Month: January 2016

Hosting A Super ‘Big Game’ Party On A Budget

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Big brands are paying upwards of $5 million for 30-second Super Bowl ad slots, and the city of San Francisco is forking over $4.8 million to host weeklong festivities leading up to the big game. But when the two top NFL teams compete on Feb. 7 in Santa Clara, California, for Super Bowl 50, thankfully you’ll be shelling out considerably less than that to hold your Big Game party.

Super Bowl parties are among the most inexpensive to host. Besides the traditional chicken wings, tortilla chips and guacamole, and beer–the most important must-haves are adequate seating and a big-screen TV to watch the game.

The most widely watched sporting event of the year last year drew an estimated 184 million viewers to see winning team the New England Patriots take on the Seattle Seahawks. According to the National Retail Federation’s  Super Bowl Spending Survey, viewers spent an average of $77.88, up from $68.27 the previous year. That covered everything from game day food and new televisions to athletic wear and decorations. Food and beverages accounted for nearly 80 percent of the total of $14.3 billion in spending.

Hosting or attending a Super Bowl party in someone’s home was the most popular option. Only 5 percent of viewers opted to watch the game in a restaurant or bar, where loud noise can detract from the game-watching experience.

So if you’re planning to host a Super Bowl party for family and friends, how can you avoid going over your budget? Below are some ideas for throwing an inexpensive event that will still be fun and entertaining. 

Keep It Casual 

Set expectations with guests that your event will be low key and casual. After all, it’s the game (and the commercials) that will be the star of your event. Nearly half of viewers in the NRF survey say that the game itself is the most important part of the day, followed by nearly one-third saying that the most important parts for them are the commercials and hanging out with friends and family.

Stress in your invitation that you’re just hosting a casual get-together to watch the game. No fancy invitations are required: a simple email or e-vite with time, place, directions, and other details will do. And make sure you ask guests to RSVP so you’ll have an idea of how many people plan on attending. That way you’ll know how much food to buy–and won’t overspend for guests who won’t attending. 

Make It a Potluck 

People love sharing, and this goes double when it comes to sharing favorite dishes with family and friends. Asking each guest to bring a dish will not only create an interesting array of food and beverage offerings, it will significantly reduce your expenses.

You might say in your invitation that you’ll provide one hot main dish (such as chili or soup) and snacks (such as cheese and crackers or raw veggies and dip) so you’ll have something to serve in the very unlikely event a majority of your guests show up empty-handed. But in all probability, once you ask guests to bring something, you’ll be inundated with food and beverages.

And don’t worry about asking people to sign up to bring a specific type of dish (such as a beverage, snack, entree, or dessert). For some mysterious reason, potlucks always seem to turn out. You may be buried under an avalanche of chips, guacamole, salsa, and beer for a while–but that’s a good problem to have since you can always eat the leftovers or give leftovers to guests.

If one of your guests has a special recipe (such as spicy chicken wings or a football-shaped cake) that you think could be the star of your party, you might reach out privately and ask them to bring it. Once the teams are decided, you can ask people to use the colors of their favorite team in the food they bring (or their serving dishes) to up the fun factor.

In light of people’s food preferences (vegetarian, vegan, low-carb, low-fat) and food allergies (gluten, lactose, nuts), it’s also a good idea to ask guests to label the dishes they bring accordingly. A small card indicating the dish is vegan, vegetarian, or gluten-free, or containing nuts can go a long way to making sure your guests enjoy themselves and don’t ingest anything that won’t agree with them. 

Buy in Bulk 

Whatever food and beverage items you plan to supply for the party, watch for sales and try to buy in bulk. Your local retailers are gearing up for the Super Bowl and will have an abundant supply (and probable sales) on Super Bowl staples such as avocadoes, tomatoes, salsa, chips, carrots, celery, chicken, and beer.

Watch for the circulars that show up in your mailbox, and take a trip to the local supermarket to see what they have on sale. Now might be a good time to visit a big-box outlet such as Costco and take advantage of savings by buying in bulk. You can always use the party leftovers to feed your family in weeks to come. 

Seating Options 

You’ll want to make sure you have adequate seating for guests, but you don’t need to go overboard and rent chairs. Clear extra pillows and cushions that might reduce the seating capacity of your TV-adjacent sofa and chairs, and place them on the floor to create comfortable nearby viewing areas.

If your seating options are skimpy, don’t worry. Many people like to stand up to watch the game, freeing themselves for circulating or enthusiastic cheering when their team scores. And if you must bring in extra seating, ask a friend or family member if they can bring over a few folding chairs. 

Decorations 

It fun to spruce up your home with banners, balloons in team colors, or football-shaped trinkets. Definitely feel free to unleash your inner decorator for your Game Day bash. But your friends are really there for the game, and in all likelihood, they won’t remember your decor. It will be the fun they had, the nail-biting moments of the game, the moments of triumph and defeat as they watch their favorite team struggle for dominance. And thankfully, moments like that cost nothing.

If you must decorate, dig out decorations you have on hand or visit the dollar-store so you won’t break your budget. And is with everything, less is more. A strategically placed banner or a few balloons will go a long way to add a spirit of festivity to your gathering.

Charitable Giving

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It’s that time of the year again: a combination of New Year’s resolutions and the start of tax time has many of us looking for a place to donate money. It can be difficult to figure out which charity is most deserving of your money and how to make your charitable donations work best for your financial situation.  


You might have a favorite charity, like a local group or someone with whom you’ve worked for years. If not, finding the right charity can be a difficult task, both because unethical individuals may want to exploit the best intentions of others and because running a nonprofit organization is a difficult task, making many well-intentioned charities ineffective at fulfilling their mission. 

Check out the charity with an objective watchdog group 

One of the difficulties with charitable giving is understanding where your money goes. In recent memory, there might be no better example of the confusion surrounding a charity than Invisible Children, the organization behind Kony 2012. It soared into the public consciousness a few years ago behind a viral marketing campaign, followed by a very public arrest of one of its central figures after an alleged act of public indecency.

In the wake of his arrest, various reports accused the organization of diverting attention from larger human rights abuses in the region and questioning the financial background of the organization. It’s unclear, even this far removed, what happened with Invisible Children, and whether the public backlash was warranted, but various watchdog groups certainly paint the charity in a positive light. That’s why the best way to determine whether a charity is a good organization and worthy of your donation is to check with the three biggest charity watchdog organizations: Charity Navigator (charitynavigator.org), Charity Watch (charitywatch.org), and the Better Business Bureau’s Wise Giving Alliance (give.org), all of which are also endorsed by Consumer Reports. 

Verify each charity’s tax-exempt status 

Never assume an organization has tax-exempt status, even if it might seem like it does or should. For example, some universities offer tax-exempt donations for their general scholarship funds and other donations, but giving to specific departments or organizations, such as the debate team or theater department, is not tax-exempt. Even if your donation was tax-exempt last year, even if someone involved in the organization tells you that they’re tax-exempt, even if you’re 99% sure the organization is tax-exempt, check with the IRS website at https://www.irs.gov/Charities-&-Non-Profits/Exempt-Organizations-Select-Check 

Always give money directly 

One way that scammers will use the goodwill of charities for their own benefit is to call people and ask for donations over the phone. Don’t assume that someone who calls you actually works for the organization. Instead, finish your conversation and then donate directly to the organization. Even legitimate fundraisers often take 40 percent of the proceeds, keeping your money from the people you really want to help.

Donating directly also gives you more control over the paperwork, ensuring you get all the documents you need for a tax deduction. You can also confirm the quality of the organization and that the organization is tax-exempt. 

Make sure to request privacy 

Once you’ve given money to a charity, it’s easy to end up on countless lists with people calling constantly from other charities. If you’ve ever given money to a political campaign, you’ve probably already experienced this. Some of our members report that they’ve received correspondence from political parties for decades, even after switching political parties. So be careful! Make sure you care enough about the charity that it won’t bother you to have your dinner interrupted or get junk mail. 

Sources:

http://www.consumerreports.org/cro/2012/12/make-sure-your-donation-counts/index.htm    
https://www.irs.gov/Charities-&-Non-Profits/Exempt-Organizations-Select-Check    
https://www.charitywatch.org/charities  
http://give.org/ 

IRS Scams 2016

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Every year, the Detroit Auto Show brings in visitors from around the world to see the newest models from major car manufacturers. The Consumer Electronics Expo gives us a chance to see all the new gadgets that will be on our wish lists come holiday time. Penny Arcade Expo unveils the year’s new video games that our teenagers will be using to ignore their homework. For those of us who spend our days protecting other people’s money, January is the time of year we get to see the newest makes and models of IRS scams. 

That’s right, they’re back. Scammers are using tax time to take advantage of the unwary, and much like the newest Ford at the auto show or yet another iteration of the Madden video game, all of the hype is kind of disappointing, because this year’s models look so much like last year’s. What happened to innovation? 

So let’s take a look at the “new and improved’ 2016 lineup of IRS scams. Of course, it’s important to remember that innovation can happen at any time, so just because something isn’t listed below, it does not mean it’s not a scam. If you have any suspicion you’re dealing with a scam, hang up, call the IRS or send an email to the Federal Trade Commission (FTC). Caution is your best approach. 

The telephone scams 

Up first is one of the oldest scams in the IRS scam lineup. You get a phone call from someone claiming to be from the IRS and claiming you owe money. They insist that if you don’t pay right now, you’ll go to jail. You might recognize this one as a variation on a grandparent scam or Nigerian Prince scam, but if not, the process is simple: You don’t owe the money and the scammers are trying to get you to give them money they don’t deserve. 

If someone calls you claiming to be from the IRS, even if your caller ID says “IRS” or the like, hang up and call the IRS. If it’s legitimate, then you will be able to find out from the IRS. If not, you’ll find out right away. Remember, you have a right to an attorney, you can have your accountant present if you’re being audited, and you have the right to due process no matter the charge. Don’t ever assume you have to pay anyone right away just because they called you and demanded payment. 

The email scam 

One newer variation of the telephone scam is an email version carrying the same threat, but asking for much less money. This is a traditional phishing scam in which scammers ask for a modest sum that’s payable online. Their hope is that you’ll see a small amount, compare it to the terrible consequences they’re threatening, and pay to make it go away. After all, who wouldn’t spend $50 or $100 to make the IRS go away? Unfortunately, though, you won’t be entering your financial info on a secure site that’s provided by the IRS. You’ll be entering your info on a dummy site that’s set up by scammers to grab your credit card or checking account information. They’ll in turn use that info to rack up all sorts of fraudulent charges. 

As a rule of thumb, never, ever, follow the link in an email to a site where you may be asked to enter financial information.  If you have an email from the IRS, see if you can find your account by going directly to the IRS website.  The same is true for eBay, Amazon, and other retailers that scammers love to impersonate. Yes, it’s easier to follow a link than it is to find the right page on your own, but scammers are counting on that.  A few clicks could save you thousands of dollars. 

The tax preparer scam 

The final variation of this scam is the tax preparer phishing email scam. In this one, the goal is the same as the variation described above. Instead of impersonating the IRS, they’re impersonating a tax preparer. They’ll likely have some authentic-looking credentials, which are fake, and assure you everything’s alright, but you need to update your info on the IRS’ e-file page. The problem is, the link in the email doesn’t take you to the IRS’ page. It takes you to … you guessed it! A dummy page that looks like an IRS page but actually captures the financial information you enter. 

Don’t be a victim. Always follow through with an extra phone call or email. Don’t follow links that are provided in emails and don’t assume that a webpage that looks OK must be OK. It’s tax time, the time of year where we get a national math test, and math tests are stressful for everyone. Scammers know that and they prey on it. 

If you suspect you’ve been the victim of identity theft, let us know. The sooner we know, the more protection we can offer. Also, file a complaint with the FTC and alert one of the major credit bureaus.

Sources:

https://www.irs.gov/uac/Tax-Scams-Consumer-Alerts

Lessons Of Powerball

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With the Powerball jackpot eclipsing one billion dollars, an unprecedented lottery fever is sweeping the nation.  Around watercoolers, in person and virtually, the entire country is consumed with conversations about how to spend a hypothetical windfall.  While you didn’t win, it’s been fun to think and fantasize about.  Some observations from listening to our members talk about the jackpot: 

1.) Never take the annuity. 

The average return on the annuity comes out to less than a 2 percent annual yield. Historically, that’s less than inflation, meaning you’re better off stuffing cash in your mattress than taking the annuity. Side note: Do not stuff several hundred million dollars in a mattress; aside from the financial and security concerns, your mattress will be incredibly uncomfortable and scrape the ceiling. 

If you were to put your money into one of our savings products, you would get a much better return. Again, we wouldn’t recommend putting a few hundred million dollars into your savings account and calling it a day, but spreading your money around in a variety of financial products could yield much better results. For example, our money market accounts, savings certificates and similar savings products all offer returns with low risk, much better than leaving your money in an annuity provided by the lottery commission. 

2.)  No one seems to understand what a billion dollars is. 

One billion dollars is not a lot of money. It’s an impossible amount of money. It’s easy to forget that one million dollars is one thousand times larger than one thousand dollars; it’s even easier to forget that one billion dollars is one thousand times larger than one million dollars. In other words, if you currently owe $250,000 on your house, one billion dollars would pay your mortgage, the mortgage of every family in your neighborhood (100 houses at $250,000 is $25 million), the whole neighborhood’s car notes (200 cars at $40,000 is $8 million), put everyone’s kids through college (200 children at $250,000 is $50 million) and still have enough money left to do the same for 10 more neighborhoods just like yours. 

3.)  One billion dollars is so much money, it’s enough to rethink our happiness. 

As long as we’re all having trouble pretending to spend the jackpot, it’s a reminder that joining the one percent doesn’t have to be the goal. If you can’t think of a way to spend one billion dollars, you probably don’t need to make one billion dollars. If you were to hit a jackpot big enough to pay off your debt, fund your retirement and set up a fund to take care of your family for the next century, would that be enough to satisfy you financially? If so, you could probably do so for a fraction of the Powerball jackpot. Each individual’s experience will vary, but for most of our members, a few million would be enough to hit all of those goals. 

So what would you do with the rest of the money? Who cares? Everything after that point would be fun, but meaningless. We’d all love to own an NBA team, but most of us would be almost as happy with season tickets. A lot of us would rather watch the game at home, anyway. Would you really like to drive a nicer car? That’s great, but how much time would you spend in your Bentley if you weren’t commuting to work every day? 

The other side of the coin is true, too. The horror stories about lottery winners who ended up alone, broke, and miserable have given a lot of people reason to pause. It seems like every conversation about the Powerball jackpot has to bring up the curse of the lottery. Whenever that happens, people talk about putting aside enough to make sure they’re happy, but instead it seems like having so much money is what causes the curse. With one billion dollars, you could give away 99 percent of your winnings and still have enough money for everything in the last paragraph, so why not just give it all away at the outset? Then, no one is coming around with their hands out, you never have to wonder if people are after your money, and you’ll still be set up well forever. 

4.)  Figure out your retirement number. 

One of the most interesting things underlying these conversations is that people don’t seem to know how much they’d need for the rest of their lives. While it’s not likely to ever come up because of lottery winnings, knowing how much money you need to live on for the rest of your life is important. It lets you plan your savings, investments and schedule your retirement.  If you don’t know your number, it’s time to make serious plans.  Stop waiting on a lottery windfall. We’ll help you come up with a reasonable, achievable plan so you’ll eventually be able to retire.  It might not be a retirement in the Bahamas, but even on your salary, you should be able to retire someday.

What Should I Look For In My Credit Report?

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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. 

If you need help in improving your credit, take that credit report and call Accel, our financial counseling partner.  It’s free, unlimited financial counseling for members of Destinations Credit Union.

Sources: 
http://www.consumerfinance.gov/askcfpb/312/when-should-i-review-my-credit-report.html  

http://www.consumerfinance.gov/askcfpb/314/how-do-i-dispute-an-error-on-my-credit-report.html 
http://www.consumerfinance.gov/askcfpb/311/how-do-i-get-a-copy-of-my-credit-report.html

How Everyone Else Spends Their Money

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One of the most difficult obstacles in setting a budget is understanding how much is needed for each category. Is $500 enough for groceries or should it be $1,000? How do I know if I’m being extravagant when it comes to entertainment? Am I saving enough?

The same difficulty comes up when it’s time to negotiate your salary or ask for a raise. If we don’t know how much money everyone else is making, it’s difficult to ask for a fair amount. No one wants to leave money on the table because they asked for less than the boss would have agreed to, but there’s a little voice in the back of our heads that makes us uncomfortable with asking for too much.

That little voice is part of the problem, of course.  It’s what keeps us from asking the neighbors how they managed to save up enough to buy the house. It’s what keeps us from being willing to admit our budget isn’t where we’d like it to be. Our overall discomfort with discussing money, which lies in stark contrast to our willingness to show off our money, can be an incredibly large problem.

In hopes of helping you live within your means, understanding where you’re being frugal and where you’re being extravagant, and figuring out what it will take to save for a house, retirement, or college fund, let’s take a look at how the typical American household makes and spends its money. As a reminder for those who haven’t taken algebra since high school, most of these statistics use the median figure, which is the number at which 50% of Americans would be above the number and 50% would be below. That number is more accurate than the mean or average, simply because the ultra-wealthy distort the mean, in spite of making up a very small proportion of the population. 

Question:  How much do Americans make?

Answer:  The typical household income is just shy of $54,000.  That number comes from the U.S. Census Bureau, which is reliable, but its reliability comes slowly:  it’s a 2014 stat. Still, our income is up one percent from 2013, and another 1 percent would put us at right about $60,000. After a few years of sub-one percent income growth in the middle class, every little bit helps.

Question:  How much money does the typical American have saved? Does age affect our savings?

Answer:  It really does.  Young people have the least saved, with 51% of Americans under 35 keeping less than $1,000 in savings.  Millennials have a negative savings rate of about 10%, meaning that for every $100 young people make, they spend $110 on average.  The savings outlook gets rosier as Americans get older, though, with positive savings rates among every other adult age-related demographic. Americans between the ages of 35 and 44 years old save at nearly a 3% rate, which doubles to nearly 6% for those between the ages of 45 and 54, and doubling again to 13% in the decade before retirement.

As for the total amount saved for a rainy day, the typical American household has around $6,000 in savings, around 12% of median household income.  Unfortunately, roughly one-third of all Americans reported that they had less than 30 days of emergency savings, while 47% said they had less than 90 days.

Financial planners typically recommend households keep at least six months of emergency savings on hand, although some analysts suggest household savings should be equal to a year’s income.  Six months of median income would be $27,000. 

Question:  So, how do we spend our money?

Answer:  The biggest chunk of the typical American budget goes to housing, at roughly $18,000 per year. That’s about one-third of our paychecks, which has a ripple effect throughout the economy.  It makes homeownership crucial, because getting back equity on part of that huge slice is the first step to financial security.  It also causes all sorts of geographic problems:  A family needs an income over $150,000 per year to buy a home in Los Angeles, but only $48,000 to afford a home in Orlando. Since everyone needs a place to live, employers have to pay employees more in expensive cities, driving up the prices of goods and services across the board and raising everyone’s cost of living. Thus, lower-income individuals are pushed farther and farther from city centers, lengthening commutes, increasing transportation costs and generating CO2.

Transportation costs about $10,000 per year, the second most expensive budget category, while food costs of around $7,000 come in third.  Both of these categories will be cheaper in next year’s numbers because fuel prices are so intimately tied into both.  Still, if you’re looking to clean up your budget, the 30% or so that typical families spend on cars, gas, groceries, and eating out is probably the quickest way to trim fat.

Personal insurance and health costs take up another $9,000 per year, so your health care and health insurance might cost more than your food.  Eating healthier may reduce all of these costs for your family, although it’s not clear how much less expensive eating healthy really is. 

The rest of our spending is discretionary spending, split into three roughly equal categories:  entertainment, clothes, and everything else. These numbers vary considerably from family to family and year-to-year.  If you bought a new washer/dryer last year, for example, you’re probably not in the market for a new one right now.

Hopefully, this article was enlightening and it can help you figure out how you’ve been spending your money as well as what adjustments you might make to save a little extra money.  If you’re looking to set up a more aggressive savings plan, let us know. We’ve got great programs and we’re eager to help you out.

Sources:
http://money.cnn.com/interactive/news/economy/us-spending/ 
http://www.investopedia.com/financial-edge/1012/how-americans-spend-their-money.aspx 
http://www.dailyfinance.com/2010/12/13/forbes-how-americans-spend-their-money/ 
http://www.fool.com/investing/general/2015/02/02/heres-how-much-the-typical-american-saved-last-yea.aspx 
http://www.deptofnumbers.com/income/us/ 
http://www.usatoday.com/story/money/personalfinance/2015/03/31/millions-of-americans-have-no-money-saved/70680904/ 
http://finance.zacks.com/much-money-average-american-family-savings-7304.html    

Pay For Delete Scams

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You may already be checking your credit report regularly and you might have developed the habit of challenging or reporting any suspicious activity. But what do you do with a stubborn charge that won’t go away? You know you shouldn’t have to pay it, but for whatever reason, you can’t get it off your report.  You call the creditors in question and they tell you they understand, it’s no big deal and they’ll gladly delete it from your credit report if you pay a small fraction of the charge.  What do you do in that scenario?

For a lot of people, paying a couple hundred dollars is better than the headache or the full amount of the charge. They don’t have to worry about the charge, and they know that over time they’ll more than make up that money in savings on credit card interest charges.  It’s all part of the cost of doing business, they think, so they cut a relatively small check.

For the rest of us, we don’t want injustice to stand.  Or maybe we can think of a better way to spend a few hundred dollars than paying a scammer.  We could put it toward retirement, our kids’ college funds, or buy ourselves a new dress for stepping out on the town. The point is that spending a few hundred dollars on a personal luxury, no matter how frivolous, is still a better idea than spending it on a scam.

Legitimate credit agencies don’t engage in pay for delete schemes. The way it’s supposed to work is that if a debt is reported as being sent to collection, it stays on your credit report for seven years, with certain exceptions, including some medical bills. Often, big credit agencies will sell the debt to smaller ones for less than what is owed, so they can receive guaranteed income, then the smaller agencies are looking to get some amount paid off, generally more than they paid for the debt.

Those smaller agencies are often less scrupulous, and they offer to report the whole debt as a mistake if you pay a certain amount. Sometimes, that amount is the debt in full, which nets them a tidy profit. Other times, it’s a smaller amount.  In theory, this could have a very positive effect on your credit.

However, there’s no guarantee they’ll follow through, nor a reason for them to put the offer in writing, because the process isn’t above board. In addition, if a creditor creates a charge that shouldn’t be there, they’ll often ask for pay-for-delete so they can mark it as removed, making it harder to identify a fraudulent charge after the fact.

Arm yourself with knowledge. Here are three scenarios in which a charge can be removed from your credit report:

  1. You never got the bill (or the bill was for an incorrect amount)– This is pretty obvious, and you shouldn’t have to pay a dime.  Make sure to challenge suspicious charges. If you don’t believe that you incurred a debt, let the collection agencies know. Ask to see evidence of the bill; sometimes the creditor can’t produce it, and they will waive the charge. Make sure to follow up afterward to confirm that the charge was removed.
  2. The bill was for a medical debt – As mentioned earlier, some forms of medical debt can be removed from your record. Double check this with your accountant or lawyer. Make sure you also check with your insurance company so you know they paid as much as they were obligated. Ask the medical provider for a detailed, itemized bill, then ask your insurance company for your explanation of benefits (EOB). At a minimum, show the EOB to your medical provider to make sure they’re billing correctly. Every case is different, so be detail-oriented, write down everything the provider and insurer tell you, and seek help from a professional. A single medical bill can be worth 25 points on your FICO score, so it pays to follow through. Remember, a creditor is not a medical provider, so they will have much less freedom to rework old bills, which is why they may be more interested in pay-for-delete. 
  3. It’s a small-time creditor – This is where the line between good security and under-the-table scam starts to blur. Small-time creditors want the revenue and they’re going to be more likely to offer shady practices in exchange for money. Make sure to get everything you can in writing, and be suspicious. If they’re unscrupulous enough to try pay-for-delete, then they probably didn’t do all of their due diligence to find out if you paid the bill. Ask for evidence. Make sure you really owe the money. Be persistent; this is real money that you can spend in better ways than on scams.

It’s important to stay on top of your credit report, but don’t let that number at the top dictate your life. Yes, you’d like it as high as possible, but that’s not a reason to give money to scammers.  If you do the work on your end, you can often get to the bottom of these charges, save your credit score, and keep cash in your pocket.


Sources:
https://www.credit.com/credit-reports/the-truth-about-credit-repair/ 
http://www.creditcards.com/credit-card-news/pay-for-delete-shady-credit-report-cleanup-1264.php 

http://www.creditinfocenter.com/debt/pay-for-delete.shtml

New Year’s Resolutions

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By the end of January, many of us will have forgotten all about our New Year’s resolutions. It can be difficult to change our lives, even when it’s for the better. Knowing this, we want you to know that, in your financial life, there are changes you can make today that will last the entire year. Here are three resolutions you can set today and some follow-up goals for the rest of the year. 

Today:  Save money automatically.  If you want to improve your net worth, build financial security or make a big purchase at this time next year, the easiest way to do so is simply to automate your savings. You can set up an automatic transfer to savings so you won’t be tempted to spend it. With many of our savings products, you can even access the money if an emergency arises. 

Later:  Set up an emergency fund.  How much do you have set aside for a rainy day or to cover the unexpected?  If an emergency came up, would you have to sell investments, cash in your retirement or borrow from family?  Make this the year for setting up your emergency fund.  You’ll eventually want to have at least six months of income put aside where you can get to it. for now, start with $1,000, a month’s income, or whatever feels realistic.  It might be difficult to get in the habit of saving money, but this is the resolution you’ll be really happy you kept if something unexpected happens. 

Today:  Pay down your debt.  If you’re struggling with debt, there are three basic solutions for paying it down, getting your payments under control and getting ahead of debt.  You can make more frequent payments, pay more each month or lower your interest rates. 

Paying more frequently makes sense if you get paid every two weeks: You might already know about the advantage of bi-weekly payments, which let you make the equivalent of an extra monthly payment every year.  If you’re already doing that or you don’t get paid on a weekly schedule, you can also increase the amount you pay every month. Even an extra $25 per month is $300 per year, and you can set up those payments automatically. Make sure you increase your payments the most on the bills with the highest interest rates first, even if they don’t have the largest balances. 

Finally, you can get ahead of your debt by lowering your interest rates. You can call the creditors who are charging you the highest interest rates and pay the bill, transfer the balanceto a credit card or loan with a lower interest rate, or see if they’ll offer you a lower rate due to improved credit. One way to make this work is to arrange a home equity loan at a lower fixed rate, then move your balances with the highest interest rates to the loan. 

Later:  Get control of your spending. It’s time to make a budget and stick to it. Build rewards into the budget so you’ll actually be happy to follow it. Take a look at what you use your credit cards to buy, then budget at least some money for those items or activities. You’ll never keep a resolution like “stop eating out,” but you have a good chance of keeping a resolution like “don’t go over the eating out budget.” This also gives you 12 chances to succeed: Every month you can do better than the month before. 

Today:  Make a drawer.  Many of us who have had the misfortune to act as the executor on a loved one’s estate have had the terrible task of finding all the savings, debts, insurance policies and other financial parts of their lives.  Don’t do this to whomever is taking over your life. Empty a drawer in your kitchen or study and put as many relevant documents in it as you can find.  Make a list of everything in the drawer and everything that’s missing. Put a copy in the drawer and another with your will so it’s as easy as possible for the grieving individual in charge. As with any sensitive, personal data, keep this information in a safe place that only you and the likely executor(s) of your estate will have knowledge. 

Later:  Fill the drawer. What’s missing from the drawer? Do you have a will? How much life insurance do you have?  Do you have enough savings to take care of your children? What about a plan for how they will receive that money? 
Talk to a financial planner and insurance specialist to make sure you’re set. With any luck, 2016 won’t be the year you need it, but if it is, it’ll be better for everyone involved if there’s a plan.
And that’s it … three things to do today and three projects to complete during the year.  None of them are out of reach, so you’re setting yourself up for success by making resolutions you can keep.

My Parents Are Showing Signs Of Dementia. How Can I Protect Them Financially?

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As the country gets older, the mounting problem of dementia will only get more prominent. Already the sixth leading cause of death in the country, and the only killer among the top 10 that is completely unpreventable, the Alzheimer’s Association predicts that, by the year 2050, Americans will spend over one trillion dollars on treatment for dementia, five times the current price tag.  For those of us whose loved ones suffer from the disease, it’s a trial every day.  We can’t do anything about the emotional or physical toll the disease takes on loved ones and caregivers, but the devastating financial costs can be mitigated with a combination of planning, transparency and teamwork. 

Q:  I think one of my parents is showing signs of dementia. What can I do now, before the symptoms get worse? 

A:  Because dementia is a group of symptoms, rather than a specific disease, early identification is important, but a full diagnosis may be far off.  Those early days of uncertainty, in which the good days outnumber the bad, can be very tough.  Even if it’s difficult, though, taking decisive action early on is very important. 

The first step is to assemble a team of loved ones and caregivers. Unfortunately, this can be tougher than it sounds.  The sufferers of many diseases can readily identify their own symptoms, but one of the warning signs of dementia is forgetting things and also not realizing that they’re being forgotten. What that means is that the sufferer of dementia is an unreliable advocate on their own behalf.  It also means that, if they deny their problems, other family members may take their side in a misguided effort to show affection and solidarity.  Among the most likely culprits is the sufferer’s spouse, who has likely been shouldering an increasing load to compensate for the sufferer’s worsening mental condition.  Still, anyone who might be able to help should be made part of the early planning.  Also consider bringing in those who won’t help, but who have the ability to derail your plans, either through gossip and complaints or legal challenges. 

If you are your parents’ primary caregiver, you will be spending their money.  Someone in the family will resent that.  Be prepared. 

Q:  Okay, so what do I do once I’ve assembled my team of loved ones? 

A:  You need to sort out several aspects of caregiving.  If they have a will or living will, see if you can read it.  Find as many answers as possible before you have the meeting.  Talk to a lawyer.  Talk to your parents’ financial institutions and then come talk to us.  You’re going to need to find all of their money.  Maybe you’re very lucky and your loved one has left a detailed accounting of their finances. Most likely, though, you’ll need to get legal recognition as the primary caregiver or receive power of attorney before you can access the accounts.  You may not be able to do so before the family meeting. Do your best. 

Use the family meeting to make plans.  Who’s going to pay for what? What happens if the sufferer needs home care?  Will your parent go to a nursing home?  Will you bring in a nurse?  Will he or she move in with you or one of your siblings?  Bear in mind that planning at this stage is more about transparency, openness, and validating everyone’s feelings.  Few of the best laid plans made today will actually be followed.  That’s fine.  Flexibility is important and so is teamwork. Listening to others’ needs at this meeting will go a long way toward building trust when you need to make a financial decision with your parents’ money down the road. 

Q:  Is there anything I can do to help?

A:  Buy a big box of disposable pens and a bulk container of note pads and sticky notes.  Put them all over the house; at every phone, next to a favorite chair, next to the stove, even in the bathroom.  Your plan is to remove every barrier to writing so that the sufferer will be more likely to write things down. Not only does the writing help ease the symptoms of dementia, but having pads and stickies everywhere can be a coping mechanism to make the passage from the early stages to full onset dementia last as long as possible. 
Q:  What can Destinations Credit Union do to help?

A:  We’re not medical experts, but we are financial experts. Come see us and we’ll talk you through some of your options.  We can help turn your parents’ long-term savings into cash if it is needed now. We can help combine various accounts of theirs into consolidated accounts that you can access.  We can set up a home equity loan to bring in the medical equipment or any other changes you need to make to the house should you bring a parent into your home to live with you.
Most importantly, we can help make sure you haven’t forgotten anything. This is a tough time and we’re here to support you.
Sources:

http://www.alz.org/facts/ 

http://www.alz.org/ 

http://www.stuffyoushouldknow.com/podcasts/how-dementia-works    

Investing In New Media

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It sounds like free money:  Everywhere you look, people are glued to their mobile phones, whether they’re in line at the post office, watching TV in their living rooms or cutting you off during the morning commute. All you have to do is throw some money at the stock offerings for Facebook or Twitter and wait for the cash to start rolling in, right? But, if you’ve checked recently, Twitter’s stock has plummeted, they’re laying off workers and investors are panicking. Facebook had the same growing pains, and anyone old enough to remember Y2K also knows the names etched on the gravestones in the social media graveyard: Friendster, Myspace, Google Buzz, etc.

How can you protect yourself from disaster without missing out on what appears to be the wave of the future? You don’t want to end up kicking yourself because you missed out, just like you don’t want to kick yourself for buying too much. Below are some tips for investing in emerging technologies without losing your shirt. 

1. Understand the product.  You’d never buy Coca-Cola stock if you didn’t know what a soft drink is, so don’t buy stock in social media unless you understand their business. Social media sites are in the business of selling data to advertisers.They make their money by developing sophisticated algorithms that claim to understand you very well, so advertisers don’t have to spend big money to broadly distribute their message. What this means is that users are the product and advertisers are the customers. 

Facebook and Twitter have very different ways of displaying content to users, and therefore have different pitches when they talk to advertisers. The best example of the difference between the social media giants is from summer 2014: Facebook was filled with Ice Bucket Challenge videos while Twitter was full of unrest in Ferguson, Missouri. At the time, this was seen as an indictment 

of Facebook: Its vaunted algorithm was weighted too heavily to favor users’ immediate network and content that utilized Facebook add-ons like its video player.  Twitter was correctly identified as the better medium for serious news. In retrospect, the seriousness of Twitter is its problem – users go to Twitter for news, revealing less of themselves and making themselves less easy to target for ads. 
2. Understand the market.  Facebook is preferred by Baby Boomers, while Twitter is preferred by millennials, mostly because Boomers (their parents) are on Facebook. As of right now, Boomers are a more lucrative market because they have higher incomes and net worth. However, over the next five years, Millennials are expected to comprise more than half of all workers in the country and have an even larger share of personal spending. Boomers will be retiring as millennials are buying houses, minivans, golf clubs and all of those markers of suburban middle age. They can’t just buy coffee, cellphones and tattoos forever.
If you’re buying Twitter stock, you’re planning on holding it until the millennials come of age, and therefore you’re betting on Twitter figuring it out over the long term. If you’re buying Facebook, you’re planning on selling sometime before the Boomers disappear from the workforce. Remember, all of those headlines about Boomers spending more in retirement are looking at Boomers at the beginning of retirement – when time seems ample, energy seems infinite, and all of those hobbies put off for decades need new supplies.  Even America’s most mercurial and surprising generation will eventually succumb to the comforts of retirement. 
3.  Understand the risk.  There’s never been a guaranteed safe play in the history of tech stocks. It’s doubly so for social media. Bear in mind that Facebook and Twitter compete directly with Google, Microsoft and increasingly with Apple for generating data to sell to advertisers. Of those companies, Google has always been tethered to the massive losses from YouTube, Microsoft took a major hit with its antitrust suit, and Apple nearly went belly up during Steve Jobs’ absence. It’s easy to read that last sentence as a list of great businesses beating the odds and overcoming adversity, but it ignores all of the companies that failed to do so.  Buying Facebook or Twitter is going to be risky.
There are lots of ways to combine those three ideas to better protect yourself. If you want to offset risk, there isn’t much of a better investment than the savings products we have at Destinations Credit Union. Take a look at the Kasasa Saver account you can pair with Kasasa Cash Rewards Checking! By stocking up on our certificates or a High Yield Account, you can use low-risk investments to protect yourself, while still getting a higher return than one of those corporate banks can offer. Check out our rates.

If you’re worried about the time involved in your investment, our savings products can help there, too. If you’re buying Twitter now, you’re making a deal with yourself that you won’t sell it too soon and miss out on profits. But what if you need the money soon? Our Kasasa and High Yield accounts have no penalty for withdrawing your cash if you need it, helping put your mind at ease.

Whatever your plan for investing, we can help you fill out your portfolio to help you reach your goals. Just give us a call and let us know what you want to do. We’ll sort out the rest.
Sources:

http://www.kiplinger.com/slideshow/investing/T052-S003-25-best-stocks-for-2015/index.html 

http://www.americanpressinstitute.org/publications/reports/survey-research/millennials-social-media/