Author: Maurie Backman

A significant portion of older Americans are headed for retirement with insufficient savings.

The Federal Reserve reports a median retirement savings of $185,000 for Americans aged 55 to 64 as of 2022.

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Among Americans ages 65 to 74, the number increases to $200,000. But neither balance is a particularly large amount, given that retirement could easily last 20 years or longer.

Baby boomers as a whole might not seem prepared for retirement, but that doesn’t mean all older Americans are doomed. Some baby boomers are headed for financial security, and it’s all thanks to the smart decisions they make on a regular basis.

Here are three things financially savvy baby boomers do with their money that could lead to decades of comfort once they retire.

Pay themselves first

Earlier this year, U.S. News & World Report found that 42% of Americans across all ages don’t have an emergency fund.

But financially savvy boomers don’t let themselves get into a situation where they can’t cover a surprise bill and end up with debt. Rather, they practice paying themselves first.

On a basic level, paying yourself first means allocating money to your savings from every paycheck before using it for anything else — but there are different ways to do it.

If your employer offers a 401(k) and you sign up, contributions can be taken directly from your paycheck. If not, you can set up automatic transfers to an IRA so that you’re funding your retirement plan every month.

You can also set up automatic transfers from a checking account, where your paycheck might land, to a savings account to build an emergency fund. Having emergency cash reserves could spare you from having to take out a loan or put an unplanned expense on a credit card.

Experian says that baby boomers have an average of $6,754 in credit card debt. But having savings ready at all times could help you avoid debt and the financial insecurity it can lead to.

Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

Avoid lifestyle creep

As people’s paychecks increase, a funny thing starts to happen. Instead of taking the opportunity to save more money, many folks opt to spend more instead. But that could lead to more stress, more debt and less stability.

A 2024 report from PYMNTS Intelligence found that 48% of Americans earning more than $100,000 a year live paycheck to paycheck. And the reason may boil down to lifestyle creep.

Financially literate boomers don’t let themselves increase their spending as they edge toward the end of their careers and their earnings peak.

Instead, they find ways to be happy with their current standard of living and continue saving so they can support their lifestyles without worry once retirement arrives. It’s a practice you may want to adopt so you can benefit from your growing paycheck instead of having it become a source of stress.

Smart investing

Investing isn’t just important when you’re young and trying to build retirement wealth. It’s just as important to hold your investments as you approach retirement, and during retirement.

Boomers that are financially stable continue to invest, and they don’t completely withdraw from the stock market out of fear.

It’s a good idea to scale back on stocks as you age to minimize your risks. But ditching stocks completely could mean not generating enough income to lead the lifestyle you want.

A 2024 Empower review of baby boomers’ investments found that they tend to allocate 36% of their assets to U.S. stocks and only 7.6% to international stocks, which can be more volatile. It also found that boomers tend to keep 10.5% of their assets in U.S. bonds and 29.6% in cash.

Boomers who maintain a diverse investment mix over time often end up having more stable returns. They should also consider assets that can generate income for them once they’re no longer working. Some options that work well in that regard include dividend stocks, municipal bonds and real estate investment trusts (REITs).

Certificate of deposit (CD) laddering can also be a good option, namely because doing so offers low-risk returns while earning different interest rates over different term lengths. When each CD reaches maturity, you can reinvest your earnings. When interest rates fall, CDs become less attractive. However, in the near term, CDs are another smart option for boomers to consider for their investments.

Savvy boomers also invest in the most tax-advantaged manner possible. For those who are still working, IRAs and 401(k)s make sense.

The nice thing about these accounts is that there are no age limits for making your annual contributions, so boomers can fund them as long as they’re still working and earning money. You may want to continue funding your IRA or 401(k) for as long as possible to take advantage of the tax benefits involved.

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Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free. Subscribe now.

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

When you give money to a contractor for home improvements or repairs, you expect that work to be completed. However, some Atlanta residents learned the hard way that things don’t always work like that.

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They have reportedly waited seven years for a trial date after being allegedly scammed by Angela Hodges, who ran a tree removal business called Don’s Tree Experts.

Hodges, who is accused of defrauding her customers, once again attempted to postpone a recent pretrial hearing at DeKalb County Superior Court claiming she was ill. However, she showed up to the courtroom after the judge issued a bench warrant, WSB-TV Atlanta Channel 2 reports. She is being charged with felony counts of theft by taking and theft by deception.

"As soon as I got released from the hospital, I did show. And the judge took the information and is willing to hear our side of the story to get the case moving forward," she told reporter Justin Gray. A motions hearing on the criminal charges is slated for September with an estimated trial date in October.

Hodges told the news network all of her unhappy clients have been refunded, though it’s unclear whether that’s true and if it encompassed every case against her. An April 2023 report from FOX 5 says that she promised to pay back six DeKalb County customers in exchange for a six-year probated sentence. At least one customer was not hopeful.

Consumer advisor Clark Howard says it’s hard for people to get their money back in situations like this. As he explained to WSB-TV, “The cases are hard to prove. They’re hard to investigate. And so consumers are left without any help at all. Your money is gone."

A suspiciously similar name

In 2023, WSB-TV began investigating Hodges after consumers complained about her taking their money. Back then, DeKalb County resident Sherral Cannon said he contacted Don’s Tree Experts thinking it was the same company he’d used in the past.

Hodges’ company’s name is similar to another called Don’s Tree Service, which may have led customers to trust her.

“We called Don, who had been here before, to cut down some trees,” said Cannon to the news network. He wrote Hodges a check for $700 as a deposit for the work he needed done.

“She disappeared. Never saw her again,” Cannon said.

Don’s Tree Service is a company that’s highly rated and has been in business for over 20 years. Owner Doni Jones says she’s seen mix-ups along the lines of what happened to Cannon.

“We hear the stories because they’ll call us when they can’t get that other person on the phone,” Jones told WSB-TV. “You see someone get taken advantage of like that and to know there’s a possibility they think you may be involved in that. It’s frustrating.”

Meanwhile, Hodges has been arrested numerous times in multiple counties, and there have been at least 40 civil cases filed against her, says WSB-TV.

Gray asked Hodges if she was still in the tree removal business and was directed to her attorney, who said that the business is still in operation but would not speak to Hodges’ involvement in it.

Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

How to avoid being scammed by a contractor

The National Association of Realtors, citing a 2023 study from JW Surety Bonds, says that about one in 10 Americans have been a victim of a contractor scam, losing an average of $2,426. That’s why it’s important to know how to avoid becoming a victim.

First, only work with contractors or companies that are licensed and insured. And from there, do your research. Look up the company on the Better Business Bureau to see how many complaints are on file, and see if you can use a state database to look up complaints by license number.

Once you’ve done that initial research, you’ll want to talk to previous customers to see what their experience was like. Don’t just trust online reviews — anyone could’ve written them. This especially applies to testimonials on a given company’s site.

Independent sites like Yelp may be a bit more reliable. But ultimately, your best bet is to ask to see an example of a contractor’s work when possible and have a quick conversation with that homeowner. If you can ask someone you know for a recommendation, even better.

Furthermore, be wary of companies that require a large deposit up front. You may have to pay something, but if it’s more than 50% of the project cost, consider it a red flag.

Some states actually place a limit on the amount of money contractors can ask for up front when doing a job. You can research your state’s laws here.

Also, do not hand over any money without a signed contract. And read the terms of that contract carefully so you know what you’re getting into. Make sure the contract has a date for when the work will be completed, as well as remedies you can take if the company breaches the contract.

Finally, always get multiple estimates for a home improvement or repair project, and be suspicious if one quote is remarkably lower than the others. It may be that the company is trying to lure you in with a much more attractive price only to try to run away with your money afterward.

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Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free. Subscribe now.

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

If you’re a young adult and feel like your finances aren’t in order, you’re not alone. A 2024 Bank of America survey found that 52% of Americans aged 18 to 27 say they don’t make enough money to live the life they want, and that sky-high living costs are a top barrier to financial success.

Furthermore, adults in this age group are delaying major financial milestones, such as buying a house and saving for retirement. And 46% have to rely on financial support from parents and family just to stay afloat.

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Let’s say you’re 27 years old and ready to get serious about your finances, but are struggling to get by with the high cost of living. Here are some steps you can take toward securing your financial future en route to achieving major life goals.

Emergency fund

One of the most important things you can do right away is get started on an emergency fund. This is cash you can easily access in case something unexpected happens, such as losing your job. Having a cushion to fall back on can help prevent you from falling (further) into debt.

Many experts recommend stashing away three to six months’ worth of expenses, however, since you’re just starting out you might want to think a bit smaller. Personal finance expert Dave Ramsey, for example, recommends setting aside $1,000 at first. Over time, you can build up your emergency fund. Since this cash isn’t meant for everyday spending, it’s also a good idea to keep it in a high-yield savings account so it can earn interest.

Tackling debt

Take a look at your debt situation. You may already be on a payment plan when it comes to student debt or auto loan debt. But if you have any high-interest debt, including credit card debt, it’s in your best interest to pay it off as quickly as possible. The last thing you want to do is continue digging yourself a bigger hole. Come up with a plan to tackle your debt so you can get to saving. Drawing up a budget with this goal in mind may be helpful.

Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

Saving for retirement

Does your employer offer a 401(k) plan? If so, you can sign up and direct a portion of your paycheck, pre-tax, into an account and invest it in the market. This is a good idea especially if your employer offers matching contributions (up to a certain percentage of your pay), which essentially amounts to free money. It’s recommended you contribute as much as you can afford, at least up until the maximum employer match amount.

Otherwise, you can start building your retirement savings through an individual retirement account (IRA), which can also be invested in the market. Keep in mind there are yearly contribution limits for 401(k) and IRA accounts.

Long-term goals

At age 27, you still have most of your adult life ahead of you, but you may have long-term goals beyond achieving financial security. These can include starting a family, buying a home or simply generating as much wealth as possible. A financial adviser can help you plot a path toward achieving them.

Think about how your finances might impact your life goals. There are costs associated with many personal milestones, so look at the big picture in the course of mapping out your long-term plan.

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Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free. Subscribe now.

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

The Los Angeles neighborhood of Westwood is "well maintained" with "surroundings [that] are quiet and clean" according to comments on the online real estate marketplace Trulia.

But now, one home that neighbors describe as a “hell house” — attracting squatters, drugs and criminal activity along with a growing pile of garbage — is making life miserable for residents.

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As KTLA reports, the underlying issue is that the older brother and sister who own the home are anti-social hoarders who regularly engage in profanity.

"They’ve been a menace to the neighborhood for the whole time that we’ve lived here," said Amy Gordon, a local resident.

But Gordon says things went from bad to worse in the past year as the pair “hoarded themselves out of their own home” — moving into their cars out front, essentially opening their front door to problems.

Now the neighbors have banded together to address the challenge, and their city council rep is taking action.

When one problem house causes problems for everyone

Serious hoarding presents a number of concerns for both hoarders themselves and their neighbours. Safety is a serious issue.

Hoarding can attract rodents, increase risk of fires and — in the case of the Westwood “hell house” — intruders.

Gordon says the home is attracting people who leave drug paraphernalia around the community, including across the street from a school.

Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

It also impacts property values — as the home where the hoarding takes place drops in value, so do other homes in the area.

However, it’s important to approach the situation with compassion, since hoarding is a real disorder that affects people of all ages.

Area resident Carrie Livingston, told KTLA that she called Adult Protective Services to try to help the homeowners, to no avail.

Neighbors reached out to city police, city leaders and even building and fire inspectors to get the "hell house" owners the help they desperately need.

Since then, community residents have filed restraining orders against the brother and sister.

They’ve also gathered more than 150 signatures on a petition they sent to their city council representative Katy Yaroslavsky.

And that got a response.

Yaroslavsky promptly asked the city attorney to declare the property a public nuisance and reached out to the Los Angeles County supervisor to provide the siblings with mental health support.

She’s also advocating for policy change in such situations, saying it takes too long for the city to step in on properties like this one.

“The process is slow, complicated, and leaves neighbors in limbo,” she said in a statement. “I support current efforts to streamline how the City handles nuisance properties and will keep pushing to move that work forward.”

What to do if your neighbor is a hoarder

If you find yourself next to a hoarder, you could try speaking to your neighbor directly about the problem, but they may not be responsive.

Like the residents in Westwood, you may need to seek intervention. It helps to be aligned, as they have been, in your approach.

Reach out to local law enforcement if you feel you’re in danger and connect with a local resource like Adult Protective Services and health departments to check in on your neighbor and try to help them.

This process could take some time. It’s important to protect yourself and your loved ones — as well as your property — in the meantime.

• Consider constructing a fence, sealing garbage and recycling bins and bringing in a pest control company if required.
• Document the evolving situation with images, video and notes — particularly in the event your property ends up sustaining damage due to your neighbor’s hoarding.
• Contact the local code enforcement office if you feel your neighbor has violated a specific ordinance. For example, if there are piles of trash outside your neighbor’s home seeping onto your property, that’s something you could bring to your town or local law enforcement agency.
• Report any violations of homeowners association (HOA) rules to the HOA board, as Nolo legal services advises. From there, they should be the ones to step in and take action.

You may, depending on the circumstances, have grounds to file a lawsuit against your neighbor if their hoarding has caused damage to your home or cost you money in a specific way.

Even if you’re not in danger per se, you have the right to protect your home and community. And you could help people suffering from a very serious disorder.

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Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free. Subscribe now.

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

When you’re caught speeding, driving recklessly, running a red light or doing something else that violates traffic laws, there are hefty fines involved.

Typically, a police officer hands you a ticket on the spot or you get a notice in the mail. One way your citation won’t be delivered? Via text message.

Unfortunately, con artists are taking advantage of people who don’t know that.

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In Alameda County, California, numerous residents have been getting texts telling them they owe money on unpaid fines from traffic citations. It’s all a scam.

"There is so much fraud that a lot of people cannot distinguish fraud from reality," Sandi Bethune, an Oakland resident, told ABC News.

A new traffic citation scam is on the rise

Thankfully Oakland resident Moises Salazar didn’t fall for the text he got citing a traffic violation.

“I read it and I understood it was fake,” he said.

Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

But he is among the growing number of citizens reporting the issue to Alameda County Court, which has since issued a public service announcement about the problem:

"… the Court does not contact the public through text messages to make payments for traffic citations. The public is cautioned not to provide financial or personal information if contacted via text or a phone call. The Court does not seek this information through texts or phone calls."

It added that anyone concerned about a traffic citation should first visit the court’s website to confirm they owe money. They can do this by clicking on "Pay Your Traffic Ticket."

From there, residents can input their name and driver’s license number to see if there are any outstanding fines. It’s a good safety measure with the growth in such scams.

"We don’t want people to get duped into giving out information that can lead to identity theft," Rosynsky told ABC News.

How to avoid a traffic ticket scam

Unfortunately, these scams are not limited to Alameda County — they’re happening across the country. (Another popular one? The fake unpaid toll violation.)

Never pay a “delinquent” traffic ticket, parking ticket, or toll without verifying it first. Be especially suspicious if you’re asked to pay your fine by wire transfer or another unconventional method.

Here are some more tips to protect yourself and others from such scams:

Beware of any text citing a traffic violation or unpaid toll. Tip-offs that the texts are fake:

• The violation is dubious — for example, it says you owe money for parking illegally on Whitehead Street, but you’ve never been to Whitehead Street.
• The text comes from an international number or may have been sent to multiple numbers at once.
• The message says ‘dear customer’ or ‘dear resident’ and doesn’t use your actual name.

If you receive a text of this nature, contact your local county court for more information, or to at least report the scam. You can also try contacting your local Department of Motor Vehicles.

You can also report the scam to the U.S. Department of Transportation at (800) 424-9071 or [email protected]. The Internet Crime Complaint Center is another place you can report scams of this nature.

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Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free. Subscribe now.

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

Personal finance expert Suze Orman didn’t grow up wealthy — she worked her way through a number of challenging jobs and learned how to invest before becoming the success she is today.

Orman is a firm believer that everyone deserves to live without financial stress — both during their working years as well as in retirement. To achieve that goal, Orman is a fan of living below your means, always having a financial safety net, and working toward financial independence.

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But doing that takes time and effort.

As Orman says, “Financial independence is not something we snap our fingers and have materialize right then and there. It is the result of a process that we create and then commit to seeing through.”

If your goal is to achieve financial independence to the point where you’re able to retire early, the right tools could set you up for success. To that end, here are three accounts Orman recommends putting in place as soon as possible.

An emergency fund in a high-yield savings account

You never know when you might face a surprise expense or a period of financial hardship. That’s why it’s important to have an emergency fund — money in savings to cover unplanned bills, or to take the place of your paycheck for a while if that becomes necessary.

Unfortunately, an early 2025 U.S. News & World Report survey found that 42% of Americans do not have an emergency fund. In addition, SecureSave, a fintech Orman co-founded, reported in August of 2023 that 63% of workers do not have enough emergency savings to cover an unplanned $500 expense.

At the very least, it’s a good idea to save enough money in an emergency fund to cover three to six months of essential bills. However, Orman would prefer that you save more.

“You know that I want you to have far more than three months of living costs set aside. One year is my sweet spot advice for being prepared for major financial setbacks,” she said.

An emergency fund could also be an important component of your early retirement strategy. If you retire before you can access your IRA or 401(k) penalty-free, you can potentially dip into your cash reserves to pay bills (though ideally, that money should be saved for unplanned expenses).

You can also use your emergency fund to cover expenses during periods when the stock market is down and it’s a bad time to tap your portfolio.

Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

A retirement account

The number of Americans who are nearing retirement without savings is alarming. AARP found last year that 20% of Americans 50 and older don’t have any money socked away for their golden years.

In addition, the Federal Reserve puts median retirement savings among Americans 65 to 74 at just $200,000 as of 2022.

Orman says the key to building a strong retirement nest egg is to start saving when you’re young — ideally, in your 20s. The sooner you fund your retirement account, the more time that money has to grow.

Orman also thinks people should save at least 15% of their income for retirement when they’re younger (and beyond). And if you want to retire early, you may even want to aim higher.

If you have access to a 401(k) plan, it can be particularly advantageous to participate — and max out if possible. This year, that means contributing $23,500 if you’re under 50, $31,000 if you’re 50 or older, or $34,750 if you’re between the ages of 60 and 63.

One easy way to boost your 401(k) savings is to claim your employer match in full. If you’re not sure what that entails, ask your benefits department.

You should also know that your employer match won’t count against your contribution limit. So if you’re 29 and want to contribute $23,500 out of your paycheck, and your employer matches your first $2,500 in contributions, you can put in $26,000 this year.

An investment portfolio

The nice thing about retirement plans like IRAs and 401(k)s is that they give you a tax break on your money. With a traditional IRA or 401(k), for example, your contributions go in tax-free and investment gains are tax-deferred.

The problem with these accounts, though, is that you’re required to wait until age 59 and 1/2 to take distributions. If you take an earlier withdrawal, you’ll typically face a 10% penalty. And a penalty like that could easily eat away at your savings.

That’s why it’s important to invest in a taxable brokerage account if you think you’d like to retire early — though you won’t get any IRS benefits, your account will also be unrestricted. You’ll be able to take withdrawals whenever you want and contribute as much as you want in any given calendar year.

Orman says it’s important to be strategic with your investments — and to be mindful of your asset allocation at different stages of life.

"For many people, as they near retirement, it can make sense to reduce their reliance on stocks if they want a smoother ride," she said. "But just because you had 80% or more invested in stocks when you were 40 doesn’t mean you need or must keep that much invested in stocks when you are 65 or 75."

To be clear, you shouldn’t reduce your stock exposure at a certain age so much as at a certain point before retirement. Generally speaking, the five-year mark is a good time to start moving out of stocks and into bonds, which tend to be more stable.

This doesn’t mean you should dump your stocks completely as retirement nears. But you may want to limit your portfolio to 50% or 60% stocks so you’re not overly exposed to market volatility at a time when you’re ready to start tapping your investments for income.

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

The past few years have been wrought with rampant inflation, and many Americans are having a hard time paying their bills.

In a February CBS News and YouGov poll, 77% of Americans said their income isn’t keeping up with inflation. And a March survey from Equitable found that 80% of Americans across all income levels are worried about rising living costs.

Life can be especially challenging for young adults who are just starting their careers and craving independence. Suddenly, the burden is on you to pay for every little expense. And what if you realize you can’t afford everything you need?

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Imagine you’re 22 years old and you’re ready to move out of your parents’ house, but you’ve done the math and discovered you can’t afford a place of your own. One of the reasons is your car payments eat up too much of your income — but you need wheels to get to work every day.

So, what can you do to lower your auto costs? And can you do anything to lower your living costs as well?

Tackling high car payments

A number of things may be contributing to high transportation costs at that age. Let’s focus on your auto loan and car insurance.

Insurance premiums tend to be higher for less-experienced drivers, as they’re deemed more likely to get into accidents. Companies can also assess risk based on a car’s make, model and safety features. A high-end car that’s expensive to repair or a car with a high theft rate result in higher premiums.

If you want to try cutting down on your insurance bill, you can start by collecting quotes from multiple companies and select the best deal. Don’t be afraid to negotiate, either, especially if you have a good driving record thus far. Ask if there are any further options for lowering your monthly payments.

As for your car loan, even as borrowing rates remain elevated, you may be able to refinance for a better deal if your credit score has improved since you bought the vehicle. What kind of car do you have? If it’s new or expensive, you may want to consider swapping it with a cheaper option.

Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

Rent options

If you’re in a situation where you can take your time to find a new place to live, it can pay to be patient and wait for the right rental opportunity to come along.

But if you’re still unable to find something in your price range, you might need to adjust your expectations. That could mean living in a different neighborhood than you wanted or a much smaller space with fewer amenities close by.

Still can’t find what you want? It might be time to put those dreams of living by yourself on hold. Co-habitating with roommates may not be ideal for everyone, but it’s a great way to cut down on living expenses. Not only does the rent get split, but you may be able to save on general household expenses.

Take control of your finances

If you feel like you’re drowning and can’t keep up with your bills, there are further steps you can take to improve your situation.

First, get yourself on a budget so you can track every dollar spent. Next, review your spending and identify ways to cut back. Chances are, there are some discretionary expenses you can reduce, whether it’s dining out or paying for subscription or streaming services. And along those lines, do a spending audit to make sure you aren’t paying for services you don’t use.

If you want to boost your monthly income, you may also want to look at getting a side hustle. This can allow you to afford and save more for yourself.

And if you can swing it, it’s a good idea to start an emergency fund. This may take time if you’re in a position where you can barely cover rent and car payments. But the point of an emergency fund is to provide a cushion in case of an unplanned expense so you don’t fall deep into debt.

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• This is how American car dealers use the ‘4-square method’ to make big profits off you — and how you can ensure you pay a fair price for all your vehicle costs

Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free. Subscribe now.

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

In April 2025, the Jensen family faced serious legal troubles when James and Kelly Jensen, together with their sons Maxwell and Zachary, were charged with money laundering. The family stands accused of orchestrating a sophisticated $300 million fraud scheme involving the illegal transportation of crude oil from Mexico.

Jensen’s company, Arroyo Terminals, served as an ideal conduit for the operation. According to CBS 4, the crude oil was transported via barges from the company’s Rio Hondo facility to various buyers throughout Texas. Federal agents conducted a raid on Arroyo Terminals on April 23.

However, CBS 4 now reports that charges against Kelly Anne and Zachary are being dismissed "in the interest of justice."

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An evolving situation

The Jensen family has been accused of masterminding a $300 million crude oil smuggling operation that prosecutors called “Operation Liquid Death,” according to MySanAntonio.com.

In late April, U.S. Marshals apprehended James and Kelly at their sprawling 27,000-square-foot estate. The couple, along with their children Maxwell and Zachary, face indictments for money laundering and criminal charges stemming from activities beginning in May 2022.

According to court filings, the family facilitated approximately 2,900 shipments of crude oil into the United States while directing payments to enterprises connected to Mexican criminal organizations.

“They were entering into agreements with conspirators — unindicted conspirators — to bring mislabeled crude oil from Mexico into the United States,” Assistant U.S. Attorney Michael Hess said during an April 24 hearing.

Paperwork described the shipments as “waste oil,” Hess said, not crude oil.

“This is significant mainly because the government of Mexico, through its oil company, PEMEX, will not allow for crude oil to enter into the United States, except through very limited agreements with oil and gas companies,” Hess said.

This wasn’t James’ first encounter with legal trouble regarding petroleum products. In 2011, PEMEX filed a lawsuit against him, alleging theft of natural gas condensate. James maintained his innocence throughout the proceedings, and the case was ultimately dismissed in 2013 due to insufficient evidence.

Maxwell, who co-owned Arroyo Terminals, was said to have had "significant ties to Mexico,” according to Assistant U.S. Attorney Laura Garcia.

The Jensen family unanimously entered pleas of not guilty to all allegations. Subsequently, prosecutors filed an amended indictment against James and Maxwell, charging them with providing support to the Cartel de Jalisco Nueva Generacion (CJNG), which has been designated as a foreign terrorist organization. A conviction on this terrorism charge could result in a 20-year federal prison sentence for both men.

Recently, the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury has imposed sanctions on five leaders of CJNG. This cartel is known for its extreme violence and controls a substantial portion of the fentanyl and other illegal drug trade entering the United States.

On May 27, authorities dropped all charges against Kelly and Zachary Jensen. When questioned about this development, a representative from the U.S. Attorney’s Office declined to provide further details.

Prosecutors are pursuing a $300 million judgment against James and Maxwell Jensen. Their seizure targets include two bank accounts, three commercial trucks, four tank barges, and more than 80,000 barrels of crude oil.

The government is also seeking to confiscate numerous Jensen family assets, including their mansion in Sandy, Utah, a home in Draper, Utah, a substantial property in Jackson, Wyoming, a luxury vehicle, and the Arroyo Terminals property.

Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it

How oil scams affect you

The Transnational Alliance to Combat Illicit Trade reports that illegal crude oil trading generates between $5.2 billion and $11.9 billion annually, with criminals stealing approximately 99 to 227 million barrels of oil each year.

According to Windward AI, oil smuggling occurs in various forms: concealing oil in hidden ship compartments, conducting illegal ship-to-ship transfers, or using fraudulent documentation to transport oil—the latter method apparently employed by the Jensens.

Beyond its illegality, oil smuggling significantly disrupts supply chains. When border authorities investigate suspected smuggling, legitimate shipments face delays, increasing suppliers’ costs that ultimately get passed on to consumers.

The Energy Information Administration notes that crude oil constitutes over 52% of gasoline pump prices. Smuggled oil can increase crude prices, making gasoline more expensive. Additionally, smuggled crude often fails to meet quality standards, resulting in potentially unsafe fuel.

Poor-quality gasoline can do more than just reduce your vehicle’s performance—it can cause serious damage. Your car might stall in dangerous situations, such as highway driving, or experience other issues including failure to start, delayed gear shifts, and acceleration problems.

Extensive engine damage from contaminated fuel can lead to substantial repair costs. Consumer Affairs estimates engine replacement typically costs between $5,000 and $10,000, with final expenses varying based on whether your vehicle is new or used and your specific engine type.

Consequently, combating illegal crude oil smuggling isn’t solely about preventing criminal profit — it’s also about ensuring vehicle safety and protecting drivers from potentially devastating repair expenses that many cannot afford.

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 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
• This is how American car dealers use the ‘4-square method’ to make big profits off you — and how you can ensure you pay a fair price for all your vehicle costs

Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free. Subscribe now.

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