Protecting Your Financial Life

Transcription

1 Protecting Your Financial Life HELPING STUDENTS AVOID AND MANAGE FINANCIAL THREATS Thomas Duffany June 12, 2014 Agenda Risk Management Techniques Meet Gus Insurance Emergency Savings Identity Theft PROTECTION PLANNING 1

2 Students and Risk RISK MANAGEMENT 3 Underlying Factors Defining Risk Uncertainty Probability/Frequency Severity of Loss RISK MANAGEMENT Managing Risk Credit Card: Fraudulent Purchases Avoid Don t have a credit card Reduce Monitoring your account (Alerts) Prevent Lock doors, don t leave wallet/purse unattended, etc. Transfer Company provides liability protection Retain Maximum liability $50 4 2

3 Underlying Factors RISK MANAGEMENT 5 Meeting Gus Gus is just beginning his Sophomore year at Texas Tech and is majoring in chemistry with plans to go to Medical School. He got a job over the summer so that he could move out of the dorms and into an apartment with some friends. He has his own car to get him from home to campus and work. He got his first credit card and uses it primarily for purchasing gas for his car. 6 3

4 Scenario 1 - Insurance Gus returned home from work one night to find that the pipes to the apartment above his had leaked and caused the ceiling in his apartment to collapse causing damage to some furniture and other belongings including some clothes, his laptop, and his prized 54 TV. He has no idea how to handle the situation. Is Gus protected under his parent s Homeowner s Insurance? Off campus rarely covered On campus often covered Coverage restrictions (10% of parent s coverage) Expensive electronics etc. may not be covered Consider the size of the deductible Renter s insurance is typically very affordable 7 Renter s Insurance Important Considerations Recognizing the value of property Actual Cash Value vs. Replacement Cost Take an Inventory Apps available Choosing an appropriate deductible Liability Coverage Additional Living Expenses Protecting Personal Property Lock dorm rooms!! (Day and Night) 8 4

5 Scenario 2 - Insurance While driving home from the big game Gus was distracted by friends in the car and caused an accident. The other car is heavily damaged and there were some injuries to passengers in both cars. Can Gus be protected under his parent s Auto Insurance? Yes it is often cheaper this way Make sure to let the insurance company know of the change For students that are >100 miles from home and do not have a car there are often discounts 9 Auto Insurance Important Considerations Liability Coverage Covers other vehicles and bodily injury to others State minimums for liability Are they sufficient? Out of state student Collision/Comprehensive Coverage Covers your own vehicle if you cause accident Not required Choose appropriate deductibles How does letting a friend drive affect insurance? Vicarious liability Insurance follows the car not the driver 10 5

6 Scenario 3 - Insurance Gus went to visit a friend living in the dorms and while there the guys decided to play tackle football in the hallway. While playing, Gus dove for a score and as he got tackled his head hit a door knob and opened a large cut that required 16 stitches. Can Gus be protected under his parent s Health Insurance? Yes until age 26 (regardless of student status) Verify out of area coverage (especially for HMO plans) 11 Health Insurance Options for students not covered by parents plans Student Plans ~50% of colleges offer plans Often do not offer catastrophic coverage Marketplace Tax credit: need to file individually Catastrophic plans: be careful Medicaid Means testing emergency savings Requires good communication Private Plans Options may be limited Ensure they meet essential coverage 12 6

7 Scenario 4 Emergency Savings It s time for midterm exams and Gus has a big test this morning. On his way to campus his car stops accelerating and instead just revs when he presses on the gas. In talking to his mechanic he finds out his transmission needs to be replaced and will cost him $1,500. How can Gus afford these charges? How could this affect his grades? 13 Emergency Savings Recommendations: 3-6 months of expenses (some say 6-12 months) Factors to consider: Monthly expenses Job stability Deductibles Use a separate, liquid account Use only for emergencies Great sale on these awesome/cute shoes Spring Break Gas or Hotel to go to a Tim McGraw concert in Dallas Replenish if used 14 7

8 Emergency Savings Challenges/Excuses: No Job Mom and Dad are the bank Expenses > Income 3-6 months?! That s a lot of money!! Temptation Is this realistic for a student? Is it appropriate? 15 Scenario 4 Identity Theft Gus went in for a shift at work and without realizing it, he left his wallet on the passenger seat of his car. After his shift he came out to find his window shattered and his wallet gone. To make things worse he realized he never took his Social Security card out of his wallet after bringing it in for HR paperwork when he first started working. Immediate steps to take: File a Fraud Alert with one of the Credit Bureaus Close accounts Review Credit Reports File a police report Get a replacement ID/SS cards 16 8

9 Protect Your Identity Tips to Protect Your Identity Properly dispose of information Shred mailings with personal information Credit card offers Bills Account statements Etc. Consider opting out of offers or Erase memory storage from computers/devices Wipe utility programs 17 Protect Your Identity Tips to Protect Your Identity Beware of impersonators Don t give out information unless you initiate Phone Mail Internet Avoid clicking on links in s that Are from unknown senders Ask for personal information Seem out of place for the sender 18 9

10 Protect Your Identity Tips to Protect Your Identity Keep information secure Don t overshare on Social Networking Sites Info could be used to answer security questions Limit access to your pages Use secure WiFi/websites when sending information Keep passwords private Be aware of apps on mobile devices Lock Your Dorm Room!!! 19 Protect Your Identity Tips to Protect Your Identity Monitor your credit reports Three credit bureaus Equifax Transunion Experian One free report annually from each bureau Even if the student has no credit If information is inaccurate contact the bureau and file a claim 20 10

11 Protect Your Identity 21 Protect Your Identity 22 11

12 Review Risk Management Techniques Meet Gus Insurance Emergency Savings Identity Theft PROTECTION PLANNING Photo Credits Pack.asp PROTECTION PLANNING 12