Do you and your money care about the same things?

By Heather Marshall, CFPC, MPP; Educator, AAA Fair Credit Foundation/Utah SavesPiggy bank in front of blackboard

As the old adage goes “Actions speak louder than words.” On the topic in question, it is fair to say spending is an action that implies values. Which explains why the nature of finances can be so personal, and challenge us to ask the question, what do we value?

Is it:

  • Family?
  • Friends?
  • Health?
  • Happiness?
  • Travel?
  • Spontaneity?

In asking these questions, spending becomes a means of self-examination shedding light on our actions and our values. Sometimes they don’t add up and when they don’t add up life can get off track. Such as if you value health, and yet find on your bank statement a lot of transactions related to unhealthy fast food. Thus, prompting the questions:

Does your money care about the same things you do?
Is your budget going towards things you really care about?

In which case steps can and should be taken to realign spending with what we value. Such as:

  • Review expenditures and categorize them to see where the money is going. Know where you are now so you can make a plan going forward.
  • Recognize there may be some items in your budget that need adjusting, but will take time to achieve. For example, moving closer to work to cut down on travel and provide more family time will require time and planning.
  • Set goals to getting your money on track.
  • Make your goals visible. When you have the impulse to spend on something you really don’t value, you can stop yourself because you have visual reminders around you. Create visuals with pictures of your goals on the wall, on our computer, on your phone. Keep it readily in front of you.

Remember, money can enable a lifestyle of values and goals that reflect us. Now that you are aware of these tendencies and about what you value in life…go make your money care about what you care about.

Saving for Education is Simplified in 2018

By Invite EducationChild with graduation cap and gown

The recent tax bill expands 529 savings plans to include expenses for elementary and secondary education. And, the annual gift tax exclusion has increased. This is big news for education savers – no matter how much you are saving!

Congress wanted to make it easier to save for education. Traditionally, 529 plans have been used to cover college costs only, making 529 savings plans the go-to option to save for college for many families.

The new tax bill allows 529 plan distributions of up to $10,000 annually to pay for private school tuition all the way through the senior year of high school. This would include religious and parochial institutions.

“This expansion of the 529 plan is a net positive for families saving for higher education as it opens flexible options for tax-advantaged savings towards high school tuition as well.” said Peter Mazareas, a member and former chairman of the College Savings Foundation.

The other benefits of 529 plans remain unchanged. Earnings are accumulated tax-free each year, and distributions from the accounts for qualified educational expenses are also made free of tax. These tax-free savings and distributions help build a larger education savings nest egg and help reduce the amount borrowed for college.

States and national program managers offer 529 plans, often sold directly by the states (direct-sold plans) or through financial advisers (adviser-sold plans)

In addition to the federal tax benefits, you should also consider these factors:

State tax advantages: Many states offer deductions for qualified contributions. However, take a closer look at any restrictions. Some states require residents to use an in-state plan to qualify for deductions.

Fees and performance of investment options: As with any investment plan, it is important to pay attention to the fees and to the risk/return given the time frame for saving. Many plans offer age-based investment options to reduce the risk of principal loss as students get closer to college age.

More information on the program in your state can be found at

Some education savers may also take advantage of the increase in the annual gift tax exclusion. Taxpayers can now make tax-free gifts up to $15,000 ($30,000 for joint filers). If you have the means, consider taking advantage of a unique 529 plan benefit: you can lump-sum, super-fund a 529 plan with five years of gifting. Up to $75,000 can be bundled without gift taxes and put into a 529 plan, making it easy to transfer to relatives and help pay for future expenses. Once making the maximum bundled gift of $75,000, the contributor would have to wait five years before making additional gift contributions without penalty.

These changes are intended to encourage saving for education. But, the most important step remains the same: begin saving today. Consistently saving – even small amounts – over long periods of time allows a basic concept of finance, compounding, to work in your favor. Compound interest is the additional amount earned on previous interest. For example, if you have $100 in the bank and earn 3 percent interest, after 1 year you will have $103 if the interest compounds annually (aka simple interest). If it compounds every day, you will have $103.05. At the end of the second year, you will have $106.09 with annual compounding and $106.18 with daily compounding. The point is to illustrate that earning interest on interest grows savings as quickly as possible.

Another related basic rule of finance is that savings will double when the number of year times the interest rate approximately equals 70. For instance, in 10 years at a 7 percent interest, a $100 investment would be valued at $201.36, compounded daily. Taking advantage of compound interest can help grow education savings and reduce future college debt.

Finally saving for education is getting easier as crowd-funding opportunities are used. Many 529 plans have programs to permit relatives and friends to contribute to a student’s 529 education savings account. Also, be on the look-out for national programs such as Gift of College, which can now be found at retail outlets such as Toys R Us and Babies R Us. Friends and relatives can purchase these gift cards online or in stores to contribute to a student’s college savings.

All of these programs are designed to make saving for education easier with the hope of reducing future student debt. Remember: Saving a dollar today is better than borrowing one tomorrow.

Is It Always Best to Pay Off Credit Cards Before Saving for Retirement?

By Janet Alvarez

image of credit card

Close-up of a credit card

Conventional wisdom says you should pay off your credit cards before saving for retirement. While it’s generally true you should pay off high-interest credit card debt as quickly as possible, there are a few situations where retirement savings should come first. Let’s look at the benefits of each approach.

Benefits of Paying Off Credit Cards First

Credit cards usually mean high-interest debt, and the longer you take to clear it, the more you’ll pay in interest. Here are some key reasons why you should pay off credit cards first:

  • High-interest credit card debt can be hard to make a dent in. If you’re not making more than the minimum payment on your credit card, compounding interest means your balance will barely budge. Even if you never use the card again, you will end up making payments for a long time.
  • If you’ve got credit card debt, your finances might be strained. High credit card debt is usually an indicator that you’re living above your means. You should get your spending and budget under control before investing in retirement.
  • High-interest debt rates are usually higher than market returns. If your credit cards carry a 25 percent interest rate, but a retirement fund is likely to only earn about 8 percent per year in the market, that’s a whopping difference of 17 percent that you’d be missing out on by saving for retirement instead of paying down credit cards.

Benefits of Saving for Retirement While Paying Off Cards

Still, saving for retirement is critical, and there are several reasons why you might wish to do so even if it takes you longer to pay down high-interest cards. Among these are:

  • 401(k)s and other retirement vehicles carry tax benefits. You can contribute to 401(k)s and certain other retirement plans using pre-tax dollars, thereby reducing your adjusted gross income and overall tax burden. This frees up extra cash for other purposes, such as credit card debt repayment.
  • The earlier you start saving for retirement, the better. Delaying retirement savings means missing out on months or years of compound interest. The longer you wait, the more likely you’ll end up pinching pennies in your 50s as you try to catch up on retirement savings. Compounding interest allows even people who never make big salaries to end up with comfortable nest eggs—but only if they start saving early.
  • Saving for retirement builds good financial habits. Socking money away for retirement is not only essential to your financial future, but it also helps you develop better money habits today. In doing so, you’ll learn how to budget better and address the sources of your debt. Plus, retirement accounts are usually difficult to raid (they often carry fees and penalties for early withdrawal). These extra hurdles discourage you from accessing this cash until you actually need it for retirement.

Special Situations May Help You Decide

Deciding whether to pay off credit cards or save for retirement first is a complex, personal issue. However, there are some special circumstances that suggest a clear direction:

  • Your employer offers a 401(k) match. A retirement savings match is free money. Even if you have high-interest credit cards, save at least the minimum required to get your full employer match, or you’re leaving money on the table.
  • Your credit cards have low interest rates. If you’re able to carry or transfer your credit card debt on low or zero percent APR cards, then it makes sense to save for retirement while paying these off, since your low interest rates mean debt won’t snowball quickly—assuming you’re not making new purchases that add to existing debt. (See: When to Do a Balance Transfer to Pay Off Credit Card Debt).
  • You’re age 50 or older. If you’re 50 or older, savings are critical because you’re that much closer to retirement, and have less time to save or allow money to compound. Plus, savers 50 or older are allowed extra catch-up contributions to their retirement plans.
  • You’re buying a house or applying for credit. If you’re applying for a mortgage or other forms of credit in the foreseeable future, you’ll want your credit card balances low, and your credit score as high as possible.

Paying off credit card debt and saving for retirement are both important financial goals. Often, they can even be achieved simultaneously. Regardless of which one you pick, commit today to setting aside extra cash each month to achieve your financial goal.

Janet Alvarez is the news anchor for WHYY/NPR and the Executive Editor of Wise Bread, an award-winning consumer education publication focused on helping consumers make smarter credit choices.

What Were The Actual 2018 Tax Changes?

Q: There was so much talk about the proposed changes to the tax code. Now that the Tax forms with post-it notechanges have finally been signed into law, I’m wondering which planned modifications actually became a reality. What were the exact changes made to the U.S. tax code this year?

A: Many of the changes signed into law with the official Tax Cuts and Jobs Acts were quite different from those planned. Remember, though, that none of these changes will take effect until April 2018 at the earliest.

Let’s take a look at exactly how the tax code will be different for 2018.

1.) Changes for the seven income brackets

The current administration initially planned on condensing the income bracket system into just three brackets. However, when the law was finally passed, the seven-bracket system remained in place, though income levels for each bracket were tweaked.

The old income levels for the seven brackets were as follows: 10%, 15%, 25%, 28%, 33%, 35% and 39.6%. The new rates are now 10%, 12%, 22%, 24%, 32%, 35% and 37%.

2.) Removal of Obamacare penalties

While the administration was not successful in repealing the Affordable Healthcare Act, there will be no penalties for those who choose not to have adequate health coverage starting in the year 2019. For your 2017 and 2018 taxes, though, you will still need to provide proof of health coverage or be held liable for the penalty.

3.) Changes in standard deductions and personal exemptions

The personal exemption has been eliminated, while standard deductions have increased.
In 2017, the standard deduction for the single taxpayer was $6,350, in addition to one personal exemption of $4,050. For 2018, those deductions will be combined into one larger standard deduction of $12,000 for those filing separately, and $24,000 for joint filers.

4.) Child tax credit

Deductions and credits for children under age 16 have doubled from $1,000 to $2,000. There is also a new tax credit for non-child dependents.

The Child and Dependent Care Credit, offering parents deductions for specific child care expenses, remains as-is.

5.) Estate tax exemption

Before the current changes, the 40% estate tax applied to the portion of an estate was valued at $5.6 million for the individual, and $11.2 million for a married couple. The new law will double these exemptions. Taxpayers filing as individuals will be granted an exemption of $11.2 million, while married couples will have a $22.4 million exemption.

6.) Education tax breaks

Original versions of the tax bill included plans for reducing or eliminating several education tax breaks, but none of these changes actually made it into the Tax Cuts and Jobs Acts.

The Lifetime Learning Credit and Student Loan Interest Deduction remain unchanged, and the exclusion for graduate school tuition waivers is also still in place.

However, the new tax bill has expanded the available use of funds in a 529 college savings plan to include other levels of education. You can now use money in those funds to pay for private school tuition or tutoring services for children in grades K-12.

7.) Deduction changes

There have been slight changes in the mortgage interest, charitable contributions, medical expense and State and Local Taxes (SALT) deductions.

The mortgage interest deduction was previously in place for any mortgage debt totaling up to $1 million. Under the new tax code, all mortgages taken after Dec. 15, 2017 and totaling up to $750,000, are qualified for this deduction. Also, the interest on a home equity loan can no longer be deducted.
The charitable contribution deduction has seen two minor changes. Taxpayers can now deduct as much as 60% of their income for charitable donations, up from the previous 50% limit. Also, donations made to universities in exchange for the privilege of purchasing tickets to athletic events can no longer be deducted as charitable expenses.

The cap for the medical expenses deduction has been cut from 10% of adjusted gross income (AGI) to 7.5% of AGI. Unlike nearly all other provisions in the bill, this change is retroactive to the 2017 tax year. Also, it will only apply through 2018.
The SALT deduction, which includes property and income tax, was originally slated for elimination, but was preserved with some changes. The total SALT deduction now cannot exceed $10,000.

8.) Corporate tax rate changes

The modified tax code lowers the corporate tax rate to a flat 21% on all profits. This simplifies taxes for most businesses while providing them with a significant cut as well.

9.) Disappearing deductions

Not every deduction survived the new tax law. Here are some that won’t be in effect for 2018 taxes:

  • Casualty and theft losses that were not caused by a federally declared disaster
  • Unreimbursed employee expenses
  • Tax preparation expenses
  • Miscellaneous deductions previously subject to the 2% AGI cap
  • Moving expenses
  • Reimbursement for employer-subsidized parking and transportation

10.) Repatriation of foreign assets

In an effort to bring some of the country’s largest companies’ profits back to American shores, the new tax law features a one-time repatriation rate of 15.5% on all cash and similar foreign-held assets, and 8% on non-liquid assets held overseas.

11.) Changes to the AMT exemption amount

The alternative minimum tax (AMT) exemption was permanently adjusted to account for inflation. These changes will be most dramatic in 2018 and are as follows:

  • For a single taxpayer or one filing as head of household, the AMT rate will increase from $54,300 to $70,300.
  • For a married couple filing jointly, the AMT rate will increase from $84,500 to $109,400.
  • For married couples filing separately, the AMT rate will increase from $42,250 to $54,700.

Your Turn: What do you think about the changes in the tax code? How would you do things differently? Share your thoughts with us in the comments!


4 Incredible Facts In Honor Of Black History Month

It’s Black History Month; so let’s celebrate!Martin Luther King Jr.

In honor of Black History Month, Destinations Credit Union is proud to share four little-known facts about African American history, along with a list of fun ways to commemorate black history and culture.

1.) Dr. King improvised the most historic part of his speech

On August 28, 1963, more than 250,000 Americans stood spellbound at the Lincoln Memorial, as Martin Luther King Jr. delivered his iconic address.

While much of his speech went down in the annals of history, perhaps the most famous lines are those in which Dr. King describes his dream of a tolerant, respectful society. Incredibly, those words were likely ad-libbed on the spot.

Dr. King and a group of advisers spent hours polishing the planned speech, and the original version was a lot more political than inspirational. In fact, it did not make any reference to dreams.

Onstage, singer Mahalia Jackson allegedly whispered to King, “Tell ’em about the dream, Martin.”

After intoning, “We are not satisfied, and we will not be satisfied until justice rolls down like waters and righteousness like a mighty stream,” Dr. King’s talk became more of a sermon.

He continued with the now-famous lines:

“Even though we face the difficulties of today and tomorrow, I still have a dream. It is a dream deeply rooted in the American dream …”

Dr. King’s talk is now considered one of the most successful speeches ever in American history.

2.) Rosa Parks was not the first black woman to stage a sit-in

Before Rosa Parks was on the scene, there was Claudette Colvin.

In March of 1955, the 15-year-old schoolgirl remained rooted to her spot, refusing to move to the back of the bus. This was nine whole months before Rosa Parks’ famous stand. The young girl had been studying the history of black leaders, like Harriet Tubman, in school. Those lessons had triggered many heated discussions about the present-day Jim Crow laws. When the bus driver demanded that Claudette move to the rear of the bus, she refused.

The teenager said, “It felt like Sojourner Truth was on one side pushing me down, and Harriet Tubman was on the other side of me pushing me down. I couldn’t get up.”

3.) The Quakers were the first to protest against slavery

The Quakers were famously known as “The Society of Friends.” Four of these men from Germantown, Pennsylvania wrote the first protest against slavery in 1688.

Drawing inspiration from the Golden Rule, the peace-loving men wrote, “Pray, what thing in the world can be done worse towards us, then if men should rob or steal us away, & sell us for slaves to strange Countries, separating husband from their wife and children …”

This rare document was rediscovered in 2005 and is now part of the Haverford College Special Collections.

4.) One in four cowboys was black

It might not be the picture you’ll get from watching Western movies or TV shows, but at least 25% of cowboys were black.

After the Civil War ended, the old Wild West attracted lots of newly freed slaves seeking freedom and paid work. While they did find a demand for their skills and lots of freedom to live as they pleased, the blacks – and all cowboys – had to contend with many physical dangers while sleeping under the stars and “riding them horses,” such as inclement weather, reckless outlaws and rattlesnakes.


There are so many ways to celebrate Black History Month! Here are just a few ideas to help get you started:

  • Read the poem, “I, Too, Sing America” by Langston Hughes.
  • Bake sweet potato biscuits, a traditional African American-inspired soul food.
  • Jazz up a dull day by tuning into some blues music.
  • Play the ancient African game of Mancala. You can make a board at home using an empty egg carton with the lid cut off, and some beans for game pieces.
  • Look up James Karales’s photos of the 1965 Selma to Montgomery civil rights marches.
  • Read On Beauty by contemporary author Zadie Smith.
  • View Jacob Lawrence’s Migration Series.
  • Read the poem, “A Pledge to Rescue Our Youth” by Maya Angelou.
  • Crank up the volume on some hip-hop music, a genre that originated in the ’70s, in Bronx, New York City.


ATM Jackpotting Scam

Hitting the jackpot in an arcade game is enormous fun. You stand there grinning as theMan at ATM machine tickets keep pouring out. And then you get to choose a cool prize to take home.

Recently, though, scammers have given this awesome kind of win a sinister twist by bringing the jackpotting mechanism to Automatic Teller Machines (ATM). This doesn’t mean you can ask for a $20 and the machine will start spitting out hundreds instead. But it does spell trouble for ATMs and their owners throughout the country.

Jackpotting attacks on ATMs have been spreading through Europe and Asia for quite some time.  Recently, though, the Secret Service sent out an alert warning that jackpotting has reached the United States.

The alert was reported by Brian Krebs, who quotes several sources for this warning and cautions the public to be aware and careful of these attacks.

Here’s what to know about the ATM jackpotting attacks.

How does it work?

First, an attacker performs some basic scouting to figure out a way into the ATM. They usually target models with front-facing panels because they’re easier to access. To avoid detection and gain easy access to the machines, thieves have been posing as ATM technicians. They’ve also been using medical endoscopes to reach the insides of the ATMs.

Once the vulnerable area within the ATM is determined, the scammers attach their own computers to mirror the ATM’s software. The thieves will now install malware, which conveniently places the ATM under their control. At this point, the ATM will appear to be out of service for users and so scammers can force the machine to do their bidding from a remote location.

The criminals’ final step in this hack is to program the ATMs to spit out piles of cash and to send “money mules” to go and collect the cash for them.

Alternately, scammers may quietly bide their time and only take action a few days, or even a week, later. They will then return to the compromised ATM and program it to dispense all of its cash at once – which they will promptly pocket, of course.

What malware is at play?

Krebs’ report suggests that the malware being used in these attacks is Ploutus D, a malware that has been widely used in ATM hacks since 2013. However, this claim has not been verified.

Just this past spring, researchers working in Kaspersky Lab wrote about three relatively simple ways fraudsters can hack and remotely control ATMs. The scammers can use any of these methods, or they may be using Ploutus D, as Krebs believes.

Which ATMs are Vulnerable?

While every ATM in the country is at risk of being attacked, the fraudsters appear to be particularly targeting Diebold Nixdorf-made ATMs.

The Secret Service alert also warns that ATMs running Windows XP are “particularly vulnerable” and should be updated as soon as possible. Unfortunately, though the Windows XP Embedded support ended more than two years ago, many ATM owners neglect to install updates as advised, therefore placing their machines at greater risk for hacks.

What you can do?

ATM jackpotting targets the machine’s owners and generally does not affect the common citizen. However, you can do your part to stop these crooks by reporting any suspicious activity you see near an ATM.

Did you spot a technician who looks out of place? Is an ATM that worked just fine yesterday suddenly out of service? If so, alert the local authorities so they can take appropriate action.

ATM Safety

While jackpotting might be relatively new to the U.S. and it’s not yet clear how widespread these attacks are, it’s always a good idea to exercise caution when using an ATM in a public setting.

Here are some tips to remember the next time you use an ATM:

  1. Always cover the keypad with your free hand when inputting your PIN.
  2. If someone is lurking near the ATM for no apparent reason, do not use it.
  3. Be wary of signs that the ATM may have been tampered with, such as a new-looking keypad, a card reader that looks different than the rest of the machine, or an out-of-place security camera.
  4. Don’t use ATMs that are in unfamiliar neighborhoods or in stores you never frequent.
  5. If you’re withdrawing cash, be sure to secure your money in a wallet immediately after it’s dispensed. Don’t dawdle near the machine.

While the full impact of these jackpotting attacks is not yet evident, they are definitely not something the Secret Service is taking lightly. Do your due diligence to help stop the attacks, and always use caution when using an ATM in a public area.

Your Turn: Do you still use ATMs in public places? Have you ever had a less-than-perfect experience?


Why More People Are Opting To Watch Big Games At Home

When your favorite sports season is in full swing, and as your favorite teams play in

gold football icon

important games, it’s time to decide where to watch the game. While going to a live game is exciting and sports bars have their appeal, more people are choosing to stay home.

Fewer People Watching at Sports Bars

In cities with NFL teams, as well as in cities without NFL teams, “Sunday sports bar foot traffic dropped by double digits between the 2015 and the 2016 season.” (1)

Why the move from sports bars?

Increasingly, people are choosing to stay at home rather than going to their favorite haunts to watch their games. The proliferation of options for online watching is at least one way to explain this trend.

Lots of fans, however, say it it just too expensive to hang out in a sports bar. The food tends to be costly and not worth the high price tag. Also, more people are trying to eat healthier food, a goal that’s easier to achieve at home.

There may be an unspoken competition to keep up with the drinking levels of others in the bar. That can lead to more expenses, in addition to other potentially serious ramifications, such as getting home late or not being able to drive safely at all.

About half of today’s football fan base is female. Women often find bars to be a less than ideal environment for watching sports, with distractions ranging from mild flirtations to outright harassment. It’s often simply not worth the hassle. For both women and men, the quiet, unthreatening home environment is a definite advantage.

What’s the Appeal of Home Watching?

First and foremost, the appeal of home viewing comes with the ability to control the remote. You are the captain of the ship when you watch at home. When watching on DVR, you can fast forward through commercials you don’t like or pause and get up for a snack. This is a luxury that viewers at the bar, or even at a live game, simply do not have.

What’s the most important aspect of watching the big games? Food, of course! At home, you can prepare your favorite dishes and snacks at a fraction of the cost of bar or stadium food and drink. You can choose healthy options and keep the calories down along with the costs.

Another advantage is flexibility. Thanks to online devices, you can run an errand at mid-game, keep up with the score on your mobile device and return home to finish watching the game. In our busy world, this flexibility makes a huge difference. In fact, it appears that some of the people who used to frequent sports bars are actually going to other places. “Instead of watching the game, fans appear to be finishing their errands. In 2016, hardware stores and gas stations experienced a 12% uptick in Sunday visits from people who frequented sports bars those days the year prior, according to Foursquare. Foot traffic to pharmacies and grocery stores also increased.” (2)

What About Atmosphere?

Many people like the camaraderie of watching games with like-minded fans. This is a legitimate reason to leave the comfort of home and seek out the hallowed halls of the sports bar. However, having a game night at home is increasingly the choice that many fans are making. You can invite the people you feel most comfortable sharing your team’s ups and downs with, and avoid the others at the sports bar who can spoil your fun.

What About Watching the Game Live?

While most sports fans agree that there’s nothing better than seeing their favorite team play live, when pressed they may admit that it just isn’t that comfortable to sit in the hard stadium seats or fight the crowds. Oddly, some fans report that even if they go to a live game, they watch it again on TV when they get home because they feel they missed too much by actually attending the game.

While paying pricy cable bills can be painful, going to a live professional sporting event can be much more expensive for a one-time event. In addition to the price of a ticket, there’s parking to consider as well as the cost of concessions and any souvenirs.

For many reasons, from costs and health benefits to personal control, it’s clear that skipping the sports bar and the stadium is a growing trend.

Your turn: How do you prefer to watch your favorite games? Live, at a sports bar, or at home?

1. Foursquare, Steven Rosenblatt.  

2 Market Watch, Jacob Passy.  

3 Is Watching Sports on TV Actually Better Than Being at the Game? Dan Levy.