Author: Christy Bieber

Ryan, a recent caller to The Dave Ramsey Show, explained that he’s in "a bit of a jam" and — while he tried to consolidate his loans — he didn’t qualify and now he doesn’t know how to get out of the crushing debt he’s racked up and the poor credit he now has as a result.

Ryan has a base salary of $140,000 per year, though he usually makes anywhere from $180,000-$220,000 per year — that is until he had a setback. Ryan had a workplace injury that left him out of work for a year-and-a-half and on worker’s comp payments. The result is that events in his life now mean he owes a combined total of $181,000 on his credit cards, personal loan, car loan and student loans, in addition to his $767,000 mortgage. The caller has a stepson and a girlfriend who lives with him and makes between $60,000-$70,000 herself.

Ramsey tends to be critical of debt and this time was no exception: "I’m talking to a single guy who makes $180,000 and owes $180,000," he observed, following with blunt advice for how the caller could fix his situation.

Unfortunately, the caller didn’t seem too interested in taking this advice.

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A cautionary tale in lifestyle inflation

Ramsey was dismayed at how much the caller owed, especially relative to how much he makes; both the caller’s debt and his salary are far greater than the amount most people have. Yet, the caller managed to dig himself into significant consumer debt. But stats tell us, he isn’t unlike many other Americans.

While the Federal Reserve Board says Americans collectively owned $18.20 trillion in the first quarter, data from Experian published in January of 2025 shows that consumers on average owe a total of $105,056. The caller, with his mortgage and other debt, owes a combined total of $947,000 — close to a million dollars.

As the Bureau of Labor Statistics shows, the median weekly salary is around $1,194 or $62,088 per year, which means the caller earns nearly three times that amount and still can’t get his finances in order, leaving Ramsey to declare, "You’ve given your life away and the way you get it back is you’re gonna have to give up some stuff."

Ramsey made multiple suggestions to the caller, including:

• Selling his home — valued at over $1 million
• Selling the expensive car that the caller is currently making payments on
• Cutting spending dramatically and aggressively paying down debt

However, the caller was quick to dismiss these suggestions with rationalizations. He didn’t want to sell the house, for example, because he didn’t have good enough credit to buy a new one. And he didn’t seem willing to cut back on his spending, instead going on the defensive and telling Ramsey he’d already paid back a few thousand over the past few months.

Rmasey was very unimpressed by this, telling the caller, "Sell your car, sell your stupid house. Get you another one later, when you get your act together. But you don’t want any pain, you don’t want to sacrifice."

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How to get out of debt

While the caller was interested in a consolidation loan, Ramsey said this was the wrong approach — "It’s mathematically impossible to borrow your way out of debt," he said. Ramsey’s alternatives of selling the home or car, or living frugally, however, were all options that would make a meaningful difference in helping the caller pay off what he owes.

"Live on beans and rice and pay $140,000 a year onto this debt, and you are debt free in a year and a half. You have absolutely no freaking life. You’ve been living like you make twice what you make and walking around, strutting around acting like it’s OK, and it isn’t OK. It’s stupid," Ramsey said.

While he didn’t overtly mention it, Ramey’s classic technique, the debt snowball method (as opposed to the avalanche method), could come in handy here. It involves paying the lowest balance debt off first while paying minimum balances on your other loans, then moving into the next lowest balance, then the next and so on until you’ve paid off all you owe, building momentum as you go.

However, this approach requires you to make extra payments to your debt — ideally, the largest amount you can, as often as you can. The idea is that though you may be paying more in interest in the long term, you’re building confidence in your ability to become debt-free.

But regardless of which debit payoff method you choose, you still need to free up as much of your budget as possible. “And it’s going to hurt. Getting well is going to hurt. But not getting well is going to hurt more,” cautions Ramsey.

This means making aggressive budget cuts and other lifestyle changes such as:

• Reducing fixed expenses by downsizing a home or selling a car
• Cutting out all non-essential spending like food and entertainment from your budget (at least temporarily)
• Working more hours or getting a side gig to devote more of your income toward debt
• And though Ramsey himself advises against it and this caller couldn’t get one, you could try to consolidate your loans into a single monthly payment and negotiate a lower interest rate
• Set a goal of when you want to be debt-free and track your progress towards it
• Develop a realistic budget with these things in mind and learn to live within these means
• And lastly, once you’ve paid it off, start setting money aside in an emergency fund to help rebuild your finances and learn the secrets of the stealthy wealthy

The reality here, as Ramsey pointed out, is that the original caller does have a substantial income, relative to the average. It should not be impossible for him to get out of debt (in fact both Ramsey and co-host John Deloney did it), but he’s going to need to adjust his lifestyle while he still has the option and before the staggering debt leaves him with none. As for why the caller isn’t budging yet? Ramsey concludes, “When you get to hurting enough, Ryan, you’re going to figure this out. But you’re not hurting enough yet.”

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Money doesn’t have to be complicated — sign up for the free Moneywise newsletter for actionable finance tips and news you can use. Join now.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

On December 30, 2023, David Fauls found himself in a terrifying situation. Fauls was playing in the basement with his kids when something unexpected occurred: “I just heard this unexplainably massive sound," he said. “I looked out and I could see the mushroom cloud."

What Fauls heard was his neighbor’s home exploding in an incident that shook Fauls’s own home as well. Fauls and another neighbor ran toward the flames to help Richard Pruden, the neighbor whose home had disappeared with the blast. Tragically, Pruden and his grandson were hurt and his daughter, her husband and their other two children were killed in what the officials preliminarily called an “undetermined fuel air explosion” — one of several house explosions that has rocked Southeast Michigan recently.

Fauls did what any good neighbor would do in a crisis, offering assistance on that devastating day. But now, he is also in need of help and says his insurer isn’t stepping up. The company refuses to cover the $68,000 in damages to his home — damages he believes resulted from the explosion.

Fauls has been pleading for aid ever since, even as the wait causes financial devastation for his family. "No family should have to go into debt or break the bank to get the coverage that they’re paying for insurance to cover,” Fauls said.

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Why the insurer isn’t covering the damage

Fauls’s home is located 600 feet away from the exploding property and in the aftermath of the tragedy, Fauls says he began to notice what he says are new problems around his own home.

"I’ve got to get past the emotion and trauma of this thing and then try to deal with this,” he told WXYZ Detroit. “Every single day we just found something else and we just kept seeing more and more.” He listed split moldings, cracks in the foundation and a host of other serious issues, including significant damage to at least 10 windows.

Estimated repair costs included $23,745 for foundation issues and $44,256 for windows. Following the explosion, Fauls asked his insurer, AAA Auto Insurance Club Association, to cover the costs — but he says the insurer refused to send a claims representative to see the damage firsthand.

"He refused. He just would never step on site. He would not get involved. He would not try and see the damages,” Fauls told WXYZ. The insurer did send a forensic engineer from Nederveld Engineering, who Fauls described as "very dismissive."

The engineer attributed the cracks and window damage to the age of Fauls’s home, rather than the blast, so the insurer agreed to pay $20,223 in damages for cracked paint and drywall and nothing at all towards the $68,000 the windows and foundation would cost. However, Fauls disagrees with this assessment.

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"I see a report that’s telling me the plastic broken in between my window panes is age-related deterioration. When a concussive force rocked this house and I watched that and now there’s discoloring and you can’t see out these windows. I’m like, OK, this is craziness. This is not just unprofessional, it’s absurd,” said Fauls.

For its part, AAA told WXYZ that, “[Auto Club Insurance Association] takes all homeowner claims seriously" but said that the company brought in an independent, licensed engineering firm to provide expertise and evaluate the situation as a matter of common practice and the company stands by the engineer’s report, which makes clear the damage wasn’t caused by the explosion.

It says, "there was a portion of the claim in which coverage could not be afforded based on the expert engineering findings, which concluded that the damages in question were not attributable to that same incident but were consistent with normal age-related wear and tear."

Fauls isn’t satisfied and neither are many others who are covered by the same insurer. In fact, Fauls and 61 others filed complaints against AAA last year with Michigan’s Department of Insurance and Financial Services. These complaints meant AAA earned the fifth-highest number of insurance complaints in Michigan during that time period.

What to do when an insurer won’t pay

Considering this as a cautionary tale, you may want to avoid a similar situation by doing the following:

• Carefully review your insurance policy to understand what is and isn’t covered prior to any incidents or claims and sign up for coverage that offers what you need
• Take detailed photos of your property and home upon taking possession so you have a clear reference point to what state the house is in
• If you have an inspection report, keep this handy as well
• Take pictures of any damage you do see, so you can keep track of what was and wasn’t already pre-existing

When disputes like this occur, legal battles are one outcome and decisions to pursue them often come down to which side can put together the most compelling case. If you’ve already claimed damages and find the insurer isn’t willing to pay for them, you may:

• Obtain a lawyer to help you argue your case
• Get additional expert opinions of your own as soon as possible following the incident to see if the insurer’s findings are consistent with your experts’
• Talk to others who witnessed the event or neighbors who may have also noticed the same issues with their own home
• Carefully document all new damage you attribute to the incident
• Keep records of repair bills
• Depending on your circumstances, you may also want to file a complaint with your local insurance commissioner, as Fauls did

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• How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you’ll need a substantial stash of savings in retirement

Money doesn’t have to be complicated — sign up for the free Moneywise newsletter for actionable finance tips and news you can use. Join now.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

A financial windfall in your 20s presents both a challenge and a powerful opportunity to build wealth early. Let’s say you’re 26, with no credit card debt, a $27,000 car loan at 8% interest, and minimal monthly expenses beyond rent and insurance. After taxes, you have $36,000 left over from the windfall to do what you want with.

The decisions you make now could shape your financial future. So, what should you do with the money?

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Should you pay off your car loan?

Since you have $27,000 in car loan debt, paying off your $27,000 car loan might feel like the most obvious choice to make — especially since you have a fairly high interest rate at 8%.

It makes good financial sense. Eliminating the debt would earn you an immediate 8% return on your money with zero risk. That’s especially appealing since auto loan interest isn’t tax-deductible.

Let’s say that you originally borrowed $32,000 on your car at 8% using a 48-month loan, and you have 40 months left to pay with a balance of $27,348.42. If you paid off your full balance next month, you’d save around $3,899.01 in interest. Getting the definite 8% ROI from avoiding auto loan interest is likely worthwhile.

You could then redirect your former monthly car payment into savings or investments.

Should you invest the windfall?

Given how high the interest rate is on the auto loan, paying off the car loan might be the best decision, but you could choose to keep making payments on your vehicle and instead invest all $36,000 of the windfall.

Alternatively, you could pay off the car loan, and then invest the remaining $8,651. Either way, putting at least part of the windfall into the market can help your money grow.

Although the stock market isn’t risk-free, you can generally expect around a 10% average annual return over the long term by investing in an S&P 500 index fund.

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Other options to take advantage of the windfall

Whether you choose to pay off the car or invest part of the money, there are other important financial considerations, too. For example:

• Retirement contributions: If you haven’t maxed out your 401(k) or IRA for the year, consider using the windfall to boost your long-term savings.
• Emergency fund: Having three to six months of living expenses in a dedicated fund can protect you in case of a job loss or unexpected expense.
• Short-term savings goals: If you’re planning to buy a home or make another big purchase in the near future, you may want to keep some of the money in a high-yield savings account.*

It may also be worth speaking with a financial advisor to create a personalized strategy, especially when dealing with a large sum of money at a young age.

With the right approach, a $50,000 windfall could be more than just a lucky break — it could be the foundation for a stronger financial future.

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Money doesn’t have to be complicated — sign up for the free Moneywise newsletter for actionable finance tips and news you can use. Join now.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Las Vegas police officers have decided not to go on strike after department employees were asked to consider work action in the face of a planned increase to their retirement contributions that union officials say would decrease their take-home pay.

Instead, the Las Vegas Police Protective Association (PPA), the union representing officers, has entered talks with the department regarding pay increases, according to the Las Vegas Journal-Review.

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“Due to the fear of retaliation, rather than support for the officers by their immediate leadership, we made the decision to ask our members to continue to work and allow the PPA, through newly expanded contract negotiations, to fight and get the pay cut fixed so officers do not lose a single penny of pay,” Steve Grammas, the union’s president, told the publication in a story published July 3.

Here are the details behind the contribution changes, why it could mean a pay cut for officers and how it all came to this.

Increased contribution rate

In November, the state-run Public Employees’ Retirement System (PERS) decided to increase the contribution rate for Nevada police and fire employees up from 50% of gross pay to 58.75%. Contributions are shared equally between employees and employers. Combined with a 2.6% cost-of-living pay increase also taking effect, Grammas told the Journal-Review that take-home pay for officers would decrease by around 2% starting July 18.

The figures prompted the union to poll its members, asking them to consider actions that would result in work disruptions starting July 4. But, the union opted to negotiate.

The PERS program gives participants guaranteed income for life after they retire. Ideally, contributions and investment earnings would cover pension payouts, but that hasn’t been the case for decades, reports the Journal-Review. As of fiscal year 2024, the system was only around 75% funded with an unfunded liability of $20 billion.

To address this shortfall, PERS has increased its contribution rates, and since local governments have to pitch in their half, that leaves them less money to boost take-home pay. Local broadcaster 8 News Now also reports a struggle to keep up with pay and retirement benefits has led to a staffing crunch, a situation that can further impact contributions.

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How can you budget to deal with a pay decrease?

In a situation like this, where employees receive a haircut to their take-home pay through no fault of their own, there may be a few options available to try to deal with the issue, including:

• Transferring to a location where contributions aren’t so high or looking for a job elsewhere that has better terms for employees
• Working overtime to make more money to make up for the pay decrease, or starting a side-gig
• Finding cuts to make in your budget, such as dining out less, cutting a streaming service or trimming other non-essential expenses
• If you work a union job, press leadership to negotiate better terms

None of these options are ideal, but if you need to make up for lost income, they may be among the few choices workers have.

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• How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you’ll need a substantial stash of savings in retirement

Money doesn’t have to be complicated — sign up for the free Moneywise newsletter for actionable finance tips and news you can use. Join now.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Building inspections must be conducted by licensed professionals.

Unfortunately, in Miami-Dade and Broward counties, hundreds of inspections may have been performed by someone without proper credentials.

Enrique Fernandez Jr., a South Florida man, has been accused of using his late father’s credentials to submit as many as 724 inspection reports, project affidavits and other building reports.

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Fernandez denies the allegations that were investigated by WPLG Local10, an area TV station.

He’s now facing $3.6 million in civil fines, but no criminal charges have yet been laid.

An assumed identity?

Local10 News first conducted the investigation into Fernandez Jr. in 2024, after it was discovered that several large building projects had undergone plumbing, electrical and mechanical inspections signed with the name “Enrique Fernandez” and listing license number 21218.

The actual holder of that license was Fernandez Jr.’s deceased father, who passed away in 2018. News10 provided evidence that Fernandez Jr. renewed his dead dad’s license and changed all of the details in the system so the credentials were delivered to him.

He then found work with private engineering firms conducting building inspections for the government, signing off on numerous reports, including for a nine-story building.

Firms he worked for included JEM Inspections and Engineering, NV5, Winmar Construction, and E&K Engineering, although NV5 told News10 that his employment was brief.

The Florida Board of Professional Engineers took notice of the fraud, and has now filed a 724-count administrative complaint, one for each fake report he allegedly filed. With the board seeking fines of $5,000 per violation, that could add up to a whopping $3.6 million penalty.

Law enforcement officials are also investigating; however, the state investigator said a detective told her, “He forged a dead man’s signature and used a dead person’s seal. So it makes it more complicated criminally, because there’s no victim.”

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How to protect yourself from unscrupulous inspectors

"He’s done a job he wasn’t qualified for," a board inspector told News10 during the initial investigation.

Fernandez continues to say he’s not to blame, stating, “They have the wrong Enrique Fernandez.”

Those who are hiring these investigators will need to do their due diligence, including researching the license of the person they hire and making sure all the details match, including full names and the date the license became active.

Those who suspect something is off should report any concerns to the Board of Professional Engineers to investigate.

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• Here are 5 ‘must have’ items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you?
• How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you’ll need a substantial stash of savings in retirement

Money doesn’t have to be complicated — sign up for the free Moneywise newsletter for actionable finance tips and news you can use. Join now.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Aside from saving for retirement, one of the best things you can do with your money is build an emergency fund. Life happens, and a designated stash of cash can come in handy when you’re suddenly hit with a major car repair or a medical emergency.

Take Kerry, for example. Kerry, a self-employed artist that earns roughly $80,000 a year, was wise enough to create an emergency fund. But thanks to a major home repair that wound up being quite costly, her emergency fund is down to $1,000.

Having experienced the benefit of emergency savings first hand, Kerry knows she needs to rebuild her savings before another potential bump in the road puts her in debt. With this in mind, Kerry is left wondering if she should pause her retirement contributions to rebuild the emergency fund.

To figure out what’s best for Kerry, let’s get into the numbers.

Arguments for and against pausing retirement contributions

First things first, pausing contributions to your retirement savings is generally a bad idea for most people, especially if you have an employer that matches contributions to an RRSP account.

Since Kerry is self-employed, she doesn’t get that matching contribution, so she wouldn’t be giving up as much if she were to pause retirement contributions for a while. She would, however, be losing out on the tax breaks that she would receive from contributing to her retirement accounts, as well as the compound interest that the invested money would earn.

Pausing her retirement contributions, even for a short period, could make a significant difference in Kerry’s retirement nest egg.

At the same time, since she’s self-employed and may face a greater risk of financial problems without emergency savings, there’s a solid argument to be made that Kerry should pause her retirement contributions while she shores up her emergency fund. Otherwise, she could risk going deep into debt if she doesn’t have the money to take care of another major emergency expense.

So, what should Kerry do? One option is to temporarily pause retirement contributions and save up for a mini-emergency fund, then begin splitting her extra money between retirement investments and emergency savings until the latter fund is back to where it should be.

This could be a good approach as she could give herself an financial cushion to fall back on and wouldn’t have to pause retirement contributions for too long, allowing her to slowly build up both her retirement and emergency accounts at the same time.

But if Kerry prefers to maintain her retirement contributions while rebuilding her emergency fund, she’s got to get serious about saving.

Shoring up emergency funds without putting retirement at risk

Unfortunately for Kerry, the cash that she tries to save for her emergency fund is going to have to compete with her living expenses. This makes reallocating her money a little harder to do, but that doesn’t mean it can’t be done.

In order to rebuild her emergency fund, Kerry should keep an eye out for any potential options to save some money or boost her income. Here are a few ideas to help Kerry with stashing some cash away for emergencies.

• Budgeting: The first thing Kerry should do is establish a budget that accounts for all of her necessities, while also allowing her to put some money away for her emergency fund. Creating this budget, however, may require a few sacrifices.
• Cut down on spending: As mentioned above, Kerry may have to make some changes in order to save money for her emergency fund. Making meals at home, reducing electricity use, taking advantage of public transportation and cancelling pricey streaming subscriptions are all ways that she can cut down on spending.
• Consider working a side gig: Sometimes cutting down on spending to save money is easier said than done. If Kerry finds this to be true, picking up some extra work on the side could be the solution. Driving for a rideshare service, delivering packages and pet sitting for neighbors are all decent side hustles that could allow Kerry to save some money without sacrificing anything from her personal life and set her own working schedule.
• Sell used items: This could be a good way for Kerry to boost her income and save some money. Depending on what she has that she’s willing to part with, selling used items could fetch a decent return that Kerry could then put straight into her emergency fund.
• Save your windfalls: Putting away cash that lands on her lap, such as a cash birthday gift or tax return, is another good way for Kerry to add to her emergency fund.

In the end, it’s up to Kerry to figure out what works best for her, but the good news is she has a few options to explore.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Being laid off for months can be really scary, especially if you’re the sole earner in your family. It’s an even more frightening situation if you are at risk of losing the house you’ve worked so hard for.

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The good news is if you’re 60 days late on mortgage payments, you’re typically not going to be at serious risk of foreclosure yet. The Consumer Financial Protection Bureau (CFPB) says generally lenders can’t start the process until you’re 120 days late. Foreclosures are also usually the last resort for lenders.

If you’re going to be starting a new job soon, you hopefully have options to get back on track with your home loan before that happens.

Still, there’s a chance your lender will act, and you also face serious damage to your credit when you’re behind, as your record of late payments will stay on your credit report for up to seven years, according to Experian. Plus, you’re in a pretty stressful spot that may damage your mental health.

Here’s how to cope in this difficult situation, as well as some steps you can take to try to make sure you don’t face a similar issue in the future.

What can you do if you’re behind on your mortgage payments?

If you’re behind on your mortgage payments, your options vary depending on whether you have money to pay something now, or at least soon, and how much your lender will work with you.

If you don’t have the money to make payments now but will be employed soon, you have more options than if you can’t afford to make any payments at all for the foreseeable future

In either situation, the best option is to contact your lender ASAP. As the CFPB explains, you should have information ready to share, including:

• The reason you can’t make payments
• Whether you expect to start paying soon, or not at all
• Information about your assets and debts

Your lender may grant you relief by offering forbearance or restructuring your loan to make future payments more affordable. In most cases, lenders will work something out if they can because they want to avoid foreclosing, which takes money and time. However, you must be able to pay something, or have a plan to pay soon.

If you don’t think you’ll be able to pay anything for the foreseeable future, selling your house could be best before you fall too far behind. You’ll have to be able to sell for enough to pay off the loan, though, because otherwise your lender would have to agree to a short sale (accepting less than the amount due) or you’d have to pay the difference. Since in some states the lender can sue you for the deficiency after the short sale, the CFPB advises getting a waiver in writing.

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Be aware of closing costs that can be 6% or more of your sale price and must be covered from the proceeds or from your bank account.

The good news is, if you’re expecting to get back to work soon, you may not have to sell and incur transaction costs or potentially lose a low mortgage rate. You may just be able to arrange a payment pause, and whether you make a deal or not, if you resume your payments before you’re 120 days or more behind, you should still be able to avoid foreclosure starting.

How to cope with the mental stress of being in debt

It’s understandable to be pretty stressed about your situation if you’re unemployed — especially when you’ve fallen behind on the bills. Research shows that unemployment increases the risk of a variety of mental health disorders, including anxiety, depression, drug use, and even eating disorders. Obviously, you’ll want to try to find positive ways to cope.

Working out a plan for your financial situation, including talking to your lender, will help a lot with your stress since you won’t be so afraid of foreclosure if you’ve talked with your creditors and they’ve agreed to a plan for your situation.

The University of California, Berkeley also recommends communicating with loved ones about your situation and your worries, joining a job-seekers support group, clarifying your greatest fears and proactively addressing them, and making sure to get enough sleep, as well as exercising and eating well.

By taking these steps, you can hopefully get through this troubled period and emerge from unemployment feeling good about your situation and able to get back on track financially.

How to prepare for a layoff

You’ve already lost your job and are dealing with the aftermath, but after you get back to work, you can take steps to reduce the damage that any future unemployment can do. This includes:

• Creating an emergency fund so you can cover the bills, which includes three to six months of living expenses
• Working to rebuild your credit by paying your cards and loans on time
• Paying down your mortgage and taking other steps to reduce monthly expenses so you won’t have such high bills in the future.

Since your late mortgage payments will likely damage your credit, it’s going to be especially important to focus on earning a good score again in the future. Getting current on all past due bills, maintaining low balances on your credit cards, and paying on time for the future will help you earn good credit again over time.

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Money doesn’t have to be complicated — sign up for the free Moneywise newsletter for actionable finance tips and news you can use. Join now.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Kevin Costello, owner of Siam Imports, had a bad experience recently receiving payment with cash. A customer came into his store and paid with a fake $100 bill, but it turned out that the bill was actually a legitimate bill made into a counterfeit — and he failed to catch it.

"I had a couple other girls in here at the same time, so I didn’t really closely look at the $100, which if I would have did that I could [have] probably prevented it,” Costello said.

One reason he didn’t identify the issue on the spot: The counterfeit $100 was made using a clever technique thieves are favoring recently.

Unfortunately, Costello isn’t the only one to receive payment with phony money, as counterfeiting cases are on the rise in Hawaii, where he owns his business. Fake bills can cost business owners a lot of money, so it’s important to understand the dangers of this crime as well as how to identify fake bills — even if the counterfeiting is done well.

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Bleached money on the rise in Hawaii

According to Honolulu police, counterfeiting and forgery rose 16.5% in the past year.

While this counterfeiting can take on different forms, one popular method — and the one that applied to the bill Costello collected — involves taking $1 bills, bleaching them and reprinting them to look like real $100 bills.

"We’re seeing more and more of these bleaching of dollar bills and then they’re being printed with 50 or 100 on them,” Tina Yamaki, president of Retail Merchants of Hawaii, said.

One reason this approach is becoming common is that it can be really hard to detect. “It still feels kind of like a paper bill because you’re still using the same, you know, paper. It’s like if you throw money through the wash. Right? It still feels like a bill, but we’re seeing a lot more people now holding it up to the light, finding out that the [counterfeit detection] pens don’t always work,” Yamaki said.

It’s not just Hawaii where there is a concern. According to the Federal Reserve, around one in 40,000 bills is counterfeit, with high-denomination ($50 and $100) bills accounting for most of the fake money.

While this is a significant decline in counterfeit funds since 2006, when around one in 10,000 notes was thought to be fraudulent, this still means that as much as $30 million in fraudulent money is cycling through the economy.

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How to spot fake money

Costello feels that his mistake in accepting the fake $100 was driven by the fact that he simply didn’t take the time to look carefully enough at the bill. "Take the extra couple seconds, actually, all it would’ve took,” Costello said.

However, for those who aren’t as confident about their ability to tell a forgery, it’s helpful to review the nine guidelines from the Secret Service that can help you to distinguish when a bill is fake. Some of the features real bills include:

• Large, off-centre portrait images without a frame
• Money being printed on paper that’s a blend of linen and cotton, with random red and blue security fibers woven throughout
• A watermark you can see when holding the money up to light and looking at the bill from either side
• Color-shifting ink that changes from copper to green as money is tilted at a 45-degree angle
• Clear thread that is embedded vertically in the paper on larger bills, which indicates the denomination of the note if the bill is held to light
• A 3D security blue ribbon woven into the $100 bill’s paper. The 100’s move from side to side if you tilt the note back and forth and they move up and down if you tilt the note from side to side

You can also look at the face plate number, the position of the letter and number on the note and the number designators placed on the bill by the Federal Reserve.

If you have any doubts, be sure to review the Secret Service guide, which includes pictures of each of these features, to help you determine if the bill is a legitimate one.

While it’s a pain to take the time to confirm all these details, it can keep you from accepting a bill that’s not a valid one and that vigilance can pay off both for you and for the rest of the economy.

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• How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you’ll need a substantial stash of savings in retirement

Money doesn’t have to be complicated — sign up for the free Moneywise newsletter for actionable finance tips and news you can use. Join now.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Recently, 72-year-old Tracy Jeffords received a text message claiming he owed money for using a toll bridge. Since Jeffords had been in San Francisco for a heart procedure, he assumed the message was legitimate and related to his trip. Believing it was a genuine toll fee, he provided his debit card information to make the payment.

Jeffords received a follow-up text message the very next day claiming he needed to make an additional payment. Concerned by this second message, he decided to check his bank account to clarify the situation. To his dismay, upon reviewing his account, he discovered he had fallen victim to a fraudulent scheme that had cost him $3,300.

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"It made me feel terrible," Jeffords said. Jeffords also cautioned, "It’s going to happen to somebody else."

Unfortunately, he’s right. That’s because Jeffords was the victim of a FasTrak text scam, and there have been many similar texts sent out to people in the Bay Area for months.

FasTrak scams put drivers at serious risk

FasTrak manages California’s toll collection system, but it does not send text messages asking individuals to provide their debit card information for unpaid tolls.

This is not a legitimate toll collection operation, but rather a scam involving individuals who are falsely representing themselves as toll authorities. These scammers are distributing fraudulent payment notices to residents across the state, demanding payment for alleged toll violations.

FasTrak issued a warning about the scam, telling ABC 7 News that customers are repeatedly being sent messages instructing them to visit a certain fraudulent site in order to pay their toll bills. Those who receive the threats via text are warned that if they don’t act quickly and pay in full, they’ll face legal penalties.

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FasTrak scams put drivers at serious risk

FasTrak manages California’s toll collection system, but it does not send text messages asking individuals to provide their debit card information for unpaid tolls.

This is not a legitimate toll collection operation, but rather a scam involving individuals who are falsely representing themselves as toll authorities. These scammers are distributing fraudulent payment notices to residents across the state, demanding payment for alleged toll violations.

FasTrak issued a warning about the scam, telling ABC 7 News that customers are repeatedly being sent messages instructing them to visit a certain fraudulent site in order to pay their toll bills. Those who receive the threats via text are warned that if they don’t act quickly and pay in full, they’ll face legal penalties.

"You have an outstanding toll," ABC 7 reported that one of the text messages said. "Your toll account balance is outstanding. If you fail to pay by (a date or) April 19, 2025, you will face penalties or legal action."

Unfortunately, when a phone user falls for one of these scams and provides their information, they can quickly lose a lot of money, just as Jeffords did.

"The primary thing is that the money moves almost instantaneously. And when the money is moved, you cannot easily get it back. In most cases, it’s gone," Michel Weksler, a payment security consultant and tech expert, told ABC 7.

That’s exactly the experience Jeffords had, since he has tried to dispute the $3,300 withdrawal and subsequent eBay purchase, but hasn’t been able to get his funds returned. "It’d be everything to get it back, because it’s a lot for me. You know, I don’t work," Jeffords commented.

How to avoid toll scams

Toll scams like the one Jefford fell victim to have become so common that the Federal Trade Commission had to issue a consumer alert about them in January.

The FTC said that any text about tolls is "a phishing scam" and warned that "not only is the scammer trying to steal your money, but if you click the link, they could get your personal info (like your driver’s license number) — and even steal your identity."

The good news is, the FTC has some foolproof tips to help you avoid falling victim to a scam like this one. The FTC advises:

• Never click on any links when you get an unexpected text
• Stop and check out any texts that you get that are unexpected, especially if scammers try to create a sense of urgency to get you to move quickly
• Reach out to the state’s tolling agency if you get a similar text message, using a phone number that you find yourself on a website you know is real (look for a .gov website address)
• Report and delete any unwanted texts that came through

Taking these precautions can help you avoid ending up in a similar predicament to Jefford’s. As this scam victim’s experience demonstrates, these sophisticated schemes can target anyone, regardless of age, education, or financial savvy.

"Especially older people," he warned. “I have my facilities about me, but I don’t really think twice or get suspicious as I should, or as I used to."

What to read next

• Financial aid only funds about 27% of US college expenses — but savvy parents are using this 3-minute move to cover 100% of those costs
• Here are the 6 levels of wealth for retirement-age Americans — are you near the top or bottom of the pyramid?
• Here are 5 ‘must have’ items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you?
• How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you’ll need a substantial stash of savings in retirement

Money doesn’t have to be complicated — sign up for the free Moneywise newsletter for actionable finance tips and news you can use. Join now.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.