Your 2023 money fears are here! Crawl under the covers for this week’s blog post. We’re planting a flashlight beneath our chin and turning out the lights to share a few financial fears that are lurking at the end of 2023. But before you board the windows and bar the doors, rest assured that these worries all have potential happy resolutions. Read on for tips and info to make our four financial phantoms like any horror movie beasties – these money fears may be scary to witness but not actually able to hurt you…
1. SPOOKY SPOOFERS
If you are a regular FFCCU blog reader, you’ve heard about this money fear before – and with good reason! Scammers are out in force across every platform you can imagine: email, text, phone, apps, and more! They are adaptable, unscrupulous criminals imitating legitimate businesses and organizations you trust. They rely on the victim’s feelings of shame and embarrassment at having been tricked to slow their response to theft.
What to do about these schemes? Ideally, don’t even respond to their messages! If an email or call is suspicious, but you aren’t sure – get in touch with the organization on your own through their official contact methods and confirm if the message is legitimate. If the worst case happens and you give a spoofer sensitive information, contact your credit union (or bank, credit card co., etc.) immediately for help mitigating the damage. Responding to a scam quickly might even help you get reimbursed for the money they stole!
Remember: FFCCU will never text, email, or call you asking for personal or account information, like your social security or account number. If someone reaches out and asks for that information, they are not from FFCCU, and it’s likely a scam.
MOVIE MONSTER IT REMINDS US OF:
John Carpenter’s “The Thing.” Spoofers shape-shift to imitate organizations and people we trust, sometimes to steal money, account information, or even contact details to pose as us and further the con! But there are usually simple tests you can conduct to prove they aren’t the real deal.
2. STUDENT LOANS RISE AGAIN
Federal student loan payments have been on pause for years – and their return tops the list of money fears for many grads. The financial crunch of the pandemic was offset by repeated pauses on expected student loan payments, but those monthly bills have come back to life and are coming for borrowers! Fortunately, measures to ease student loan burden, like income-based repayment, the SAVE program, and Public Service Loan Forgiveness, exist. It’s scary to take on a new, sizeable monthly payment, but we’re past the period of uncertainty about what would transpire with student loans, and relief options are either available or coming soon. It may not be the solution borrowers were hoping for, but it keeps the worst of student debt at bay for a while longer.
MOVIE MONSTER IT REMINDS US OF:
Zombies. A seemingly endless sea of payments slowly shambling towards you because of your brains? Yeah, that sounds about right. And just like horror flick heroes keeping the walkers at bay, there are some measures to board up the entrances and buy some breathing room.
3. THE LOST BANKS
The collapse of a number of large commercial banks earlier this year sparked money fears for many. We went into detail on the topic with a previous blog, but in brief: these big banks pursued a riskier business model that faltered due, in part, to rising interest rates. Many of their customers had deposits well above the insured amount. In fear of losing money, a surge of these customers started to drain their deposits out of savings, causing a collapse.
This scared a lot of members into thinking: could the same thing happen to me? If a federally insured bank could be sucked dry, what’s protecting me? The good news is you don’t have much to fear – many credit unions, and FFCCU especially, have protections against this situation.
First, credit unions are less likely to engage in these risky financial behaviors. Additionally, deposits at FFCCU are covered under American Share Insurance (ASI) – a credit union-owned fund that protects up to $250,000 per account (rather than per person). Even in the unlikely circumstance of a failure, your accounts have a remarkable level of protection. It’s worth noting that in nearly 50 years, no member has ever lost money with an ASI-insured account. (NOTE: Other credit unions may be insured through other entities, so these details won’t necessarily apply to non-FFCCU members.)
MOVIE MONSTER IT REMINDS US OF:
Dracula. Draining his victims of their “liquid assets,” the quintessential vampire may seem scary – but horror fans know there are plenty of ways to remain safe from this undead menace. Dracula can’t come in without an invitation, and even then, has to worry about crosses, stakes, garlic, running water, silver, and a variety of other anti-vamp protections – a bit like your comprehensive ASI insurance protecting every one of your accounts!
4. THE CASH CONSPIRACY
One of the many financial conspiracy theories floating around the internet relates to paper cash and the prospects of a government-backed digital currency (called a Central Bank Digital Currency or CBDC). Is the government trying to get rid of all paper dollars and coins?! What can the government do if our money is wrapped up in a CBDC: could they review all your private transactions, limit what you buy, or even confiscate your funds?! Some more reactionary conspiracies conflate the initiative with research into a CBDC. FedNow is rolling out to eligible banks and credit unions…does that mean paper money is on the way out, and Big Brother has a grip on your account?!
Absolutely not! To begin with, there are numerous problems with transitioning to entirely digital currencies. Concerns about hacking, unbanked persons having access, technological and wireless connection issues, and a host of other problems will likely keep a paper money-free society in the thinking stage for a long time. Even the less sweeping proposal of introducing a CBDC has a lot of unresolved problems that proponents of the system are working to address. On top of that, those advocating for a CBDC point out that such a program would never take off without congressional approval. Among our money fears, this one is perhaps the most sensational.
But what about the FedNow program that is rolling out this year? Confusion arose when FedNow was mixed up with CBDC plans, but they have nothing to do with each other! FedNow is a program to speed up funds transfer between financial institutions. The impacts of this won’t always be readily apparent to bank customers or credit union members, though it does provide a method for much speedier payroll fulfillment. In the words of the US Federal Reserve itself: “FedNow is neither a form of currency nor a step toward eliminating any form of payment, including cash.” Myths busted.
TV TERROR IT REMINDS US OF:
The X-Files. There’s no mysterious cigarette-smoking man lurking in a dark room conspiring to abduct your dollar bills. And you don’t have to worry that a secret “truth is out there.” The number of problems that need to be worked through to successfully implement even a limited CBDC will keep it on the horizon for a time. Cash money isn’t going anywhere any time soon, and the effects of FedNow will either be unnoticeable or beneficial to most Americans. When it comes to these fears, you should be more skeptical than even Agent Scully!