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Planning an Affordable Family Vacation - March 31, 2014 by WWFCU

Hispanic family in a car. Family tour in a car.Travel expenses can take a big bite out of your budget, but the Michigan Association of CPAs advises that there are many ways to make your vacation dollar go further.

Search for Deals
Don’t miss out on the many online opportunities to find great bargains. You can use online travel sites to search for the lowest airfare, hotel rates, and car rental, as well as entertainment deals. It’s a good idea to check specific airline sites, too, because they may be advertising specials that aren’t included on the bargain sites.

Pick the Package
Before booking any segment of your trip, check out packages available from airlines or hotel chains. It’s often possible to find low-priced packages that include both hotel and airfare, and admission to local attractions, as well. However, remember that packages may not always be the cheapest deals. Examine the details and make sure that what you’re getting is worth what you’re paying.

Be Flexible
Uncertain exactly where you’d like to go? Then plan your trip around the best deals available. Sites that specialize in low-cost travel usually advertise specials to certain locations, as do many airlines. If the location sounds like somewhere you’d enjoy exploring, you could save a great deal on your trip.

Choose a Destination Location
Want to save money during your vacation on gasoline and admission costs for various attractions? Pick a hotel that has a pool, playground, nearby hiking, or other on-property activities. In addition, many hotels offer suites with their own kitchens. While these may cost more than regular rooms, the savings on restaurants may more than offset the higher price.

Explore the Great Outdoors
Camping is not only a fun family activity, but it’s also a cheaper way to travel. There are campgrounds and cabins at national and state parks that offer an inexpensive way to explore these locations. Outdoor vacations are a great departure from the usual routine and make it possible to get away from the television and computers. And in many cases, they are much less rustic than you might imagine. There may be cabins available at some sites, as well as water and electricity hookups.

In addition, getting in touch with nature may not be your only option when you camp. Disney World, for example, has campgrounds that can lower the price of what might otherwise be a fairly pricey vacation. You may find campgrounds near other theme parks or attractions, so don’t limit your search to hotels when looking for accommodations.

Head South
If you’ve dreamed of taking a vacation in the Caribbean or Mexico, summer is a great time to do it. That’s because summer is considered the off season, and many resorts offer promotions that feature great rates. If you’ve assumed you couldn’t afford a sunny resort locale, double check to see if prices are lower than you thought at this time of year.

Consult Your CPA
Your local CPA has many great ideas for cutting costs in various aspects of your life. Turn to him or her for advice on any of your financial needs.

This article was submitted by the Michigan Association of CPAs (www.michcpa.org).

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Turn Retirement Dreams into Reality - March 24, 2014 by WWFCU

Close up view of golf ball on tee on golf courseHave dreams about retiring early? We have some tips on how to make that dream a reality.

According to the Michigan Association of CPAs, retiring early takes meticulous planning and more than a tidy sum of money, but for the truly committed, early retirement is possible. Here is what you need to do if you desire an early escape from the work world.

Envision Your Retirement Years—One of the biggest challenges that retirees face is determining how much they need to save by the time they hope to retire. The further away you are from retirement, the more difficult the task. CPAs and other experts say you need somewhere between 70% and 80% of your pre-retirement income to maintain your standard of living. This rule of thumb is helpful for starters, but it doesn’t consider that the amount of money you’ll need in future years depends, to a great extent, on the retirement lifestyle you plan to lead.

Make The Most of Retirement Savings Opportunities — Perhaps the best way to prepare for an early retirement is by taking full advantage of 401(k) plans or other employer-sponsored, tax-deferred retirement plans. These plans make it possible for you to invest pretax money for retirement directly from your paycheck and, as an added bonus, many companies will match part, or even all, of your contributions.

If you’re self-employed, you can create your own retirement plan by opening a Keogh account. Even if you work for another company and are covered by a retirement plan, you can use a Keogh plan to shelter self-employment income you may earn from consulting or freelance work.

Traditional and Roth IRAs offer additional opportunities to build your retirement nest egg. Eligible workers can contribute to an IRA even if covered by a 401(k) at work. In certain cases, your IRA contribution may be tax deductible and, in all cases, there is no tax on earnings inside an IRA until the money is withdrawn.

Reduce Expenses to Build a Surplus — Retiring early is an aggressive act that requires not only intense saving, but a serious willingness to live below your means during the wealth accumulation phase of your life. Are you willing to replace expensive restaurant meals with dinners at home? Are you ready to lower your housing costs by trading down to a smaller home? The more fat you can trim from your budget, the more you can invest toward achieving early retirement.

Become an Astute Investor — It’s important to be vigilant about the allocation of the assets in your investment account. The biggest mistake you can make with retirement savings is to play it too safe. The longer you have before you retire, the more you should invest in stocks which offer growth potential. Stocks may be considered risky because they are more volatile in the short term but, over time, stocks typically outperform other investments. Your challenge is to achieve a reasonable balance between risk and reward.

Consider Your Future Insurance Needs — Right now, you probably have health, disability, and life insurance coverage under your employer’s group policy. In fact, your employer probably pays some of the cost of this coverage. When you retire, at the very least, you will need to replace your health insurance with a new policy that will carry you to age 65 when Medicare kicks in.

Enlist Help — Retiring early necessitates far more than a desire to call it quits before reaching your normal retirement age. It requires a knowledgeable look at the lifestyle you envision and the resources you have to fund your future. A CPA can be a valuable resource for would-be early retirees. He or she can help you work out a spending and investment plan that considers your retirement goals, current resources and investments, and future sources of income, as well as taxes, inflation, interest rates, and other components that factor into your plan. The sooner you make an appointment with your CPA, the sooner you’ll be on your way to achieving early retirement.

This article was submitted by the Michigan Association of CPAs.

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The ABCs of Auto Insurance - December 30, 2013 by WWFCU

Auto_insuranceYou know you have to have auto insurance, but do you know exactly what it covers?

Auto insurance protects you against financial loss if you have an accident and is a contract between you and your insurance company. You agree to pay the premium and the insurance company agrees to pay your losses as defined in your policy.

Auto insurance provides property, liability and medical coverage:

  • Property coverage pays for damage to or theft of your car.
  • Liability coverage pays for your legal responsibility to others for bodily injury or property damage.
  • Medical coverage pays for the cost of treating injuries, rehabilitation, and sometimes lost wages and funeral expenses.

An auto insurance policy is made up of six different kinds of coverage. Most states require you to buy some, but not all, of them. If you’re financing a car, your lender may also have its own requirements.

Most auto policies are for six months to a year. Your insurance company should notify you by mail when it’s time to renew the policy and to pay your premium.

This article was submitted by the Insurance Information Institute, an organization that provides facts and assistance free of charge to the media, individuals and organizations. Submission of this article does not imply an endorsement or recommendation of the Financial Resource Center site.

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6 Tips for Deducting Donations - December 17, 2013 by WWFCU

DonationIf you’ve donated to a charity this year, the IRS wants you to know about few things about deducting it:

Tax-exempt status – Contributions must be made to qualified charitable organizations to be deductible. Ask the charity about its tax-exempt status, or look for it on IRS.gov in the Exempt Organizations Select Check, an online search tool that allows users to select an exempt organization and check certain information about its federal tax status as well as information about tax forms an organization may file that are available for public review. This search tool can also be used to find which charities have had their exempt status automatically revoked.

Itemizing – Charitable contributions are deductible only if you itemize deductions using Form 1040, Schedule A.

Fair market value – Cash contributions and the fair market value of most property you donate to a qualified organization are usually deductible. Special rules apply to several types of donated property, including cars, boats, clothing and household items. If you receive something in return for your donation, such as merchandise, goods, services, admission to a charity banquet or sporting event only the amount exceeding the fair market value of the benefit received can be deducted.

Records to keep – You should keep good records of any donation you make, regardless of the amount. All cash contributions must be documented to be deductible – even donations of small amounts. A cancelled check, bank or credit card statement, payroll deduction record or a written statement from the charity that includes the charity’s name, contribution date and amount usually fulfill this record-keeping requirement.

Large donations – All contributions valued at $250 and above require additional documentation to be deductible. For these, you should receive a written statement from the charity acknowledging your donation. The statement should specify the amount of cash donated and/or provide a description and fair market value of the property donated. It should also say whether the charity provided any goods or services in exchange for your donation. If you donate non-cash items valued at $500 or more, you must also complete a Form 8283, Noncash Charitable Contributions, and attach the form to your return. If you claim a contribution of non-cash property worth more than $5,000, you typically must obtain a property appraisal and attach it to your return along with Form 8283.

Timing – If you pledge to donate to a qualified charity, keep in mind that for most taxpayers contributions are only deductible in the tax year they are actually made. For example, if you pledged $500 in September but paid the charity just $200 by Dec. 31 of that same year, only $200 of the pledged amount may qualify as tax-deductible for that tax year. End-of-year donations by check or credit card usually qualify as tax-deductible for that tax year, even though you may not pay the credit card bill or have your bank account debited until after Dec. 31.

Bottom line: your support of a qualified charitable organization may provide you with a money-saving tax deduction, but conditions do apply. For more information, see IRS Publication 526, Charitable Contributions, and for information on determining value, refer to Publication 561, Determining the Value of Donated Property. These publications are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).

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Taxes–What to Stash and What to Trash - December 10, 2013 by WWFCU

Tax_DocsWhat records and documents should you keep in case the IRS ever decides to audit you—and for how long should you keep them?

Here’s some advice to consider:

  • The standard statute of limitations is three years, but the IRS can audit up to six years after a filing if it suspects under-reporting of income by more than 25 percent.
  • If auditors find fraud, or if you fail to file a return at all, there is no statute of limitations. For this reason, many tax advisers recommend hanging on to your tax returns forever. Then, if the IRS claims it has no record of you filing for a certain year, you will have a copy to defend yourself.
  • It also makes sense to keep backup documents to your tax returns, such as W-2 forms, receipts for charitable donations, and other deductible expenses for at least six years.
  • As for investment statements, you only need to keep monthly or quarterly documents until you receive a year-end summary. These summaries, along with stock certificates and any documents related to investment purchases or sales, should be kept for as long as you own the investment plus an additional seven years after you file taxes reflecting the sale.
  • This same schedule applies to mortgages. Keep the monthly statements until the year-end statement arrives. Save these annual statements for the term of the mortgage, plus seven years.
  • Unless you are being audited, monthly bank and credit card statements can be discarded after a year.
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Know Your Obligations when Cosigning a Loan - December 3, 2013 by WWFCU

Loan_Co-SignOften, parents cosign for their sons or daughters who have adequate income but a lack of credit or employment history. By cosigning, parents help their offspring get the loan and establish credit in their own names.

But many borrowers, be they the cosigner or the primary borrower (also known as the maker), don’t recognize the magnitude of the responsibilities borne by cosigning a loan.

What responsibilities do you have when you cosign a loan?

Cosigners lend their names and good credit histories to the maker. Should the maker die, lose a job, or otherwise fail to make payments, all responsibility for meeting the terms of the loan transfers to the cosigner.

An often-overlooked aspect of cosigning a loan is the fact that the loan appears on both the maker’s and cosigner’s credit reports.

If the maker doesn’t pay, the lender will notify you to make the payments. In most cases, however, your credit report already will contain the delinquency by the time you receive the notification.

How might a cosigned loan affect your ability to get new credit?
Even if it is not delinquent, a cosigned loan is part of your credit history. Since financial institutions consider a cosigned loan your responsibility, they’ll include it when calculating your debt-to-income ratio.

This ratio helps lenders judge whether you have too many bills to pay relative to your income. The cut-off point varies widely among financial institutions and the type of loan. If it’s too high, though, the result is the same: your loan application will be denied—even when the primary borrower never misses a payment on the cosigned loan.

Should you cosign a loan?

Before making a decision whether to cosign a loan, consider the following advice offered by Experian:

  • As a cosigner, you should know the purpose of the loan, the type of loan, the terms, and why your friend or relative needs a cosigner.
  • Understand your legal and financial obligations. Federal law requires financial institutions to tell you in writing that you are responsible for paying the debt if the primary borrower can’t or won’t make loan payments.
  • Read and understand the credit contract. Be aware that a lender may be able to collect from you even when there is collateral. In the case of a car loan, for example, the lender might demand payment from you instead of repossessing the car. And even if the car is repossessed, its value may not be sufficient to pay off the loan.
  • If the primary borrower defaults on the loan, then you as the cosigner may have to pay late fees or collections costs in additions to the loan amount.
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How to Establish Credit - November 26, 2013 by WWFCU

Establish_CreditHow do I establish credit? You need a steady work record and continued residence at the same address. If you do not have a checking account, open one and be careful not to bounce checks.

You may apply for credit at a local department store or credit union. You might also consider a secured card, which requires you to deposit money as security for the charges you make on the card.

Where can I get a copy of my credit report? You can get a copy of your credit report by contacting AnnualCreditReport.com.

Can you fix my credit report or clean it up? No. If negative comments on your credit report are correct, they can remain in your file for up to seven years—except for bankruptcy, which can remain for up to 10 years.

If you believe there are errors in your credit report, you must notify the credit bureau in writing. The bureau will follow up your request with your creditor. If the creditor agrees with you, your report will be changed.

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Spend Less This Holiday Season - November 12, 2013 by WWFCU

Holiday_ShoppingIt’s easy to forget about your budget when shopping for holiday gifts.Here are some tips to stop that from happening:

  • Create a written plan for holiday spending and gift giving a month or two in advance. Include possible gifts, dollar amounts and alternative choices.
  • Establish spending limits for each person on your list and start looking for bargains early.
  • If it has been a challenging year financially, shrink your holiday gift list.
  • Separate shopping trips (when comparing prices, quality, and value) from spending trips (when making a purchase), and resist taking cash, credit cards or a checkbook on the shopping trips.
  • Wait for sales. Increased food and energy costs this year could bite into holiday sales, so sales and clearances could come earlier than usual.
  • Watch the advertising and sale flyers for items you intend to purchase.
  • Spend cash and avoid using credit cards. Charge cards tend to promote indiscriminate spending. Credit card users often say they had no idea how much they spent on the holidays until the credit card bills arrive in January or February of the next year.
  • Make more of your gifts at home. A freshly baked loaf of bread, cookies or desserts are always appreciated. Also art, crafts, needle work or a collage of photographs can make excellent gifts.
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Preparing Your Car for Winter - November 6, 2013 by WWFCU
Winter_CarFrom a mechanical aspect, winter conditions – wet, cold and icy weather – present the greatest challenge to your vehicle’s operating efficiency. Since these conditions cannot be avoided, prepare for winter by performing a complete vehicle checkup in the fall. Check, or have your mechanic check, the following items:1. Electrical System

  1. Battery – Have your alternator or generator, voltage regulator and drive belts checked also.
  2. Ignition System – Damaged ignition wires, a cracked distributor cap or worn spark plugs can make starting difficult or may cause a sudden vehicle breakdown.
  3. Lights – Make sure all your lights and lenses are clean and functioning properly. Grime on headlight lenses reduces their effectiveness by as much as 90%.

2. Brake System – Have your breaks checked regularly and do not delay any necessary maintenance or repairs.

3. Tires – Make certain your tires are properly inflated and in good condition. While it is best to purchase tires in sets of four, if you only purchase two, mount them on the rear wheels.

4. Exhaust System – Have a mechanic check your exhaust system for leaks in order to minimize the chances of carbon monoxide poisoning. If your car is stuck in the snow and you have the engine running, open a window slightly and clear snow away from the exhaust pipe.

5. Heating & Cooling System – Make sure your vehicle’s cooling system contains enough antifreeze to prevent freezing in cold weather. Keep the mixture fresh by changing it regularly and having the entire system checked for leaks.

6. Windshield Wipers, Washer, Glass & Vehicle Exterior – Clean windows offer optimal visibility. An antifreeze washer solvent should be used in the water reservoir bottle.

It is also recommended that you have a winter driving kit in your vehicle. The following items will be invaluable should an emergency develop:

  • Bag of abrasive material (sand, salt or cat litter)
  • Small snow shovel, snow brush and ice scraper
  • Traction mats
  • Flashlight & extra batteries
  • Window-washing solvent; cloth or paper towels
  • Booster cables; warning flares or triangles
  • Gloves or mittens and blanket
  • Cell phone

Compliments of AAA.

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Tips for Shopping for a Vehicle for Your Teen - October 28, 2013 by WWFCU

Shopping teen vehicleAccording to the National Highway Traffic Safety Administration (NHTSA), auto accidents are still the leading cause of death for American teenagers. However, due to safer vehicles graduated license laws, the numbers have decreased 65% from 8,748 teen deaths in 1975 to 3,023 in 2011.

Regardless of statistics and new vehicle safety precautions, automakers still haven’t come up with a vehicle that can drive itself when the weather gets bad, when a tire blows out or when another driver becomes distracted and wanders into your lane. Seasoned drivers rely on their experience and split-second-decision-making abilities to negotiate these perilous moments. Teens don’t have that experience.

Automobile crash experts cite inexperience, low seat belt use, driving with too many passengers in the car, inattention, drugs and alcohol and excessive speeds as the reasons why teens are involved in so many fatal crashes.

Another culprit is the size and type of vehicle they drive. In an emergency situation, because a young driver has little or no driving experience to draw on, he’s forced to rely on the structural integrity of his vehicle to see him through a collision. The kind of car a teen drives could mean the difference between injury and death.

Does that mean you should rush out and buy a brand new car with all the latest safety options?

Not necessarily. However, the Insurance Institute for Highway Safety recommends newer models. They do better in crash tests than older cars and have extra safety features like air bags, anti-lock brakes and passive restraints.

How a vehicle does in a frontal impact depends on its structural integrity and its crumple and crash zones. Crumple zones absorb energy on impact, and since their collapse is controlled, the energy that would otherwise damage a passenger area gets channeled to different parts of the vehicle.

Bigger vehicles have longer crumple zones, providing more protection to the passenger areas. However, they’re not an ideal fit for everyone. Consider a young petite woman. If she can’t comfortably reach the gas pedals or see over the steering wheel, she’s not going to have good control of her car. Consider, too, the rollover issue with sport utility vehicles. Because they have a high center of gravity, they are more prone to rollover than cars. Experts cite speed and inattention — two culprits behind teen crash fatalities — as the causal factors in rollovers.

NHTSA conducts front and side crash testing on vehicles predicted to have a high sales volume, vehicles that include a new safety feature or have been structurally redesigned. The agency also assigns vehicle rollover resistance ratings. They publish their results on their website. Before you begin to research your automobile’s crash test scores, take a moment to look at the website’s “Frequently Asked Questions” page. You’ll glean insight into the different kinds of tests they perform, under which conditions they perform them, and the factors they use to rate performance. Another source for crash test information is the Insurance Institute for Highway Safety.

If you’re in the market for an older model, experts recommend buying a sturdy and reliable — but not overpowered — sedan. Your teen won’t be able to drive at excessive speeds, but if he loses control of the vehicle, he won’t face the increased rollover risk he would if he was in a high profile vehicle. Make sure the car’s tires and brakes are in excellent shape. Examine seatbelts for loose or fraying fabric and make sure they attach and retract properly. Consider having the car thoroughly checked out by a trusted mechanic.

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