2019 Financial Literacy Supplement

FINANCIAL LITERACY SUPPLEMENT

2019

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Cerita Battles SVP, Head of Retail Diverse Segments Wells Fargo Home Mortgage

...Informing you everyday in every way

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PUBLISHER Denise Rolark Barnes STAFF D. Kevin McNeir, Editor Ron Burke, Advertising/ Marketing Director Shevry Lassiter, Photo Editor Lafayette Barnes, IV, Assistant Photo Editor John E. De Freitas, Sports Photo Editor Dorothy Rowley, Online Editor ZebraDesigns.net, Design & Layout Mable Neville, Bookkeeper Dr. Charles Vincent, Social Sightings columnist Tatiana Moten, Social Media Specialist Angie Johnson, Circulation REPORTERS Stacy Brown (Senior Writer), Sam P.K. Collins, Timothy Cox, Will Ford (Prince George’s County Writer), Eve M. Ferguson, Jonathan Franklin, Jacqueline Fuller, Hamil Harris, Tatyana Hopkins, D. Kevin McNeir, Lee Ross, Dorothy Rowley, Brenda Siler, Ronda Smith, Sophia Sparks, Sarafina Wright (General Assignment Writer)

Financial literacy is important to achieving many goals in life. Wells Fargo is proud to be title sponsor of the Washington Informer’s financial literacy supplement. Get Smart About Credit Day, an annual financial education outreach campaign sponsored by the American Bankers Association (ABA) is on October 17, making this month the perfect time to bring awareness to this important topic. We appreciate the Informer’s leadership in providing helpful information to its readers focused on financial education and we are glad to be included.

Wikipedia defines financial literacy as the possession of the set of skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources.

Having a sound understanding of credit – including how to use it responsibly – is essential. Good credit may make it easier to borrow money, may lower interest rates on loans or credit cards, may reduce insurance premiums, and may make it easier to rent an apartment and buy a home.

When you understand money and credit, you are more informed and can be more confident in the financial decisions that you make. In addition, it can make the journey to reach your financial goals an enjoyable and successful one whether that’s purchasing a car, becoming a homeowner, starting a business or even planning for retirement. Not understanding financial requirements and implications for goals like these can delay then or even mean not achieving them at all.

As we recognize Get Smart About Credit this month, I encourage everyone to be proactive about financial literacy. Learn everything you can about the financial goals you want to achieve. There are many resources to help. You can find assistance online, by phone and even in person, many times at no cost. At Wells Fargo, our Financial Health bankers provide our customers personalized support, proactive guidance and encouragement, and convenient financial resources they need to take action and improve their financial health. The Hands on Banking® online learning center offers resources for anyone who wants to learn more about money management. There are articles to read and even self-guided courses to help improve financial literacy on a number of topics.

Financial literacy is a solid foundation to start the journey to achieve many of life’s financial goals. And Wells Fargo is committed to helping people establish better financial health – setting them on a path towards financial stability and reaching their full potential.

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PHOTOGRAPHERS John E. DeFreitas, Shevry Lassiter, Roy Lewis, Demetrious Kinney, Daniel Kucin, Jr., Mark Mahonny, Lateef Mangum

www.washingtoninformer.com / THE WASHINGTON INFORMER FINANCIAL LITERACY SUPPLEMENT – OCTOBER 2019

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Understand Costs Associated with Buying A Home Before You Purchase Buying a home is one of life’s most delightful achievements and a goal most Americans hope to achieve. In Wells Fargo’s latest “How America Views Homeownership” survey, more than half of the respondents (70%) say that owning a home is seen as a sign that someone is a “successful adult.” If your goal is to be a homeowner, it’s important be aware of costs associated with the home buying decision. Not only do you want to know what it takes to finance the mortgage, but also what’s needed to help you stay in the home and be a successful homeowner. Here are some associated costs with homeownership that buyers should keep in mind.

By Donna Greene VP, Diverse Segments Market Consultant

Downpayment – Most home purchases require a downpayment. While a downpayment could be as low as 3%, that amount can be a homeownership barrier, especially for many low-to-moderate income homebuyers. More than one in four respondents to the Wells Fargo survey said that the downpayment is

the No. 1 hurdle to purchasing a home. For those who qualify, there are programs that could help families reach the amount they need for that downpayment. The NeighborhoodLIFT program has helped more than 22,000 families achieve homeownership with downpayment assistance since 2012. Homebuyers should also check nonprofits and even their local governments for programs that offer bond and/or downpayment assistance programs.

Closing Costs – These costs are due when you sign the final documents at the closing transaction for your home purchase.

Closing costs may include attorney, lender and real estate agent fees, and prepaid items such as escrow payments. Closing costs are often 3% to 5% of your total loan amount. So even if you have the funds for the downpayment, make sure you have enough saved to cover closing costs.

Property taxes and insurance – Many homeowners have their

property taxes and insurance paid through an escrow account.

That means you do not have to save for these separately because they are part of the monthly payment you make to your lender where part goes toward principal and interest of the mortgage and the other goes to the escrow account. Property taxes and insurance premiums may change over time, so your lender may conduct an annual review and make adjustments to make sure you have enough to cover the costs of the taxes when they are due. Your lender may require having an escrow account, especially if your downpayment is less than 20%.

If you have that choice and want to pay the taxes on your own, it’s important to budget correctly so that you have the funds available when they are due. Not paying your taxes on time can result in additional fees and could lead to foreclosure.

Repairs and Maintenance – If you don’t already have a rainy day fund, you definitely want to have one as a homeown-

Find an approach that’s as unique as you are.

Introducing a complimentary service.

Build your financial confidence. Begin by having a conversation with a Financial Health Banker — someone who can assist you on your financial journey, no matter where you are at the moment.

• Find new ways to reduce spending and build savings • Take control of your debt and pay bills with confidence • Make credit work for you, not against you One small step at a time, we’ll help you achieve what you set out to do.

Call toll-free 1-877-924-8692, and talk with a Financial Health Banker.

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THE WASHINGTON INFORMER FINANCIAL LITERACY SUPPLEMENT – OCTOBER 2019 / www.washingtoninformer.

er. Regular maintenance is one thing but repairs can pop up at any time. Making sure, you also are prepared for unexpected repairs play an important role in being a successful homeowner.

Some lenders also look at your savings when considering you for loan approval.

Planning to become a homeowner is an exciting decision.

Help that journey be as enjoyable as you can by understanding and being prepared for all of the financial obligations of being a homeowner.

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Buying a home is one of life’s most delightful achievements and a goal most Americans hope to achieve.

Career Change Checklist: Are You Prepared?

If you’re considering a job or career change, it’s important to do some homework before you make the leap. Many benefits from your current position could be tied to specific dates and time frames.

Gathering the right information can help you strategically time your exit and set yourself up for greater success. Consider these steps before you resign:

By John Marshall Wells Fargo Advisors

1. Decide if you’d prefer to quit now or wait until you have an offer.

This decision requires you to factor in how unhappy you are in your current position and whether you’re able to live off your savings for a while. If you’re in a traditional industry, such as sales, it might be better to find a new opportunity while you’re employed. But if you’re in high-tech, biotech, private equity, or a similar industry, there may

be less risk in taking some time off.

2. Check your employment contract and noncompete agreement.

Have a labor attorney review any legal documents you signed when you were hired to evaluate their terms and enforceability. Some contracts may require you to pay back relocation money, education grants, or bonuses if you don’t stay for a certain period of time. Others include “golden handcuffs” that mean you will lose unvested options, restricted stock, deferred compensation, and other benefits upon resignation. Still others may require waiting for a specified length of time before taking a job with a competitor.

3. Review your retirement benefits.

Check the vesting schedule for

A simpler path to your new home With me by your side and these online resources at your fingertips, you’ll have the support you need to navigate the home loan process.

Prepare for successful homeownership with helpful videos and interactive online programs like My FirstHome®. These tools are designed to help you understand the mortgage process and plan your home purchase.

Find the mortgage that’s right for you by comparing loan features, interest rates, monthly payments, closing costs, and more.

Apply the simpler way with an online mortgage application that can import information and lets you upload documents quickly and conveniently.

Track your mortgage application with yourLoanTrackerSM. See your loan status and upcoming tasks, upload documents, and get text alerts when you reach key milestones.1 To determine if a home loan is available with yourLoanTracker features, talk to a

Call, stop by, or click today!

1300 I Street NW 12th Floor Washington, DC 20005 (202) 414-3345 wfhm.com/loans/ privatemortgagebankingwashingtondc/indexbranch.page

home mortgage consultant.

View all your accounts together and manage your mortgage with Wells Fargo Online®.

Enjoy personalized support from me every step of the way, with guidance and information to meet your unique needs.

1. Your mobile carrier’s text messaging and web access charges may apply for text messages.

All credit decisions subject to credit qualification. Information is accurate as of date of printing and is subject to change without notice.

Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A. © 2019 Wells Fargo Bank, N.A. All rights reserved. NMLSR ID 399801 IHA-4995383b

your employer’s 401(k) contributions and profit-sharing contributions to see how long you have to work to claim your portion of the money. Many plans require you be employed on the last day of the plan year to get employer contributions for that year. You may want to wait until after the plan year ends before you terminate employment so you don’t lose those contributions.

4. Check the terms of stock options, restricted stock, or other forms of non-salary compensation.

You may want to delay your departure if a valuable number of options will vest in the near future.

If you’re already vested, find out if you’re still subject to the same trading windows and how much time you have to exercise your vested options once you resign. In many cases, options expire if they aren’t exercised within a certain time frame—typically 90 days after your departure.

5. Manage your health insurance.

If you don’t already have a new position or if your new employer’s health plan has a waiting period, figure out where you will get coverage to fill the gap. If your company has 20 or more full time employees, you’ll be able to keep your current plan for up to 18 months after you stop working under the federal law COBRA (you’ll likely have to pay your share and your employer’s share of the premium). You may want to compare those costs with coverage available on the government’s health insurance marketplace. Remember, if you live in a state with a health insurance man-

date and you can afford but do not purchase coverage, you may have a tax penalty.

6. Spend your FSA accounts.

If you put pretax money into a flexible spending account (FSA), try to spend down the account before you resign. FSAs typically operate on a use-it-or-lose-it basis (though you may be able to extend with COBRA). In contrast, if you have money in a health savings account (HSA), that money is yours to keep.

7. Consider a group life and disability insurance conversion.

If you have life or disability coverage through your employer, you may be able to convert your group policy to an individual policy. Often you have a short window after your resignation to apply with the insurer for continued coverage. This can be an especially good option if insurers consider you a risk because of your age or medical condition.

8. Consult a Financial Advisor.

Whether you’re planning to take some time off or go right into to a new job, an advisor can provide valuable financial guidance through the transition.

This article was written for Wells Fargo Advisors and provided courtesy of John Marshall, Financial Advisor in Washington, DC at 202-8614458. © 2019 Wells Fargo Clearing Services, LLC. All rights reserved.

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC, Member SIPC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company.

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www.washingtoninformer.com / THE WASHINGTON INFORMER FINANCIAL LITERACY SUPPLEMENT – OCTOBER 2019

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When disaster strikes, financial preparations are as important as food and batteries

Financial preparedness checklist — steps you can take today: Arrange for direct deposit of my paycheck, Social Security checks, or other income sources.

Review my insurance coverage.

Review my will and trust documents.

Review IRA and employer plan beneficiary designations.

Discuss a family disaster plan in the event of an unexpected evacuation.

Sign up for Wells Fargo Online® banking with Bill Pay and Wells Fargo Mobile® banking for quick access to my account activity and to pay bills, transfer money, and deposit checks from my mobile phone or tablet1.

Review my savings options for emergencies.

Call, stop by, or click today!

1300 I Street NW | 12th Floor Washington, DC 20005 | (202) 414-3345 wfhm.com/loans/privatemortgagebankingwashingtondc/index-branch.page

Insurance is: Not insured by the FDIC or any federal government agency. Not a deposit of or guaranteed by any bank.

1. Some accounts are not eligible for mobile deposit. Availability may be affected by your mobile carrier’s coverage area. Your mobile carrier’s message and data rates may apply.

Deposit products offered by Wells Fargo Bank, N.A. Member FDIC. © 2019 Wells Fargo Bank, N.A. All rights reserved. IHA-4994588a

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THE WASHINGTON INFORMER FINANCIAL LITERACY SUPPLEMENT – OCTOBER 2019 / www.washingtoninformer.

From Milk to Meat: Grooming Youth for Banking Success

By Lee Ross WI Staff Writer

One of the most difficult tasks involved in leading the unbanked and underbanked into new relationships with banking institutions, is getting them to set aside the myths, fears, and anxieties – many of which are generationally taught. To calm those fears, D.C.’s Department of Insurance, Securities and Banking, regularly engages with young people to reach them before those family lessons take root.

“Often, we find that people mistrust banks and aren’t sure about them. Or they believe they don’t have enough money to have a bank account and be able to go out and do the transactions they need so they rely on nontraditional money sources and transactions like money transmitters and check cashers,” Stephen C. Taylor, Chairman of the D.C. Department of Insurance, Securities, and Banking told the Informer at a Financial Literacy Day at H.D. Woodson High School. “These alternative routes, cost consumers about $800 per

year trying to access their own money and there are issues surrounding safety when you’re walking around with money in your pocket rather than having it in a savings account.”

Taylor said that programs, like Bank on DC work to reduce the number of unbanked (those without any accounts) and underbanked (those with some type of account but still rely on nontraditional money services) by easing them into banking.

In some instances, this means providing free or low-cost bank accounts to those who cannot af-

DC’s Department of Insurance, Securities, and Banking partnered with H.D. Woodson High School to introduce financial literacy to 11th and 12th grade students. They passed out Bank on DC bags and pens to students. (Photos by Shantella Y. Sherman)

Financial advisor, Linda Easley Stroman said that financial wellness and overall wellness go hand-in-hand.

ford the fees or aiding those who have had previous problems with bank accounts to establish second chance accounts.

The program at H.D. Woodson, used the performing group, The Reminders to bring the message to young adults, who Taylor said are often encouraged through peer pressure to spend money on the latest trends with little regard to saving.

“We’re here at H.D. Woodson, with the Mayor’s Pathways to the Middle-Class agenda and economic inclusion to ensure everyone has a fair shot. This program is geared towards 11th and 12th-graders so these young adults start learning about good financial hygiene, about saving money and making budgets,” Taylor said. “They will begin to see that they don’t have to have the latest smartphone and begin looking towards the future by learning to pay themselves first.”

Linda Easley Stroman, Founder and Owner of Lasting Change Life Coaching, LLC, told the Informer that one of the biggest challenges to good financial hygiene is self-image.

“Our self-image or the way we allow others to see us and tell us how we are, encourages us to dress up the outside rather than taking care of the inside or infrastructure. We do not embrace wellness overall, which includes financial health,” Stroman said.

“It’s all connected. If we’re well financially, we tend to be on our way to being well physically,

mentally, and nutritionally.”

Stroman, who took part in the Woodson High program with Bank on DC, said that African Americans tend to make others rich rather than trying to figure out how to do for ourselves. This would include creating multiple streams of income, investing, and taking time to learn how best to secure our futures through delayed gratification.

“Delayed gratification is something we really have to work on because it gives a clearer picture of what we want and why we want it. Do we want things for the wrong reasons? When you have to wait and work towards getting those things, you can sometimes determine, it really isn’t of value,” Stroman said. “We have to get to a point where we begin shifting behaviors, doing a bit of tweaking and seeing how banking and investing can benefit us.”

The Department of Insurance, Securities and Banking (DISB) partnered with H.D. Woodson High School and Funding the Future to hold the financial literacy event for District students in grades 11 and 12. Funding the Future (www.fundingthefuturelive.org) is a nonprofit organization that uses live music, video and performance to engage students in an interactive financial education program. It has performed for more than 150,000 students in 500 unique venues across 34 states, promoting financial literacy.

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The musical duo The Reminders, performed during the Woodson program, encouraging youth to spend responsibly and invest in their futures.

www.washingtoninformer.com / THE WASHINGTON INFORMER FINANCIAL LITERACY SUPPLEMENT – OCTOBER 2019

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Learning better ways to manage your money doesn’t have to cost a thing

Mobile banking My accounts Transfer money Bill pay Mobile deposit Mobile pay

The more you understand how your money works, the more confident you’ll feel about your financial decisions. That’s why we created Better Money Habits® in partnership with Khan Academy—an independent, nonprofit organization with the mission of providing a free, world-class education for anyone anywhere. Better Money Habits is a one-of-a-kind online approach to financial education that’s customizable and answers tough financial questions in practical ways.

Get the financial know-how you need at BetterMoneyHabits.com

Bank of America, N.A. Member FDIC. © 2018 Bank of America Corporation.

All rights reserved. AR8MG4PW

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THE WASHINGTON INFORMER FINANCIAL LITERACY SUPPLEMENT – OCTOBER 2019 / www.washingtoninformer.

The Costs of Being Unbanked Compiled by Lee Ross WI Staff Writer Consulting firm Accenture estimates that bringing unbanked adults and businesses into the formal banking sector could generate as much as $380 billion in new revenue for banks in emerging markets by 2020. Unbanked is defined as those without an account at a financial institution or through a mobile money provider. Underbanked households have bank accounts, but also rely on alternative financial services (such as payday loan companies) because their banking relationships do not fully meet their needs.

Many believe that refusing to accept cash for transactions is un-American. / Courtesy photo

Cashless Culture on the Rise?

By Lee Ross WI Staff Writer

On a recent trip to a local salad shop a massive queue of customers could be seen turning around and exiting – without their food. Amid the murmuring, one customer angrily shouted back to employees, “This is still America! You have to accept cash!”

What this gentleman and many other Americans are finding is that cash is no longer ‘king’ and a growing number of businesses have opted out of accepting cash as legal payments for goods and services in a bid for streamlined, efficient operations.

“We save a lot of time not having to count registers, there is virtually never a case of our books being unbalanced, and we have more time to focus on food preparation,” the store manager, Stephanie Webb said. “It does mean that a lot of people who do not have credit or debit cards or who do not have our app, aren’t served, but so far, that’s been a small minority of customers.”

But that small minority tends to demographically include the unbanked and those in disenfranchised communities.

Keya Strong, a Northeast, D.C. resident and college sophomore said the push to go cashless goes against many of the tenets of a healthy economic system she learns about in school. It also forces students to use credit for frivolous things.

“Some of my friends and I have experienced situations where because we had to use credit to buy lunch, we neglected to add on the interest or caused an overdraft on our accounts,” Strong said. “We are always being advised to use credit for emergencies only, but then you go to buy a burger or get a salad, and no one wants your cash money, so you have to use it for frivolous things.”

Strong said that in addition to making the average young person seem irresponsible, the overdrafts later impacted her ability to establish another bank account. To simplify things, Strong said if she cannot pay cash, she will not make the purchase.

“My grandfather used to say, ‘never owe or borrow against the store’ meaning don’t live using credit and owing other people. He lived to me almost 100 and kept a wad that could choke a mule in his pocket. I was able to restore my relationship with my bank, but I live my grandfather’s rules now. Cash only.”

Across the U.S. a backlash has begun in several cities, including San Francisco and Philadelphia to ban cashless businesses. One salad chain, Sweetgreen, reportedly reversed its decision to go completely cashless, though individual locations in the District continue a credit or app payment only system.

Opponents of cashless stores say the move hinders privacy, as each transaction that goes through a middleman (banking system) takes note of what is being purchased, at what frequency, and by whom.

Cashless businesses also deny access to those who are unable to acquire bank accounts because they lack proper documentation. FLS

7%

The Federal Deposit Insurance Corp. (FDIC) found in a study that 90.6 million Americans are financially marginalized, having to rely on alternate financial services (AFS), which charge fees for transactions that are often free to customers of banks, credit unions and other federally insured institutions. An estimated 9 million U.S. households (7 percent overall), which includes 15.6 million adults and 7.6 million children, were unbanked in 2015, according to the Federal Deposit Insurance Corporation (FDIC).

Many banks decline accounts to prospective account holders if they have a record of financial mistakes, such as bounced checks or relatively minor overdrafts. Other Americans have been blacklisted from major U.S. banks because they’ve failed background checks.

ChexSystems is a debit bureau, which collects information from banks and other financial institutions. While not a part of your credit report, your ChexSystems report is similar in that it shows previous account activity, in this case with banks and credit unions. If denied a checking account, it is generally the result of a poor ChexSystems rating.

The Center for Financial Service Innovation’s 2016 Financially Underserved Market Size Study found that financially underserved Americans spent approximately $141 billion in fees and interest during 2015 to borrow, spend, save and plan.

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Nearly 45 million consumers are credit invisible – meaning when lenders or potential landlords go to the credit bureaus to pull your credit history, they simply won’t find anything.

Or, you may be unscoreable, meaning that the bureaus will find some credit data, but not enough to create a reliable credit score.

www.washingtoninformer.com / THE WASHINGTON INFORMER FINANCIAL LITERACY SUPPLEMENT – OCTOBER 2019

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FOOTPRINTS TO YOUR FINANCIAL FUTUR ® Our dedicated team of employees conducts an average of 800 community service and financial literacy hours annually to over 50 non-profit organizations, churches and schools mostly in low to moderate income areas in the Washington, DC Metropolitan area. We also provide financial education to individuals who are currently or formerly incarcerated. We believe in strengthening our local communities and partnering with organizations that are doing all they can to make a difference in the communities where we live and work.

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Protect Your Investment with Homeowners Insurance

DISTRICT OF COLUMBIA

1. Protects your home from a multitude of calamities, including wind damage, fire, vandalism, tornadoes, hurricanes and thunderstorms. It is crucial to understand whether your property is insured on a replacement cost basis or an actual cost basis.

Replacement cost coverage will be a little more expensive because it will cover the market value of your home.

DEPARTMENT OF INSURANCE, SECURITIES AND BANKING Protecting Your Financial Interests

2. Covers your personal belongings. If your furniture, electronics, appliances, or clothing is stolen or destroyed by a covered peril, your policy will reimburse the value of the covered loss. Often, coverage protects your personal property anywhere, whether it is at your home, in your car, in your college student’s dorm or in storage.

DISB HELPS DISTRICT RESIDENTS AND BUSINESSES

FOR FREE!

202.727.8000

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CONTACT DISB

WE CAN HELP YOU • Get financially fit

• Finance a small business

• Avoid financial scams

• Prevent home foreclosure

• Address student loan issues

• Resolve complaints

STEPHEN C. TAYLOR, COMMISSIONER TWITTER: @DCDISB

Stay Informed!

www.washingtoninformer.com

By Stephen C. Taylor Commissioner District of Columbia Department of Insurance, Securities and Banking Your home is your castle and haven. The place where you and your loved ones can feel safe and protected. But is your home protected?

Homeowners insurance shields your investment from loss or damage caused by disasters or accidents. If you have a mortgage, most likely your lender collects and escrows homeowners insurance premiums together with your property taxes and monthly mortgage. However, when your loan is paid off, the financial institution will no longer collect and pay your property taxes or insurance. You must remember to continue homeowners insurance coverage after your mortgage is repaid so that your home remains protected.

In support of Mayor Bowser’s vision to give all District residents a fair shot, the Department of Insurance, Securities and Banking (DISB) works to ensure a fair, non-discriminatory and well-regulated insurance market. DISB also wants to help you prevent housing loss caused by unexpected events.

Maintaining your standard homeowners insurance policy is important because it:

3. Provides liability protection. It protects you in the event a lawsuit arises due to an injury that occurred on your property. It will pay the legal and medical fees and lost wages for the injured person up to the limits of the liability set forth in your policy.

4. Offers peace of mind.

Maintaining coverage enables you to sleep better at night, knowing that your investment is safe and secure from covered events. Remember, your home is probably the most significant investment you will make in your lifetime and continuing your coverage provides a safety net.

Many factors influence the cost of homeowners insurance: the age and location of your home, cost of rebuilding, the proximity to a fire hydrant, presence of alarm or fire suppression systems, claims history or your chosen insurance deductible. These are just a few aspects that could impact your insurance premium. Your insurance agent will be able to provide a quote once they evaluate your needs.

If you have questions about insurance, please call DISB at (202) 727-8000 or visit disb.dc.gov.

Sincerely, Stephen C. Taylor Commissioner District of Columbia Department of Insurance, Securities and Banking

www.washingtoninformer.com / THE WASHINGTON INFORMER FINANCIAL LITERACY SUPPLEMENT – OCTOBER 2019

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GET SMART ABOUT CREDIT WITH THESE HELPFUL TIPS Using credit wisely can be a powerfully good thing. A strong credit score grants you access to preferred loan terms and the best rates. In addition, using credit wisely helps you seize personal and business opportunities that could be out of reach without access to credit.

TIPS • Pay Your Bills on Time and In Full. If you do not, it will bring your score down.

• Check Your Credit Report for Errors. Review your full report and contest issues that are incorrect. This can also help you to catch fraud and identity theft.

• Try to Keep Your Used Credit Ratio Low. Lenders like to see borrowers using only a small amount of their approved credit amount.

• Talk With Your Lenders About Your Situation. You’re not just your credit score and credit history, talk to your lender or creditor about your current financial situation.

BankWithUnited.com | Member FDIC

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THE WASHINGTON INFORMER FINANCIAL LITERACY SUPPLEMENT – OCTOBER 2019 / www.washingtoninformer.

Building Up Your “Health- and Wealth-Esteem” “Wealth is found by reducing your life problems, increasing activities that create purpose, meaning and resources in your life. Wealth is not a quantifiable number, but a customized lifestyle that creates freedom and happiness…”

Quote: www.welldone.com

By Linda Stroman Lasting Change Life Coaching, LLC Lindastroman44@gmail.com

When we live life with a commitment to our overall wellness, we are able to make well-informed decisions resulting in health and financial balance.

Positive thoughts and affirmations lead us to discover our best health and wealth connection.

Below is “food for thought” to improve our mental, intellectual, emotional, physical and financial wellbeing: Adopt an attitude of self-care I decided to rid my household of chemical-based products and replace them with natural solutions and remedies. Immedi-

ately I noticed my thinking was clearer. In addition, I decided to switch to a whole-food based diet and began to eliminate processed foods. The money saved on less beneficial food items and cleaning products reduced expenses, increased savings and grew my businesses. My energy and mental clarity heightened to make better decisions regarding my health and wealth Understand your “enough” The process of “mindfulness” in my day-to-day life has led me to more abundant health and wealth. Mindfulness is a process of being present with all aspects of your being. I have embraced the concepts of “mindful cooking and eating.” It is said it takes approximately 20 minutes for your brain to determine you are full.

Slowing down my eating process has helped to not overconsume.

This also leads to savings within

Yes,

my grocery budget and increasing my overall health. Also, moving toward a minimalist mentality has reduced my overage of material possessions and happiness with my “enough.”

Understand your opportunity cost This represents the benefits missed out on when choosing one opportunity over another.

Within the realm of health and wealth, we must understand our options and how to make the best decisions. When determining things like nutrition, exercise, spending, saving and investment choices, we have to outline our options and choose the one that gives us the best health and wealth benefits.

Know your live numbers Technology has provided advantages regarding the oversight of our finances. I believe in maintaining a level of “manual” attachment with my finances.

The ATM can provide a ballpark

figure of my balances, but not the total picture. The same applies to your health. Know your vital numbers such as your cholesterol, blood pressure, vitamin and mineral levels. Our bodies alert us when something has changed so we can identify holistic ways to improve our health.

Create multiple streams of income and health patterns Wealth is easier developed by having diversified streams of income. Whether it is a combination of full-time employment, self-employment, entrepreneurship, passive income, it is important to diversify your income as you would your investments. I believe this carries a level of peace because you are not relying on one source of income. The same holds true with our health. We must create a diverse action plan regarding our nutrition and fitness. Diversity brings a level of enjoyment to the processes we are trying to change.

FLS

it’s possible.

With a Home Equity Line of Credit, you can: • Consolidate bills • Fix up your home • Take care of what’s important

A HELOC gives you the flexibility to borrow money now and in the future.

STAR (Steps Toward Achieving Results) Home Equity Loans* are also available to help meet financing needs.

Get started at AtlanticUnionBank.com/homeequity Formerly Union Bank & Trust

NMLS # 551889 nmlsconsumeraccess.org

*The STAR Home Equity Loan is available to Virginia, North Carolina and Maryland residents who have property located in a low- to moderate-income census tract and/or have an income below 80% of the area median income as identified by the U.S. Census Bureau. Loan amounts range from $2,500 to $9,999. Visit a branch to apply.

www.washingtoninformer.com / THE WASHINGTON INFORMER FINANCIAL LITERACY SUPPLEMENT – OCTOBER 2019

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Recent and Recommended Books to Better Understand the Unbanked

By Lee Ross WI Staff Writer

The Unbanking of America: How the New Middle Class Survives

Financial Inclusion at the Bottom of the Pyramid

By Carol Realini , Karl Mehta

As incredible as it may seem in this hyper-connected, technologically advanced era, half the planet’s population exist as “Financial nomads”-those who nourish and shelter themselves without using traditional banking services. While the wealthy live at the top of a metaphorical pyramid, taking financial security and banking services for granted, there are billions of people who struggle at the pyramid’s base in an exhausting state of financial exclusion and insecurity.

Times are changing rapidly, but despite global uncertainty, technology has the capacity to reach and equip people in all walks of life. Advances in communications have reconfigured the ease with which we interact with our money-and these advances can provide innovative financial services to the unbanked and underserved around the world.

By Lisa Servon

No Slack: The Financial Lives of Low-Income Americans

What do an undocumented immigrant in the South Bronx, a high-net-worth entrepreneur, and a twenty-something graduate student have in common? All three are victims of our dysfunctional mainstream bank and credit system. Nearly half of all Americans live from paycheck to paycheck, and income volatility has doubled over the past thirty years. Banks, with their high monthly fees and overdraft charges, are gouging their lower- and middle-income customers while serving only the wealthiest Americans.

Lisa Servon delivers a stunning indictment of America’s banks, together with eye-opening dispatches from inside a range of banking alternatives that have sprung up to fill the void. She works as a teller at RiteCheck, a check-cashing business in the South Bronx, and as a payday lender in Oakland. She looks closely at the workings of a tanda, an informal lending club. And she delivers engaging, hopeful portraits of the entrepreneurs reacting to the unbanking of America by designing systems to creatively serve many of us.

By Michael S. Barr

The financial crisis exposed the potentially unsavory results of the interaction between low- and moderate- income households and alternative and mainstream financial institutions. Many households were overleveraged or paid high costs for financial services, while others lacked access to useful financial products that can cushion against economic instability. The financial services system is not well designed to serve low- and moderate-income households, leaving them without financial slack: they did not have adequate breathing room for making the financial adjustments that would permit them to better meet their own needs. No Slack shows us why these families were the least prepared to handle the shock of the deep recession. This pivotal analysis focuses on the Detroit metropolitan area’s low- and moderate-income neighborhoods, which are similar to those of other Rust Belt communities. The Detroit Area Household Financial Services study—conducted at the height of the subprime lending boom—examines these households’ decision-making processes, behaviors, and attitudes toward a full range of financial transactions.

How the Other Half Banks: Exclusion, Exploitation, and the Threat to Democracy

By Mehrsa Baradaran

The United States has two separate banking systems today—one serving the wellto-do and another exploiting everyone else. How the Other Half Banks contributes to the growing conversation on American inequality by highlighting one of its prime causes: unequal credit. Mehrsa Baradaran examines how a significant portion of the population, deserted by banks, is forced to wander through a Wild West of payday lenders and check-cashing services to cover emergency expenses and pay for necessities—all thanks to deregulation that began in the 1970s and continues decades later. “Baradaran argues persuasively that the banking industry, fattened on public subsidies (including too-big-to-fail bailouts), owes low-income families a better deal...How the Other Half Banks is well researched and clearly written...The bankers who fully understand the system are heavily invested in it. Books like this are written for the rest of us.” —Nancy Folbre, New York Times Book Review “How the Other Half Banks tells an important story, one in which we have allowed the profit motives of banks to trump the public interest.”

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Homeownership is important.

We’re here to help first-time homebuyers navigate the mortgage process and make buying a home affordable, even if you have: • Little money for a downpayment • Little or “less-than-perfect” credit history • A recent job change To get started, call 1-888-253-0993 or visit mtb.com/mortgage.

Equal Housing Lender.

Certain restrictions apply. Subject to credit and property approval. ©2019 M&T Bank. Member FDIC. NMLS# 381076. 15609-A 190521 VF Washington Informer: 5.65” x 6.1”

THE WASHINGTON INFORMER FINANCIAL LITERACY SUPPLEMENT – OCTOBER 2019 / www.washingtoninformer.

Housing Counseling: Your Trusted Path to Homeownership

By Hermond Palmer Vice President, Housing Programs National Foundation Credit Counseling I have heard it said, “African Americans don’t do counseling.”

My response is always, “Why not?”

If you were sick, you’d go see a doctor. If your car needed some engine work, you’d go to a mechanic. If you wanted to get your praise on, you’d go to a house of worship. The premise behind this formula is simple.

You need help for a specific issue, you get the help you need from a

subject matter expert to address that issue. So, why not go to counseling?

What makes counseling so different?

There are many types of counseling; career, educational, marital, spiritual, and more. For the purpose of this article, I will be discussing housing counseling.

So, let’s start at the beginning.

What is housing counseling? The Department of Housing and Urban Development (HUD) describes housing counseling as services designed to educate consumers about the home buying process and the benefits and risks of homeownership. These programs work to support sustainable homeownership as an outcome that provides homebuyers with housing stability and financial independence.

To help you better understand housing counseling and get the support you need in your pursuit of homeownership, I have listed some key points to consider: 1. Why should you want to work with a housing counselor?

It works!!! Through the “Pre-Purchase Counseling Outcome Study,” HUD found that 35 percent of participants became homeowners within 18 months of pre-purchase counseling.1 After reviewing the data from

their 2013 study on the benefit of pre-purchase housing counseling the executives at Freddie Mac said, “We find that [pre-purchase housing] counseling reduces the delinquency rate of first-time homebuyers by 29 percent”2 2. Who should you be dealing with when preparing to buy your home?

You should always work with a HUD-approved housing counselor.

3. What is a HUD-approved housing counselor?

A trained professional who is certified by the government to help you assess your financial situation, help to determine if you are ready for homeownership, help to evaluate your loan options and create a plan to help you qualify for an affordable mortgage.

4. Why is it important for you to work with a HUD-approved housing counselor?

First and foremost, they are certified by the government. A HUD-approved housing counselor cannot promise that you will get your home right away for exactly the price you want. They will, however, help you look at your options and decide what’s affordable and right for you.

5. How can you find a HUD-approved housing counselor?

There are different ways to find a HUD-approved housing counselor: • Use the CFPB’s Find a Counselor tool to get a list of HUD-approved counseling agencies in your area.

• Call the HOPE Hotline, open 24 hours a day, seven days a week, at (888) 995-HOPE (4673) • Call the CFPB at (855) 411CFPB (2372) to be connected to a HUD-approved housing counselor over the phone In closing, here are the key takeaways: • Don’t buy into the hype that, “African Americans don’t do coun-

seling.” If you have an issue and counseling of any benefit, you make sure to get the help you need.

• Know that pre-purchase housing counseling works.

• Trust that support from a HUD-certified counselor can be a tremendous help to anyone preparing to buy a home.

• A HUD-approved housing counselor will help you look at your options and decide that’s affordable and right for you.

NOTES: 1.) HUD study highlights benefits of housing counseling by Tanisha Warner 2.) The Undeniable Benefits of Housing Counseling Are Worth Every Cent

by Garrick T. Davis FLS

Stop Dreaming and Start Buying Your path to buying a home safely, affordably!

If you want to buy a home, but don’t know if you can qualify for a mortgage, where to start, or simply need help navigating the process, Envisioning Homeownership was created for you.

The National Foundation for Credit Counseling® (NFCC®) wants to partner with you to make your dream of homeownership your reality. Experts will help you:

Buying a home can be stressful, but it doesn’t have to be. The NFCC is a HUD certified, national intermediary and we are ready to tackle any challenges you might have.

• Simplify and understand the buying process • Review your current financial situation • Evaluate your ability to support the costs of homeownership • Establish and implement an action plan to overcome identified challenges • Identify down payment assistance programs for which you qualify • Evaluate your loan options

Stop Dreaming and Start Working to Build Your New Reality as a Homeowner!

Call now! 1-800-388-2227

Call 1-800-388-2227 or visit www.nfcc.org/who-we-help/future-homeowners/ to learn more.

www.washingtoninformer.com / THE WASHINGTON INFORMER FINANCIAL LITERACY SUPPLEMENT – OCTOBER 2019

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cent. Falling behind on debt payments is a catalyst for more significant hardships like late fees, debt collection calls, inadequate savings, and lower credit scores. For some, bad debt can even make it hard to get or keep a job. All of these consequences create a situation where people desperate for debt relief are vulnerable to deceptions and ripoffs. So how can you tell if an offer to help you take control of your debt is legitimate or not?

By Bruce McClary Vice President, Marketing National Foundation for Credit Counseling (NFCC) A recent study conducted by Prosperity Now reveals troubling details about debt in African American communities. Data shows that more than 27 percent of African American households are struggling with late debt payments, which is noticeably higher than white households at 15 per-

Look Beyond the Promises You’ve heard the ads on radio and television that promise to share “the secret to getting out of debt that the big banks don’t want you to know” or the guarantee to make up to half of your debt disappear. It might be easy for someone without debt worries to dismiss these messages, but anyone who is being pressured by a debt collector day in and day out might be tempted to believe what they see in these commercials. It always helps to take a moment to investigate an offer, especially when money is at stake. Fact-checking a debt settlement advertisement through trusted sources like the Consumer Financial Protection Bureau (CFPB) can give you the real story on what to expect.

A Safer Way Out of Debt Know Your Rights Some debt relief companies will want you to get started right away after you agree to their terms.

While the urgency of your debt problems is a good reason to do something quickly, you should never sign up for any program before taking the time to understand the terms fully. Avoid doing business with companies that tell you to stop communicating with your creditors and advise you to withhold payments while negotiations take place. You have a right to communicate with your lenders and being told not to pay is bad advice that will lead to credit sabotage. This is why the CFPB, the government agency established to protect and educate consumers, says debt settlement companies may “leave you deeper in debt than you were when you started.” That’s not a situation you want to face.

years, nonprofit credit counseling programs provided by members of the National Foundation for Credit Counseling (NFCC) have helped millions of people safely put debt struggles in their past. By relieving financial stress, you can focus on life’s most important priorities, like family and the freedom to live the life you want. According to research by The Ohio State University, nonprofit credit counseling

by NFCC agencies leads to significant reductions in credit card debt,

higher credit scores, and improved confidence in money management skills.

How to Get Help Now Reaching out to an independently accredited nonprofit credit counseling agency is as easy as visiting nfcc.org or calling 1-800-388-2227. No matter your circumstances, speaking with a counselor will regain control of your debt and achieve real financial stability. FLS

Safe Solutions There are safe solutions for getting out of debt and putting your life back on track. The value of these programs is life-changing and can go way beyond what a typical debt elimination scheme could offer. For more than 68

Get help with your debt from someone you can trust!

Debt Management Plans are the smart choice for paying off debt!

Since 1951, the National Foundation for Credit Counseling® (NFCC®) has helped

Nonprofit

millions of people. Our services help people

Can help improve credit score

stage of life, from leaving the nest to

overcome financial challenges at nearly every

Lowers interest rates

retirement. We help people with a plan to pay

Helps you pay everything you owe

understand bankruptcy options and offer

off debt, preserve or achieve homeownership,

One monthly payment

financial tools and educational resources so

Comprehensive counseling and education provided

success in managing their money!

The NFCC is a safe, trusted resource for debt help!

Whatever your situation, you can achieve your goals and experience financial freedom with NFCC!

Call now! 1-800-388-2227

that each person can gain confidence and

Call 1-800-388-2227 or visit www.nfcc.org to learn more.

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THE WASHINGTON INFORMER FINANCIAL LITERACY SUPPLEMENT – OCTOBER 2019 / www.washingtoninformer.

A simpler path to your new home With me by your side and these online resources at your fingertips, you’ll have the support you need to navigate the home loan process.

Prepare for successful homeownership with helpful videos and interactive online programs like My FirstHome®. These tools are designed to help you understand the mortgage process and plan your home purchase.

Find the mortgage that’s right for you by comparing loan features, interest rates, monthly payments, closing costs, and more.

Apply the simpler way with an online mortgage application that can import information and lets you upload documents quickly and conveniently.

Track your mortgage application with yourLoanTrackerSM. See your loan status and upcoming tasks, upload documents, and get text alerts when you reach key milestones.1 To determine if a home loan is available with yourLoanTracker features, talk to a

Call, stop by, or click today!

1300 I Street NW 12th Floor Washington, DC 20005 (202) 414-3345 wfhm.com/loans/ privatemortgagebankingwashingtondc/indexbranch.page

home mortgage consultant.

View all your accounts together and manage your mortgage with Wells Fargo Online®.

Enjoy personalized support from me every step of the way, with guidance and information to meet your unique needs.

1. Your mobile carrier’s text messaging and web access charges may apply for text messages.

All credit decisions subject to credit qualification. Information is accurate as of date of printing and is subject to change without notice.

Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A. © 2019 Wells Fargo Bank, N.A. All rights reserved. NMLSR ID 399801 IHA-4995383b

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