The Androscoggin Bank Blog

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Which Should Come First: Buying or Selling Your Home?

picture of neighborhoodIt may not have seemed like it at the time, but buying your first home was simpler than buying your next home. Why? Because now you have to deal with that previous mortgage and concern yourself with timing the purchase of your new home. Before making that offer on your new home, you must decide which makes more sense: to sell your existing home before purchasing a new one or to wait to sell until you have found a new home for yourself. Like any major decision, it helps to sort out the pros and cons:

Should You Sell First?

Good Idea:

It feels great to sell your house and release yourself from that mortgage. Selling first enables you to free up the equity of your current home—something many homebuyers need to do to pay for closing costs and that down payment on your next house.
Selling first also means that you avoid paying the cost of two homes, including utilities and real estate taxes. And don’t forget the cost of the dual mortgage payment.

Bad Idea:

If you sell your house before finding your next one, the stress of being without a roof over your head may lure you into a hasty deal. Short-term apartment rentals can help alleviate the feeling of pressure and prevent poor, reaction-based decisions when you need to find a new house quickly. Some sellers who find themselves in between homes negotiate a “rent-back agreement” with the lenders and the buyers to be able to stay in the home for a set period of time. While this type of arrangement can alleviate timing hurdles, it’s also a more complicated legal arrangement that can open up another realm of complexities to your housing search and transition.

Should You Buy First?

Good Idea:

Let’s not forget the reason you are moving in the first place. For a variety of reasons, you need a home that is more suitable for you and your family. It might be in a better location, it might have certain amenities that your current house lacks. One of the major advantages of buying your next house before selling your current home is time. You won’t be in a rush and can take the time to find a home that truly suits your needs.
If you can afford the luxury of buying first, you can avoid the inconvenience of having to find a suitable apartment to live in for some indefinite period, plus the cost of storing belongings that won’t fit in the short-term rental.

Bad Idea:

For the non-investor, holding a dual-mortgage is usually not a desirable situation. Relying on the timing of real estate deals and closing timeframes can be a bad idea because deals don’t always go smoothly. Closing delays can prolong the process for weeks. What if your buyer has trouble getting their mortgage? What if the home inspector isn’t so impressed with the improvements you made in your kitchen? These kinds of issues can turn the closing season into a longer period than anticipated, costing you more money as you deal with dual-mortgages.
Another risk associated with buying your new home before selling the old one is that you might be more inclined to accept a low bid that undervalues the home. Buying into a second mortgage can put you in a more desperate position that has you begging for deals you would have swiftly turned down if not the victim of a vulnerable position.
Whichever option you decide fits your situation the best, prepare yourself for necessary costs as you make the transition into your next home. It’s important to look at both the financial costs and the emotional costs for you and your family.

Sources:
http://www.yourmortgage.com.au/article/buy-first-and-then-sell-or-sell-first-then-buy-79267.aspx
http://www.realtor.com/advice/buy/buying-a-house-while-selling-a-house/


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MainStreet Foundation Awards Annual $25K for Kids Grant to Preble Street Teen Center

group photo

Androscoggin Bank’s MainStreet Foundation announced that Preble Street Teen Center has been named the 2016 recipient of its annual $25K for Kids grant. The award was presented at the MainStreet Foundation annual meeting held November 17, 2016 at Cheverus High School in Portland, Maine. Focused on its mission of providing the three essentials of life – food, shelter and security – to as many children as possible, the $25K for Kids award was presented to Preble Street Teen Center to help it maintain and expand its many services to children and teens.

Preble Street is a statewide organization aimed toward providing accessible, barrier-free services to empower people experiencing problems with homelessness, housing, hunger and poverty, and to advocate for solutions to these problems. The Preble Street Teen Center focuses on the youth and teens of Maine who have been forced to leave home, often battling mental illness, substance abuse and homelessness. Every year, Preble Street is seeing in increase in the number of youth asking for help and the increasing complexity of their situations.  

Elena Schmidt, Chief Development Officer of Preble Street, shared why the $25K for Kids award is so meaningful to Preble Street: “It’s hard to overstate the importance of MainStreet Foundation funding for Maine kids who really need it.  It means safety around the clock, meals, health care, counseling, education and employment.  And most important, it gives kids who have been abandoned and abused—who are in the hardest times of life, whose futures hang in the balance— a chance to begin to trust, to dream, to reach their goals, and to find a place to call home.” 

MainStreet Foundation’s mission is simple, focused and essential: to help keep kids safe, healthy, active, happy, educated and nourished. The $25K for Kids annual award is even more focused on the three essentials of life – food, shelter and security. According to Melissa Rock, Vice President and Director of Marketing at Androscoggin Bank, “We selected Preble Street Teen Center because we’re committed to making an impact on as many kids as possible. When we learned more about how the Teen Center in Portland is serving as a hub for teens all over Maine, with the numbers of kids in need only rising, we were moved to help. Preble Street also partners with many other organizations that support at-risk kids, which further extends the reach of this award.” To learn more about Preble Street, visit preblestreet.org

Preble Street Teen Center was one of three finalists for the $25k for Kids award. Chosen from a pool of numerous applicants, Boys & Girls Clubs of Southern Maine, an organization focused on providing positive environments for children and teens to realize their full potential, and Safe Families for Children – Maine, an organization which hosts vulnerable children and creates family-like support for desperate families.

This is the fourth year that MainStreet Foundation has awarded this annual grant. In 2015, Longley Elementary School was awarded the grant for its after-school programming including an innovative walking school bus. In 2014, the grant was awarded to the Androscoggin Childhood Advocacy Center (ACAC), a child-focused center that promotes the healing of victims of child sexual abuse. In 2013, Good Shepherd Food Bank’s BackPack Program in Lewiston and Auburn Schools received the grant. 

About Androscoggin Bank’s MainStreet Foundation

The MainStreet Foundation is Androscoggin Bank's $1,000,000 Foundation with a mission that is simple, focused and essential: to help keep at-risk kids in Maine safe, healthy, active, happy, educated, and nourished. Four times a year, MainStreet Foundation makes grants (up to $5,000) to excellent non-profit agencies actively working in our communities to help kids thrive. These grants vary based on the need and typically exceed $50,000 per year. In 2011, Androscoggin Bank pledged to donate $100K to the MainStreet Foundation in honor of outgoing Bank President Steven A. Closson. With this gift, MainStreet is able to offer four $25K individual grants – one in each year starting in November of 2013. 

About Androscoggin Bank

Androscoggin Bank, headquartered in Lewiston, Maine since 1870, is dedicated to serving the communities of Maine, its residents and the business community.  As of 12/31/15, the Bank’s asset size was $866,645,754. Delivering smarter banking services and products is our commitment every day. Androscoggin Bank is Member FDIC.


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Do You Need a Mortgage Preapproval? Why (and how) to Get One.

woman with a calculator

Unless you were recently selected as the No. 1 pick in the NFL draft or released a hit album, you probably won't pay for your new house in cash. Like millions of Americans, you'll take out a mortgage.

 

Before you begin your housing search, it’s worth your time to get a mortgage preapproval, which is usually good for up to 90 days. Lenders will review and verify some of your financial information, then tell you how much money they'd be willing to let you borrow.

 

Getting preapproved can speed up the homebuying  process. In a competitive market, it’s not uncommon for sellers to receive multiple offers on the same home. When you’re looking at homes, a preapproval letter can be a great tool with which to impress sellers. The document indicates that you're serious about buying.

 

More importantly, it shows you'd probably get the needed financing and that you have the backing of a lender to go through with a deal. Having that kind of support could even give you additional leverage when negotiating a home’s final price.

 

Don't confuse preapproval with prequalification.

 

Although they sound quite similar, a mortgage prequalification is not the same as a preapproval letter. The former is simply when a lender provides a potential homebuyer with a rough estimate of how large of a loan he or she might be able to take out. This is based on little background information, and so prequalification letters don't carry much weight if presented to a seller.

 

On a very basic level, buying a home is like deciding where to go for dinner. Although the possibilities may seem endless, you'll need to stick to your budget. Ask yourself, how much house can I afford? And stay within that range. Otherwise, you may end up overextended and regretting your decision. A mortgage preapproval ensures that you can focus on looking at homes that you can afford.

 

How to get a mortgage preapproval.

 

To obtain a preapproval, you'll need to provide your would-be lender with some financial documentation, including a copy of your credit report, tax returns, pay stubs and checking and savings account statements. This helps financial institutions determine your creditworthiness. Usually it's free, but you may have to pay the lender's cost to get your credit report.

 

Getting a mortgage preapproval isn't a 100% guarantee that you'll receive a loan. However, as long as there aren't any dramatic changes in your personal finances, it's fairly safe to assume that the lender will let you borrow the stated amount. Therefore, it's best not to switch jobs just before applying for a mortgage and to avoid racking up additional debt between getting preapproved and actually trying to borrow the money.

 

Before applying for a preapproval, work on improving your credit score. Reduce your debt as much as possible while making sure not to accumulate any more of it. These moves will make you look like a better risk to lenders.

 

Once you have a preapproval letter in hand, you'll be that much closer to buying your own home.

 

© Copyright 2016 NerdWallet, Inc. All Rights Reserved.

 

 

 

 


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Be vigilant against skimming fraud

A lonely gas station

While most of us are aware that we need to secure our personal information--when was the last time you looked at the device you use to swipe your debit or credit card? 

A newer and less obvious type of fraud, skimming, takes advantage of the hardware we use all the time to process credit and debit card transactions. It is harder to spot and can go undetected for months.

What is skimming?

Skimming is a kind of card fraud that places an extra part on physical card swipers and dippers. The goal is to collect your card numbers and any associated pins. These devices are typically placed on machines that don’t regularly have staff maintenance – for example at gas pumps. Fraudsters are also targeting locations such as ATMs and even the point-of-sale at a store—though these areas are often better monitored than the lonely gas pump. 

How do I spot a skimmer?

Skimmers are made to look like part of the card reader machine. Advanced operations often run a camera nearby that captures the pin information associated with the card. The thief leaves the device in place and then can retrieve it later, match any pins to specific cards, and make counterfeit withdrawals or purchases.

What can you do?

One way to stop this type of theft is to spot it before you insert your card. So a little detective work may be necessary.

 

 

  • Does it wiggle? Look for obvious extra layers and temporary looking attachments. ATMs are rugged machines. Many are outside and built to stand up to the weather and hard use. There shouldn’t be anything loose on the machine. If the card slot moves or does not seem to be a permanent part of the machine, it’s time to dial up your fraud radar. Don’t use a card reader with parts attached by duct tape or a sign that says “Please use the temporary card reader.”

 

 

  • Is it a real ATM? Some third-party, nonbank machines might be set up just to steal your information. If you can, plan ahead and use the ATMs that you are familiar with – or that are located on bank premises.

  • Does something seem different? If you use the same ATM every week and something seems odd, point it out to someone in the branch. Androscoggin Bank team members have been trained to spot skimmers at their locations, but it helps if we are all vigilant. 

Protect your PIN.

For the crooks to win, they need your card number and, where applicable, your pin. Try to protect your PIN by covering the keypad with your other hand as you enter the number. 

Be suspicious to be safe.

If it doesn’t look right, it probably isn’t. Take the time to be aware of changes, obvious signs of prying or scratching, double sided tape, or loose parts on the card reader to protect your information, and always shield your PIN.


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What to do if you’re a Victim of Identify Theft

keys imageIf someone has used your identity for his or her own gain, you are the victim of a crime. Your role in fighting back and limiting the extent of the financial damage is summarized in a recent video released by the Federal Trade Commission.

This is a good and simple video that helps you with some steps to take right away.

Follow this link to the Federal Trade Commission site for the video and other helpful information. 


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Ready to sell your home? 10 Steps to Take Before the First Showing

image of living room

Preparing to sell your home can be surprisingly difficult. For some, it’s an emotional process. For others, it’s simply an asset and they want the highest return on their investment.

 

Regardless, when it’s time to sell your home, you need to spend time thinking like a buyer. These 10 tips will help you prep your home, inside and out.

 

  1. Do a drive by. If a potential buyer sees trash on the lawn or overgrown weeds, they won't be enticed to come inside. Boost your home's curb appeal by planting a few colorful flowers at the entrance, and mow the lawn.
  2. Declutter. Most people are familiar with the deceptive cleanup strategy of stuffing all the mess under the bed or in a closet. Count on potential buyers checking closets and cupboards, and make sure they are tidy and organized.

  3. Lighten up.  Open up the blinds to allow as much natural light as possible. Consider adding extra lamps that can be dimmed for ambiance.

  4. Add accents. You don't have to do a major renovation to make your home more appealing. Little accents such as new sink hardware and cupboard knobs can make a big difference. If you opt for a bigger project, make sure it will add value instead of detracting from it.

  5. Neutralize. While you may love a bright orange living room, it could be too much for a potential buyer. Neutralize the color scheme by painting walls white and covering up any brightly colored furniture.

  6. Put up mirrors. Replace bold artwork with mirrors to make a room look bigger and lighter. As potential buyers walk through the house, they can catch glimpses of themselves, helping them envision themselves in the home.

  7. Aromatherapy. There’s no need to buy fancy candles or incense. On the day of a showing, simply place a couple of tablespoons of vanilla extract or other essential oil in the oven at 300 degrees. Within minutes, the home will be filled with a beautiful aroma.

  8. Feng shui. As potential buyers walk through the home, it should flow nicely. They shouldn't be bumping into furniture. Ensure each room is spacious and has a clear purpose. If you have a room that's an office/guest room/crafting trifecta, decide which role works best and then rearrange it for that purpose.

  9. Beautify the bathroom. Transform a bathroom into a spa. Fresh linens, bath mats and candles can make all the difference. Put the toilet seat down, and you can even fold the final sheet of the toilet paper into a fancy triangle.

  10. Clean. Ensure that your house is clean for showings. Don't forget to scrub the baseboards, remove the shower scum and dust. Consider getting carpets steam-cleaned as well. If you don’t have time, consider hiring a cleaner for important showings or an open house.

 

 

Try walking through your home, pretending to be a potential buyer, to see what needs fixing, and then tackle those details. Whether it’s a foul pet smell, a cluttered playroom or a outdated appliances, ask your real estate agent or a friend for honest feedback. With a few repairs, the house will be ready for showing  in no time.

© Copyright 2016 NerdWallet, Inc. All Rights Reserved.


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Tips for Hiring a Contractor for Homebuyers and Sellers

image of contractor jumping in air

Not every home is ready to sell without some TLC. Likewise, many homes are far from move-in ready, or lack the cosmetic features a homebuyer desires. Whether you are a homeowner selling your home or a buyer looking to move, hiring and working with contractors is a common aspect of the home selling or buying process. These considerations will make the process a little smoother:

1. Prioritize home improvement projects to get ready to sell.

When you have multiple improvements needed to get your house ready for the sale, it is paramount to prioritize the projects. The most important fixes need to get attention before any luxury upgrades. These are essential for the basic functioning of the house, including major components such as windows, doors and the roof. 

After taking care of the essential fixes, evaluate your remodeling budget. How much do you have leftover to fund additional improvements? If you have $10,000 left in the budget, prioritize again and consider what matters most to buyers: the kitchen or bathroom. A $100,000 leftover budget would enable you to invest in adding an extra room or installing high-end appliances in a complete kitchen makeover. Often this level of construction is only necessary if the home can’t compete in a very competitive buyer’s market.

2. Screen the contractor.

Hiring a qualified contractor is a significant part of getting improvements done on your house in a timely and quality manner. Start by asking people you trust for referrals. Contractors rely heavily on the strength of their reputation with past clients.

Part of the pre-qualifying process is making sure the contractor understands the scope of work involved and your goals for selling the home. If you receive bids from multiple contractors and one of the bids is significantly lower than the others, do some extra homework to be identify the variance in cost. Do they fully understand the project? Are they planning to use quality materials? When you hire, ask for the specific details of your agreement in a written contract, with both parties receiving a copy.

3. Work successfully with a contractor.

 

Recognizing that you want to put your house on the market, time is another critical factor. Look for a contractor who has the capacity to complete your project on your timeline. Before making the commitment, ask for a detailed schedule to be completed in the contract. If you are hiring the contractor for a small project amidst their larger projects, you could see delays on getting it completed, which will only slow your home sale.

It is ultimately up to you to keep the project on track and get your house on the market within your required timeline. Keep in contact with the contractor to confirm that the company is keeping the project on track. Work out a payment plan, in writing, that allows you to pay in increments as milestones are reached along the way.

 

Budget for a contractor during the buying process.

Many homebuyers rely upon a contractor to help customize a home they intend to buy. As a homebuyer, the inspection process is particularly important. Be sure that you understand the inspection and repair contingencies before signing the contract. Scrutinize the details concerning the scope of inspections and get a clear idea of when any repairs provided by the seller will be completed.

1. Budget for the right contractor.

 

In addition to the cost of your new home, some of your budget will be allocated to a contractor for home improvement projects to get the house ready for move-in. Consider drawing up a budget based on the estimates you get from contractors for the entire scope of work.

2. Work effectively with your contractor.

 

Making your new home ready for your family to move in should be your top priority. To make this happen, you need to work effectively with your contractor. The home inspector can uncover problem areas with the house, but only a contractor can give you actual prices for fixing these problems. The contractor can also suggest fixes that both you and the inspector missed. Communicating with your contractor during an on-site walk-through prior to the closing will give you an accurate picture of what needs to be done and how much it will cost.

 

Sources:

https://www.angieslist.com/articles/4-ways-prioritize-your-remodeling-projects.htm
http://www.uexpress.com/smart-moves/2014/1/15/home-sellers-hiring-contractors-without-hitting
https://www.angieslist.com/articles/how-avoid-home-closing-nightmare.htm

 


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What College Students Need to Know About Building Credit

image of keyboard and credit cardBuilding credit while you are young is vital, but not often thought about by college students.


Many millennials graduate college and usually have big plans to begin their “real” lives. These plans often include buying a new car, buying a home and other large purchases. But graduates run into trouble if they have not built up any credit.

 
Having a good credit score can set you up for a promising future and prevent a lot of stress after graduation. Credit is what financial institutions use to determine if you are reliable and are likely to repay your loans, on items like cars, houses and more. We sent out our college intern to get some insight from Lucille McIntyre and Melodie Cyr,  two of our retail managers. With their help, we have compiled a few tips to help you build your credit.

Consider getting a student credit card.

There are a lot of cards geared toward building credit for students. Now remember this is NOT free money, and you will have to pay this back so make sure you are using this as a tool to build credit not to get yourself into more debt.

Pro tip 1:

Melodie Cyr recommends, paying the card balance after you receive your statement, but before the due date. If you pay it off too early or too late you will not build credit.

Pro Tip 2:

Lucille McIntyre suggests getting the card when you turn 18 before you have taken out your student loans. This way a creditor cannot use the student loan debt to give you a higher interest rate. 

Take out small loans.

Depending on your existing credit score, at many banks you should be able to take out a small loan of around $500 (give or take). This is a great way for you to start building credit without having much credit. You can take out the $500 loan (make sure you have the means to pay it back) and use it to help pay for books or just leave it in your account as simply a way to build up your credit. However, be warned there will be interest on top of the loaned amount you will need to pay back as well as your regular payments. If you stay on top of the loan, it could be an excellent step toward building credit. Be sure to speak with your lender about the payments, schedules, interest and fees before taking out a loan.

It’s about the relationship.

McIntyre is a firm believer on the importance of relationship banking and building your credit or simply your finances overall. Make sure you bank at a place where you feel comfortable asking questions, feel as though you are getting the right answers, and more importantly a place you trust. This expert advice can make or break your credit score.

Monitor your credit report.

 Cyr strongly recommends pulling your credit report annually and reviewing your credit score. At a young age, many college students are not even thinking twice about this, until they become a victim of identification theft or fraud. Get into the practice of monitoring your credit report regularly.

Don’t use too much of your limit (on credit cards).

 One factor in your credit score is how much available credit you have and how much of that total balance you have used. If you have a credit card, don’t use more than 35% of your available balance. This is one factor that can cause your score to drop.

Educating yourself about your finances is a key to your success as you move from being a student and entering into the “real” world. Getting a degree is impressive, but to capitalize on your accomplishments, it’s important to understand how to maximize your financial potential by the time you graduate.


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How to Save While In College

image of stacks of coins

As we all know, college is very expensive.  If you are in college now, it might be scary realizing how much debt you’ll have at the end of school. If you are like a lot of folks in college, for the last few years you have been taking advantage putting everything earned during birthdays, holiday, work, and even the change found between the cushions of dorm room futons toward paying for school. What happens after graduation when you have debt AND little or no savings?

 
Our marketing intern – who is still in college – browsed through a few sources and ended up in conversations with two of our branch managers, Lucille  McIntyre and Melodie Cyr.  She compiled a list of a few tips so as you graduate you will hopefully also have money stored away to start off on the right foot.

Advice from a student, for students:

Consider opening a Money Market account.

If you already have a portion of money saved, consider putting it away into a money market account. Generally, money markets offer you the freedom of a savings account with a slightly higher interest rate.

Put aside 10% of your income.

Have 10% automatically taken out of each paycheck and put into a separate account. While you may think this is going to be extremely painful, having this money automatically put into a separate account for saving helps with the “out of sight out of mind” concept. Hopefully, you will to learn how to live without it and eventually you won’t notice its missing! If you need that money, it’s safe and sound and still available.

Go against Newton’s Law.

Tell yourself that what goes in, must NOT come out! This is, of course, until you decide on using this savings account. However, this is going to take some will power. You have to stick to it or this will not work.

Check for Fees.

When opening any kind of savings account, make sure you check for transactional fees. These can add up quickly based on your habits, and is money that is being taken out of the savings you are working so hard to grow. 

Apply for scholarships.

The money you could save from school expenses could be placed into savings or a cd where it can earn interest.

Be FRUGAL.

No one judges a college student for being cheap. So take advantage of it and embrace the socially acceptable, cheap college student lifestyle. Consider it part of the “college life” that everyone raves about.

  • Consider eating at home.
    This goes hand in hand with being frugal. Why not make your coffee at home instead of buying that $2-$3 each morning? Saving almost $20 a week will add up in a savings account! 
  • Take advantage of student discounts.
    Love eating out or your Dunkin? Take advantage of deals or discounts for college students!

Speak with a financial advisor.

It is never too early to plan for your future. Your bank should be able to offer advice on specific ways that might help you save, no matter where you are right now!

Pro Tip:

Have 3+ months of living expenses in your savings at all times. This will be a good safety net for you if something happens and you are unable to work.

 

For more ways to save, check out this list: http://www.forbes.com/sites/maggiemcgrath/2014/06/13/the-10-habits-you-develop-in-college-that-will-save-you-money-in-the-real-world/#5df279a46d33

 


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Financial Exploitation of the Elderly

image of elderly person's hand

Did you know that today is World Elder Abuse Awareness Day?

We are not sure how anyone could take advantage of older generations, who worked so hard and have experienced a lot in their time, unfortunately it happens every day. According to a study done by MetLife , at least $2.6 billion is being stolen annually in the US from the elderly. In this post we will discuss how you can prevent this form of abuse.

What is financial elder abuse?

According to the Center for Disease Control and Prevention , elder abuse is defined as “the illegal, unauthorized, or improper use of an older individual’s resources by a caregiver or other person in a trusting relationship, for the benefit of someone other than the older individual. This includes, but is not limited to, depriving an older person of rightful access to, information about, or use of, personal benefits, resources, belongings, or assets.”

How to prevent financial elder abuse. 

  • Make sure you understand where your money/ your loved one's money is going.
  • If you (or your loved one) rely on someone else to manage funds, make sure they are trustworthy with some basic background checks or by using a trusted financial intuition.
  • Develop a financial guide with a finance advisor for whoever will be handling finances.
  • It’s important to get to know your bank and make sure you have a good relationship with the people handling your or your elder’s finances.
  • Arrange to have a Social Security or pension check deposited directly to your or your elder’s bank account.
  • Call in to check up on your elder or ask your children to check in on you. It is as simple as calling or stopping by. Playing a key role in each other’s lives means that someone will be able to tell if something isn’t right.
  •  Elders should NEVER give a credit card, social security card number or other account number over the phone or through mail. These scams come in the form of sweepstakes, lotteries, and more.
  • Check your or your elder’s credit report yearly to ensure there is nothing out of the ordinary.
  • Destroy (shred) anything with personal information once it is no longer needed, such as, bank statements, old credit cards, etc.

If you or someone you know is being financially exploited call...

The Department of Health and Human Services Adult Protective Services 24 hour hotline 1-800-624-8404.