No matter how much money you have, if you never learn to manage it, you will always be stressed and you may even lose what you have. Financial literacy, which is not taught in our schools, is mandatory, especially in today’s market.
Also, if you don’t manage your money, you may fall into one of the traps below.
Excerpted from comcast.net Finance
Most of us are so busy trying to keep our heads above water (and many even fighting to save their homes) that we may have developed financial habits that harm us.
Forgery. Loan fraud. Counterfeiting . . . It’s surprisingly easy to adopt a dicey financial habit under the guise of “everyone does it,” “I was just trying to help” or “it seemed like a good idea at the time” only to discover later that what you’ve done is in fact, illegal.
Odds are you won’t get caught, but if you do, the consequences and penalties can be harsh. Here are six money habits you should quit now.
- This one is more prevalent than any of us would guess: Using someone else’s name and identity is against the law. We actually know of someone who allowed his financially stressed parents to use his name to obtain credit — which they could not get in their own names because of already-ruined credit. It was discovered. The person who did this lost a very good job as a result, which is something no one wants to happen in this market. Our concern is that parents would put their child in that position and risk their future because of their own needs? That’s horrible.
- Many banks offer overdraft protection that kicks in if you write a check for more than the balance of your account. But writing a check that you know is no good is illegal. This, technically, is writing a bad check and THAT is illegal. There are actually criminal penalities involved if the bank decided to complain. You either have the money or you don’t, and writing a check when you don’t is against the law.
- Signing someone else’s name on a check is generally considered forgery and would be illegal in most states, according to Carol Kaplan, a spokeswoman for the American Bankers Association in Washington, D.C. But suppose an adult child signs an elderly parent’s name because the parent is incapacitated or a parent signs a child’s name because the child is away at college. Guess what? Those signatures are still forgeries, unless a power of attorney is in effect.
- This was prevalent in recent years, but we doubt that muh of it is happening now due to devalued homes and more-cautious lenders: Homebuyers and homeowners who want to refinance may be tempted to inflate their income or hide some of their debts to better their chances of a “yes” from the lender. But lying on a loan application is fraud, and lenders are required to check an applicants’ information, but we are finding that they don’t, which makes it difficult for all concerned down the road.
Living with a lie and dealing with the potential consequences is not worth it.
- You’ve seen scribbles on currency . . . However, it isn’t meant to be written on, chewed by pets or run through clothes washers. Accidental damage to currency normally isn’t illegal, but deliberate defacement is, i.e. meaning your initials or a phone number written on paper currency. Federal law prohibits any action that mutilates, cuts, defaces, perforates or glues together U.S. currency or otherwise renders bills unusable. The law doesn’t offer specific examples of usability, but common sense should apply.
We hope you can join us at one of Marin Family Action’s Financial Literacy Workshops for high school students or Adults; however, if you are unable to do so, perhaps an online course will help answer Where Does All My Money Go?
