February 12, 2017 Payday loans offer relief at ‘a very...
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Sunday Gazette-Mail, February 12, 2017 11J By Kate White Staff writer Need cash now? Search on- line and dozens of websites turn up promising exactly that. Each year, 12 million Ameri- can adults take advantage of payday lenders, according to a Pew Research report. The loans, however conve- nient, warn the Federal Trade Commission, often are difficult to repay and “come at a very high price.” The FTC advises consumers thinking of taking out a payday loan to first consider some alter- native options. Lending companies hold a borrower’s check until the loan is due and charge borrowers additional fees every time a loan is extended. Borrowers write a check to the lender for the amount they want to borrow plus a fee. “A payday loan — that is, a cash advance secured by a per- sonal check or paid by electron- ic transfer is very expensive credit,” the FTC’s website states. “How expensive? Say you need to borrow $100 for two weeks. You write a personal check for $115, with the $15 fee to borrow the money. The check casher or payday lender agrees to hold your check until your next payday. When that day comes around, either the lender deposits the check and you re- deem it by paying the $115 in cash, or you roll-over the loan and are charged $15 more to extend the financing for 14 more days,” the website explains. “The cost of the initial $100 loan is a $15 finance charge and an annual percentage rate of 391 percent. If you roll-over the loan three times, the finance charge would climb to $60 to borrow the $100,” states information from the nation’s consumer pro- tection agency. Such loans are prohibited in West Virginia. Instead of a payday loan, the FTC suggests considering a small loan from a credit card union or small loan company. Do your research and shop to find the credit offer with the lowest cost. Make a budget and save mon- ey, the agency advises. “A savings plan — however modest — can help you avoid borrowing for emergencies,” the website states. The Pew report, which was published in 2012, found that payday loan borrowers are spending about $520 in interest on a $375 loan. Most borrowers use payday loans for ordinary living expens- es over the course of months, not unexpected emergencies over the course of weeks, the report states. An average borrower is in- debted about five months of the year, according to information from Pew, which states most payday loan borrowers are white, female and between 25 to 44 years old. “The bottom line on payday loans: Try to find an alternative,” the FTC’s website warns. “If you must use one, try to limit the amount. Borrow only as much as you can afford to pay with your next paycheck — and still have enough to make it to next payday.” Reach Kate White at [email protected], 304-348-1723 or follow @KateLWhite on Twitter. Payday loans offer relief at ‘a very high price’ By Jacob Bogage The Washington Post It’s time to stuff your suitcases full of all your earthly belongings and go shopping for a hoodie bearing some fearsome mascot. You’re headed off to college, per- haps the first time you will be left to your own financial devices. It’s a lib- erating feeling, but also a period that petrifies financial advisers and par- ents, too. Faced with student loans — along with fend-for-yourself expenses like paying for food and rent — many college students are often unprepared for the financial world they’re entering. “High schools and middle schools don’t do a good job preparing students for budgeting,” said Ronya Corey, senior vice president of wealth man- agement at Merrill Lynch. “Unfortu- nately for most students, going to college is a practical exercise in fi- nance.” And increasingly, students are leav- ing college with a big mound of stu- dent loan debt. Seven in 10 college students owe an average of $28,000 in student loans, according to an In- stitute for College Access & Success study in 2013, the last year for which such data is available. So how do you get through college with enough fiscal savvy to avoid living with your parents after gradua- tion? Here are some financial tips for college students to help you navigate those four (or five) years and exit with less monetary heartache then your peers: Start thinking about money now, Develop your financial strategy before you set foot on campus, said Katherine Dean, managing director of wealth planning at Wells Fargo. Hash out your expenses: tuition, books, rent, food, airfare home for Thanksgiving, entertainment, tickets to football games. Be transparent with yourself and your parents about how much college is really going to cost. Talk with your parents to get a stronger grasp on what real-world expenses look like. Go food shopping with a parent to learn how much groceries cost. Going on a family va- cation? Book travel plans with your mom so you know how much your family spends on airfare. “The earlier the better,” Dean said, “because it better equips and prepares them for what they’re getting into.” It’s never too late to approach your parents or a financial mentor, like a grandparent or family friend, to learn some of the same basics, Dean said. Make a budget, stick to it Remember all those expenses you laid out? The tuition, books, rent, food, entertainment and whatnot? Set goals for yourself about how much you want to spend on each and hold yourself to those goals. Categorize your spending into “buckets,” said Rick Harkins, wealth management adviser at Harkins Wealth Management in Providence, Rhode Island. And if you’re on track to overspend in one bucket, don’t pour money from another into it. “Stick to those allocations,” Harkins said. “If you spend down one bucket, don’t take from another.” Use online tools to track your spending habits and help you set ac- curate goals. Most banks offer free spending-tracking software. Other Web sites like Mint.com or eMoney do, as well. Monitor, protect your credit College is the first time a lot of young people get credit or debit cards. It’s also the first time young people might take on substantial amounts of debt in the form of student loans. Opening a credit card may help students establish a financial foothold and create a credit history. But there are potential pitfalls, Harkins said. Missing a single credit card pay- ment can ding your credit score and increase the fees and interest rate associated with the card. And some credit cards target students with free giveaways, but carry high fees and interest rates. Compare credit cards to find out the interest rates they charge. Re- search their fee structures. One card might have a low interest rate, but charge an exorbitant fee every time you withdraw money or make a pay- ment, said Michelle Cortes-Harkins, an adviser at Harkins Wealth Manage- ment (and Harkins’ wife). If you have a job in college that gives you a steady and relatively sub- stantial income, start paying down your student loans then and there, Cortes-Harkins said. Save, save, save. Then save more Have you saved yet? You should, financial advisers agree. In fact, take a break from reading this piece to go sock away a few dollars. College is a time rife with uncer- tainty, which means students need to have some money on hand for an unexpected expense. What if your car breaks down or you have to fly home suddenly? Harkins recommends regarding saving as a subscription. If you’re willing to pay $7.99 a month for Net- flix, couldn’t you put aside $10 a month — or $20 or however much you can afford — to “pay yourself?” “As soon as you do have discretion- ary income and start living on a bud- get, you can probably find that mon- ey,” Harkins said. View your saving as a sliding scale, he said. It’s best to stash away 10 to 15 percent of your income, but if you have a job, maybe you can afford to save 20 percent. If you’re living off an allowance from your parents, maybe save 7 or 8 percent. That’s a good way to start saving for retirement or some larger future expenses, such as buying a home or going to graduate school — because no one wants to leave college. Set up a Roth IRA — an individual retirement account — the advisers say. You can invest up to $5,500 a year in a tax-free Roth IRA. You can take $10,000 out of that account after five years without penalty to buy your first home or for more education. Otherwise, that money you’ve in- vested stays locked up accruing inter- est until you’re 59 1 / 2 years old, when — presto! — you have retirement savings! “Students are pretty reluctant to open a Roth IRA because they think, ‘I can’t access that money for another 40 years,’” Corey said. “To have espe- cially millennials think about long- term planning, I find very difficult. I show people the power of compound- ing to show them how far ahead it gets them.” Live below, not within, your means Think about it this way: If you live below your means during college, you have a bunch of money left over after college when you’re thrust into the dark and scary “real world.” Take advantage of student dis- counts, Cortes-Harkins said. They’re everywhere, from riding public trans- portation, to buying movie tickets. High school and college students can save 10 percent on Amtrak fares with a “student advantage” card. Col- lege students get free two-day ship- ping from Amazon. Use travel Web sites such as Kayak and Travelocity to hunt for travel deals. Think twice about whether you really need that sweater from the book store or that extra cup of coffee. Talk with your roommates about shar- ing expenses for things like groceries or dorm or apartment decor. Talk with your significant other about who pays for every date. “Talk about money,” said Harkins. “I think, in years past, we didn’t even talk about money when we were kids. It was a taboo subject.” A few money rules every college student should live by 1111 Oakhurst Drive • Charleston, WV 25314 304-941-1704 BibleCenterSchool.com Building a foundation for high school by offering a rigorous Preschool - 8th grade including a TK program. We strive to impact the hearts, hands, and head for Christ. NOW ENROLLING FOR 2017-2018 • ½ day Toddler Program (1 and 2 year olds) • ½ day Preschool Program (3 & 4 year olds) • Pre-K class programs with Creative Curriculum • After school programs until 2 p.m. • Early Drop Off beginning at 8 a.m. • Emphasis on early childhood growth and development ENROLLING NOW First Presbyterian Church is Conducting tours and accepting applications for classes beginning in August 2017: On the corner of Virginia Street & Leon Sullivan Way Charleston, WV www.firstpresby.com ******304-343-8961 ext. 128*** Offering quality early childhood development since 1946 Accep�ng Applica�ons From Infants to Age 12 Open 6:30 a.m.-6:00 p.m. 302 21 st St., Nitro 304-755-2555 King’s Way Chris�an EduCare ’ hi d d d d d d d d d
Transcript of February 12, 2017 Payday loans offer relief at ‘a very...
Sunday Gazette-Mail, February 12, 2017 11J
By Kate WhiteStaff writer
Need cash now? Search on-line and dozens of websites turnup promising exactly that.
Each year, 12 million Ameri-can adults take advantage ofpayday lenders, according to aPew Research report.
The loans, however conve-nient, warn the Federal TradeCommission, often are difficultto repay and “come at a veryhigh price.”
The FTC advises consumersthinking of taking out a payday
loan to first consider some alter-native options.
Lending companies hold aborrower’s check until the loanis due and charge borrowersadditional fees every time a loanis extended. Borrowers write acheck to the lender for theamount they want to borrowplus a fee.
“A payday loan — that is, acash advance secured by a per-sonal check or paid by electron-ic transfer is very expensivecredit,” the FTC’s website states.
“How expensive? Say youneed to borrow $100 for two
weeks. You write a personalcheck for $115, with the $15 feeto borrow the money. The checkcasher or payday lender agreesto hold your check until yournext payday. When that daycomes around, either the lenderdeposits the check and you re-deem it by paying the $115 incash, or you roll-over the loanand are charged $15 more toextend the financing for 14 moredays,” the website explains.
“The cost of the initial $100loan is a $15 finance charge andan annual percentage rate of 391percent. If you roll-over the loan
three times, the finance chargewould climb to $60 to borrowthe $100,” states informationfrom the nation’s consumer pro-tection agency.
Such loans are prohibited inWest Virginia.
Instead of a payday loan, theFTC suggests considering asmall loan from a credit cardunion or small loan company.Do your research and shop tofind the credit offer with thelowest cost.
Make a budget and save mon-ey, the agency advises.
“A savings plan — however
modest — can help you avoidborrowing for emergencies,” thewebsite states.
The Pew report, which waspublished in 2012, found thatpayday loan borrowers arespending about $520 in intereston a $375 loan.
Most borrowers use paydayloans for ordinary living expens-es over the course of months,not unexpected emergenciesover the course of weeks, thereport states.
An average borrower is in-debted about five months of theyear, according to information
from Pew, which states mostpayday loan borrowers arewhite, female and between 25 to44 years old.
“The bottom line on paydayloans: Try to find an alternative,”the FTC’s website warns. “If youmust use one, try to limit theamount. Borrow only as muchas you can afford to pay withyour next paycheck — and stillhave enough to make it to nextpayday.”
Reach Kate White [email protected],
304-348-1723 or follow@KateLWhite on Twitter.
Payday loans offer relief at ‘a very high price’
By Jacob BogageThe Washington Post
It’s time to stuff your suitcases fullof all your earthly belongings and goshopping for a hoodie bearing somefearsome mascot.
You’re headed off to college, per-haps the first time you will be left toyour own financial devices. It’s a lib-erating feeling, but also a period thatpetrifies financial advisers and par-ents, too.
Faced with student loans — alongwith fend-for-yourself expenses likepaying for food and rent — manycollege students are often unpreparedfor the financial world they’re entering.
“High schools and middle schoolsdon’t do a good job preparing studentsfor budgeting,” said Ronya Corey,senior vice president of wealth man-agement at Merrill Lynch. “Unfortu-nately for most students, going tocollege is a practical exercise in fi-nance.”
And increasingly, students are leav-ing college with a big mound of stu-dent loan debt. Seven in 10 collegestudents owe an average of $28,000in student loans, according to an In-stitute for College Access & Successstudy in 2013, the last year for whichsuch data is available.
So how do you get through collegewith enough fiscal savvy to avoidliving with your parents after gradua-tion? Here are some financial tips forcollege students to help you navigatethose four (or five) years and exit withless monetary heartache then yourpeers:
Start thinking about money now,Develop your financial strategy
before you set foot on campus, saidKatherine Dean, managing director ofwealth planning at Wells Fargo.
Hash out your expenses: tuition,books, rent, food, airfare home forThanksgiving, entertainment, ticketsto football games. Be transparentwith yourself and your parents abouthow much college is really going tocost.
Talk with your parents to get astronger grasp on what real-worldexpenses look like. Go food shoppingwith a parent to learn how muchgroceries cost. Going on a family va-cation? Book travel plans with yourmom so you know how much yourfamily spends on airfare.
“The earlier the better,” Dean said,“because it better equips and preparesthem for what they’re getting into.”
It’s never too late to approach yourparents or a financial mentor, like agrandparent or family friend, to learnsome of the same basics, Dean said.
Make a budget, stick to itRemember all those expenses you
laid out? The tuition, books, rent,food, entertainment and whatnot? Setgoals for yourself about how muchyou want to spend on each and holdyourself to those goals.
Categorize your spending into“buckets,” said Rick Harkins, wealthmanagement adviser at HarkinsWealth Management in Providence,Rhode Island. And if you’re on trackto overspend in one bucket, don’t pour
money from another into it.“Stick to those allocations,” Harkins
said. “If you spend down one bucket,don’t take from another.”
Use online tools to track yourspending habits and help you set ac-curate goals. Most banks offer freespending-tracking software. OtherWeb sites like Mint.com or eMoneydo, as well.
Monitor, protect your creditCollege is the first time a lot of
young people get credit or debit cards.It’s also the first time young peoplemight take on substantial amounts ofdebt in the form of student loans.
Opening a credit card may helpstudents establish a financial footholdand create a credit history. But thereare potential pitfalls, Harkins said.
Missing a single credit card pay-ment can ding your credit score andincrease the fees and interest rateassociated with the card. And somecredit cards target students with freegiveaways, but carry high fees andinterest rates.
Compare credit cards to find outthe interest rates they charge. Re-search their fee structures. One cardmight have a low interest rate, butcharge an exorbitant fee every timeyou withdraw money or make a pay-ment, said Michelle Cortes-Harkins,an adviser at Harkins Wealth Manage-ment (and Harkins’ wife).
If you have a job in college thatgives you a steady and relatively sub-stantial income, start paying downyour student loans then and there,Cortes-Harkins said.
Save, save, save. Then save moreHave you saved yet? You should,
financial advisers agree. In fact, takea break from reading this piece to gosock away a few dollars.
College is a time rife with uncer-tainty, which means students need tohave some money on hand for anunexpected expense. What if your carbreaks down or you have to fly homesuddenly?
Harkins recommends regardingsaving as a subscription. If you’rewilling to pay $7.99 a month for Net-flix, couldn’t you put aside $10 amonth — or $20 or however muchyou can afford — to “pay yourself?”
“As soon as you do have discretion-ary income and start living on a bud-get, you can probably find that mon-ey,” Harkins said.
View your saving as a sliding scale,he said. It’s best to stash away 10 to15 percent of your income, but if youhave a job, maybe you can afford tosave 20 percent. If you’re living off anallowance from your parents, maybesave 7 or 8 percent.
That’s a good way to start savingfor retirement or some larger futureexpenses, such as buying a home orgoing to graduate school — becauseno one wants to leave college.
Set up a Roth IRA — an individualretirement account — the advisers say.You can invest up to $5,500 a year ina tax-free Roth IRA. You can take$10,000 out of that account after fiveyears without penalty to buy your firsthome or for more education.
Otherwise, that money you’ve in-vested stays locked up accruing inter-
est until you’re 591/2 years old, when— presto! — you have retirementsavings!
“Students are pretty reluctant toopen a Roth IRA because they think,‘I can’t access that money for another40 years,’” Corey said. “To have espe-cially millennials think about long-term planning, I find very difficult. Ishow people the power of compound-ing to show them how far ahead itgets them.”
Live below, not within, your meansThink about it this way: If you live
below your means during college, youhave a bunch of money left over aftercollege when you’re thrust into thedark and scary “real world.”
Take advantage of student dis-counts, Cortes-Harkins said. They’reeverywhere, from riding public trans-portation, to buying movie tickets.
High school and college studentscan save 10 percent on Amtrak fareswith a “student advantage” card. Col-lege students get free two-day ship-ping from Amazon. Use travel Websites such as Kayak and Travelocityto hunt for travel deals.
Think twice about whether youreally need that sweater from thebook store or that extra cup of coffee.Talk with your roommates about shar-ing expenses for things like groceriesor dorm or apartment decor. Talk withyour significant other about who paysfor every date.
“Talk about money,” said Harkins.“I think, in years past, we didn’t eventalk about money when we were kids.It was a taboo subject.”
A few money rules every college student should live by
1111 Oakhurst Drive • Charleston, WV 25314 304-941-1704 BibleCenterSchool.com
Building a foundation for high school
by offering a rigorous Preschool - 8th
grade including a TK program. We
strive to impact the hearts, hands,
and head for Christ.
NOW ENROLLING FOR
2017-2018
• ½ day Toddler Program (1 and 2 year olds)
• ½ day Preschool Program (3 & 4 year olds)
• Pre-K class programs with Creative Curriculum
• After school programs until 2 p.m.
• Early Drop Off beginning at 8 a.m.
• Emphasis on early childhood growth and development
ENROLLING NOWFirst Presbyterian Church is
Conducting tours and acceptingapplications for classes beginning in
August 2017:
On the corner of Virginia Street &Leon Sullivan Way Charleston, WV
www.firstpresby.com******304-343-8961 ext. 128***Offering quality early childhood development since 1946
Accep�ng Applica�ons
From Infants to Age 12Open 6:30 a.m.-6:00 p.m.
302 21st St., Nitro 304-755-2555
King’s Way Chris�an EduCare’ h i ddddddddd
