OHIO — Did you make any New Year’s resolutions that involve improving your financial health? January is Financial Wellness Month and the perfect time to take inventory of your savings and investments to ensure you are fiscally fit for 2022.
It’s no surprise that COVID-19 caused consumers of all ages to think differently about their finances. According to one consumer sentiment tracker, 59 percent plan to make permanent changes to the way they spend and save. If you are working only part time, or are retired and on a fixed income, it’s important to know if you have enough money in emergency savings, for retirement income, and to not forget about the effect inflation has on finances.
Fortunately, the Department of Commerce is uniquely suited to give guidance in this area based on the industries we work with and regulate. We can help you reach some of your financial goals in 2022 with the following tips from our divisions of Financial Institutions and Securities.
Create a budget and track your spending
Determine how much money you need to cover your essential monthly expenses such as your mortgage or groceries. If your expenses exceed your income, you’ll need to make some adjustments. Start by cutting back or eliminating anything that is not necessary.
Be careful giving money to family, friends, or charities. Although it is nice to want to help others in need, you need to be sure you can cover your expenses first and plan for unexpected emergencies.
Review your savings and investments for better returns
Given how low interest rates are, talk to your local bank or credit union to find out if there are ways to increase the returns on your accounts, or if they have any short-term investment vehicles to consider such as an IRA or certificate of deposit. They may have specific products more suited for older clients.
Review your current investment portfolio and determine if your asset allocations (e.g., stocks vs. bonds) meet your goals or need adjusting as you near retirement or if you’re already retired, based on risks and returns.
If you don’t have a financial adviser, consider hiring one. Contact the Division of Securities’ Investor Protection Hotline (877-683-7841) to ask if the person is licensed to sell securities in Ohio, if any enforcement actions have been taken against them, and if the security has been properly registered with either federal or state regulators.
Check your accounts monthly and your credit reports yearly
Review your monthly account statements. Report any inaccuracies immediately to the financial institution, especially if you suspect any fraudulent charges on your accounts. Your liability is limited, but only if you contact the bank or creditor, usually within 60 days.
Typically, you can get a free copy of your credit reports from the three major reporting bureaus annually by going to AnnualCreditReport.com. Due to the COVID-19 pandemic, Equifax, Experian, and TransUnion are continuing to offer free weekly online credit reports.
Build an emergency fund
An emergency fund helps you handle a financial surprise without going into debt or resorting to high-cost loans. Start by putting in small amounts, such a $100 per month. Aim to have three-to-six months’ worth of your living expenses in a separate savings account.
Don’t become a target for financial fraud
Fraudsters will target older consumers because they assume you have saved money most of your adult life, may have a pension, and have invested money for many years in an employer-sponsored investment account such as a 401(k).
Never give your Social Security number, date of birth or credit card numbers in response to unsolicited email messages or “cold callers” over the phone. If you receive a call from someone claiming to be with the IRS or Social Security Administration, it is a scam, and you should hang up! The IRS never asks for personal information over the phone, and the Social Security Administration rarely contacts you over the phone unless there is ongoing business.
Related: learn about scams that target older adults
Use a credit card whenever possible. If you opt for using a debit card and it is compromised, scammers have direct access to your bank funds. Additionally, in the case of a fraudulent transaction, a credit card provides additional protections.
Set up fraud alerts on your various financial accounts so you know if someone is trying to access your money. Consider asking a family member or friend to be a “trusted contact” whom a financial institution can call if they suspect suspicious activity and can’t reach you.
Don’t make quick investment decisions based on sales pitches that refer to “great deals that will be offered for only a short time” or those that offer unreasonable rates of return. Before investing any money, call the Ohio Division of Securities’ Investor Protection Hotline (877-683-7841) to learn more about the salesperson and the investment product being offered for sale.
Do your homework when using peer-to-peer (P2P) payment apps. The popularity of these commonly known “money transfer apps” is growing, but consumer protections are limited and may generally be based on how the payment is funded. We created a great resource to help Ohioans learn more.
Older Ohioans have worked hard to accumulate money during their years of employment, so now is the time to enjoy the benefits. These tips will help older adults ensure their money lasts as long as they do.
The Ohio Department of Commerce is the state’s chief regulatory agency, focused on promoting prosperity and protecting what matters most to Ohioans. We ensure businesses follow the laws that help them create jobs and keep Ohioans safe. To learn more about what we do, visit our website at com.ohio.gov.
