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Published: Friday, September 29, 2017 @ 3:09 PM
Much has been made recently about the importance of protecting your personal information in the aftermath of the Equifax data breach. Among your most private data, is your Social Security number, which is assigned at birth to all Americans.
The unique nine-digit Social Security number (SSN) has become a coveted way to guarantee government benefits and universally identify us all individually. But where did the number come from? How did it originate?
In the midst of the Great Depression, the need arose for the government to provide a system that buoyed the American family even as unemployed people looked far and wide for work. Trying to turn the tide on the destitute state of the U.S. worker, President Franklin D. Roosevelt signed the Social Security Act into law in 1935. One year later, Social Security numbers were born.
Right after its inception, it proved ideal for tracking the earnings of U.S. workers as well as determining government benefits. But such a gigantic undertaking didn’t start smoothly, according to the Social Security Administration.
First of all, employers were tasked with deducting taxes from workers’ wages. The swift implementation of payroll tax deductions in January 1937 meant government had to quickly hire and train workers as well as acquire facilities and devise a public education plan for Americans.
Soon, bureaucratic red tape temporarily slowed the Social Security process, with some wondering why the government didn’t just use people’s names and address as the chief identifiers. As the Social Security Administration summarizes on its website, there were problems with that method:
A 1937 publication recounts, “A recent news account states that the Fred Smiths of New York City have had so much trouble in being identified by their creditors, the courts, and even their friends, that they have joined together in forming the ‘Fred Smiths, Incorporated,’ to serve as a clearing house for their identification problems.”
Your Social Security number is comprised of a three-digit area code, a two-digit “group number,” and a four-digit serial number.
The area number
The area code (the first three digits of the SSN) was designed to indicate a geographic region. One problem that immediately arose with this scheme is that it was confusing for people who worked overseas. For the first three decades of its use, the area number represented the state in which the card was issued. But after 1972, that changed. Since then, “the area number has been assigned based on the ZIP code of the mailing address provided on the application for the original Social Security card,” the agency says.
The group number
The group number (the fourth and fifth digits of the SSN) is still a unique identifier but is related to the machines and mechanical equipment involved in producing the numbers and verifying the accuracy of punch cards, which were used in the early years.
The serial number is made up of the last four digits of the SSN. “The serial number represents a straight numerical series of numbers from 0001–9999 within each group,” the agency says. One serial number you’ll never see is 0000, which is not assigned.
When the government devised the Social Security number, it was meant to track work histories and contributions to the U.S. pension system, but things have changed quite a bit in more than seven decades. SSNs are now used for identification purposes on mostly all official documents, including tax returns to driver’s licenses, bank accounts and more.
Critics have said that the United States should switch to a national identity card system, popularized in much of Europe. The fear is that hackers will eventually crack the code on the nine-digit Social Security algorithm. In July, a group of Carnegie Mellon professors released a study showing that SSNs could be guessed with surprising accuracy.
Combining information about the area code, group number and serial number of particular SSNs allowed the researchers to pinpoint identities with startling accuracy.
“In a world of wired consumers, it is possible to combine information from multiple sources to infer data that is more personal and sensitive than any single piece of original information alone,” said project lead Alessandro Acquisti, a researcher in the Carnegie Mellon CyLab.
The threat of identity theft has made protecting your Social Security number a No. 1 priority. Thieves can unlock untold riches – not only by cleaning out your bank accounts, but generating new lines of credit for ungodly amounts — by getting their hands on your SSN. In that sense, your SSN is the door to your credit.
Money expert Clark Howard says the best way to protect your Social Security number is by freezing your credit, which is the main safeguard against identity theft.
“Credit freezes are one of the most effective ways for consumers to protect themselves against identity theft — and this goes for anyone at any time,” he says in his online Credit Freeze Guide.
The guide offers detailed instructions on how to freeze your credit with the three major credit-reporting agencies, Equifax, Experion and TransUnion.
As data breaches become commonplace, consumers can take comfort in knowing that there are ways they can protect themselves and their personal information. For better or for worse, we are left with the Social Security number system until something better comes along.
The Social Security Administration said that more than 450 million original SSNs have been issued as of 2008, meaning that nearly every legal resident in America has one.
Published: Wednesday, December 13, 2017 @ 10:32 AM
— It's that time of year again when parents and college or college-bound students fill out the FAFSA (Free Application for Federal Student Aid).
The idea of wading through a form – especially one that requires financial information – is definitely not an appealing idea, but the FAFSA could be a tremendous help in getting your student money to attend college.
The following points are what you need to know, as well as common mistakes to avoid when filling out the FAFSA.
Fill it out – you have nothing to lose.
You may think that you don't need to fill out the FAFSA, especially if you believe you might not qualify for need-based aid. But there's no income cut-off point with federal student aid, according to the U.S. Department of Education. In addition, the FAFSA can help you qualify for all kinds of grants, loans and scholarships, including those offered by your state, school or private organizations.
By investing a few minutes of time, you could reap thousands of dollars in potential rewards.
Submit it ASAP.
The sooner you submit your FAFSA, the better, according to consumer adviser Clark Howard. Although the federal deadline isn't until June 30, 2018, you should check with the financial aid administrator at colleges you're interested in to make sure their deadlines aren't earlier.
Submitting earlier will help you plan how you'll pay for college. You'll also have a better chance of getting as much aid or scholarship money as possible since some colleges distribute their available money on a first-come, first-serve basis, Howard says.
Gather the information you'll need.
The FAFSA asks questions about the student as well as his or her parents if the student is a dependent.
You'll need the following information on hand as you fill out the FAFSA:
Watch out for common mistakes.
The National Association of Student Financial Aid Administrators points out some common mistakes that can delay your form's submission or cause you to not get the aid and scholarships you might qualify for. They include the following:
Keep an eye out for requests for more information.
Your FAFSA may be selected for verification, which means you'll have to provide some additional or supporting information, U.S. News & World Report explains. This process doesn't necessarily mean you've done anything wrong. You may have a discrepancy or mistake on your form, but some FAFSAs are just randomly selected for verification (lucky you!).
Published: Wednesday, November 22, 2017 @ 12:01 PM
— With the recent massive security breach of Equifax — one of the three credit bureaus with which many may have thought their private information was safer than most — now many people are dealing with more insecurities, wondering where they can entrust their private information, if anywhere.
Here are some options:
Better and cheaper than credit monitoring, an option for optimal security is freezing your credit through each of the three credit bureaus (Experian, Equifax and TransUnion), according to WSB money expert Clark Howard at Clark.com.
The fee is $3 to $10 per person per bureau, depending on your state, to allow you to seal your credit reports — except now it's free with Equifax from here on out due to the recent data breach.
You will be provided with a personal identification number (PIN) that only you know and can be used to temporarily unfreeze (or "thaw") your credit when legitimate applications for credit and services need to be processed such as when you are buying a car.
This added layer of security means thieves can't establish new credit in your name even if they are able to obtain your personal information.
LifeLock vs. CreditKarma.com
While LifeLock advertises it can help consumers secure their information to guard against identity theft, LifeLock charges monthly services that start at $10 a month.
This kind of credit monitoring is not the same or as effective as a credit freeze, said Craig Johnson for Clark.com.
Instead, he recommends CreditKarma.com for free credit monitoring.
If you haven't already frozen your credit, now would be the time since Equifax recently got hacked and the information of possibly 145.5 million people was attained by these hackers.
Information accessed primarily includes names, social security numbers, birth dates, addresses and, in some instances, driver's license numbers.
To try to compensate, Equifax is offering free identity theft protection and credit file monitoring (but only through Jan. 31, 2018) with its TrustedID Premier.
Another point of confusion is the unsolicited free Dark Web Email Scan offered by Experian to your email, leading to a monthly fee for further scanning.
Experian IdentityWorks also offers a free 30-day trial membership for identity theft protection and resolution, involving a monthly automatic deduction of $9.99 for the plus plan or $19.99 for the premium plan.
It's free to cancel within the 30-day trial period, but the consequences are not revealed up front for those who decide to cancel their membership once the monthly fees begin.
Published: Friday, November 17, 2017 @ 4:17 PM
— Your house is a large expense with many associated costs like a mortgage payment, insurance, maintenance and more.
It provides a roof over your head, of course, but since it usually costs you money each month, why not put it to work for you and earn some cash in the process?
The following are four ways your house can make you money:
List your home with Airbnb or VRBO.
If you're planning to be out of town for a few days or don't mind bunking with a friend, you may be able to make some money by renting out your home through sites like Airbnb and VRBO.
Before jumping in, you'll need to take time to learn about the market, your expenses and any taxes you may need to pay. And before you list your property, you'll need to understand how to make it stand out with a good listing, including compelling photos and competitive pricing. Airbnb has a series of toolkits to help with this.
Rent it out to the area's growing TV and film industry.
When TV, film and commercial producers want to depict a home on screen, many times they'll rent the real thing, according to Money. It can be inconvenient for owners, however, since their homes may be taken over by a large crew and be completely rearranged.
On the other hand, homeowners often have fun with the experience while making some extra money. And while you're watching TV or a movie, you may be able to spot your home.
Host a foreign exchange student or faculty member.
Temporarily hosting a foreign exchange student or faculty member who's studying or teaching in this country can help you make some extra cash for anywhere from six weeks to six months at a time. You'll also be exposed to a different culture and language, and the experience could help you form a bond that lasts even when your guest returns home.
The Penny Hoarder suggests contacting student housing offices at local community colleges and universities, asking to be placed on their list of host families. After this, you'll have to apply, be interviewed, and allow your home to be toured. You'll also need to pass background and reference checks.
Rent out your driveway or storage space.
If you have extra space in your driveway, you may be able to make some money by letting others park there, according to Men's Health. This is especially true if you live near a commuter rail line or sports stadium, but you'll need to check to make sure you're not violating any local ordinances. Check out websites like JustPark to get started.
Published: Tuesday, November 14, 2017 @ 3:15 PM
— Health insurance has a large impact on your finances, so it pays to get the most out of your plan.
Understanding its ins and outs can be confusing, but it's worth your time to check on benefits you could be losing out on or mistakes that could cost you money.
Choose your plan carefully.
When it's time to renew your health care coverage, consumer adviser Clark Howard recommends not just blindly signing up for your current plan, even if you've been happy with it.
Your plan – as well as other options you may be able to sign up for – may have changed. Take a close look at the co-pays, deductibles, in-network providers and other specifics to make sure you're making the best possible choice.
Take advantage of preventative care benefits.
Almost every plan, according to healthcare.gov, offers preventative care benefits that are free. You won't have to pay a co-pay or meet your deductible to get these services at no charge.
Services for adults include age-appropriate vaccinations and colorectal cancer screenings for patients over 50.
Work within your formulary.
Health care plans typically have a formulary, which is a list of medications that they're willing to pay part of or the entire cost of. It may include a list of preferred medications, for which it will pay the highest percentage of the cost.
It pays to be familiar with your formulary before you get an unpleasant surprise at the pharmacy, according to NerdWallet. Print out a copy of the document from your health insurance company's website, or call up an online copy at your doctor's office. Your doctor can work with you to make sure you get an effective medication that you can afford.
Utilize HSAs and FSAs.
If your health insurance plans allow you to put aside tax-free dollars in a Health Savings Account (HSA) or Flexible Spending Account (FSA), you should learn how they can help you. Consumer advisor Clark Howard's website, Clark.com, has a chart that explains the pros and cons of each.
An HSA is usually associated with high-deductible plans, and like an FSA, it helps you save money to pay for health care expenses. These can include everything from prescription eyeglasses to medication.
Watch out for surprise out-of-network charges.
Your insurance plan has a list of network providers, and when you can, you should stay in-network. That's easy enough if you're visiting a single doctor, but if you need to have surgery, things can get more complicated.
For pre-planned surgery, Consumer Reports recommends talking with your doctor's billing department to get a list of everyone who will provide your care, including radiologists and anesthesiologists. Call your health care company to see if they're in-network, and if not, ask your doctor if in-network providers can be used.