If you received a gift card over the holidays, chances are you’re happy about it. After all, what’s not to like? Gift cards allow recipients to buy stuff without taking money out of their pocket — at least in theory.
But gift cards can be a mixed blessing. Forget you have one and it can sit in your drawer, unused, for ages. Receive one for a store you don’t care for and you may find yourself buying things you’d really rather not. Or maybe you’ll overspend and find yourself using that $20 Pottery Barn gift card for a $50 lampshade you don’t really need.
Here are ways to make sure your gift cards stay a blessing — not a curse.
Spend it sooner rather than later
If you intend to use your gift card, it’s better to act fast. Stores may go out of business, may not honor outstanding gift cards after filing for bankruptcy or may close their only location near you.
That’s especially true as consumer shopping patterns continue to shift and brick-and-mortar retailers shut their doors — 2017 saw retail giants including J.C. Penney and Macy’s announce the closure of stores nationwide.
And the quicker you use a gift card, the less likely you are to forget about it. Nearly $1 billion in gift cards went unused in 2015, according to consulting company CEB Tower. That’s a significant sum of money left on the table.
Don’t want to spend? Regift, resell or donate
If you receive a gift card for a store with no nearby location, or one that you simply have no interest in visiting, you can get rid of the card by regifting, reselling or donating.
“It’s important to do an honest assessment right from the beginning and think, ‘Am I really going to use this or is this a stretch?’” says Shelley Hunter, spokeswoman for Giftcards.com, a website that sells gift cards.
Find a friend or family member who will appreciate your unwanted present. And if you can’t, sell it to somebody else. Sites like Raise.com or Cardpool.com allow users to resell gift cards online. Though you likely won’t get the full value of the card back — the cash you get can range from 60% to more than 90% of the original amount — Hunter says it’ll be worth it if you weren’t going to spend it anyway. You’re likely to get closer to the full value for stores that have nationwide footprints and sell a wide variety of merchandise, such as Target or Walmart, Hunter says.
Or consider donating your gift card to a local school, after-school program or homeless shelter.
Avoid overspending — and underspending
A study by payments technology company First Data found that 75% of consumers overspend the value of their gift card by an average of $38. That’s not necessarily a bad thing — a gift card can bring down the amount you spend on something you wanted but couldn’t afford otherwise.
Beware of “gift card creep,” however — spending excessively on something you didn’t really want, just because the card makes it relatively affordable. Plan ahead of time, and ask yourself whether you truly value the item. To get the best deal, you should also look around for coupons and shop when the retailer is having a promotion.
What if you’ve come close to your gift card limit and have a small amount left on your card? Certain states require retailers to exchange the value of the card for cash if it falls below a threshold. Though the threshold is $5 for many states that follow this policy, it ranges from $1 in Vermont and Rhode Island to $10 in California. Some stores may also have policies in place to refund low values for cash, regardless of which state they’re in.
Try new things
Gift cards can be a burden if you feel forced to spend money on things you won’t ever use. But they can also push you to try new things.
“You’re not giving a gift, you’re giving the gift of an experience,” Hunter says of presenting somebody with the store vouchers. So go out on a limb — try that new local restaurant, take the cooking class or browse through that clothing store you’ve been meaning to check out. You might find that your gift card brings more value to you than its worth in dollars and cents.
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The article The Smartest Way to Use Gift Cards originally appeared on NerdWallet.
Chances are good that the Equifax data breach affects you. What do you do next? The short answers: Consider a credit freeze. Scrutinize your credit statements. And check your credit reports from all three credit bureaus.
Equifax says hackers used a website application vulnerability to access the personal information of about 143 million U.S. consumers, or more than half of the country’s adult population. Credit bureaus such as Equifax are an especially sensitive target because they handle detailed financial records, and it’s nearly impossible for consumers to avoid credit reporting. Every time you apply for credit, the personal data — including your name, birthdate and Social Security number — you share can be stored by a reporting bureau.
Most credit card issuers and lenders report consumer activity to all three major U.S. credit bureaus, and your data is likely duplicated at Experian and TransUnion. There’s no reassurance in the fact that only one bureau was hacked.
“On a scale of 1 to 10, this is a 10, and that’s because of the quality of the data … your Social Security number is the skeleton key for your identity,” said Adam Levin, founder of CyberScout, a company offering identity theft and data breach defense services.
Freeze your credit for the best protection
Credit freezes prevent stolen information from being used to open new accounts in your name by restricting access to your records. Without access to your credit history, most creditors won’t open a new account.
“We have to assume that our personal information is exposed and act accordingly,” Levin said. He said a credit freeze has become “a critical thing to do.”
Credit expert Barry Paperno, who blogs at Speaking of Credit, agreed: “That’s the most extreme method, but it’s also the most effective.”
But this most effective method will cost you in money and inconvenience.
A freeze might cost you a small fee, which varies from state to state, but it’s better than a credit monitoring service. A freeze can prevent fraud, while monitoring alerts you fraud might have happened. It’s the difference between using a deadbolt to keep thieves out rather than a security camera to catch them after the fact.
You’ll also have to pay to lift the freeze each time you apply for credit or need to allow a potential landlord or employer to check your credit. You’ll receive a PIN to “thaw” your credit. Keep it in a safe place.
Here’s how to request a freeze:
Equifax: Call 1-800-349-9960 or go online
Experian: 1‑888‑397‑3742 or go online
TransUnion: 1-888-909-8872 or go online
Even with your credit frozen, you’ll still have access to your credit records and scores. If you don’t already have a way to regularly monitor your score and report information, consider signing up before you place a freeze. Some credit card issuers and many personal finance websites offer them for free. Watching for a big, unexplained change can alert you to potential fraud.
Place fraud alerts if a freeze is too much
If you don’t want to lock out all creditors — perhaps you’re in the middle of mortgage shopping or refinancing — you can place a 90-day fraud alert on your credit. This tells potential creditors to verify your identity before issuing credit in your name.
Contact one of the three bureaus, and it will notify the others.
Monitor your own credit
You’re entitled to at least one free credit report from each credit bureau every 12 months via AnnualCreditReport.com. If you haven’t accessed your credit reports within the past 12 months, do it now. If you’ve reviewed them recently, placing a fraud alert on your credit files allows renewed access.
Use your reports from the bureaus, and any free score and report services you have, to watch for:
New accounts that you didn’t open
Credit inquiries that don’t match when you applied for credit
Balances that don’t match your statements
Deal with your credit cards
Freezing keeps new accounts from being opened, but doesn’t stop fraudulent charges on an existing account. Take these steps to protect yourself:
Check your email and regular mail. Some consumers whose account numbers were compromised are being notified by credit card issuers that they’ll be sent a new card and the old one will be deactivated.
Even if you’re not notified by your issuer and you think your data wasn’t in this breach, don’t relax. Stay vigilant by checking your credit card statements for changes you don’t recognize. If something looks fishy, dig further. Often there’s a phone number listed with the merchant name for the transaction.
Consider signing up for text or email alerts about credit transactions. Many issuers let you set them for charges above a certain amount.
If you see a charge you think isn’t yours, call your issuer right away to dispute it. Your card issuer can’t charge interest or fees on the transaction while it’s being investigated.
What was exposed? Is my data out there?
The data accessed includes:
Information such as names and addresses, birthdates, Social Security numbers and some driver’s license numbers
Credit card numbers for approximately 209,000 consumers
Some documents from about 182,000 consumers’ credit report disputes, including personal identifying information
Consumers can check whether their information is affected at www.equifaxsecurity2017.com. However, the “Check potential impact” process asks you to input the final 6 digits of your Social Security number, which gives security experts pause.
Equifax also opened a call center that you can reach at 866-447-7559. It will notify the subset of consumers whose credit card numbers or dispute documents were affected by mail.
Should I sign up for the free Equifax monitoring?
Equifax is offering all U.S. consumers free credit and identity theft monitoring for one year. But the risk doesn’t disappear after a year. Someone who has your Social Security number has it — and might try to use it — forever.
The service is through TrustedID, an Equifax company. The terms of service include waiving your right to participate in a class-action lawsuit or class arbitration and agreeing to use individual arbitration. The National Consumer Law Center has called upon Equifax to strike that clause. Failing that, the NCLC advises consumers they can opt out of the forced individual arbitration by notifying Equifax in writing within 30 days.
Bev O’Shea is a writer at NerdWallet. Email: email@example.com. Twitter: @BeverlyOShea.
The article Lock Down Your Data After Equifax Breach — Right Now originally appeared on NerdWallet.
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School is out, and summer is upon us. It's time to let loose and have some fun. That sounds great in theory, but it can be horrible for our finances if we aren't careful — especially when it comes to taking summer vacations.
For many people, travel is a significant part of their summer budget, but reckless spending while on vacation can wreak havoc on their finances. People often spend more when on vacation, perhaps because they get caught up in the moment or simply because things are more expensive than at home.
So what can you do this summer to make sure you don't end up with a financial hangover, wondering where the money went or how the credit card bills got so high? Here are a few tips to help you enjoy your summer vacation without derailing your finances.
It helps to start with a plan for your summer vacations. You don't have to rule out spontaneity entirely, but having an overview of when and where you'd like to go, what you'd like to do and how much it will cost gets you started off on the right foot.
You can also do some research to identify deals ahead of time. Many hotels offer discounts during offseasons, and some airlines have lower fares when you fly during off-peak times. Services like Airbnb offer competitive prices for lodging and may help you reduce expenses if you eat some meals in instead of going out.
With a plan in place, you can start saving for your trip. Creating a separate “fun fund” helps cement why you're saving the money and can help you keep your eye on the big prize when lesser temptations, like a new TV, arise.
To determine how much you need to save each month, divide the cost of the trip by the number of months you'll be saving. Major trips, such as to a Disney location or overseas, may require significant planning and a longer time horizon to save. For instance, taking a $6,000 trip every three years would require you to save around $170 a month. If you wanted to do this more frequently, you'd have to save even more.
If “staycations” or weekend getaways are more your speed, you may not need to save as aggressively or as long. You can build these trips into your spending plan by setting aside an extra 5% or 10% from your check each pay period.
You can also get the whole family involved by encouraging your children to set aside a portion of the money they receive from birthdays and allowances for parent-free spending while on vacation.
Set a daily spending budget for your trip and don't exceed it. Include what you'll spend on food, activities, lodging and anything else that might come up. You can also get your children involved in the planning, having them participate in the family's budgeting. Even young children will benefit as they are exposed to responsible spending.
But remember, setting these spending limits means being realistic. If you have to budget $500 a day for a five-day trip because you plan to eat at restaurants for every meal and you want to bring souvenirs home to friends and family, so be it. It's more important to be realistic about what you'll spend and to save for it than it is to convince yourself you won't spend much and go two or three times above what you budgeted.
Once you've settled on how much you'll spend, stick to it. It's easy to talk yourself into not counting little purchases like a coffee here or mouse ears there, but those little purchases add up and can have a significant impact on your vacation fund. Give yourself a 3% to 5% buffer in your budget for the “Oh, that's so cute” and “Man, I just need to have that” moments — we've all had them.
With practice, you'll get better at estimating how much you'll need each day, but having a cushion can help in case you underestimate.
Most of us aren't going to plan a vacation down to the minute, but with money saved up in a “fun fund” and a cap on your daily spending, you can enjoy yourself and avoid maxing out your credit cards.
The article Enjoy Your Summer Vacation — Without Maxing Out Your Credit Cards originally appeared on NerdWallet.
Identity theft continues to be a booming business: In 2014, 17.6 million Americans fell victim, and cybercriminals made off with $15.4 billion. And tax refund theft remains a lucrative piece of that business, despite the IRS' efforts to stamp it out.
How do hackers do it? In one scam, they filed bogus returns with information harvested from the IRS' own files or by using Social Security numbers.
Then they waited for the direct-deposit refunds to flow in. Victims usually didn't know anything was wrong until the IRS refused to accept their tax returns.
Here are some of the defenses that the IRS, state tax agencies and the e-filing industry are building to combat scammers:
Quicker responses to warnings. Thanks to technological enhancements, the IRS now receives warnings if a large number of returns come from a single computer address within a short period of time.
Delaying refunds. This allows the IRS time to recognize that more than one return has been filed for the same Social Security number. Previously, the IRS issued e-file refunds seven to 10 days after it received a return. The new target is 21 days.
Earlier filings of W2 forms. Businesses had been required to issue wage and payment statements to workers by Feb. 1, but didn't need to file them with the IRS until June. Now both will be due by Jan. 31.
Sharing information: Intuit, which makes TurboTax, and H&R Block have agreed to share more information more promptly with the IRS about filings they consider suspicious.
Safety begins at home, of course. The IRS also has advice for taxpayers on identifying — and more importantly, avoiding — tax refund fraud:
Always use security software with firewall and anti-virus protections, as well as strong passwords.
Learn to recognize phishing emails, calls and texts from thieves posing as legitimate organizations, such as your bank, credit card company and even the IRS. The IRS will never try to contact you via phone or email.
Don't click on links or download attachments from emails if you don't recognize the sender.
Protect your personal data. Don't routinely carry your Social Security card, and make sure your tax records are secure.
If you think someone used your information to file a return, contact the IRS immediately. Specialists will help you file your tax return, receive any refund you're due, and protect your account from identity thieves in the future.
© Copyright 2016 NerdWallet, Inc. All Rights Reserved
You’re not the only one joyfully anticipating the holiday season. Cyber criminals are all aflutter, too, as they look forward to the killing they’ll make ripping off innocent shoppers like you. Here are some of the most common ways these thieves operate, because awareness can help you avoid becoming yet another victim.
Beware those enticing ads that turn up on Facebook and other social media sites offering vouchers, gift cards and deep discounts, as well as the online surveys these ads often link to. These offers are often only empty promises designed to steal your personal information.
Additionally, if you receive concert, theater or sporting event tickets as a gift, never post pictures of them online. Cyber thieves spend lots of time monitoring social media, just waiting for the opportunity to create phony tickets they can resell from your barcode image. If your ticket is resold, you might just find yourself out of a seat on the night of your event. It’s also unwise to post live from an event that gives criminals a heads-up that your home is empty and ripe for picking. Better to wait until the next day to post about the wonderful time you had.
It may be a mystery to you how cyber thieves got your private email address, but it’s chillingly clear they’re up to no good. Your inbox may fill up with all kinds of legitimate-looking product offers and delivery notices this holiday season, but clicking on links of bogus ones or entering personal information on the linked sites can provide criminals with the opportunity to steal your identity.
With mobile apps available for just about everything, it’s a sad sign of the times that certain free mobile apps (often disguised as games) have been specifically designed to steal personal information from your phone. This is a particularly scary development since many people use their phones to secure their cars and homes. For this reason, only install apps from familiar companies and, at the very least, find a third-party review from a trusted site if you’re interested in an app from an unfamiliar source.
Lots of people use portable USB drives, which makes it all the more important to avoid those being distributed as giveaways this holiday season unless they’re from a trusted source. These innocent-looking devices are often used as a method of introducing malware to computers.
A spirit of generosity is traditional at holiday time, but if you’re not careful, your donations may never make it to the needy. Fake charities that skillfully tug at your heartstrings abound at this time of year, just waiting for you to willingly give your hard-earned cash to scammers. Before donating, be sure to check out charities thoroughly, to make sure that they’re not only legitimate, but also that they allocate the bulk of funds toward their causes rather than “administrative costs.”
These strategies will also help keep you a step ahead of scammers:
Scammers may be smart, but you can still outsmart them. A little foreknowledge and caution go a long way toward ensuring you’ll enjoy a safe and memorable holiday season.
© Copyright 2016 NerdWallet, Inc. All Rights Reserved
As routine financial tasks move online, you may have fallen out of the habit of banking at a branch office. If so, receiving a paper check can be a hassle, requiring a special trip just to deposit it.
Thankfully, mobile depositing is now widely offered by banks and credit unions, allowing you to put that refund from the cable company or birthday check from your uncle into your account without having to go to a branch.
Financial institutions that offer remote depositing generally do so through smartphone apps. Although the procedure can vary, in most cases you start by endorsing the back of the check, the same way you would if you were depositing it with a teller or at an ATM. The app prompts you to snap photos of both the front and back of the check and send them through the phone to your account provider.
If you have multiple accounts at the same institution, you’ll need to select the one you want to receive the money. Most of the time, you’ll be asked to enter the amount you’re putting in. The app usually has software designed to read important information from the photos, such as account and routing numbers and the amount of the check. But having you punch in the dollar figure reduces the chance of a software error that accidentally moves $20 into your account when the check was for $200, for example.
Ideally, the same privacy and security safeguards are in place whether you’re conducting a transaction online with your computer or logging in with a mobile app. Depositing a check by phone is no different. Financial institutions are refining and improving online security practices all the time, and their customer service departments can answer questions if you’re concerned.
You can decrease your risk of having your personal financial data stolen by changing your passwords frequently, using an authentication code on any mobile device you use to access your financial accounts, and avoiding using unsecured Wi-Fi networks at cafes, hotels and other public places.
If the camera on your phone isn’t of good quality, it may be hard to take a clear enough picture. To improve your chances, lay the check on a flat surface like a table, and make sure it’s well-lit. Some apps require the image to include all four corners of the check, so make sure you’re not cutting off part of it when you take the photo. To be safe, allow a small margin around it.
In many cases, there are restrictions placed on money deposited by mobile app. Some financial institutions limit the total dollar amount you can put in this way each month, or won’t accept individual checks over a certain amount. Sometimes, these limits are lower if you’re a new customer, and you’re allowed greater freedom to deposit checks with the mobile app after you’ve had your account for a while.
Although paper checks are becoming less common, you may still receive them from time to time. Having the option to deposit them with your smartphone eliminates a lot of the associated inconvenience. This will only be more true as the technology improves.
© Copyright 2016 NerdWallet, Inc. All Rights Reserved
For many people, debit cards are the perfect plastic. They offer most of the conveniences of credit cards with no risk of accumulating debt.
But like credit cards, debit cards are vulnerable to rip-off artists. And debit card fraud is particularly scary because thieves can withdraw money directly from your checking account.
Here’s how debit fraud happens and how to protect yourself.
Debit card fraud can be sophisticated or old-school. Thieves use techniques including:
Adopt these simple habits to greatly reduce your odds of falling victim to debit card fraud:
Even if you’ve taken precautions, debit card fraud can still happen. If your card gets hacked, don’t panic. Tell your bank or credit union right away so you won’t be held responsible for unauthorized charges, and file a complaint with the Federal Trade Commission.
© Copyright 2016 NerdWallet, Inc. All Rights Reserved
Q: I need to get money together in a hurry. What can I do? Help!
A: There are times in your life when you need cash fast. It may be hospital bills, car trouble or crushing debt. A personal loan is for times like these. Personal loans range from $250 to more than $10,000, and are not secured with collateral. That means there's no property that backs the value of the loan. Personal loans may seem attractive, but they do come with some downsides. Is a personal loan right for you? And if so, how do you go about getting one?
Let's take a look at four critical questions to ask before getting a personal loan.
1) How's my credit score?
Closely examine your credit score. You can check your credit score once a year at annualcreditreport.com. If your credit score is above average, finding a personal loan with a reasonable interest rate is easier. If your score is lower than you'd like, try a secured loan. Rates on secured loans are usually lower. You provide collateral as insurance if you can't pay it back on time. In many cases, you can use your savings account as collateral, but be sure to pay on time!
A big downside of a personal loan is the higher interest rates. You can keep your interest rate down by limiting the amount you borrow, using a shorter repayment period or securing your loan with personal property. If none of these strategies can get the interest rate down to an affordable level, a personal loan may not be for you.
2) How do I apply?
The application process varies. Some take weeks, and some hours. Some have application fees, and some don't. The interest rates and limitations on uses for the money vary as well.
You'll always need a form of identification, usually a Social Security card or a state-issued ID. You'll need to show proof of income, usually in the form of W-2 forms, bank statements or paycheck stubs. If you're self-employed, income statements or another proof of payment can be used. If you've recently lost your job, be upfront. Otherwise, you may end up with more loan than you can afford. You'll also need proof of address such as recent mail or the lease for the property.
3) What do I need to watch out for?
Scammers prey on desperation. Be careful. The classic phishing scam is when scammers pretend to be legitimate loan companies. You apply for that loan and give them all the information they need to steal your identity. Advance fee loan scammers trick you into paying a "loan fee" prior to receiving money, and then disappear.
4) Where do I go?
Always deal with a company you trust. Don't fall for large final payments, early payment penalties or other unfavorable terms. Be wary of scammers.
WVU Employees' Federal Credit Union offers personal loans with competitive interest rates. If you're in the market for a personal loan, come speak with one of our member service representatives or apply online at wvucu.com. Call, click, or stop by WVU Employees' Federal Credit Union today!
The end of summer inevitably means a mailbox overflowing with back-to-school sale advertisements. But before you fill your shopping cart, ask yourself these five questions to keep more money in your pockets as you kick off the school year.
The answer, if you want to save money, should be yes. Check your bank account balance and decide how much you can spend on new items, and how much you want to spend. This will be especially important if you need big purchases like a computer. Aim to come in under budget. If you have a couple bucks left over, reward yourself with a latte — or save them for a rainy day.
The best way to save is to not spend at all. Restrict your list to items that you've run out of or need more of, not those you want. It's a good philosophy for all shopping, not just back-to-school.
Basic school supplies — such as pens and pencils, folders and three-ring binders — are simple and largely the same; it's not worth paying more for a brand or a pop star's face on the front. The same goes for clothes (better to wait for when the season changes) and textbooks (there are so many avenues to buy used, rent or go electronic).
But with other items, you'll be rewarded later for spending more now. Computers and calculators bought new will last longer and likely require less upkeep than used models.
The biggest savings don't come in once-a-year sales — saving is a habit that follows you through every season. Cut back on the everyday expenses that could be costing you hundreds of dollars a year. If you send your kid off with lunch money, consider packing her meals instead. Invest in some Tupperware that you can stuff with sandwiches, fruit or leftovers. You'll be surprised at how much you can save, even in just a month.
Looking ahead can help save you some extra dollars. Find an unbeatable deal on notebooks? Stash a couple away for next year. For big-ticket items, discounts are your friend — but again, getting the cheapest on the market might mean you'll have to buy a new computer in two years, or that backpack will snap in six months. Keep your sights focused on the long term to avoid having to shell out more money before you have to.
Back-to-school shopping doesn't have to be a drag. Keep these questions in mind as you prepare for the new school year and you'll be in the right mindset to save money.
© Copyright 2016 NerdWallet, Inc. All Rights Reserved
So you've found your dream car, and now comes the hard part: paying for it. Most people don't have the means to pay cash for a new car.
That's why there are alternatives for financing. Here's a primer.
Leasing allows you to drive a nicer car without the hefty costs. You'll usually have lower monthly and down payments than with purchasing, as well as reduced repair costs since the average three-year lease expires before the vehicle's warranty does. You pay sales tax only on the portion of the car that you finance.
Here's the catch: You never really own the car. It's similar to renting a car for several years. At the end of the lease, you'll pay for wear and tear, as well as any miles that you drove over the limit, which is typically 12,000 to 15,000 a year. It can also be costly to terminate the lease early.
With a lease, you'll always have a payment. It's a great short-term option, especially if you like to buy and trade in cars regularly, but the costs add up over time. In contrast, when you buy, there will be — eventually and ideally — a period of several years when you aren't making a car payment.
If you tend to drive cars into the ground, buying is a better option financially. There is more flexibility in selling, you have no mileage charges, and you can save money in the long run.
There are advantages and drawbacks to both options, so consider your budget, lifestyle and driving needs before deciding.
Most dealers allow you to pay only a small portion of a car's price with a credit card. Dealers have to pay a credit card transaction fee, generally 1% to 3% of whatever was charged on the card. Since dealers typically have a profit margin of only a little over 2%, they aren't interested in sacrificing it to a card company.
So should you put at least part on a card? It depends. If you can get a 0% interest card and you'll be able to pay it down during that introductory term period, it may be worthwhile. Otherwise, it's probably best to stick with a traditional loan.
Don't confine your financing search to just the dealership. Your local financial institution is more likely to offer lower rates, which means less interest paid over the life of the loan.
With financing in hand, you can focus solely on getting the best deal and turning your dream car into your real ride.
© Copyright 2016 NerdWallet, Inc. All Rights Reserved
What are my options for digital banking?
In the age where errands can be done from your living room couch, banking is right there along with shopping for clothing or airline tickets.
Digital banking is growing greener with each technical advancement. Mobile banking helps the environment by saving the gas you'd need for the trip and the paper used for statements and receipts. Debit card use saves on paper, metals and energy used to create, track and replace cold cash. With instant-pay sites like Paypal and online bill paying, virtually all paper use in the production of checks, receipts and money is eliminated.
Are there any risks to digital banking?
The benefits are fantastic, but digital banking does come with several minor risks. Some people find budget-keeping more difficult when a glance at a phone screen reveals a generous bank balance while neglecting payments that are still outstanding. The best fix for this is to set up separate accounts for savings and spending so you know exactly what's in your checking account. Also, there are some things, like setting up new accounts and making certain deposits, that must be done in person.
The biggest threat is the fear of hackers and identity theft. To this end, WVU Employees' Federal Credit Union uses industry-leading security protection technology, which can be strengthened when you choose strong passwords and refrain from banking on public computers. In fact, the advent of online banking has reduced the quantity of paper scraps containing personal information. This in and of itself is reducing incidences of identity theft.
Do any banking initiatives directly support environmental sustainability?
Every ethical financial institution's goal is to support the sustainability and health of its community. Credit unions lead the charge nationally by supporting local businesses. The shorter the distance that goods travel, the less CO2 that leaks into the atmosphere. WVU Employees' Federal Credit Union has also contributed to green initiatives across the community, such as alternative energy and sustainable agriculture. You can help these efforts by choosing an energy-efficient car or adding green features to your home.
How can this help me?
Aside from the benefits of going green, sustainable banking offers many advantages: it can be done anytime, anywhere. You save on gas. Emailed receipts and monthly statements keeps everything organized and in one place, which also helps with budgeting.
Instant payment allows you to, well, be paid instantly. No more misplacing checks or waiting for them to clear. With automatic bill payments, you can forget about your bills without forgetting to pay them, keeping your stress levels down and your credit scores high. Green auto loans allow you to save money on purchases that might have previously been more expensive. Ultimately, saving the earth can save you time, money and energy.
To be part of the future, take these four easy steps:
Do you know exactly what happened on July 4, 1776? What do
our Fourth of July celebrations commemorate, and why?
The Reason We Celebrate July 4th
July 4, 1776 is the date written on the original Declaration of Independence, even though it wasn't signed until Aug.. 2 of the same year. July 4th was the day in which the Continental Congress officially agreed and approved the final edits to the document that Thomas Jefferson wrote. It declared the words that would establish a new nation, independent of Great Britain's control.
Thirteen American colonies were already at war over oppressive taxation, but residents weren't consistent in their opinions and their efforts until the words of the Declaration united them and gave them a foundation for the Revolutionary War victory in 1783. Because the Declaration was also understood to be the first formal statement by any group of people asserting a right to choose their own form of government, it was a significant document for all citizens of the world, not only for the colonists.
Although it was called Independence Day as early as 1791, the Declaration of Independence wasn't always celebrated on July 4th with a vacation from work and fancy fireworks. In fact, the United States Congress didn't make it a holiday for federal employees until 1870, nor did lawmakers pass additional legislation to make July 4th a paid federal holiday until 1938.
During the Revolutionary War, July 4th was commemorated with 13-gun salutes, representing the 13 colonies, official banquets for the Continental Congress and their families and parades and shows for the troops. Ships at sea were draped with red, white and blue while in port and at sail, and General George Washington reportedly ordered a double ration of rum for his fighting men to celebrate.
One of the signers of the Declaration of Independence was John Adams, who wrote the following in a letter to his wife, Abigail: "It ought to be solemnized with Pomp and Parade, with Shews, Games, Sports, Guns, Bells, Bonfires and Illuminations from one End of this Continent to the other from this Time forward forever more."
Celebrating July 4th At Home
Today, we certainly have our modern pomp and parade, shows, games, sports, guns, bells and bonfires to celebrate July 4th. But we also have jet fighter salutes at airshows and choreographed fountains and fireworks exploding over lakes, rivers and harbors throughout the country. John Adams probably could never have imagined the majestic displays we take for granted now.
Whether you enjoy a road trip with your family or stay home to barbecue by the pool, you can plan a 4th of July that's fun for everyone. In some parts of the U.S., you can even celebrate with your own patriotic fountains and fireworks. Start by contacting your local fire department to learn the rules for purchase and use of fireworks in your area, and to ask if you'll need a permit to use them. Then, stop by your local retailer to check out their light show fountain kits to complete your patriotic display.
Celebrating July 4th in Washington, D.C.
If you're planning to join the crowds gathering in our nation's capital in Washington, D.C., here are some suggestions for a budget-friendly but unforgettable 4th of July:
For many credit union members, a savings account is a formality. They know, in theory, that saving is important. Maybe they got a bonus at work and stuck $50 in a savings account. Other savings options that come with higher rates, such as IRAs or 401(k) accounts, took priority and that initial deposit was quickly forgotten.
Tax-advantaged retirement accounts are fantastic, but it's unlikely that retirement is your only savings goal. When it comes time to put a down payment on a house, buy your next car or plan an exciting vacation, the money in those retirement accounts will be locked up tight. There's no way to get to it without taking on massive penalties and paying a lot in taxes.
If you want your money to be there when you need it, no matter when "it" is, now might be the time to take another look at the humble savings account. Even if it's not your primary savings vehicle, a savings account can offer tremendous benefits. Let's look at some ways to get the most out of it!
1.) Dividend rate isn't the only consideration
Many experts shun savings accounts, citing low interest/dividend rates as their chief concern. If you're looking to maximize your returns, putting all your money in a savings account isn't the smartest plan. It's unlikely that your financial plans call for maximizing returns on all your investments, though. While it's true that higher return investments do exist, savings accounts offer unique benefits.
First, savings accounts are NCUA insured up to $250,000. If something unthinkable happens, you're promised to be reimbursed for your losses. That's quite a lot of security for your hard-earned cash.
Another benefit of savings accounts is their liquidity. If you need the money in your savings account tomorrow, you could get it. You can withdraw cash in person, at a branch or from an ATM. You also have access by using our online banking or mobile banking to transfer funds to another account to make payments on a loan. You can also transfer funds to your checking account to conveniently use your debit card without worries of overdrafting.
2.) Automate, automate, automate!
You know that exhausted feeling you get after you've been shopping? It never seems fair. Sure, there was some walking involved in your day, but the total amount of physical activity was fairly limited. All you did was make a ton of decisions.
That feeling has a name. It's called decision fatigue. Making a commitment to something takes willpower and energy, and you've only got so much in your tank. Waiting until the end of the month to decide what to do with your household surplus can encourage splurging. Thinking about sensible decisions takes willpower, and you've already used your allotment for the month.
That's why it's great to know your savings account can be automated. You can set up automatic transfers between your draft account and your savings account or even make it part of your employer direct deposit. Make that decision once and then never have to think about it again. You can save your willpower for more important decisions, and let your cash reserve grow.
3.) You need an emergency fund
Even if you have a high-paying job, you've only got as much security as the economy allows. Your company could succumb to competition.Your job could be eliminated. You or a loved one could get sick, requiring you to leave your job or cut back to fewer hours.
Other emergencies could happen. Your car could break down. You could face a big medical bill or fall victim to a scam. What would you do to cover your costs in these situations?
Situations like these are among the leading causes of bankruptcy. People find themselves forced to rely on credit to get through such circumstances. With no way to repay those charges, people are stuck in a constant cycle of debt repayment that ruins financial plans for years.
The best way to avoid this calamity is with a strong emergency fund. How much should you have saved? Most experts agree that 6 months of living expenses is a good target, though that number may need to be higher if you work in an industry with a tight labor market. What's a living expense? Count anything that you couldn't cut if you absolutely had to do so. For example, your housing, utilities, insurance, debt maintenance and food. Don't include luxuries like dinners out or monthly subscription costs that you could stop paying if money got tight.
It's important to keep that emergency fund accessible. If it's in a brokerage account, you risk needing to access that money when the market is down. A savings account provides the security and flexibility that you need for your rainy day fund.
4.) Keep your funds separate
If you already have an emergency fund, you may have some other savings goals. Suppose you plan to start a business, but need start-up funding to do so. You might want to put away money gradually over time to make your dreams a reality.
If you keep that money in your draft account with the rest of your funds, there can be a real temptation to spend it. Resisting that urge depletes some of that willpower, which makes it easier to make impulsive choices in other areas. Instead of relying on your self-control to keep those savings safe, you can build separate accounts for each specific savings goal. This will let you track your progress while also keeping the money safe from an Amazon splurge.
Meeting new people is difficult for many adults. After college and the first few weeks on a new job, the number of people you'll encounter as a part of your everyday life starts to drop off pretty dramatically. If you're looking for more than just friendship, it gets even more challenging. Finding other people who are also looking for a relationship involves so much innuendo and hidden meanings, the single life sometimes doesn't seem like a bad way to live.
Fortunately, though, there's the Internet. Dating sites like eHarmony and Match.com make it easier than ever to find other people who are looking for the same thing you seek. With advanced search features, you can focus on people who share your values, your sense of humor and even your astrological sign. If you're clear about what you're looking for, they might even find you!
Unfortunately, that same ease of connection makes online dating sites a haven for scammers. Using the information you provide, they can craft a profile designed to win your trust. Once they've got you, they can string you along for months, damaging your pride and perhaps robbing you blind!
There are many safe and happy relationships that began on dating sites, so this is by no means an indictment of them. If you're going to use them, though, you would be wise to practice a few precautions. Watch out for any of the following red flags that could signal a dead-end relationship.
1.) Walk away from wire transfers
The greatest warning light in the world is a request to send money insecurely. There are dozens of reasons why scammers might ask for a wire transfer, account details or other financially sensitive information. Maybe they claim to have a sick relative who is desperate for medical attention or they want to come and see you, but can't afford a ticket.
Whatever the sob story, it will have three key elements. One, it will be couched in terms of love or relationship advancement. Your new squeeze may make a sudden confession of love first, or pressure you by saying you need to prove your love. Two, there will be a specific reason why the money must be transferred using an insecure method, like Western Union. The scammer may not have a checking account, or may not have time to wait for a check to clear. Third, there will be a significant urgency. You will have to decide right then whether or not to help, and not helping will be the end of your budding romance.
Whenever someone you don't know offline asks for money via wire transfer, run away. No one with good intentions will want the anonymity and immediacy of a money transfer. Being generous in a new relationship is one thing, but it's possible through many other means.
2.) Keep pictures close to your heart
Digital technology has made it easier than ever to share pictures with people all over the world. This is wonderful for sharing your vacation with friends from school or showing off your child's art to proud grandparents. It's also enabled some new romantic norms. Many people in long-distance relationships use the Internet to enable their intimacy in healthy ways.
As much as this use of technology has been a boon to new couples, it's exposed many to new dangers as well. Risqué pictures or messages can be used as blackmail material. Scammers may threaten to make your private messages public unless you pay them or give them personally identifiable information. Sadly, the law is not on your side in situations like this. It's not illegal for people to make public the correspondence you sent voluntarily.
The best advice is to avoid sending explicit material to anyone you have any reason to distrust. Also, don't pay so-called image removal fees. The FBI reports there's no evidence to confirm that scammers actually do remove information after they've been paid to do so.
3.) Don't get strung along
In the rush of a new relationship, it's easy to let all other considerations fall to the wayside. Especially if online dating is a way to get back in the dating game after a long hiatus, the thrill and giddiness of a connection with someone new can have an almost drug-like effect. In fact, like a drug, some disreputable dating sites use that thrill to keep you coming back!
Many sites offer a free trial before requiring members to pay for a costly subscription. Unscrupulous companies will have employees pose as potential matches and send messages to customers who are nearing the end of that free trial period. These messages will hint at possible romance, but move just slowly enough that the customer must pay the subscription fee to continue receiving them. Once the money's been paid, the messages stop. Other companies create fake profiles to artificially inflate the number of "available" matches near you.
The best advice for dealing with situations like this is to be proactive. Keep dialogues going with people you may be interested in talking to and find another way to communicate with them. Consider creating a dating site-only email address that contains very little information about you (other than your first name) and providing that to potential matches if your subscription is about to expire.
Dating sites are like any other place on the Internet. They can do a great deal of good, but you'll want to be careful about how you use them.
Pop quiz: What do the data breaches at Target, Home Depot and Sony all have in common? Give up? They were all caused by employee errors. These, along with about 500 other breaches, are confirming what many security professionals have worried about for years. In the digital age, the weakest link in our information security is us: humans. The most common cause of data breaches around the world is employee error or negligence.
This kind of negligence can take a few forms. It can be an employee responding to a phishing email or downloading a piece of malicious software on a company computer. An employee could fail to adequately secure his login information (by, say, writing it on a sticky note and attaching it to the monitor) or could leave company technology vulnerable to theft.
As with many other complex, human-focused problems, no single solution can address this problem. There are structural and technological changes that can help mitigate the risks posed by employee error. While these changes are developed and implemented, here are three simple steps you can take to help keep your workplace safe from hacks.
1.) Read something, say something
Everyone thinks they can detect a scam. It's a line of thinking called the general attribution error, that what's true of "most people" can't possibly be true of us and the people we know. We constantly believe we're the exception rather than the rule, and our susceptibility to fraud demonstrates this well. Most people consider themselves intelligent, discerning Internet consumers. Yet, a recent Google study found that 45% of users fell victim to a fake login page.
Scammers wouldn't keep using these tactics if they weren't working, and even if you are savvy enough to spot 99 phishing attempts in a row, the one you miss is all it takes for another big data breach to happen. If you work at a company with 100 people who are all as adept as you are at catching these emails, every scam attempt works on one person on average. Worse still, some hacking attempts begin by sending out emails from the first victim to people on that person's contact list. When that happens, one person falling victim to an attack can quickly increase the credibility of subsequent attacks.
The solution to the general attribution error is the power of collective wisdom. If you receive an e-mail that's clearly an attempt to solicit sensitive information, don't just delete it and move on. Forward it to your company's IT representative. Mention it to a colleague. Ensure that everyone knows this scam is circulating at your company.
If you do fall victim to one of these hoaxes, don't try to cover it up. You might face disciplinary action for opening malicious emails, but you will face disciplinary action if your login credentials are used to expose sensitive information!
2.) Off the clock? Lock it up!
The VA breach, one of the biggest data leaks that hit some of the most secure data in the nation, was caused when an employee improperly took confidential information home to continue working. The information was stolen and the integrity of the VA's servers was compromised. Taking work home with you might be a good way to get ahead, but unless your home can provide the same level of security as your office, it's just not worth it.
If you must take work outside the office, keep it in a secure place. Ideally, you should place it in a safe or locking file box. Failing that, keep it in a locking briefcase or other lockable container. If you're working with paper copies, don't forget to destroy or return them once you're done.
If you have a standing arrangement with your employer to do some work remotely, there are still a number of steps you can take to keep your work technology safe. If you work on a laptop, invest in a cable lock. This piece of hardware works like a bicycle lock. You loop it around a heavy object and fit the lock into your computer's power port. Should a dedicated thief rip the lock out of the port, the computer will be rendered inoperable, turning a catastrophe into a hardware replacement.
Also, don't connect to unsecured wireless networks. Anyone can join these and set up monitoring software on them to steal data in transit. If you work on your home wifi, set up a security protocol. Don't forget to change the default administrator password on your router. Most manufacturers have a default router password which would enable scammers to access your network.
3.) Keep it out of the office!
Most people spend at least some part of their work day browsing the Internet. Modern technology has made work more efficient, so most people don't begrudge five minutes on Facebook here or there. The problem is that recreational browsing can expose the office to risks.
Even the most tame hobbies can have risks. Searching for "download sewing templates" could take you to websites dotted with malicious software masquerading as innocuous archives and executables. If your interests run to games or gambling, the Internet can be a very dangerous place for your work computer.
If you're interested in gaming, you might be tempted to load up a USB drive with a few fun titles. It's very easy to accidentally save sensitive information to that USB, which becomes a liability. USB drives are the bane of IT security people everywhere, since they're easy to lose, steal or swap.
If you have downtime at the office, stick to browsing sites you know and trust. Check your personal email, read CNN headlines, or find the latest scores at ESPN. If you feel the need to explore the darker side of the Internet, be sure you do so at home where you can better control the sensitive information on your computer.
As the warmer weather begins, you may be considering making some "fit" changes. As your credit union, we’d like to encourage you to make one of those changes a dedication to financial security and success. Don’t just resolve to become physically fit this year; become financially fit, too.
When trying to lose weight, people often turn to others for help and support. They do research, ask questions, struggle to meet goals, and will often regroup after taking a step backwards. Becoming financially fit is no different. We’re here to provide you with the information and resources you need to make 2016 your most financially fit year yet. A great start is our seven exercises to make over your financial life.
Exercise #1: Weigh in
Exercise #2: Set goals
Exercise #3: Be prepared
Exercise #4: Make a plan
Exercise #5: Develop healthy habits
Exercise #6: Lose debt
Exercise #7: Stick with it
When struggling financially, it’s often difficult to jump on the scale and get a real picture of where you are. If you’re going to make changes this year, start by being honest about where your finances are right now. Weigh in! Make a list of all your debts and liquid assets. Include credit cards, student loans, personal loans, and outstanding medical bills in your listing of debts. Then, list all your sources of income, including child support and contract jobs. It’s important to know where you stand financially so you can set goals and plan for the future.
Becoming debt-free is an ideal goal, but if your debt adds up to more than your yearly income, it can be a frustrating and even counterproductive goal. Instead, set smaller, realistic goals that can bring success in a short period of time. Once you achieve one small goal, you’ll be motivated to move on to another, larger one.
For example, if you want to purchase a new television or save for a vacation, decide how much you will need to save by a specific date. Then, calculate what you will need to save each payday or month to achieve that goal. Just be patient-it’s a smarter move to pay cash than to use plastic for large purchases. If you’re looking to dump debt, start by paying off your smallest one. Once you do this, you’ll be motivated by the momentum you’ve created.
Unexpected expenses happen. A car needs new tires, a child outgrows his jacket, an appliance needs to be repaired – but with an emergency fund, you’ll be ready for these unplanned-for occasions. Before you attempt to pay off any debt, set aside some cash that’s easily accessible so you can turn to it rather than a credit card when an emergency comes up.
Make a plan
If you want to become financially fit this year, a budget is a must-do. You’ve already taken stock of where you are financially, so now it’s time to plan where you want to go. List all your monthly expenses and compare your list to the list of monthly income you made earlier. Your income should exceed your expenses. If not, it’s time to improve your bottom line.
Develop healthy habits
You cannot become financially fit if you spend more than you bring in each month. Find a way to either cut expenses or increase your income. What are some non-essential expenses in your budget? You can easily trim monthly pedicures, car washes, dinners out, and maybe even gym memberships from your expenses. Watch out for other items you’re buying that aren’t necessarily on your budget.
Increasing income is another great way to become more financially fit. Do you have a hobby, such as graphic design, knitting, or writing that could earn you extra income? If there’s no conflict of interest, you could even take your day job and contract yourself out to friends or family on the side. Extra income will help you pay down your debt at a much faster rate.
Lose that debt
Getting rid of debt is the single best thing you can do for your financial future. When you figure late fees and interest into your budget, you don’t make much progress on the principal balance. Start saying goodbye to your debt by paying off your smallest debt first. Then, take what you would normally pay each month on that debt and apply it to the next-smallest debt. Continue paying off all your debt this way. It will take time and patience, but you’ll start to see a huge change to your bottom line as those debts begin to disappear.
Stick with it
Making changes to your life is a challenge. Take the time each month to look at your budget and your bottom line and make adjustments as you go. There is no magic solution to becoming financially fit, and you will make mistakes along the way. Don’t be discouraged when you slip up. Instead, look at it as an opportunity to learn and regroup so you can push hard to your financially healthy and secure future.
While the IRS says that anyone with knowledge of high school mathematics (and an afternoon to kill) can do their own taxes, the hurdles to filling out a tax form are many. Let’s take a look at some of the most common pitfalls that people make while preparing their own tax returns and how you can avoid falling in to them.
Most websites will start their list of tax preparation errors by pointing out that you can deduct some medical expenses, but you should stop before you get that far. Before you start poring over receipts and charitable contributions, make sure you’re not leaving money on the table with the “standard deduction.” The standard deduction is the IRS’s baseline for what an average person spends on deductible expenses. This amount is $6,300 for a single person, $9,250 for a head of household, and $12,600 for a married couple that’s filing jointly.
The IRS has a form to help you determine if you should itemize or take the standard deduction. There are six categories on it: medical expenses, taxes, interest, gifts to charity, casualty and theft losses, and work expenses. Before you start itemizing, take a moment and make a ballpark estimation. None of these expenses can include costs that someone paid for you, like insurance in the case of medical expenses or employer reimbursement in the case of work expenses. Take a look at your expenses in these categories for December and multiply that by twelve. Are the items you’re trying to deduct likely to be greater than your standard deduction amount? If not, you can save yourself a ton of time and hassle, and probably even a little money, by taking the standard deduction.
The most common source of audits from the IRS is unqualified deductions. By taking the safe route with the standard deduction, you can avoid heavy scrutiny from investigators. This simplified tax filing process can speed your preparation time and help you get a faster refund.
2. Not proofreading
The easiest place for the IRS to detect fraud is by comparing names and Social Security numbers. In 1987, the IRS began requiring Social Security numbers for all dependents claimed on a tax return. Between 1986 and 1987, the number of dependents claimed on taxes dropped by seven million. While it might be funny to describe the IRS as eating seven million children, the reality is that this is one of the most common and most easily visible frauds.
Make sure every person you list on your return is listed by the same name that’s on their Social Security information, and that each of those names is spelled identically. While these errors aren’t difficult to correct, they can significantly delay the processing of your return. If you recently changed your name, make sure the name change has been processed with the Social Security Administration.
While small math errors will be automatically corrected by the IRS, another place to check your errors is in rounding. If you’re rounding to the nearest dollar, that’s fine. But if you’re regularly putting in items that end in 5 or 0, that’s a signal to the IRS that you’re working from memory, not from receipts. Make sure you check the amounts that you’re listing against the paperwork you have on hand. Resist the impulse to estimate or “fudge” your income even a little bit; all of the income statements you get are copied to the IRS, and rounding, addition, or data entry errors are sure to trigger red flags from investigators.
3. Being too aggressive (in predictable ways)
If you’ve been looking for tax advice online, you’ve probably heard the sage advice that you should be as aggressive as you can be in preparing your return. If you’ve got a deduction that you think you might qualify for, you should claim it. The IRS will only investigate if it thinks it likely that the amount of money it could recover from that investigation will justify the cost. That’s true, but the IRS is an increasingly adaptable organization. They’ve caught on to the most common places where people exaggerate their deductions and can quickly identify these as ways that may trigger an investigation.
The three most common places people exaggerate their deductions are in a home office, work-related expenses, and charitable contributions. A home office must be a defined space in your home which is used exclusively and regularly for work functions. An office where you meet clients and work on your business is deductible. A den where you read your newspaper and also occasionally do a few hours of work is not. Your car is a deductible business expense when it’s used only for your business, not if it’s a family car that you also occasionally use to run business errands. If you’re going to itemize your charitable contributions, make sure you have records of the value of items you donate. Charitable contributions in excess of 5% of your income are easy places for the IRS to call for proof.
Being aggressive doesn’t mean being reckless. Be as bold as you can in claiming deductions that you can document. Don’t, though, make up or fabricate any numbers. Claim only what you can prove!
4. Making financial decisions for their tax implications
With a few exceptions, most tax incentives aren’t enough in and of themselves, to make any particular financial decision worthwhile. It’s very unlikely, for example, that you can make a charitable contribution that’s large enough to save you money on your taxes. Making your financial decisions based on the tax implications is a lot like letting the tail wag the dog.
While some decisions are only different in their tax implications, like a traditional IRA versus a Roth IRA, most of the time, your tax position should be one of the things you consider, but probably not the biggest consideration. Don’t sell assets in an attempt to change your tax burden. Fully invest in your retirement fund because of the financial security you want when you retire, not to lower your adjusted gross income. Make charitable contributions to do good in your community and make the world a better place, not to change your tax payment.
The tax code is written by people with decades of experience in financial planning from a governmental perspective. They wouldn’t be doing their jobs if there were an easy way to get out of paying your taxes. So it’s best to grin, bear it, and enjoy the things your tax dollars provide. Remember, it only comes due once a year.
Do you suffer from FOMO? It’s a generational phenomenon, like absinthe was for the Greatest Generation. For those not in the know, FOMO is an acronym that stands for Fear Of Missing Out. It’s that sensation in the back of your mind that makes you go out even when you’re tired. It’s the reason you go to the concert featuring that band you don’t even like that much because your friends are going. An adventure can happen anywhere, and if you’re not there, you’ll be the one person in the world who missed it.
How much influence does this fear have on today’s millennials? A recent Eventbrite survey found that 78 percent of 18- to 34-year-olds prefer to “invest in experiences instead of things.” Seventy percent cited FOMO by name as a motivator for their financial decisions. But seeking out adventures, rather than investing in your future, has consequences. Its fine to live a low-maintenance lifestyle, and no one should criticize the decision to not have more stuff than you need. But that’s not always what’s happening in these decisions.
It’s not a coincidence that this same group is suffering financial hardship. Millennials have the highest debt percentage and lowest credit scores, according to Experian. The same study also finds that half of millennials were late on at least one payment last year.
Fighting FOMO is a serious challenge. It may be best to fight fire with fire and think about what you might be missing out on in the future. Let’s look at three ways you can use the Fear Of Missing Out to feed your financial future — rather than your financial fears.
1.) FOMO on retirement
Road tripping with friends across the country could produce some priceless memories. What could be even more priceless, though, is getting to take that trip with your spouse and family once you’ve retired. Cutting your travel budget now and putting the extra into an IRA is the difference between a life of leisure and dying at your desk.
Don’t think of it as not having wonderful experiences. Think of it as investing in future adventures. Consider opening a vacation club account to save for one great excursion a little bit at a time. You’re not missing out on anything; you’re saving for better experiences later in life. Besides, with your savings, you can make arrangements that don’t include 16 hours in the seat of a sedan.
This savings emphasis doesn’t mean giving up on travel or other fantastic events. It does mean you should save and plan for events that really matter. That round-the-world cruise you take with your family later on in life surely outweighs the weekend trip to the mountains right now. Also, consider opening a vacation club account to save for one great excursion a little bit at a time.
2.) FOMO on home ownership
The biggest difference in wealth for older generations is time in home ownership. If you’re renting, your housing money goes out the window each month. You don’t build equity and you have to keep making that payment as long as you live there. With a mortgage, the money you pay each month stays with you as you build equity. Once you pay the mortgage off, your housing costs plummet.
Those opportunities may seem distant if you’re burdened by student loans and credit card debt. Getting out of debt is the best way to ensure you can qualify for and pay a mortgage. That means cutting spending now and committing to paying off loans and credit cards with any extra money.
Don’t think of the nights out that you won’t have. Instead, focus on the wonderful experiences you’ll have in your new home. Think of having a holiday meal at your kitchen table surrounded by family and friends. That’s the experience you’re investing in when you position yourself for homeownership.
3.) FOMO on financial security
Fifty-eight percent of millennials live paycheck-to-paycheck. That’s a stressful life. The constant worry over making rent and paying for basics can contribute to stress and lower quality of life. It’s an experience, frankly, that’s not much fun. Many millennials see this constant scramble as emblematic of their generation’s lifestyle, but it doesn’t have to be that way.
Setting aside money in an emergency fund can help you escape that cycle. A few hundred dollars in a savings account can provide a great deal of peace of mind. It’s a tremendous comfort to know that, even if an unexpected expense crops up, you’ve got rent and other basics covered.
Financial security is an experience just like going to a live show or a craft beer festival. The difference is that it’s an ongoing, long-lasting one. There is no closing time, and there is no last call. Being secure in your finances will never leave you with a hangover or ringing ears the next morning. It will make it easier to have the kind of experiences you want.
Fighting Fear Of Missing Out is a challenge. You only live once, as another generational acronym (YOLO) reminds us. Don’t use that as an excuse to not think about the future. You only get one life to have the kind of experiences you want to have, but that doesn’t mean you have to have them all right now. You can’t go back and study harder or save more for retirement. Live an enthusiastic, out-loud life in a financially responsible way.
We don’t normally like to tell you how to spend your money. Our members tend to be very good at that, often finding creative ways to turn the hours they’ve spent at the office into new ways to enjoy their lives. More often, we tell you how to not spend your money by letting you know about our fantastic savings options that can produce dividends in varying amounts of time, or we’ll often tell you about ways to use your good credit for getting a loan that can make your life better or save you money in the long run.
At tax time, however, we thought we’d take a different direction. If you’ve got a windfall coming from the IRS and don’t want to watch it disappear as you spend an extra $50 or $100 here or there, we’ve got some plans that can turn your refund into lifelong memories, earn you money in the long run or both, all while spending time doing what you want to do.
We’re working with a hypothetical assumption that you have around $1,000 coming, because it can be an awkward amount of money. It’s not enough to pay off a big chunk of debt or fund the purchase of a life-changing item like a house or new car, but it’s too much to ignore. $1,000 is a lot of money to spend, but not a lot to have.
Tackle one home improvement project
We’ve all got a list of things we’d like to do around the house. Maybe you’d like a deck for grilling once the winter lets up, or you’d like a more welcoming front entryway to your home, or you’d like to drag the kitchen into the twenty-first century. Talk to your spouse, your kids or whoever might enjoy what you’re planning to build. See what they have to say and what their interest levels might be in helping you out. Once you come up with a plan, watch some YouTube videos to make sure it’s something you can handle, and then mark your calendar. Set times to work, and make it a family project. By the time you’ve finished, you’ll have improved the value of your home, spent time building something tangible with your family, and you won’t have to suffer through a summer without your deck.
If you can’t think of a fun project your kids might enjoy, what about building a wood-fired outdoor pizza oven? They’re simple enough to assemble, the kids will definitely enjoy it, and most home kitchens are ill-suited to making really good pizza.
Once that project is done, you can always go back for more. If everyone had a great time, take a look at what’s next on your list and tackle that. Once your ambition to improve your home outpaces your refund, come see us about a home equity loan or line of credit and we’ll help you turn your house into the home of your dreams.
Take a parents’ weekend
Getting an evening away from the kids can be difficult, and a weekend might seem impossible, but it doesn’t have to be that way. You’re holding a refund check from the IRS and it might be enough to ship the kids off to grandma and grandpa’s house, or pay for a couple of nights at a hotel in a nearby city. If you haven’t tried it yet, AirBNB has made it easier than ever to find a great rate on a place to stay, even at the last minute. Guys: you get bonus points if you take her somewhere for Valentine’s Day; dinner and a show might be lame at home, but in another city it can be romantic. When was the last time she got to wear her favorite dress or jewelry?
A parents’ weekend is a great way to invest in your future, even if it doesn’t seem like it at first. Study after study says that Americans don’t vacation as much as the rest of the world, and that those who do tend to be more productive. Watch how much more smoothly everything goes at work when you get back.
If you’re looking for an inexpensive getaway, try New Orleans. It’s got haunted tours, antiquing and brass bands during the day, while still offering you world-class restaurants (Commander’s Palace is a must for upscale restaurants, Mother’s Po Boys for downscale, and try the chargrilled oysters at Acme for a taste you can’t get at home that is priced right in the middle) and Bourbon Street at night. Mardi Gras is just around the corner, but you can save a bundle by heading down afterward. Maybe while the kids are on spring break?
Encourage a gifted child
Many families find that they’d rather splurge on the kids than on themselves. If that’s the case, why not use your tax refund to invest in your child’s future? Purchase an instrument, a trainer or a tutor for a child who’s shown an interest in a special activity. The college admissions process has gotten incredibly competitive since you went through it, and the leadership and talent demonstrated through extracurriculars could mean the difference between getting into that prestigious East Coast school or having to stay home at football state university. Beyond admissions, talents your child can demonstrate will also help him or her get scholarships, making the investment you put in today a sound one financially, as well as spiritually.
If your child hasn’t displayed any gifts or specific interests, this might be a chance to spark something. You could try paying for a school trip, which seems to happen every other month, or even take a family trip to Europe. If you still can’t figure out what they’d like, you could always put the money into their college fund. We offer several tax-exempt programs, which would let this year’s refund come off of next year’s taxes while it earns interest toward their inevitably enormous tuition bill, which many experts think will be around $250,000 by 2030.
The beginning of the year is a time of resolutions and renewal. Even if you're not the kind of person who hits the gym with renewed vigor come January, getting those post-holiday credit card statements can get your heart racing. That's why the beginning of the year is a great time to check in on your financial standing and make sure you weren't the victim of holiday fraud and that your credit is in good shape.
Now is a great time to get a copy of your credit report and go over it with a fine-toothed comb. It'll help you keep on top of your finances, let you know if you should refinance your debt at a lower interest rate and give you an idea of how to use your upcoming tax refund (if you are getting one) this year.
Question: Why should I want to see my credit report?
Answer: For a lot of our members, the idea of reading their own credit report seems daunting. There's a lot of information, a lot of numbers, and it could be bad news. It can be a reminder of past embarrassments and, even at its best, it seems like homework. But, the value of going over your credit report is enormous. You can find errors and correct them, discover what you need to do to get your credit score as high as possible and understand what factors are affecting it, potentially saving thousands of dollars on any mortgage funding, auto loans or credit cards you get this year.
Question: Do I still need my credit report if I know my credit score?
Answer: While it's important to know your credit score, a single number doesn't have as big an effect on your finances as some people think. Financial institutions want to see your whole financial picture before deciding on a loan. Your credit score can be a handy way to summarize your credit history, but it can also vary from agency to agency, often by significant margins. Also, if you want to improve your credit score, you're going to need to see what's actually on your report so you can take steps toward improving it. In other words, getting one of those free credit reports is not likely to be all you need to check up on your credit.
Question: How do I get my credit report?
Answer: Visit AnnualCreditReport.com, because in a world of online scams, the best choice is the one recommended by the government's Consumer Finance Protection Bureau (CFPB). You're entitled to a free copy of your credit report every year, and AnnualCreditReport.com will give you a copy of your report from each of the three credit bureaus.
Question: Now that I've got it, what should I look for?
Answer: The first thing to do is make sure every account is familiar to you. Make sure there's nothing outstanding on which you're not currently making payments, and that there's nothing in default. Remember to check balances as well. Just because the bureau is right that you have an account, it doesn't mean they're right in how much you owe or your account standing.
Question: Should I challenge everything?
Answer: There are websites suggesting you challenge everything on your credit report, even if it's a valid charge, in the hopes that you'll get lucky and won't have to pay someone. Those websites are not trustworthy. It is illegal to file a false complaint, and even if it weren't, it's incredibly immoral. Bottom line: It's not worth committing fraud in the hopes that a credit agency or someone to whom you owe money drops the ball on paperwork.
Challenge every mistake, though. If you're not sure what a charge is, call to find out. Make sure you follow up with every mistake you challenge, too. You shouldn't be paying for or be penalized for charges you didn't incur.
Question: How do I dispute an error on my credit report?
Answer: Contact the credit reporting agency that reports the error and the company that claims you owe it money. Make sure to send copies of any supporting documents you have, but don't send the originals, because you might need those later. While any company that corrects a mistake on your behalf is required to tell all of the reporting agencies, they may not follow through. After all, if they made a mistake when reporting the first time, they may make a mistake a second time. Be sure to follow up if necessary.
Why is the cable/satellite bill so frustrating? Is it because the bill seems to go up every so often (and 2016 will be no exception) for reasons that are, at best, baffling? Is it the customer service which is, at best, infuriating? Or is it that feeling you get when you’re flipping past channel after channel that you never watch, making you realize you’re paying for something you don’t want or need? That feeling is, at best, unsatisfying. Whatever the reason, getting the TV bill under control is one of the trickiest parts of managing the monthly budget. It can feel like the options are living in the stone age or dropping a small car note on unnecessary channels.
Unfortunately, cord cutting has always been better in theory than in practice. However, as 2016 approaches, the options have never been better, but they’re still a little unsatisfactory for most of us who don’t want to spend a fortune on content, don’t have the technological know-how to rewire our living rooms and aren’t willing to engage in federal crimes by pirating TV and movies. This guide is meant to make the best of a bad situation by figuring out which families should cut the cord now, which ones should wait, and how to set yourself up to make the switch.
The first thing you’ll need if you’re thinking about cutting the cord is a reliable Internet connection. It needs to be high-speed, 30 MBPS at a minimum. If you can’t get 30 MBPS, you can’t cut the cord, period. In addition, be sure your Internet doesn’t have data caps. Even if you haven’t hit the caps yet, you still need to check with your provider because streaming HD TV and movies is a completely different situation than browsing the web or watching occasional videos on YouTube. Finally, make sure you know the price of high-speed Internet outside your bundle. One of the reasons it’s hard to save money by cutting the cord is that the cable and satellite companies have priced the bundles so Internet costs more and cable costs less than they might otherwise.
Next, you need a box to run some apps. For the minimalist, Roku, ChromeCast, and Amazon Fire offer dongles, which are around the size of a thumb drive and hook directly into your TV’s HDMI cable. Both retail for under $40 and offer all the functionality you need. Moving up in terms of size and features, Amazon Fire TV and Apple TV offer boxes with voice-activated search and video gaming for $150. You can also use a smart TV or Blu-Ray player if you have one, and many video game systems will work, too. So, if you can find a good deal on a used XBox 360 or Playstation 3, they might fit the need for now.
Finally, you need content. Netflix ($8/month) is the standard bearer for online streaming, with a massive catalog of TV, movies and original content, including “House of Cards,” “Orange is the New Black,” and Marvel’s “Defenders” series. Amazon Prime ($100/year) has a smaller catalog of TV and movies, with some originals as well. Hulu ($13/month) now offers commercial-free first-run TV, for those who don’t want to wait for their favorite shows. Maybe the most exciting addition to the lineup is HBO Now ($15/month), which has the back catalog of all of the network’s famed shows along with “Game of Thrones” every spring. Most enticing for the sports fan, Grantland creator Bill Simmons has an as-yet-undisclosed show coming to HBO this spring, with possible HBO Now ties.
Getting the whole package is pricey – nearly $50 per month. And, until now, no live sports came with it. One potential solution coming in 2016 is from Sling TV, which promises plenty of channels, including a full ESPN package for sports. It’s pretty new, so all the reviews aren’t in yet, and it’s the priciest of the bunch at $20 per month for the basic package. Still, $20 is less than basic cable in most areas, even with the bundle, making it the most likely solution for people wanting to lower their bill. Combining it with Amazon Prime combines live TV and a back catalog while giving you free prime shipping and the ability to watch all of your programming on any of your devices, which is nice if you travel or have more family members than TVs. If you add in two or three months of HBO in the spring to watch “Game of Thrones” and binge the rest of their programming, your average monthly cost would be about $35.
It’s not the cable bill-killing solution a lot of us are looking for, but carving even $10 or $20 off the bill can add up over time. This plan also eliminates Netflix, so that’s roughly another $100 per year you can save. If you’re stuck renting a cable box on top of paying for the service each month, your savings can easily come to a few hundred dollars per year. If you put that into a savings certificate or savings account, by the time we’re talking about the 2017 cord cutting outlook, you’ll already have the year’s TV bill saved up ahead of time.
The Federal Reserve, also known as the Fed, raised the prime interest rate by 0.25% last Wednesday. It is the first time the Fed raised the prime interest rate since 2006. Often, this kind of news can blur into the background, especially for young people who haven't been through an interest rate hike during their adult lives. For those who are a little older, you may not have been in a financial position to care very much 10 years ago, but now you'd like to know what's going on. Even if you're among those readers who are old enough to have lived through several cycles of Fed rate changes, you might want a refresher since it has been a while.
What is the Fed and why would it raise interest rates?
The Federal Reserve, chaired by Janet Yellen, is the most powerful financial institution in the United States. Its primary responsibility is controlling how much money is in the economy, which they do primarily by adjusting the rates at which banks, credit unions and others loan money. Essentially, when the Fed wants the economy to speed up, it lowers rates, and when it wants the economy to slow down, it raises rates.
It's important to remember that we - the credit union - don't control the prime rate. The Federal Reserve does. It uses this power to influence every part of the economy, from the price you pay for groceries to the unemployment rate. As it does this, the rest of us have to deal with the adjustment periods that stem from its decisions. Our rates for loans will have to go up. On the other hand, our savings rates will go up as well.
If you're having trouble understanding how the Fed can control how much money is in the economy or how that affects the interest rate you pay on your mortgage, credit cards and everything else, here's a simplified example:
Imagine an island with only three things on it: mangoes, dollars and people. On Monday, the island has 100 mangoes and 100 dollar bills. The price for each mango is $1. If one person wanted all of the mangoes, it would take all of the money, since there's no other product on the island.
On Tuesday, a plane flies by and drops 100 more mangoes, bringing the total to 200 mangoes and 100 dollars. Now the price for each mango is 50 cents, because the supply of mangoes has gone up without demand changing at all. Makes sense, right? What if, on Tuesday, that plane hadn't dropped any mangoes, but instead dropped another box containing a hundred dollar bills? Now spending all the money to get all the mangoes would take $200 for 100 mangoes, bringing the price of each mango to $2.
The Fed has the power to do this with money. It can "print" more or less money to put it in the economy, while taking money out by paying people to keep money with them. By the way, "print" is in quotes because the Fed actually just hits buttons on a computer and changes the balances that each bank has with it. It's all really interesting, if you're the kind of person who finds macroeconomics interesting.
Why would the Fed ever want the economy to slow down?
Answer: The most important reason is inflation. While the last few years have been largely free from the worst effects of inflation (1.86% per year since 2010, the lowest rate since the 1950s and roughly half of the average rate for the last 100 years), the spectre of the 20th century hangs over economic institutions today. For most of the last 100 years, inflation has been a major factor in economic planning; just ask any American who lived through the 1970s, which was a period of high inflation that helped motivate the Reagan-era push for free trade, deregulation and low interest rates.
Elsewhere, Brazil endured an inflation-fueled economic crisis that led to shop owners needing to increase their prices every day from the late 1970s through the early 1990s, and much of Latin America experienced a "Lost Decade" during the 1980s due in large part to foreign debt and inflation. Perhaps most memorable from history is the German inflation crisis between the World Wars: People were using wheelbarrows to carry their money, because it was worth so little that they needed massive amounts of bills to buy basic groceries. The effects of the subsequent financial crisis directly contributed to the rise of Adolf Hitler and the Nazi party.
While the Fed is not worried about the rise of fascism in 21st century America, it may be worried about the example set by Japan, where fear of inflation drove their central bank to sharply raise interest rates, bursting their financial bubble and kicking off an economic slump that lasted nearly 20 years. Paul Krugman, the award-winning economic columnist for The New York Times, argued that one of the major reasons Japan was helpless in the face of economic problems was its central banks' inability to lower interest rates, because rates were so close to zero already. Raising rates now gives the Fed more options in the future.
How does the prime rate affect my life?
Answer: Any loan you have that is not a fixed rate loan will go up. Credit cards, auto loans and many mortgages will have a higher interest rate than they did before, which means the amount you'll pay in interest every month will go up. Fixed rate loans will remain unchanged, which is why it's a good idea to get as much of your debt out of adjustable rate loans and into low fixed-rate loans.
Overall, the Fed's decision to raise interest rates makes it's better to save and worse to borrow than it was the day before. That has a lot of effects on various parts of the economy, all of which will affect you eventually, because shaking one branch moves the whole tree. On the simplest level, though, it's time to move into a fixed-rate loan and take money out of the stock market to put in an insured saving product, like our certificates and other savings products. If you'd like more personalized guidance, let us know.
With Thanksgiving only a few weeks away, holiday shopping is on the minds of many. You might have gotten off to a solid start but have a few people left on your list that have you stumped when it comes to deciding what to get them. One of the simplest ways to check them off as complete is to pick up a few gift cards. Clearly, they have become a go-to gift given that Americans spent nearly $32 billion on gift cards last year. So it should come as no surprise that you'll hear a lot more about gift cards as November rolls on. This is particularly true of your Facebook friends and family, who are probably choosing sides with one camp believing gift cards to be far superior to traditional gifts and the others finding them incredibly impersonal. This guide will go over the case for and against gift cards and give you some tips on how to save money when shopping for them.
The case for gift cards: Gift cards are more personal than cash because they show some thought about the recipient. Gift cards are also more secure than cash, particularly when being shipped in the mail system. They also have a favorable impact on your gift budget as opposed to bulkier gifts because shipping costs are much lower.
Gift cards also solve a persistent economic problem that makes an appearance in long-form think pieces within articles in the Atlantic or Slate every holiday season. Those pieces are usually accompanied by a few days of Facebook shares and retweets on the topic: deadweight. This theory states that a gift giver can't give an economically efficient gift because, if the item on which you spend $100 is worth $100 to the recipient, they would have bought it for themselves. How many times have you received a sweater that doesn't fit or a new gadget you don't want? Or how often have you received a gift that is close to what you wanted, but not quite right? It happens. In fact, an entire market exists for B-movies that are designed to look like the year's most popular films, mainly to fool the unwary shopper at holiday time. Gift cards solve this problem by letting the recipient choose his or her own gift; just ask any 11-year-old who gets a copy of "Triassic World" or "The Revengers" this year.
The case against gift cards: Gift cards are impersonal compared to actual gifts. Nothing shows your thoughtfulness like the perfect gift. If you want to make someone happy, the feeling of opening the big box will always beat out opening an envelope. Finally, it's really easy to create an awkward situation of imbalance. When you receive a gift card for $100, but you gave that person one for $50, you end up feeling guilty. When the opposite occurs, it's like you bought them a $50 gift and they got you nothing. Putting a firm price on gifts makes any discrepancy very apparent.
As for deadweight, gift cards minimize the problem, but don't eliminate it. They still have some value less than cash (whether perceived or real), so you're not fully realizing the economic potential of your gift. In fact, the only way to fully beat deadweight is by giving a gift. You can get them something they don't know about, taking advantage of imperfect market knowledge. You can make them something, taking advantage of the value of your time. Or, you can buy them something they wouldn't buy for themselves, taking advantage of some people's unwillingness to indulge. By the way, this paragraph is exactly why no one likes economists and why no one ever reads the articles on deadweight: too much rationality and not enough jolliness.
How to buy a gift card: Buying gift cards is easy, of course. But that doesn't mean you're doing it right. In fact, you shouldn't pay full price for a gift card if you can avoid it. Use gift card websites like giftcardgranny.com or giftcardzen.com to purchase gift cards at big discounts, sometimes as much as 50% off. The sites offer protection from scams, and if you end up with a gift card for an odd amount, you can always use that gift card to buy a gift card from the retailer. So, if you want to give a gift card to The Gap for $100, for example, you might find one that's actually for $112, purchase it for under $100, and save the extra value for yourself. You can often get larger gift cards at even steeper discounts, then turn them into multiple smaller gift cards.
Other ways to save money include looking for promotions. Many chain restaurants offer gift card bonuses. For example, suppose you buy $100 worth of gift cards to a Chili's. You might be able to get a free $25 card for yourself. It's never a bad idea to get a free dinner, and during the busy holiday season, it's even better.
Hopefully, this guide will make your holiday shopping smooth and easy. This season shouldn't be about stress and pressure. If you find yourself overwhelmed, take a break and drink some eggnog. If you find yourself short on cash, check out our Christmas Club accounts, so you can be set for next year.
So, you're buying a car. You've made it past the tedious comparison shopping, you've finished the detail-oriented research and you've even endured the haggling with the salesperson. Your tongue probably tastes like that terrible coffee they use in every car dealership in America, the kids are probably getting cranky and it's pretty likely you're thinking about everything else you could have done with your weekend. But, it's almost over.
"I just gotta go in to see the finance manager, sign some papers, and we're on our way home." That feeling of relief washes over you, you let your guard down, and you don't even realize until too late that you're suddenly in a much higher monthly loan payment or longer term than you'd planned for. What, in the name of Lee Iacocca, just happened?
The stereotype of car dealerships usually involves a salesman with a pencil moustache and a polyester jacket who lies through his nicotine-yellowed teeth about undercoating or telling you how the used car you were looking at has only ever been driven to church on Sundays. That guy is easy to spot. If the salesperson lies to you, you have some legal protections. If you Google before you go, you'll even know most of the tricks the salesperson might roll out. What you're less protected against are the tricks that happen in the finance office. Below, we'll talk about what to look for and how to avoid dealer finance scams so you don't spend too much on your next car.
1.) Keep your wits about you. Never let your guard down at the dealership. Every person there wants to make money off of you and they're very competitive. Even if he or she says that they don't want or receive commission on your particular sale ("I just need to hit my quota" or "One more sale puts me at my bonus, I'll take a loss on this one"), that person is almost certainly a very competitive person who's going to be comparing notes with his or her coworkers this afternoon.
The finance office is designed to put you at ease, so you'll lower your guard. The finance office is probably in a different part of the building, with different lighting and ambience. The offices may be appreciably nicer, with actual walls instead of cubicles, some of which may have art hanging on them. Clearly, the person you're talking to is important, having been in such a nice office for so long.
And that's what should scare you. The people in the finance office are often not financial experts by trade; after all they don't need to do your taxes or invest your money. They only have to understand one transaction. Therefore, many dealerships will send their best salespeople to finance classes so they can have a smooth closer at the end of each transaction. Don't let the gray hair fool you; the person in front of you is just as competitive and sharp as the one on the sales floor. After all, to get this office, the finance officer had to be really fantastic at making sales.
2.) Know your credit score. There are a lot of reasons to know your credit score before you make a large purchase, including the fact that you should check your credit report for irregularities fairly often, whether or not you're buying anything. When you buy a car, it's especially important. Finance managers like to use customer ignorance against them, and if you don't know your up-to-date credit history, then they'll smell blood in the water.
While the most obvious example is to try to charge you more than you need to pay, you might not expect that another classic is to offer you a loan at a far lower rate than you deserve. The idea is to offer you a rate so low you can't say no, then wait a few weeks before telling you that the financing unexpectedly fell through. Don't worry, he or she will tell you, you can keep the car. There's a clause in your contract that says "subject to financing," so he or she found a different lender. The good news turns sour, however, because your new rate is through the roof and you've already signed the contract and taken delivery of the vehicle.
Don't take a loan at a rate that's too good to be true. If you're tempted by an offer in the finance office, ask how long it'll be valid. Then, take it home and show it to your lawyer, so someone you trust can tell you if it's on the up-and-up. If you don't want to pay your attorney's rate, you can also bring it to us. We'll take a look, let you know about any potential pitfalls, and we might even be able to beat that rate or provide a better term, saving you even more money. Remember, if they say that the deal expires today (particularly on the weekend) or that you can't take your contract with you, it's almost certainly because they don't want you to take the time to think about what you're doing.
It's never a good idea to trust someone who doesn't want you to think.
3.) Walk in with an offer. Then, walk out with an offer. The best way to get a fantastic rate on a loan for a new or used car is to finance through WVU Employees' Federal Credit Union. We aren't looking to make a profit, we're looking to support our members. We're also trustworthy - it's why you're here in the first place, after all - so you know our great rates aren't scams. So, come see us first and you can walk into the dealership with your loan financing already approved. You'll know how much you can spend, taking the pain out of negotiating. You'll also know what interest rate you'll get and have a pretty good assurance that your monthly payment will be manageable. Plus, you'll only need to run your credit score once, so you don't have to worry about losing points from looking it up too often.
Don't let the salesperson know that you've already gotten financing, though. The dealership knows how much it wants to make on the transaction, and it doesn't care if that money comes out of the trade-in, the sale, or the financing. If you know how much your trade-in is worth and you have your financing taken care of, then the only place they can make money is on the sales price. If they know that, they'll be less flexible on the sales price. Let them think that if they give in a little on the sales price, they'll be able to make it up in financing.
But you also need to be able to walk away. Just like any other part of the sale, whomever can walk away controls the deal. If the terms of the loan the dealer offers you sound great, thank them and take them with you and let's compare notes. We're here for you and we promise to burn the midnight oil figuring out what we can do to make the best deal you can get.
This might all seem a little excessive. Maybe you're good at negotiating, you've looked up all the dealer scams and dirty tricks, and you can get the loan really close to what you want. You're only off by $50 or so, and if you just sign the papers you can take the car home tonight and be done with the whole process.
Remember, $50 may not sound like much, but over a 60-month loan, that's $3,000 plus interest. Who would you rather see pocket that $3,000: the dealership or your family? To put it another way: if your child racked up $50 in extra data charges on your phone bill, how would you feel? What if he or she did it every month for five years? Let's beat the finance office together.
When it comes to your finances, it can seem like all the advice you get is deadly boring, unbearably abstract or both. For example, when it comes to paying off debts, how can you be expected to make a dent without first having a spreadsheet that compares all your credit cards and loans with columns for principal, interest rate, fees and maybe even frequent flyer miles? It's intense. At the same time, when it comes to spending, you're no better off. How do you compare the value of a fancy dinner to buying a new outfit for the kids?
In 1986, The Economist created "The Big Mac Index" as a way to compare currency values across eras and national borders. The index shows how many hours of labor it takes to earn the cost of a Big Mac. So, if it took you 10 minutes to earn the cost of a Big Mac last year and it takes you nine minutes today, you are - in theory - better off than you were before. That's true whether those gains come from getting a raise, moving to a town with a lower cost of living or improvements in McDonald's supply chain to save consumers money. While the value of a dollar changes over time, the value of a Big Mac to a hungry customer remains constant.
We're going to use the same Big Mac concept here, but we'll use it to explain personal finance. If you're a fan of Apple products, fabulous. If not, feel free to substitute other luxury goods of your choosing. As an added benefit, if you're looking to talk about money with a young person, you may find the Apple index to be a helpful tool for starting a conversation. After all, that young person is probably staring at their phone, tablet or laptop right now.
The price of luxury
If you're carrying an iPhone, it's probably the most expensive thing you carry every day. You might not think so, because you might be used to those two-year contracts that artificially decrease the price of a phone by several hundred dollars. In reality, though, a lot of companies, from your service provider to the handset manufacturer, stand to make money by concealing the price from consumers.
Even then, you could be skeptical. "After all," you might say, "I'm currently wearing a very expensive watch. This Omega Speedmaster Moonwatch is the same model as the one that's been on the moon." Or maybe you're glancing at your Hermès Clemence Birkin purse, believing no phone could cost as much as a bag for which a noble alligator gave its life.
Actually, it does. You see, when a person buys a luxury watch, he or she usually expects to hand it down to their son, daughter or whomever so they may stay in a family for generations. The same is true for Hermes bags, particularly because they have to last long enough to get back to the top of the waiting list. A Hermes reservation can last a family for generations, too. A $10,000 watch or bag that lasts 100 years actually costs $100 per year. Similarly, a basic two-year phone contract typically came with a $200 credit toward a phone purchase, so even a free phone on that plan costs $100 per year, the same as an Omega watch or Hermes bag. A $649 iPhone 6s costs more than three times that much.
The price of five bucks
Most phones sold this year don't have 2-year plans. Instead, AT&T, Verizon and many of their competitors offer plans that can be canceled at any time, with the cost of the phone spread over two years or more, disguising the total price of the product. After all, the difference between spending $25 per month and $30 per month seems negligible. If you're already writing a check to your service provider for $200 worth of data, talk, taxes and fees every month, what's another five bucks, right? Of course, that difference over two years comes out to $120. If you have three lines on your account, the bill comes to $360.
When are you planning on paying off that smartphone? When do you expect to not have to pay another phone bill? The smartphone manufacturers assume a two-year lifecycle, and intentionally do not design their phones to last forever. Five years ago, one of the best selling phones was the original Motorola Droid. Go back another year, and it's Nokia at the very top of the sales charts, capping over a decade of the company's dominance. It's hard to remember that environment, but it included 3G networks and sliding keyboards.
Phones have short shelf-lives, so you can probably expect to make payments on a phone for most of the rest of your life. If you made that $5 payment into your savings account instead, that would be around $16,000 in time for your retirement. That's an expensive five bucks.
It's not a Big Mac, but hopefully the iPhone works just as well to explain the value of money when it's difficult to understand. Buying a product that lasts a lifetime can actually be quite affordable in the long run. On the other hand, a mindlessly squandered five dollars can be quite expensive. We've got a lot more lessons from the Apple index coming up, so stay tuned!
If you spent the morning on Twitter, CNN, or just about any other corner of the Internet, you might believe that they only thing that's happened anywhere in the universe this week is Apple's product announcement on Wednesday. Joined by developers from Adobe and Microsoft, the company showed off a new iPad, new iPhone, and a pencil. That's right, a pencil.
In all the excitement of a new $70 pencil, it was easy to miss Apple's discussion of iOS 9, which is to be released September 16. For some, however, that date was surprising, because their phones had been asking them to upgrade to iOS 9 for days. Unfortunately, that update was not from Apple. It was from scammers, hoping to gain access to people's mobile phones, where we keep all of our secrets. The effects of the attempted scam appear to be minimal so far, but it's a great reminder to brush up on our mobile security. Here are some quick steps you can take to protect yourself on your phone:
1). Always update your software. It can be annoying to find a time to plug in your phone when you're on Wi-Fi, and sometimes you don't want to put your phone down for an hour or more while it downloads the most recent operating system. For smaller apps, it can feel like you're dealing with a new update every other week. What's the deal? Those apps never seem to add anything useful.
The reason you get so many little updates is that the apps from major developers are constantly getting security updates. Google and Microsoft update every two weeks, usually with minor bug fixes and security updates, but they'll update more frequently if security risks dictate it. It might be annoying sometimes, but the frequency of those updates is the best security you have for the software you use on your phone everyday.
The biggest security issues are covered by operating system updates. Apple is notoriously slow on OS updates, just like they are with many of their apps, which only serves to make their updates even more important. When iOS 9 comes out on the 16th, it will be their third major update of the year, which is far more frequent than usual. If you're currently running anything before iOS 8.4.1, your security is out of date, and only going to be more antiquated next week. Take the time to update--it's worth it.
2). Think about the Wi-Fi you connect to. If you're still on a restrictive data plan - and with the price of mobile data being what it is, no one would blame you - you understand the relief that finding the open Wi-Fi connection of a fast-food restaurant or coffee shop can provide. But that relief might be misguided. After all, that barista - the one with the tattoos, piercings, and boho sense of cool - isn't an IT specialist. It's unlikely they get paid much more than minimum wage plus tips, and that kind of salary doesn't attract tech-savvy security experts. When was the last time the router was replaced? When did they last update the firmware or check the network for viruses? You're about to connect your phone, which may be the most expensive object on your person, the object you use the most often, and the most irreplaceable tether to your family and friends to a network whose security is at best questionable and at worst far from safe. If all you were planning to do was check social media or the box score of last night's game, you might want to just stay on your LTE or 4G network. If you were going to do anything more private, whether it's email, banking, or shopping, you definitely want to consider whether that coffee shop wi-fi is a good idea.
3). Reconsider what you do on your phone. If you had a time machine and could show your smart phone to a younger you from the 1990s, the younger you would be stunned. If you were into grunge music, you might use Spotify or Apple Music to explain that you now carry every song ever recorded in your pocket at all times. If you spent the 1990s rollerblading, you might pull up MyFitnessPal or Nike+ to show how you can track your heart rate, calories burned, and steps taken every day. If you spent the 1990s in an office, you might pull out Excel or PowerPoint to explain that, well, basically it's the same thing, but on a smaller screen. The next thing that would happen, though, is that they younger you would ask what else you use it for everyday. You'd explain messaging and email, but when you explained mobile banking how would you react?
If you told your younger self that you had a personal computer in your pocket at all times, and that you put your most private secrets in it - from medical information to intimate conversations with your romantic partner to your financial data - which you then sent out into the world through an invisible network (which you don't understand), which then ran your secrets through servers (in a location that you don't know), before traveling through another hard-wired network (that you can't explain) to your financial institution or investment firm, where the information immediately reversed course and came back to you over the same mysterious connections...If you told that to your younger self would they be impressed? Or would they smash the phone on the ground and slap you in the face for your stupidity? How can you trust your secrets that way? Why are you putting all of that information in one place?
If you want to protect your information online, you need to use the kinds of software that are built with security protocols and frequent updates. You need to do your banking on our app. We have found the best software security providers in the business and built layer after layer to protect your information. We're not interested in disappointing the 90's version of you, who still believes that there's a difference between public life and private life. We want your information safe and secure.
Our app also lets you make transfers, track your spending, report fraudulent activity, or do virtually anything else you could do in our brick and mortar locations. Most importantly, it's still us on the other end - a neighborhood credit union that puts service for members ahead of profits, so you know we're not going to cut corners on security.
WVU Employees' Federal Credit Union is built on the idea of people helping people. You already know we can do a better job looking after your money than a mega-chain bank that answers to shareholders, because we know you and our community. So why give that up when you find a bargain online? Shopping locally is better for the community, better for the environment and the best way to find something unique that can make all of your friends say “wow.”
Shopping locally is better for the environment.
We all can point to that one person in our lives for whom everything seems to come easily. He or she has a good income, great house, beautiful children and the checkout line they choose always moves the quickest. You probably really wonder about that person. Why are they so lucky? Why not me?
Well, why not you? Recent research has confirmed ancient teachings telling us that we have more power over our own luck than we think. If we focus our energy and attention in the right ways, we can make ourselves into the type of successful, powerful, happy people that everyone else will wonder about. Read on for three tips from emerging science that can change your life:
1.) Don’t covet your neighbor, just focus on your own life.
Ancient theory: The Epideictic. Scholars have known about the epideictic since Aristotle discussed it in the third century BCE, though the details have always been murky. Basically, we’ve always understood the power of praise and blame to define our world, but only recently have we been able to support it with science.
Modern science: In one recent study, researchers played a video of a man spilling a glass of milk to two groups of people. One group spoke English and similar languages, the others spoke languages in which blame wasn’t built into their sentence structure. They found that the people from the first group, whose sentences are built around, “He spilled the milk,” could identify details about the man in the video that the other group could not. Your language is leading you to blame people, including yourself, even when it doesn’t help you!
We tend to credit ourselves when we succeed, and assume other people got ahead because they were lucky. If you think people are luckier than you are, then you might need to rethink how you give credit.
The takeaway: If you want to be luckier, stop worrying about upon whom to place blame. Don’t blame yourself for your failures and don’t let life events force you into a negative mindset. Who cares who spilled the milk?
2.) Trust your gut
Ancient theory: Extrasensory Perception (ESP). Perhaps you’ve had an occasional premonition or foreboding about something and chalked it up to coincidence. That’s because people are likely scoff when you talk about it as anything but that. However, you can sometimes look at a situation and just know something is right or wrong even if you can’t put your finger on it.
Modern science: More and more, scientists are backing you up. Thin-slicing is a term psychologists use to describe the hunches we get from looking at a person or situation and making instant judgements about them. Studies have shown that people respond as accurately to five-second clips of conversations and situations as they do to five-minute clips.
In his New York Times Bestseller Blink: The Power of Thinking Without Thinking, Malcolm Gladwell covers this topic very well, discussing topics from fashion to art fraud. The feeling of instant recognition is so powerful that people with specific brain injuries don’t recognize their loved ones because they don’t feel the instant recognition.
Takeaway: Lucky people know when to trust their gut. Most of the scenarios you deal with daily are scenarios you’ve been dealing with for decades. You’ve done alright so far, so let your instincts take over. Try to use analogies to determine if the problem in front of you is like the ones you’ve seen, and if so, go with your first instinct. After all, your cave-person ancestors didn’t call an all-staff meeting every time they fought a mastodon, or you wouldn’t be here today.
3.) Keep it simple
Ancient theory: Simplicity is at the heart of Taoism, Buddhism, Asceticism, Feng Shui, and many more.
Modern science: Dr. Barry Schwartz and his colleagues have run countless studies to show that modern choices and convenience actually make us less happy. For example, if offered a chocolate from one of those heart-shaped assortments, you’d probably prefer to choose one from among a big box with dozens of choices rather than having to choose among a slim selection. Unfortunately, in his experiment, the people who chose from the smaller selection were much happier with their decision. They didn’t wonder “what if” or experience buyer’s remorse. The same is true with all sorts of variations on the same experiments.
Takeaway: Lucky people make choices and stick with them. Next time you’re in a convenience store, look at how many kinds of M&Ms they have. Regular, peanut, peanut butter, mint, almond, pretzel, crispy … the list goes on and on. Now check the sizes: regular, sharing size, fun size, big hanging bags, even bigger bags, mixed packs … so many to choose from. Ask yourself: Will getting your M&M choice exactly right make you any happier than picking one at random? If not, then don’t waste your energy trying to get it right. Lucky people make the right choice in this situation because they realize any choice is the right choice if they make it quickly and stick with it.
Want to improve your luck? The best thing you can do is improve your thinking. Dump your baggage by focusing on yourself, trusting your gut and sticking to your decisions. If you want to be the person who has everything going great, start by realizing that you already do. Count your blessings. Then, realize everybody is showing you their best face all the time. If your friend’s Facebook feed is filled with nothing but amazing life events and exciting vacations that seem to happen to everyone but you, remember that you’re seeing a condensed version of everybody’s life, with only the best parts put online.
If that doesn’t help, then think about it this way: Somebody, somewhere is looking at your life and envying your “luck.”
Did you know that only 10 percent of Americans know their credit score?
Those are the findings of a survey commissioned by TrueCredit.com, a web subsidiary of the credit bureau, TransUnion. “It is shocking how little Americans know about their credit,” said John Danaher, president of TrueCredit.com. “Good credit is a cornerstone of your financial profile, enabling you to finance major purchases, such as a home, education, or car.” Then, he added, “Not knowing about your credit can expose you to higher interest rates which translates into less money in your pocket at the end of the day.” When you apply for credit, your credit scores help lenders determine whether or not you are able to repay the loan based on your past financial performance. With a higher score, you qualify for better interest rates, higher credit limits, and more types of credit than you would with a lower score. Your score reflects the way you use credit, and there are no tricks or quick fixes to getting a good score. However, you can raise your score over time by demonstrating that you consistently manage your credit responsibly.
Here are 10 things you can do to improve your credit scores.
1. Pay your bills on time. If you have a history of paying your bills on time, you’ll have an easier time getting a mortgage loan, car loan, or credit cards. Even if you’ve had serious delinquencies in the past, a recent history (24 months) of on-time payments carries weight in credit decisions.
2. Keep credit card balances low. High outstanding debt can pull your score down.
3. Check your credit report for accuracy. Inaccurate information on your credit report can be cleared up easily. Always contact the original creditor and the credit bureaus whenever you clear up an error so that the inaccurate information won’t reappear later.
4. Pay down debt. Consolidating your credit card debt or spreading it over multiple cards will not improve your score in the long run. The most effective way to improve your credit is by slowly paying down the amount you owe.
5. Use credit cards—but manage them responsibly. In general, having credit cards and installment loans that you pay on time will raise your score. Someone who has no credit cards tends to have a lower score than someone who has already proven that he can manage credit cards responsibly.
6. Don’t open multiple accounts too quickly, especially if you have a short credit history. This can look risky because you are taking on a lot of possible debt. New accounts will also lower the average age of your existing accounts which is something that your credit score also considers.
7. Don’t close an account to remove it from your record. A closed account will still show up on your credit report. In fact, closing accounts can sometimes hurt your score unless you also pay down your debt at the same time.
8. Shop for a loan within a focused period of time. Credit scores distinguish between a search for a single loan and a search for many new credit lines, based in part on the length of time over which recent requests for credit occur.
9. Don’t open new credit card accounts you don’t need. This approach could backfire and actually lower your score.
10. Contact your creditors or see a legitimate credit counselor if you’re having financial difficulties. This won’t improve your score immediately, but the sooner you begin managing your credit well and making timely payments, the sooner your score will get better.
These ideas won’t create a dramatic improvement in your credit score overnight, but over time, they will. Remember, it takes time to develop a strong profile. Once you’ve done it, you’ll find it easier to apply for credit and favorable interest rates.
The Law of 10 Cents states that you take 10 cents for every dollar you earn and put it away, in a retirement account such as a 401(k) and/or in a savings account.
When you get paid, you pay everyone else. The grocer, the retailers, the dry cleaners, the mortgage, the phone company, the gas and electric companies, and various insurance companies.
Have you ever asked: What about ME?!?
After all, you’re the one who is working. Shouldn’t you have something reserved just for you? It’s frustrating when you come to the end of the year, look at your W2 form, and ask “where’d it all go?”
The Law of 10 Cents gives you something to show for all your work.
Ten cents on the dollar may not seem like a whole lot. But think of what you’ve gained by squirreling away a little nest-egg:
1. The security of knowing you have extra cash should a true emergency arise.
2. Knowing you can live on less than your full income.
3. Once you start putting money away, it becomes an automatic habit. Over the years, you’ll save tens of thousands of dollars. Maybe more!
Most people understand the value in the Law of 10 Cents immediately. However, it’s not that they don’t want to start saving; they simply think that they can’t do it.
Anyone who wants to do this can. Every excuse you can think of is a real concern, but none of them can hold you back if you don’t want them to do so. Excuses can be anything from “We need every penny we earn,” “I’m a single parent” and “My husband/wife would never agree” to “We have kids and can’t put anything away right now.” You might have your own favorite reason that is keeping you from putting money away now. Yet, if you wait until everything else is paid, you’ll never have money left over to be put away. The best way to make this happen is to take ten cents off every dollar BEFORE YOU DO ANYTHING ELSE. Hence the phrase ‘pay yourself first.’
Here’s how to make it happen:
1. Have the money taken directly off the top of your paycheck. Or,
2. As soon as you deposit your paycheck, put aside what’s yours in a separate account at the credit union.
3. If you’re not comfortable and don’t believe you can really live on 90 percent of your current income, do it as a trial for six months, or begin with a 5 percent or 3 percent and challenge yourself to increase it each month. During that time (and as long as you are motivated) you will find a way to make it happen.
If you truly can’t save 10 percent, perhaps because you’re aggressively paying off high-interest credit card or other debt, start with a lower percentage, perhaps 5 percent or even as little as 3 percent with the goal of eventually working up to 10 cents for every dollar earned.
Make the commitment to try it and stick with it, putting the money in a share account and/or 401(k) plan, starting with your upcoming paycheck.
Getting into debt is easy. Getting out of it is not, but it can be done.
For most of us in the 21st century, debt is a way of life. In fact, it’s becoming increasingly easy to rack up debts in more than one form. Most people now have an overdraft feature, at least one credit card, and a number of loans. Here are four things to remember on the journey towards a debt-free life:
Many larger companies now have divisions that specialize in setting up longer term arrangements to pay bills. Almost all companies are prepared to allow you to make smaller payments over a longer period of time.
Your creditors would rather settle out of court to avoid an expensive, time-consuming process. The quicker you speak to them, the sooner you can begin working together to get rid of your debts and begin saving money.
Don’t undo your hard work. Once you’ve paid off or consolidated debt, congratulate yourself.and make sure you don’t fall back into old habits. Get used to using cash for all purchases and shred the credit cards. People lived for centuries without them, so drop the idea that you need one “for emergencies.” Put away money in a savings account instead.
Have you ever wondered about the differences between credit unions and average run-of-the-mill banks?
First, let’s start with their similarities. For example, credit unions and banks both accept deposits and withdrawals, while providing loans and a variety of checking and savings accounts. But credit unions have one very significant and noteworthy difference. Unlike banks, credit unions are not-for-profit, cooperative institutions. Unlike banks, which are owned by groups of stockholders and operated by a paid board of directors for the benefit of the stockholders, credit unions are owned by their members and operated by a volunteer board of directors for the benefit of the members.
As cooperative financial institutions, credit unions are owned and operated by the very people who use the services. Each credit union’s charter defines its “field of membership.” This designates who can join. Because of that membership requirement, all members of a particular credit union are united by a common bond. As such, they share something in common: where they live or work, or their association with a recognized group or organization. Once someone qualifies for membership, often family members may join also.
Since credit unions are not-for-profit associations, profits are returned to the members in the form of lower loan rates, higher savings rates, and many free or discounted services.
What do you have to do to join a credit union? While the actual requirements vary from credit union to credit union, some sort of action is required to designate you as a member. Often, it’s as simple as making a small deposit that acts as your “share” of ownership in their institution. Think of it as your share of “stock” in the business (after all, you are the owner). And, because of the democratic characteristics of a credit union, all members have an equal voice in the way the organization functions.
Credit unions represent a different type of financial institution, as they believe fair and equitable financial service is vital to the well-being and stability of the average, ordinary United States citizen. Research shows that the United States has roughly 9,000 functioning credit unions. In 2004, federally insured state and federal credit unions had combined assets of $647 billion, which does not include approximately 500 non-federally insured state credit unions. From those 9,000 institutions, greater than 79 million members believe that their individual credit union sincerely wants to provide them with the financial services that will allow them to improve their economic well-being. The 79 million members are also satisfied with the benefits they realized as credit union members. Some of the most popular services available through credit unions are savings accounts, checking accounts, vehicle loans, and personal loans. Finally, research reflects that credit unions characteristically provide the finest financial assistance at reduced rates and with fewer finance fees on loans while offering their members higher rates on savings accounts.
So if you’re a WVU Employees Federal Credit Union Member, and your friends and family are eligible for membership, let them in on one of your best secrets. A credit union is the best place to, well, bank. Because credit unions consistently endeavor to provide the very best and most economical financial services possible to their most valuable, and indeed priceless, asset – their credit union members.
Short of winning the lottery or landing a Wall Street-sized bonus, can you end up with more money every month (to save or to spend) without giving up the small luxuries that make life so much more enjoyable?
Sure you can. It’ll take some time and effort, but there’s money to be found if you look for it.
1. Shop around for services. Home insurance, auto insurance, gym membership, Internet, cable, cell phone . . . anything you use on a regular basis, pay for monthly or where there are options. Chances are, you can shop around and find a better deal.
2. Look at what you’re using — and what you’re not using. If you have a monthly gym membership but only go twice a month, would you be better off paying an entrance fee, which some gyms allow? Find out what options exist. The same goes for cable, unlimited talk cell phones, Internet access, and anything you can be paying for but not using much.
3. When it really doesn’t matter, go generic. Staples, such as sugar, flour, rice, and even poultry may be just as good when you buy the store brand. Find out by taste-testing. Once you’ve decided which brands to bypass, keep a little envelope in your wallet where you can stash the amount you saved during each shopping trip.
4. Shop savvy. If you enjoy shopping, you can get the same thrill shopping a flea market or yard sale as you would the mall. Enjoy online shopping? Try Craig’s List! You’ll save money and have more fun.
5. Trade lower value for higher value. If you’re paying more for a home, car, clothes, anything that’s not making you happy, consider trading down so you have more money for what you really want, whatever that may be.
6. Open a Christmas/vacation club with WVU Employees Federal Credit Union. You won’t feel the difference every month, but when you get a chunk of change deposited into your account, you’ll have it for something that’s important to you.
Exchanging time for money is a basic economic activity. It underscores every transaction. You go to work and exchange your time and labor for a salary. You’re tired on the way home, so instead of cooking, you exchange money for the time and labor of a fast-food worker. You want to go out to dinner with your partner, so you give money to a babysitter in exchange for leisure time.
We make these exchanges all the time, usually without thinking too carefully about them. But, for most people, particularly young people, the biggest reserve of capital you have is your available time. That’s why it’s important to budget it accordingly. If you’re considering a freelancing project, negotiating a salary or hiring an assistant, these calculations are fairly obvious. However, there may be other circumstances where a slightly more nuanced approach is justified.
How do you decide how much your time is worth? Well, there are a few ways. If you’re employed, you can use your hourly wage as a baseline. If you’re relatively satisfied with both your work and your salary, that’s a pretty good estimation of what your time is worth. You could also use a maintenance calculation. Figure out how much you need to earn to break even each day, counting all your bills and saving for the future. Then, divide that by 8 or 10 for the number of hours you think you should be working. That’s what an hour of your labor is worth, at a minimum.
Once you have that figure, it’s much easier to decide whether a cost-saving measure is worth your time. Here are a couple of tough call cases so you can see how much your time is worth. Would you…
1.) Clip coupons?
Couponing is one of the traditional tenets of frugal living. Veteran shoppers pore over weekly circulars looking for discounts on everyday items. They create extensive databases listing weekly sales and specials. They find, clip and organize dozens of tiny slips of paper.
These activities reflect a considerable time investment. Between research, planning, organization and storage, couponing could easily take 10 hours a week. The result for that savings? Very successful couponers might save $90 a week.
That works out to $9 per hour. Would you take a job earning $9 per hour? Given the flexibility of hours, the ability to work from home and the relative ease of the task, perhaps you might. It’s a mistake, though, to think of that $90 as “free money.” It’s actually the result of significant labor.
2.) Shop at a second-hand store?
It takes quite a bit of extra time to go thrift store shopping for things you need. These stores can be poorly organized, so it may take time to find anything. You’re going to walk away empty-handed quite often. If you have to make one shopping trip a week, it might take an hour of your time.
If you can find something you need there, though, the savings can be considerable. Let’s imagine some numbers. Suppose you need a new dresser. A new one from a furniture store might cost $200, but you can easily find one at a thrift store for $50. That’s “earnings” of $150.
If you have a successful outing like that once a month, you’re spending 4 hours to earn $150. That’s a little more than $37 an hour. Spending an hour a week at the thrift store might not be such a bad idea!
3.) Manage your own retirement fund?
Keeping up with investing can be a hassle. In order to make the most of your money, you need to stay abreast of financial news and developments. Unlike most tasks, this one also requires a considerable up-front cost in terms of time. There’s a vocabulary to learn and quite a bit of research to be done before wading in. It might take you 4 hours a week of reading and studying just to master the fundamentals for a month. Add another 2 hours a week after that for checking news and staying current on the markets. Your first year, you might spend 160 hours developing your skills as an investor.
The cost savings, on the other hand, could be significant. The median retirement fund is about $101,630. A fee-based advisor would charge 2% annually to manage those funds, which in the first year would be $2,020. In the first year of investing, you’d be “making” $12.70 for managing your own retirement funds. After the initial investment, your “salary” – assuming fees stayed the same – would be just over $19.
There’s obviously much more to the decision to begin an activity than the money per hour. There’s also your personal capacity, the time it adds (or subtracts) to family or leisure time, and the extent to which you enjoy the activity. It’s worthwhile to remember that you’re not always better off doing it yourself and that your time has value. Spend it wisely; it’s the most important asset you have.
We all want to show our dads that we care on Father’s Day. Many people panic and run straight for the ties. But unless your father is a necktie aficionado and you can land him the rarest of rare finds in men’s fashion, you may want to consider something else that shows how well you know and appreciate your dad. Here are 20 ways you can honor your father this Father’s Day.
1.Get fishing licenses for both of you and go fishing!
2.College mascot-branded duct tape for the sports fan/handyman.
3.Take in a minor league baseball game.
4.Detail his car with a vinyl cleaner (Armor All) and a vacuum.
5.Take a trip to the driving range together.
6.Dust and sort his toolbox – don’t forget to label the wrenches and sockets!
7.Tackle the mowing, raking or other yard work.
8.Personalized coffee mug – write on a blank mug with sharpies, bake at 450 for 30 minutes!
9.Build your own BBQ rub or sauce using dad’s favorite flavors.
10.Give the grill a thorough cleaning.
11.Clean and organize the shed or garage – it’s probably been on his to-do list all year!
12.Grab a few of his favorite classic movies on DVD or Blu-Ray (but make sure he has a Blu-Ray player first!).
13.Pick up a few cuts of meat and ask him to teach you how to grill them.
14.Offer him a “tech tutorial” on how to better use a device he already owns.
15.Volunteer for Habitat for Humanity together – working with him to improve your community!
16.Find a local historical site and arrange a walking tour.
17.Build something with him – like a bird house or a spice rack.
18.Pack a picnic lunch and head to a local park!
19.Just spend time with him doing the things he likes to do.
20.Put a new spin on the old necktie cliché – buy a old necktie at a thrift store, do a web search for “DIY Necktie Eyeglass case” and follow the instructions to make this unique gift. Buy a pair of sunglasses to put inside before you give it to him.
Want a better way to monitor your child’s spending? Maybe you want to send money to a relative far away. Or maybe you have trouble balancing a checkbook and need a low-cost way to keep your money safe and usable. For these times and others, WVU Employees' Federal Credit Union has a solution. With a reloadable Visa card, your money is secure but accessible around the world.
Here’s how it works: Once the card is open, you can deposit money into the card just like you can into any other share account. You and the authorized users can then access that money at any ATM or use the card like a debit card anywhere Visa is accepted. You can add more money to the card at any time.
This isn’t like a gift card. It’s personalized and secured with a PIN, just like a debit card. It’s usable only by the bearer and the same identity protection Visa uses on all its cards is used for this one. You can also get replacement cards if yours is lost or stolen. Any transaction over the balance of funds on the card will be automatically declined, so there’s not much risk of overdraft or negative balances.
Reloadable Visa cards are a flexible, efficient way to manage your money. Let’s look at 3 ways you can use a reloadable Visa in your life!
1.) Manage your children’s money
A reloadable Visa works great for kids. You can put their allowance on the card electronically, and they have the latitude to spend it any way they like. It’s safer than cash since it can be replaced if lost and they can use it online without having to use your credit card.
Reloadable Visa cards are also a great way to teach your children about using financial instruments responsibly. They’ll learn to associate swiping a card with real money. This lesson will go a long way toward keeping them out of credit card trouble later in life.
Reloadable Visa cards aren’t just for young children. They’re also a great way to help your college student manage money. They’ll get a card with a pre-set spending limit to keep them out of financial trouble. You’ll get peace of mind of knowing you can send them money anytime, anywhere.
2.) Keep safe while traveling abroad
Carrying enough money for a vacation can be a real hassle. Especially if you’re traveling to a foreign country, the stress and strain of carrying a large quantity of cash can ruin the relaxation of an exotic getaway. Traveler’s checks have been a traditional option, but may be a hassle to track. If you’re looking for a simpler option, the pre-paid Visa card can help you manage your money.
You can use your Visa at any branded ATM to get money in local currency. You can also use your Visa just like you would a debit card at stores and restaurants. Best of all, if your card is lost or stolen, you have zero liability.
It may be worth your time to keep a secondary card in your luggage, just in case. It can take as much as 7 days for a new card to be shipped to you, and secondary cards can be obtained easily at signup. Having a secondary card gives you added protection and peace of mind, as long as you keep that second card in a safe place.
3.) Answers for poor or no credit life stages
Trying to navigate life without a credit card is like trying to cross the ocean in a rowboat. It’s dangerous, it takes longer, and it’s quite a bit more expensive. If you want to rent a car or a hotel room, pay bills online or use direct deposit at work, a prepaid Visa card may be the answer you’ve been seeking.
Your reloadable Visa doesn’t include a credit check, just an identity verification. It’s available for people who have a short credit history or recent trouble with credit. The number works just like a credit card number, but there’s no worry about carrying a balance or being charged interest, fees, or penalties. You can use your reloadable Visa card for direct deposit. This can save you money in check-cashing fees and get you your paycheck funds faster.
A reloadable Visa card won’t help you build credit, since it doesn’t include any lending or credit reporting. None of the activities will be reported to credit bureaus. However, it works like a credit card in every other capacity and it’s well within reach, even if your credit history isn’t perfect.
Most people have a checklist they go through before they leave the house. Is the stove turned off? Are the doors locked? Do I have my wallet, my keys and my cellphone? The only thing that has changed about that process in the last few years has been the addition of that last item on the list. Today, 91% of Americans have cellphones and 61% of them have smartphones. This is a remarkable change from even two years ago. More than half of the people you see every day are carrying a computer that dwarfs the most powerful computing technology that was available a decade ago. It’s also connected to all of the world’s information, literally at our fingertips. What do we use it for? Drawing moustaches on our selfies and tossing wingless birds at shoddily made pig housing. If you’d like to use your smartphone for more sophisticated purposes, plus add a ton of convenience and peace of mind to your life, consider mobile banking. With a couple of taps, you can access a whole suite of financial information. Let’s look at four scenarios where mobile banking can save you some time … and even some money. 1.) Say goodbye to security woes Despite all of the data breaches that have been in the public eye over the past few years, no one has figured out how to compromise mobile devices as a platform. Security leaks have affected PCs, Macs and point of sale terminals, but no widespread security vulnerability has compromised mobile banking. Despite the fear, mobile banking is actually a fundamentally secure platform. The first reason for this is the plurality of platforms. You and your neighbor may not be able to share cellphone chargers, much less apps or other experiences. This diversity makes it difficult for a single vulnerability to affect many users. Since there’s less possibility of large scale attacks, hackers have very little incentive to dedicate time toward trying to compromise mobile platforms. The second reason for this is the tight control placed on mobile devices. Because these devices have to send regular usage information back to your mobile provider, they tend to be far less prone to modification. There’s just not as much you can do to an iPhone or an Android as you can to a PC. While some users might override those protections, such modifications are not widespread enough to justify attempted infiltration. Mobile banking is secure and safe. Data transmitted from your cellphone to your provider is heavily encrypted. If you lose your phone, it can be remotely deactivated and passwords usually aren’t stored on the device. 2.) You can check your balance any time Rather than waiting for your statement every month or booting up that slow PC for checking your account balances online, you can view transactions while waiting for a bus or in line at a restaurant. You can stay vigilant against illegal account access any time you’ve got your phone and a spare few seconds. The convenience of mobile banking can also keep you from making costly mistakes. If you know funds may be running tight, check your account balance while in the checkout line to make sure you can cover the cost of your purchases. You can see if your monthly rent check has been withdrawn from your account to avoid the costly fees associated with overdrafting. It’s easier than ever to keep track of your finances. You can also help to prevent errors with mobile banking. Accidental overpayment, duplicate payments and other errors are a regrettable reality of the modern high-speed economy. By regularly checking your account statement, you can catch these pesky problems before they turn into big issues. 3.) It’s where you’ll find the next big thing Mobile payments and mobile check depositing are becoming more widely available and are already being used in many places. As technology gets better, these functions will become cheaper, faster and even more widespread. Getting involved in mobile banking on the ground floor will help you stay up to speed with this rapidly evolving world. Imagine getting turn-by-turn walking directions to your nearest ATM. You could get alerts when new houses are listed for sale along your daily commute. You might pay for your breakfast by signing a receipt on your phone. These and other changes are coming and they are only the beginning. If mobile banking doesn’t do something you need, wait six months. Someone will probably find an app for that. 4.) 24-hour-a-day instant access Do you ever wake up in the middle of the night in a panic because you can’t remember if you paid your electric bill? Ever have a tiny freakout on the bus because you suspect someone may have accessed your account? Are money worries preventing you from enjoying your vacation? If you have these concerns and are nowhere near your computer, you could just suffer through them. As an alternative, though, you could use a mobile app to check your balance and transaction history. See if your monthly bills have cleared. Make sure your balance is safe. You can do all of this any time you’ve got your phone, day or night. Mobile banking won’t replace traditional, face-to-face interaction. There will always be a place in the credit union service standards for the human interaction. What mobile banking apps offer is a wonderful supplement to those high-quality services. Space-age convenience, top-level security, and blissful peace of mind are all available from your pocket, anywhere in the world.
Q: It's summer, and the kids are off school. We've finally got some real vacation time. I don't want the next few months to disintegrate into video games and trash TV. How can I use the time off to help my family financially? Summer vacation is a quintessentially American innovation. Nowhere else in the world do kids have months on end free from school or any other responsibility. On one hand, it's great to spend more time with them. On the other, how do you keep them entertained without breaking the bank? Fortunately, there are a few ways to have the kind of summer break that builds memories without building debt. You can use these months to teach your children valuable lessons about financial responsibility, spend quality time together as a family, and save (or make!) a little money along the way. Try activities like these 5 for a fun, financially responsible summer! 1) Have a yard sale! If there's one lesson to impart to children about saving, it's that less is more. It can be hard to impart that lesson with toys from birthdays and Christmases past crowding the closet, collecting dust. Encourage them to find one or two things per day that they could contribute to a yard sale, then have it at the end of the month. Involve your kids in as many aspects of the plan as possible. Ask them to help you advertise on Craigslist and other social media. Have them tell their friends or their friends' parents about it. Show them how to do research to price items, and have them work the cash box. All of these are valuable skills that can help them with summer jobs in the future! When the sale is done, have a conversation about what you can do with the money. It could go toward a family vacation, or into a savings account or college fund. Let them contribute ideas for fun things the family can do with the yard sale proceeds. This can be a chance to teach kids about budgeting while encouraging them not to hold on to things that don't bring them joy. 2) Start a (very) small business! One way children learn the value of hard work is to earn a wage for doing a job. Paying your kids an allowance to do a job is one way to do that, but certainly not the only one. Getting your kids to help with a very small business is a great way to let them see the rewards of hard work while making a little money on the side. Business services will vary, but demand for many services is higher in the summer. Businesses need window washers. Elderly neighbors may need help with weeding, mowing, planting, or other landscaping projects. Many people clean house in the summer and list old furniture for sale, which can be rehabilitated and resold for a profit. Any of these small projects would make a fun way to spend some time together this summer. The business doesn't need to make a lot of money to be valuable. In addition to quality time, your children can gain an appreciation for the hard work that goes into making a successful business. This could be a great addition to a college application essay or a resume for a first job. 3) Fix up the house! There are tons of great, simple projects that you can tackle as a family to improve the efficiency of your home. Some of the easiest, like installing a new front door, can be done in an afternoon and improve the aesthetic appeal and insulation of your house. These are great projects to tackle as a family. Any repair or upgrade that you've been putting off can be a great summer project. Kids can earn a wage for their labor, or they can work in exchange for some privilege, like going to a sleepover at a friend's house. Doing this kind of work can help them understand how much hard work goes into home ownership. These little improvements can add up to significant savings. You'll start feeling the benefits in lower electricity bills in the summer, and continue to feel them all year round. When you sell your house, these improvements will reflect in the higher value of your home. 4) Plant a garden! Believe it or not, planting a garden is one of the most cost-effective things families can do together. For every dollar you spend in green bean seeds, you'll get up to $75 back in fresh produce! You can pickle, dry, preserve or can the extras and sell them to friends and neighbors for an even better return! There are many ways to squeeze additional savings out of a garden. Instead of costly fertilizers, you can compost kitchen waste. You can find reclaimed wood, especially from pallets and shipping containers, to make raised beds. Save seeds from produce, and water with rain collectors. Planting a garden doesn't just save money. It can also be a way to encourage your family to eat more vegetables. Tending and caring for a patch of vegetables can be a great way to build responsibility and have fun outdoors this summer! 5) Plan a stay-cation! The average cost of a family vacation is creeping up. For a family of 4, a week of vacation, excluding travel, costs $1,700! Even if you're taking a road trip in a reasonably efficient family vehicle, that could easily amount to $2,000 or more. The best parts of a vacation are the shared experiences, and there's no need to go too far to get those. Find a local festival or cultural event, and plan a vacation in your home town! Check out local historical sites and museums, eat out at nice restaurants, and come home to your own beds at night. What's more, a stay-cation can show your kids the rich culture of their surroundings. Use your stay-cation as a time to visit sites of personal interest, like where you and your partner met, or where their great grandparents went to school. They'll appreciate the deeper knowledge of where they come from, and you can appreciate the togetherness... and the savings!
Navigating the world of investing is incredibly difficult. It can be dangerous and confusing. Bad information and deceptive practices are everywhere. The only way to get through it is with the advice of a trusted advisor. A good financial advisor will earn her fees a million times over, but a bad one can charge you for the privilege of squandering your money. How can you tell the difference? These five factors can help you sort out the good from the bad in terms of financial advice. 1.) Firm size It’s always tempting to rely on advertising to identify providers of potential services. This approach tends to land you the service providers who have the most to spend, who usually turn out to be the biggest. Sometimes, that’s OK. When you’re choosing a financial advisor, though, that’s not the best approach. Big-time financial advisors are trying to get as many clients as possible, usually because they have a one-size-fits-all approach to investing. They may offer a limited range of strategies to meet most retirement needs. This approach can create two problems. First, there are unique aspects to everyone’s financial situation. If you have a separate pension, you might be able to pursue a more aggressive investment strategy. If you have a special needs child who will require significant care, you might need to be more conservative. These are not aspects of your life a big financial advisor firm is likely to consider carefully. Second, your financial situation may change dramatically. A sudden windfall or an unexpected pregnancy can necessitate a change in strategy. In those instances, you don’t want to be fighting for attention with a hundred other clients. You want a financial advisor who can spend time with you, assessing your individual needs and making recommendations tailored to your life. You can only find that at a small-to-mid sized institution. 2.) Find the right certifications There’s a veritable alphabet soup of qualified financial experts. Between CPAs, ChFCs and CFPs, there’s a world of difference in licensing and experience required. Which one you should look for depends on what you need. If you’re looking for someone to advise every aspect of your financial life, you should look for a Certified Financial Planner (CFP). This certification requires years of training and a board-standardized exam on the ins and outs of the financial world. The slightly easier to obtain Chartered Financial Consultant (ChFC) license uses the same curriculum, but does not require an exam. If you’re just looking for investment help, you should look for a Registered Investment Advisor (RIA). Because these professionals provide financial advice and charge fees for it, they are held to the highest ethical standards. These are the experts of choice for most people who need retirement assistance. If it’s tax help you need, a Certified Public Accountant (CPA) is the person to consult. They can help you minimize your tax exposure. Unless you have a very high income or a small business, hiring a CPA may be overkill. 3.) Watch their payment method Years of thrifty living may have turned you off the word “fee.” In most contexts, it’s a dirty word, a sign that you’re going to be charged money for something. In the context of a financial planner, though, “fee” is an important word. There are three kinds of financial planner payment structures. There are no-fee advisors who get paid a commission for each transaction they complete on your behalf. There are fee-based advisors who charge a fee but also get paid through other means. Then there are fee-only advisors who are exclusively paid from the fees they charge to clients. While a fee-only advisor sounds expensive, it may be your best option. Other fee structures many involve a bonus paid to the advisor for selling particular kinds of products. They may have a financial incentive to recommend services that are not in your best interest. This can put your needs behind those of the advisor, which is never a position you want with someone managing your money. 4.) See how they talk to you In an initial meeting, a good financial advisor will do much more asking than telling. They’ll want to know everything about your situation. Do you have debt? Have you started saving? When do you want to retire? These questions help to shape a retirement strategy around your needs. If they instead start talking about products first, watch out. That could be a sign of an advisor who is more interested in selling high-commission products than in serving your financial needs. If they’re trying to sell you something besides their own advice, it’s probably a bum deal. 5.) See what process they use Some financial advisors will want to ask you questions and use your answers to formulate a plan. They’ll expect you to defer to their expertise about the quality of this plan. You can refuse to take their advice, but they don’t really want you to intervene too heavily in these decisions. Other advisors will want to present you with a range of options and involve you in a collaborative process about your financial future. You’ll retain ultimate authority over decision-making. This kind of advisor can be preferable if you’re interested in actively managing some or all of your investments. Which style of advisor you prefer is largely a matter of personal preference. To get an idea of what style a potential advisor is using, don’t be afraid to ask for references. Talk to current customers about what they like and don’t like about the advice they’re getting. This is a great way to get a feel for the kind of advice you’re going to get.