you are away from your home. Scammers may even attempt to contact your family and friends with a variety of scam tactics. Additionally, consider setting your social media accounts to only allow friends to view your posts.

Avoid the use of public computers. Public computers such as hotel business centers and internet cafes are often poorly managed and provide minimal security protection for users. If you must use a public computer, do not enter any username or password on the computer and do not connect or transfer data via thumb drive/USB.

When You Return Home

Shred your boarding pass and luggage tag. Scannable codes on boarding passes and luggage tags include full name, date of birth, and passenger name record. These can also contain sensitive data from your airline record, like passport number, phone number, email address, and other information that you wouldn’t want to share publicly. For this same reason, never post boarding passes on social media.

Scan for virus and malware. It’s best to update your security software when you return home and scan for virus and malware to be sure your device has not been compromised while you were away. 

Note about business equipment: It’s best that you leave your work devices behind, however, if you can’t leave home without them, ensure that you are following your organization’s policies and procedures for protecting the devices and the information they contain while traveling.

Your inspiration for smarter saving is here!

Check out these great tips to improve your saving habits—and make smarter choices about your spending—today!

Start with these simple wins:  

Zero out your money at the end of each day.

For example, if you have $24 in cash at the end of the day, put $4 in a jar, envelope or box. Deposit this money periodically to your savings account. If you have $253 available in your account at the end of the day, transfer $3 to your savings account.

Be mindful of spending for the wrong reasons.

  • It’s okay to tell friends you can’t afford something! It doesn’t mean you make less (or are worth less); it means you have goals and know it is better to be rich than to look rich.
  • Don’t let social media influence your spending.
  • Don’t use shopping/buying/spending as a reward.
  • Don’t binge shop.
  • Don’t try to impress people by the number of shopping bags you have.
  • Think before you buy! 
    • For any purchase beyond basics (food, medicine, fuel), don’t make a purchase until at least 24 hours after you’ve decided you want to buy it. Ask yourself these two important questions, too: 
      1. Is it something you need or just want?
      2. Is it for you, or to impress someone else?
    • For any purchase, consider the cost per use.
      1. For groceries and similar products, you can find the cost per unit with the pricing on the shelf. This helps compare similar items.
      2. With bigger purchases, think about how much you’ll really use the product. A fancy new camera is great for a special vacation, but is it really worth the price if you’ll only use it one or two times a year?
  • Splurging is okay occasionally, but don’t overdo it.  
    1. Better yet, every time you go a little overboard with your spending, put at least half of what you spent into your emergency fund.

Think before you drive.

  • With the current price of fuel, it’s important to plan every trip you make, whether it’s to the store or to Denver.
  • Try to get to a point where you’re filling your tank regularly.
    1. Most vehicles get better gas mileage when full.
    2. Fill your tank at the point you can afford—½ tank, ¼ tank—and fill up again when you get back to that point. 
    3. NOTE: Many stations are now holding up to $150 when you go to the pump. If you don’t have this available, your card will be declined.
  • Consider the way you drive.  
    • If it’s available on your vehicle, display fuel efficiency all the time and make it a game to get your mile per gallon higher.
    • If you can’t display fuel efficiency, calculate your mile per gallon each time you fill up.
    • Remember: Fast, aggressive driving wastes your gas. Slow down and calm down.

Fine yourself each time you indulge in bad habits.

  • Some examples: Smoking, gambling, cursing, etc.
  • Each time you do the habit, add your “fine” amount to your savings account. 
  • Not only will this add to your savings, it may also help you break those habits in the process.

Every paycheck, pay yourself first.

  • Do as much as you can without having to tap into your savings at the end of the pay period.  
  • Put this money somewhere that is hard to get to. (It’s not saving if you take it out for regular expenses!) 
  • Decide ahead of time the reasons you can use the money, which will help you decide where it should go. Keep separate accounts (at least on paper) for different reasons: Emergency, vacation, birthdays, etc. 
  • Make it easy with automation.
  • Ask how we can help you set up payroll deductions, automatic transfers, or enroll in our free debit card Round Up and Save program!

Keep a record of everything you spend.

  • Use a spreadsheet, free budget app, or even pen and paper. It doesn’t matter what you use; just use something! 
  • Review your spending regularly to understand how you spend your money. 

Talk with your family (living with you) about you-all’s finances. 

  • Use “bill paying time” for these conversations! Adults in a relationship should understand/know about the joint finances. 
  • It’s okay for one adult to be “responsible for” on a regular basis, but the other should know what’s going on.
  • To the level of their maturity, include your children in your household’s financial conversations.

Don’t let a lack of understanding of your finances stop you from dealing with them.

  • It is better to know if there are problems going on; they won’t go away on their own.
  • Facing financial problems can only make them better.

What tips have you implemented that have made a difference in your saving or spending habits? Let us know in the comments!

10 tips to prevent fraud

Don’t fall victim to a fraud! Here are 10 tips to outsmart even the trickiest tricksters. 

1. Spot Imposters. Scammers often pretend to be someone you trust, like a government official, a family member, a charity, or a company you do business with. Don’t spend money or give out personal information in response to an unexpected request, whether it comes as a text, a phone call, or an email. 

2. Conduct Smart Searches. Not sure if a message or email is the real deal? Type the company or product name into your favorite search engine along with words like “review,” “complaint” or “scam.” You can also search for a phrase that describes your situation, like “IRS call from [company]” or search for specific phone numbers to see if other people have reported them as scams. 

3. Don’t Believe Caller ID. Technology makes it easy for scammers to fake caller ID information, so the name and number you see aren’t always right. If someone calls asking for money or personal information, hang up. If you think the caller might be telling the truth, call back using a number you know is genuine. 

4. Don’t Pay Upfront for a Promise. Someone might ask you to pay in advance for things like debt relief, credit and loan offers, mortgage assistance, or a job. They might even say you’ve won a prize, but first you must pay taxes or fees. Legitimate businesses do not do this. 

5. Consider How You Pay. Though credit cards have significant fraud protection built in, some payment methods don’t. Wiring money through services like Western Union or MoneyGram is risky because it’s nearly impossible to get your money back. That’s also true for reloadable cards (like MoneyPak or Reloadit) and gift cards (like iTunes or Google Play). Government offices and honest companies won’t require you to use these payment methods if you truly owe them money. 

6. Talk to Someone. Before you give up your money or personal information, talk to someone you trust. Con artists want you to make decisions in a hurry, and they might even threaten you. Slow down, check out the story, do an online search, consult an expert, or tell a friend. You can even call us right here at First Education if you want a second opinion! 

7. Hang Up on Robocalls. If you answer the phone and hear a recorded sales pitch, hang up immediately and report it to the FTC. These calls are illegal, and often the products are bogus. Don’t press 1 to speak to a person or to be taken off the list. That could lead to more calls. 

8. Be Skeptical About Free Trial Offers. Some companies use free trials to sign you up for products and bill you every month until you cancel. Before you agree to a free trial, research the company and read the cancellation policy. And always review your monthly statements for charges you don’t recognize! 

9. Don’t Deposit a Check and Wire Money Back. By law, financial institutions must make funds from deposited checks available within days but uncovering a fake check can take weeks. If a check you deposit turns out to be a fake, you’re responsible for repaying the financial institution. 

10. Sign Up for Free Scam Alerts. To get FTC Consumer Alerts sent right to your inbox, click here

Always remember: If it sounds too good to be true, it probably is! Stop, think, and don’t be rushed into a decision.