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Go Green with Your Bills - July 31, 2013 by WWFCU

Go_GreenGoing green when paying your bills not only helps the environment, it can also greatly simplify your life. According to the Federal Reserve, nearly 50% of the checks written in the U.S. are written by consumers to businesses. American businesses mail about 26 billion bills and statements per year, and consumers mail 9 billion payments per year in paper form. All that paper mailing consumes 755 million pounds of paper, 9 million trees and 512 million gallons of gasoline.

Stuart Williams of CheckFree/Fiserv and a member of the PayItGreen Alliance says that the average American household gets 19 bills and statements per month and makes seven payments with checks each month. If just 20% of U.S. households switched to electronic statements and bill pay, it would save 150 million pounds of paper and avoid producing 3.9 billion pounds of greenhouse gases.

So why aren’t people switching over? Williams says it’s mostly because people are entrenched in their habits. But by breaking away from routine and switching over to electronic statements, the average American household would accomplish the following each year:

  • Save 6.6 pounds of paper
  • Save .08 trees
  • Prevent 63 gallons of wastewater from entering the environment
  • Save the 4.5 gallons of gasoline needed to transport bills, statements, and payments via mail service
  • Prevent 171 pounds of greenhouse gases from being produced, which is equivalent to:
    • Preserving 24 square feet of forest from deforestation
    • Not consuming 8.8 gallons of gasoline
    • Planting two tree seedlings and allowing them to grow for 10 years
    • Not driving 169 miles
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How to Avoid Fraud - July 24, 2013 by WWFCU

Fraud-AlertConsumer fraud seems to be everywhere these days, coming in a variety of forms: fake check scams, credit repair, free trip offers and sweepstakes. Here are some tips to help you avoid being a victim of consumer fraud:

  • Don’t give out personal information. If someone you don’t know asks for your Social Security number, birthdate, credit card number, bank account number, password or other personal data – that’s when you should become suspicious.
  • Don’t be intimidated. Be wary of calls or emails that want you to provide or verify personal information immediately. Tell them you’re not interested and hang up or delete the email without replying.
  • Monitor your accounts. Review bank and credit card statements frequently and carefully. Report any unauthorized transactions to your financial institution immediately.
  • Use a shredder. Tear or shred credit offers you receive in the mail, bank statements, insurance forms and other papers with personal information.
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Building a Rainy-day Fund - June 25, 2013 by WWFCU

Saving MoneyFinancial prudence dictates that we stash away enough cash to cover living expenses for three to six months in case something catastrophic comes our way—a job loss, an unexpected illness or an unpredicted home expense.

Some items that also should be covered in such a fund include health and car insurance deductibles, rent or mortgage, food, energy bills, and phone bills. Get your rainy-day fund started by doing the following:

  • Aim low if you can’t amass the recommended cash. If you’re burdened with debt and your income is low, you can still set up a decent emergency fund. Aim for one that will cover at least one month of expenses. A cash reserve should be a priority—even over your 401(k) contributions.
  • Consolidate debt. Now stop using the credit card. Make the minimum monthly payment so you can build up savings for one month of living expenses. After you’ve done that, then you can turn your attention to other goals, such as retirement savings and paying down debt.
  • Steer clear of the stock market. You’ll want to put your emergency money in a place where you can easily get your hands on it. The two best options are a savings account at a credit union, or a money-market mutual fund. Note: Although a money-market fund isn’t federally insured, it typically has higher interest rates than a savings account.
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Taxes — What to Stash and What to Trash - June 16, 2013 by WWFCU

SONY DSCWhat 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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Coupons are a great way to save money — if you use them correctly. - June 6, 2013 by WWFCU

CouponCoupons are a great way to save money — if you use them correctly. The first obstacle to overcome is forgetting to use them. Keep them in a handy spot, like in your wallet. If you have dry-cleaning coupons, pin them to the dirty-laundry bag. If you have one for a restaurant, tack it onto the fridge or in your restaurant guidebook. Here are some other tips:

Use them only for items that you normally would buy.
Otherwise, you’re going to start spending more money. If you usually go with a generic brand of corn flakes, don’t buy a name-brand box just because you can save 35 cents—unless the reduced price of the name brand will be less than the price of the generic (for the same size of product).

Don’t buy more than you intended.
Coupons are there to promote certain products and services. If you get a coupon for an oil change, don’t let salespeople pressure you into getting a tune-up and a front-end alignment, too.

Always read the fine print.
Make sure you know all the terms at the beginning. Keep an eye out for things like, “Not valid with other offers,” or “Mention the ad when placing an order.”

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Considering a CD - May 28, 2013 by WWFCU

CDShopping at your credit union for a CD (certificate of deposit) isn’t quite as easy as going to the local music store for a CD (compact disc). But it’s a lot easier to choose than some other types of investments.

By definition, a CD or certificate of deposit is a time deposit. That means you deposit money into an account with your credit union or bank and agree to keep it there for a specific number of days. In exchange, you are guaranteed a predetermined interest rate and yield on your money. The most common CD accounts are opened for six, 12, 24, 36, 48 or 60 months.

There are two basic types of CDs, regular CDs and Individual Retirement Account (IRA) CDs. IRAs typically pay the same interest rate as regular CDs. However, IRAs offer additional federal insurance allowing investors to hold an IRA account up to $250,000. Additionally, the interest earned on IRA CDs isn’t taxed until you retire or reach the age of 59.5 years. This taxation relief is perfect for individuals who have determined that their CDs will be used for retirement only, rather than short-term, quick-return investments. However, it’s important to note that for an IRA to remain tax-free certain guidelines must be followed.

While CD interest rates are ever changing, those changes are a reflection of the economic health of the country. When general loan rates are high, CD rates will increase and vice versa. The length of time you commit to when you select a CD also affects your rate. Usually, the longer the term is, the higher the interest rate will be.

There are other factors which figure into the equation, and those factors aren’t always so predictable. For instance, competition between financial institutions can make a difference. Among the factors that can affect CD rates are consumer pricing and spending, where you live, and even how your financial institution is doing internally. “Comparison shopping” is the key.

Credit unions typically offer better rates than banks because credit unions are non-profit organizations focused on serving their members rather than paying stockholders. Also credit unions usually have lower overhead costs and pay a bit higher on CDs than at banks. It pays to take the time to monitor the market in your area for a couple of weeks and see who has the best rate for you.

Should you pick a short-term or long-term CD? To answer that you’ll need to determine how long you can let go of your money. Do you have any big purchases around the corner like a new car or a new home? Most CDs have penalties for early withdrawal which will cost you money. If you may need the money in six months or a year, pick a CD that will come up for renewal when you think you’ll need your money. If that’s not a problem, a longer-term CD may offer a better rate.

Knowing when to buy requires daily tracking of CD rates over two or three weeks. If they stay steady, go for the best deal offered and look to long term. Steady rates indicate a steady economy and show no sign of rapidly increasing rates. If they are rising slowly and suddenly take a half percentage point upwards—hold off a bit longer. This could indicate that interest rates haven’t peaked yet. In this situation wait until rates start to climb a bit slower or taper off completely. Gauge the market on your own observations; don’t make your decisions just on what specials are being advertised. If a bank recognizes that CD rates are going to increase, it is in their best interest to push long-term CDs while the rates are lower. Don’t be too hard on yourself if your timing isn’t perfect; even the professionals don’t hit it right every time.

When you’re ready to buy, the authors of The Complete Idiot’s Guide to Managing Your Money suggest you ask the following questions:

  • What are the rate and yield, and how is the interest compounded? “Rate” refers to the amount of interest added to your original amount. “Yield” is the amount paid to your account after the interest is included. “Compounded” refers to the interest that’s added to interest; the more often an account is compounded the better.
  • Is the rate fixed or variable? How long is the rate effective?
  • What is the minimum deposit necessary to open the account?
  • Can you add to the account later on—and if so, at what rate? Do the added rates mature at the same time as your original deposit?
  • How much will you receive in interest—in actual dollars and cents—when the account matures?
  • What is the penalty if you withdraw any of the funds before the account matures?
  • To avoid rolling a mature certificate of deposit over at the new interest rate, when and how do you handle the withdrawing of your money?
  • What other benefits do you receive as a CD customer? Will they waive any fees or charges on checking accounts, ATM transactions, or annual fees on credit cards?
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Going Away? Tips to Not Go Broke - May 22, 2013 by WWFCU

VacationWith summer vacation just around the corner just keep in mind – you don’t have to spend a lot of money to have a good time.

Here are tips for keeping costs down on vacation:

  • Fly during the week. Airline rates are generally more expensive over the weekend, so plan your trip from Wednesday to Wednesday (for instance) to locate cheaper fares.
  • Stay close to home. Distant destinations may call to you, but often you can find worthy locations to visit closer to home—national parks, lively cities, and other good places to explore.
  • Pack your own snacks for the road. Airline food and gas station snacks can be expensive and often unhealthy. Get into the habit of packing some sandwiches and snacks. Bring along a few bottles of water, and resist the impulse to buy an overpriced soda.
  • Do your research. Before making any reservations, compare prices widely. Check out fees that may not be obvious, like airline fees for checking bags. Look on the Internet for deals and coupons, and don’t be afraid to try negotiating for a better rate.
  • Bring your own cocktails. If you plan to have a drink or two, find a nearby grocery or party store and buy your own ingredients instead of paying for drinks at the hotel bar or local tavern.
  • Plan some down time. An itinerary keeps you organized, but don’t pack your trip so full of stops that you end up too rushed and exhausted to enjoy the experience. Give yourself and your family an afternoon off now and then to lie around the pool or go to a movie.
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Think Cash First - May 18, 2013 by WWFCU

ThinkCashIt seems like it’s become a national craze – using your credit card for everything—even routine or daily purchases. While it’s a bad habit that will be hard to break, it’s better to start sooner rather than later.

To break that habit, here’s a simple idea to help get a handle on the situation: Pay for everything with cash for one month. If you can’t manage to go cold turkey, then target certain things that you will only pay cash for during the month (groceries, for instance).

Once you get started, you’ll likely gain momentum and encouragement from what you’ve accomplished. If you’re in financial hot water, this may be the jump-start you need to devise a get-out-of-debt plan.

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Know Your Obligations when Cosigning a Loan - April 30, 2013 by WWFCU

ClosingOnLoanOften, 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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Saving Money on Homeowner’s Insurance - April 22, 2013 by WWFCU
HomeInsuranceHere are some ways to save money on your homeowner’s insurance.

Shop around.

Prices vary from company to company, so it pays to shop around. Get at least three price quotes. You can call companies directly or access information on the Internet. Your state insurance department may also provide comparisons of prices charged by major insurers.You buy insurance to protect you financially and provide peace of mind. It’s important to pick a company that is financially stable. Check the financial health of insurance companies with rating companies such as A.M. Best and Standard & Poor’s and consult consumer magazines.Get quotes from different types of insurance companies. Some sell through their own agents. These agencies have the same name as the insurance company. Some sell through independent agents who offer policies from several insurance companies. Others do not use agents. They sell directly to consumers over the phone or via the Internet. Don’t shop for price alone. You want a company that answers your questions and handles claims fairly and efficiently. Ask friends and relatives for their recommendations. Contact your state insurance department to find out whether they make available consumer complaint ratios by company. Select an agent or company representative that takes the time to answer your questions. Remember, you’ll be dealing with this company if you have an accident or other emergency.
Raise your deductible.
A deductible is the amount of money you have to pay toward a loss before your insurance company starts to pay a claim. The higher your deductible is, the more money you save on your premium. Consider a deductible of at least $500. If you can afford to raise it to $1,000, you may save as much as 25%.

If you live in a disaster-prone area, your insurance policy may have a separate deductible for damage from major disasters. If you live near the coast in the East, you may have a separate windstorm deductible, if you live in a state vulnerable to hail storms, you may have a separate deductible for hail, and if you live in an earthquake-prone area, your earthquake policy has a deductible.

Buy your home and auto policies from the same insurer.
Most companies that sell homeowner’s insurance also sell auto and umbrella liability insurance. (An umbrella liability policy will give you extra liability coverage.) Some insurance companies will reduce your premium by 5% to 15% if you buy two or more insurance policies from them. But make certain this combined price is lower than buying coverages from different companies.

Make your home more disaster-resistant.
Find out from your insurance agent or company representative what you can do to make your home more resistant to windstorms and other natural disasters. You may be able to save on your premiums by adding storm shutters and shatter-proof glass, reinforcing your roof or buying stronger roofing materials. Older homes can be retrofitted to make them better able to withstand earthquakes. In addition, consider modernizing your heating, plumbing, and electrical systems to reduce the risk of fire and water damage.

Don’t confuse what you paid for your house with rebuilding costs.
The land under your house isn’t at risk from theft, windstorm, fire and the other perils covered in your homeowner’s policy. So don’t include its value in deciding how much homeowner’s insurance to buy. If you do, you’ll pay a higher premium than you should.

Ask about discounts for home security devices.

You can usually get discounts of at least 5% for a smoke detector, burglar alarm or dead-bolt locks. Some companies may cut your premiums by as much as 15% or 20% if you install a sophisticated sprinkler system and a fire and burglar alarm that rings at the police, fire or other monitoring stations. These systems aren’t cheap and not every system qualifies for a discount. Before you buy one, find out what kind your insurer recommends, how much the device would cost and how much you’d save on premiums.

Seek out other discounts.

Many companies offer discounts, but they don’t all offer the same discount or the same amount of discount in all states. Ask your agent or company representative about discounts available to you. For example, if you’re at least 55 years old and retired, you may qualify for a discount of up to 10% at some companies. If you’ve completely modernized your plumbing or electrical system recently, some companies may also provide a price break.

See if you can get group coverage.
Does your employer administer a group insurance program? Check to see if a homeowner’s policy is available and is a better deal than you can find elsewhere. In addition, professional, alumni and business groups may offer an insurance package at a reduced price.

Stay with the same insurer.
If you’ve been insured with the same company for several years, you may receive a discount for being a long-term policyholder. Some insurers will reduce premiums by 5% if you stay with them for three-to-five years and by 10% if you’re a policyholder for six years or more. To ensure you’re getting a good deal, periodically compare this price with the prices of policies from other insurers.

Review policy limits and the value of your possessions annually.
You want your policy to cover any major purchases or additions to your home. But you don’t want to spend money for coverage you don’t need. If your five-year-old fur coat is no longer worth the $5,000 you paid for it, you’ll want to reduce or cancel your floater (extra insurance for items whose full value is not covered by standard homeowner’s policies) and pocket the difference.

Look for private insurance if you are in a government plan.
If you live in a high-risk area—one that is especially vulnerable to coastal storms, fires, or crime—and you’ve been buying your homeowner’s insurance through a government plan, find out from insurance agents, company representatives or your state department of insurance which insurance companies might be interested in your business. You may find there are steps you can take that will allow you to buy insurance at a lower price in the private market.

When you’re buying a home, consider the cost of homeowner’s insurance.

The price you pay for homeowner’s insurance depends in part on the cost of rebuilding your home and the likelihood that it will be damaged by natural disasters or burn down. You may pay less if you buy a house close to a fire hydrant or in a community that has a professional rather than a volunteer fire department. It may also be cheaper if your home’s electrical, heating, and plumbing systems are less than 10 years old. If you live in the East, consider a brick home because it’s more wind-resistant. If you live in an earthquake-prone area, look for a wooden frame house because it is more likely to withstand this type of disaster. Choosing wisely could cut your premiums by 5% to 15%.

Remember that flood insurance and earthquake damage are not covered by a standard homeowner’s policy. If you buy a house in a flood-prone area, you’ll have to pay for a flood insurance policy that costs an average of $400 a year. The Federal Emergency Management Agency provides useful information on flood insurance on its Web site. A separate earthquake policy is available from most insurance companies. The cost of the coverage will depend on the likelihood of earthquakes in your area and the construction features.

If you have questions about insurance for any of your possessions, be sure to ask your agent or company representative. For example, if you run a business out of your home, be sure you have adequate coverage. Most homeowner’s policies cover business equipment in the home, but only up to $2,500 and they offer no business liability insurance.

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 Wayne Westland Federal Credit Union.

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