What Should I Look For In My Credit Report?


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  

How Everyone Else Spends Their Money


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:

Pay For Delete Scams

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:

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

Prep Your Finances for Success in 2016

Brought to you by our partner Accel Financial Services
With 2016 just around the corner, many people will make resolutions to manage their personal finances better.  Whether that means saving more, or setting up a personal budget, the suggestions can get overwhelming.
Here are four easy personal finance goals for you to consider, to start the New Year on the right path:
1. Set up a money management system that works for you

Different systems work well for different folks, but here are a few ideas:

  • Write down your income and all of your monthly expenses. Look for opportunities to trim expenses, wherever you can.
  • Identify the areas where you might overspend, and then decide to use cash for these transactions. Then, limit the amount of cash you put in your wallet each week to the amount you’ve decided to spend. Seeing the amount of money available as a fixed, finite thing can help you control your spending. 
  • Set up automated budget alerts with a service such as our MoneyDesktop financial management program within online banking.

2. Review your credit report 
Visit www.annualcreditreport.com to receive one free credit report annually from each credit bureau. 

If you’re having trouble understanding how to improve your credit, a free credit report review through the Accel program can help.
3. Begin to save 
Once you’ve got a workable budget, automate the process of saving. Setting up direct-deposit into savings makes it much more likely that you’ll save. Plus, paying yourself first helps the money to be “out of sight and out of mind,” so that you’ll be able to stick more closely to the spending plan you’ve set for yourself.
It’s important to reach a point where you have a balance between short-term savings and long-term (retirement) savings. It should be a priority to try to adjust your budget, so that you can take advantage of any employer-sponsored retirement plan that your job might offer, especially if the employer offers a contribution match.
4. Get serious about reducing debt 
One of the first steps in decreasing your debt load is to stop adding to it in the first place. Begin to get out of the habit of using credit cards for purchases.
If you have consumer debts, look for ways to try to reduce your overall interest costs and fees. Through our credit union’s partnership with Accel, you have access to a Debt Management Plan, which may reduce interest rates, lower monthly payments and waive late fees, for free!  To learn more, call 877-332-2235 or visit www.accelservices.org.

Keep Yourself Safe During The Holiday Season

Every year, we hear about the same holiday safety tips – don’t drive tired, don’t drive drunk, assume every other driver is drunk and/or tired, etc. Those are all good ideas to keep in mind year-round. Occasionally, we’ll hear one that’s specific to the season, like how frying turkey in the driveway is as dangerous as it is delicious, and it’s also not something to try while drinking or overly tired. Unfortunately, this time of year is also one of financial dangers, many of which you won’t hear about on the morning news or read about in the paper.  Take some time, read our tips, and hopefully you won’t be a holiday victim. 

Keep an eye on your surroundings – Crowded malls and shopping centers are a savory opportunity for pickpockets.  You’re expecting to get bumped and won’t notice one more jostle in a day full of them.  If you do recognize you’ve been robbed, the thief can probably get away into the crowd, disappearing like a needle in a haystack.  Purses should be worn across the body, wallets kept in the front pocket or inside a closed jacket.  Consider leaving the house with the bare minimum, such as your driver’s license or ID, health insurance card and our debit card – which offers fraud protection and security features not available with cash. 

RFID, RFID, RFID – Today’s pickpockets don’t need to take your wallet to cause you problems, because many modern debit and credit cards emit RFID signals with personally identifying information.  If any of your cards have a chip, then you need to account for them. Check our RFID wallet guide for some tips. In a pinch, you can wrap chipped cards in two layers of aluminum foil, which will offer you protection from high-tech pickpockets, but you may get some bewildered stares or questions from folks at the register.

 

Don’t leave checks in the mailbox – At some point, we all learned not to use those colorful envelopes that tell thieves which cards might have checks in them, but we never learned the next step: Don’t put checks in the mailbox at all.  It’s not hard for thieves to grab stuff out of the outgoing mail, whether it has the power company’s name on it or is shaped like a holiday card.  Drop all checks into a big blue mailbox, bring them into your post office branch, or hand them to your postal carrier in person.  By the way, this tip should be followed year-round, and you might want to consider setting up our online bill pay feature to minimize the number of checks you write, as well. 

Understand the dangers of every form of payment – Every form of payment has its dangers.  Cash is portable and untraceable, so it’s a target for thieves.  Cards without EMV chips are in danger from skimmers built into the card reader at registers (like what happened at Target).  EMV cards can be skimmed by people with specialized equipment who bump up next to you.  All cards, cash and mobile phones are in danger of being stolen.  Some experts are even saying that check fraud will be the most dangerous type of identity theft over the next five years.  Even if you attempt to return to agrarian-era bartering, an enterprising thief could run off with the cow you were going to trade for an Old Navy gift card.

Take a breath, recognize the dangers and take reasonable precautions. Do you know what kind of fraud protection you have on each of your credit cards?  Any card about which you’re unsure needs to stay home until you find out.  Unsure about a small boutique’s cyber security? Bring cash. 
Bring your own bag – Shopping bags are a great way for stores to advertise, but they also advertise to thieves.  “This overburdened, overtired, potentially unwary individual is carrying goods from all of these stores,” the bags say “some may even have receipts in them and might have been paid for with cash.” Don’t make it easier for thieves. Instead, bring a tote bag that zips up if you have one, or your canvas grocery bags if you don’t. 
Take a trip to the car – Carrying too much is asking for trouble.  It makes you less mobile, you’re less likely to feel someone remove an item from your bags, and even if no one hassles you, it’s a good way to end up with back pain.  If you’re enduring a marathon trip to the mall, take time every few stores to take your purchases out to the car. Keep receipts in your wallet and take pictures of the bags you put in your trunk (where thieves can’t see), so even in the worst possible scenario, your car insurance can cover the loss of your shopping from a car thief.
Plus, you’ll have less to carry, you’ll get some exercise, and the cold air can help you clear your head to decide if you need to purchase anything else.  Not a bad way to keep from overspending! 
Buy yourself a holiday drink from the coffee shop – You’re probably safer if you’re alert, but that’s just an excuse.  Holiday coffee drinks are delicious, you want one, and we just gave you an awesome excuse to justify the everyday luxury of a peppermint mocha to yourself.  You’re welcome. 
January is coming, be ready – If you’re going to binge on holiday shopping in December, you’ll need to purge in January.  Keep all of your receipts and do an extra-careful reconciliation of your accounts in January.  Be ready to spend a few afternoons making phone calls to make sure every charge is correct and accounted for.  Make sure to check your credit report in January as well.  While you’re checking your credit and your accounts, take the opportunity to start the new year off right:  you have your financial info gathered already, you have your credit report in front of you and your W-2s are starting to show up, so it’s time to do three things:
  1. File your taxes.  Don’t get mad at us, it’s not our fault.  We’re only reminding you to do it early because you’ll already have most of what you’ll need, so getting your homework done on Friday will give you the rest of the weekend off. And don’t forget to have any refund directly deposited to your Destinations account.
  2. Rework your debt.  You have every one of your credit card and other account statements in front of you, so it’s time to make some calls.  For your higher interest cards, it’s time to pay them down, transfer the balances to a MasterCard at Destinations Credit Union or negotiate a lower rate.  This is easier if you’ve got some cash in hand, possibly from the tax refund you now know you’re getting.  You can also take this time to explore using your home equity to eliminate some of the high-interest cards. 
  3. Set up a Holiday Club for 2016.  Alright, you just saw how much money you spent this holiday season.  Next year, resolve to do it all without taking on unnecessary debt.  You’ll save a ton of money and a ton of stress.  The best way to do that is with one of our Holiday Club accounts.  Use this year’s budget as a guide. Next year will be a breeze.

And that’s it.  It sounds like a lot, but it’s really taking the same level of vigilance you would use for normal shopping and increasing it to correspond with the increased spending of the season.  For a good rule of thumb, maybe we should just establish the “3-Mariah” rule:  Once you hear Mariah Carey’s “All I Want for Christmas is You” for the third time on any day, you have to go home – you’ve either spent too long at the mall, or your brain has been turned into holiday slurry and you can no longer be trusted to remain vigilant.  Three Mariahs and you’re out.

How Will I Ever Retire If They Keep Moving The Finish Line?


What happens if you’ve made it to the day you thought you’d be retiring, but you’re simply not financially ready? Perhaps you passed your “Plan B” date. Maybe even “Plan C” has come and gone. You know you’ve been making the right moves, but a temperamental stock market, kids who stayed home longer than expected or an unlucky series of events keeps pushing back your time frame.  So, in exasperation, you ask … 

Question: “How will I ever retire? When will it be safe to stop working? 

Answer:  Well, hopefully very soon.  We’re going to show you some ways to put luck back on your side.  It’s going to be part planning, part faith and a good deal of ingenuity, but we can get your pictured future back within sight again. 

Question:  “OK, so how do I know when I’ll have enough money?” 

Answer:  The first thing you need to do is realize that enough money is possible.  It’s scary to read headlines about Boomers running out of money because they lived so long, especially when they’re coupled with stories about how the 4% rule isn’t enough.  If you take these articles at face value, you’ve got to come up with 40 years of savings, assuming you’ll be taking out as much as 10 percent of your nest egg every year.  Because it’s difficult (if possible at all) to get to that point, it’s easy to give up. 

Instead, go back to 4%.  Or, if you’re being conservative, make it 5%. That’s a 25% raise! That’s a lot! Then, remember the lessons of your working life: Anything that happens far in the future should be weighted far less, because you never know what might happen between now and then.  You might find you don’t care for fly fishing that much or you no longer need that annual trip across the country. Your neighborhood’s home values could rebound.  Maybe you’ll stumble onto a strong investment.  There’s too much uncertainty in life to freak out about what’s going to happen far away into the future. Take 5% out, per year, until you’re 85.  That’s plenty. Anything beyond that is too much. 

Question:  “How can I make sure I’ve got enough retirement income? 

Answer:  One of the easiest ways to produce panic is realizing that money only flows one way once you stop working. You’ve been conditioned to treat any month in which you spend more than you earn with revulsion, shame and guilt. Now, that’s going to happen every month – for the rest of your life.

A lot of retirees feel more comfortable with money coming in on a regular basis. You can accomplish this in a variety of ways.  First, try to put off Social Security as long as possible.  The higher payout will make retirement much easier. Second, try to create passive income using investment products.  In the same way that dividend-producing stocks pay out on a regular basis, you can create passive income that can be accessed any time by moving chunks of your retirement into high yield savings products like money market accounts.  That way, you can still budget the way you used to without having to sell your stocks (while hoping you guessed the right time to sell).

You can also create passive income by using your home equity to fund a business venture.  Right now, mortgage rates are low, but a lot of Boomers are missing out because they paid off their homes in order to retire.  You use a home equity line of credit to buy a rental property (which builds equity at the same time it gives you a paycheck) or start an online business built around your hobbies.  If you love to knit, sell handcrafted items on Etsy.  Do you like to fish? Start manufacturing lures with the equity in your home.  These ideas can generate a monthly income for you and also give you something else to leave to your children.  In a pinch, you can even sell the rental property or sell shares in the business for a quick cash infusion. 

Question:  What about my health?  That can be a big cost, even with Medicare. 

Answer:  One of the best places to put some money when you retire is into various forms of insurance. You probably already have life insurance, homeowners, and insurance on your other big purchases, but you also probably only have Medicare to cover the health side of your insurance portfolio.  What happens if you need something Medicare doesn’t cover?  Is it worth it to go on Healthcare.gov and try to find a supplemental plan?

One way to keep your options open is to try a “do-it-yourself” Health Savings Account (HSA).  While traditional HSAs gain their benefits from your employer paying into them, you can get a lot of the same benefits simply from putting some spare cash into one of our high-yield money market accounts.  That way, you’ve got money put aside for a health emergency, but you’re not spending on a premium you’ll only need very rarely.  As an added benefit, you can access that money if you need it for things that aren’t health-related if some other kind of emergency comes up.

Hopefully, you’ve gotten a better idea of how to tackle retirement.  You need to have faith and protect yourself at the same time.  The best way to do that is to put your money with someone you trust and give yourself access to it, just in case.  If you need any more info, want more guidance, or just need someone to talk to about taking the leap, give Destinations Credit Union a call at 410-663-2500.

Daily Fantasy Sports


Every Sunday, Americans gather to watch football. Wherever you are, whatever else you do, the one thing we all (it seems) have in common is this Sunday ritual. When Dr. King called Sunday the most segregated day in America, he couldn’t have imagined the unifying force football would become, dominating popular culture and conversation in a way few other forces could.  In fact, of the 50 most popular programs last year, 90 percent of them were professional football games. Perhaps, in a world of DVRs and on-demand programming, football may be our last shared live event. 

We’ve found a variety of ways to enjoy our shared obsession, from tailgating to fantasy football. Over the last few seasons, a new way to enjoy football has come to dominate every commercial break, ESPN segment and preview article:  daily fantasy sports.  Daily fantasy sports, or DFS, is similar to fantasy football, but it’s played on a weekly basis rather than being a season-long experience.  It was also just declared “gambling” by the state of Nevada, which is an interesting development for the rest of the country.  If you’re curious about DFS, either because you might want to play or because you want to know what all of those commercials are about, this article explains what DFS is, why it’s controversial, and outlines the potential pitfalls that come along with it. 

For fantasy football enthusiasts, DFS seems like a natural evolution. Traditional season-long fantasy football has some major issues. For instance, a single injury can ruin a season, no two leagues have the same rules, and the whole season can swing from a waiver wire pickup of a running back no one had heard of a week prior. Most of these issues are rectified by a universal scoring system and the one-week duration offered by the major DFS sites FanDuel.com and DraftKings.com.  If your fantasy football season has gone awry for any of the reasons listed above, joining a DFS league can seem like a logical way to ease the pain.  In addition, if your fantasy season is going great, DFS can seem like an appealing way to win some easy money. 

The controversial issue, of course, centers around money, because DFS currently exists in a legal gray area.  While it may look like gambling, it emphasizes skill over luck, so it is not technically gambling. While the state of Nevada has ruled DFS as such, that doesn’t change a whole lot, since gambling is legal in that state. 

Whether it’s luck or skill that’s the more important attribute, anyone who has played fantasy football knows that both are required for success, which is why this issue is so sensitive.  For instance, if Cleveland’s tight end catches a touchdown with his knees, that’s worth a lot of points, but it is unlikely anyone who selected him had predicted such a play.  Similarly, when the booth reviews a potential fumble at the goal line, it can be worth enough points to swing a matchup from victory to defeat – a touchdown is worth 6 more points than a fumble in most leagues, which is a substantial amount. That booth review can take several minutes to determine the result of a play that consisted of a split second or a few inches. 

At the same time, there is a lot of skill in determining which quarterback/receiver tandem will hook up for multiple scores or which defense is undervalued each week.  Because of these random occurrences, fantasy sports is what economists and game theorists refer to as a “knapsack problem” because it considers each player – in effect – a weighted random number generator. 

The MIT Sloan conference is dedicated to advanced analytical research into sports, and if you’re the kind of person who watches football with a spreadsheet open you may believe skill outweighs luck. However, one of the most interesting things about fantasy football is that the more skilled players tend to think the game is driven by luck while the less skilled think it’s driven by skill.  Matthew Berry of ESPN, one of the biggest names in fantasy sports, has argued for years that fantasy players should view each player as a lottery ticket and collect as many as they can, while his colleague at ESPN, Tristan Cockroft, has created what he calls “Fantasy Consistency Ratings” to account for the random variance from week to week. 

As we move into a new world of DFS, the issue remains whether the pursuit is more similar to free fantasy football leagues or sports gambling.  Congress will have to decide, it appears.  Powerful lobbying groups already exist to benefit DFS, so the sites may remain legal for longer than their online poker brethren.  Before you spend $200 to get a “free” entry, however, it’s a good idea to remember that even if DFS isn’t gambling, it’s still a way to spend money.  It can make an otherwise dull football game between two lackluster teams into something more exciting, but it can also fall nicely into a perfectly legal space where powerful people profit by exploiting human addictions. 

Sources: 
http://www.phil.vt.edu/JKlagge/ConductorChurch.htm 
http://espn.go.com/fantasy/football/story/_/id/13371473/fantasy-football-matthew-berry-draft-day-strategy-revealed-draft-day-manifesto 
http://espn.go.com/fantasy/football/story/_/page/consistency141223/2014-fantasy-football-consistency-ratings-entering-week-17 
http://www.nbcnews.com/business/business-news/will-ruling-daily-fantasy-sports-are-gambling-blow-whistle-games-n446111 

Investing In Your Career


When you think of your investment portfolio, you probably think of stocks, savings and maybe a few other financial products you own or things you’re planning to use for buying a house, fund retirement, or to keep yourself protected.  What you might overlook is the investment you’ve made in your career. You’ve invested time in your career, and if you’re still paying off student loans, you definitely know you’ve spent money on it as well.  Just like any other investment, your career has risk and return.  If you want to get the best return on your investment in your career, then here are a few tips that can help: 

Get a degree.  If you haven’t finished college, you might have found yourself bumping up against a glass ceiling.  You can finish your degree online, often in a short amount of time and without spending a ton of money.  If you’d rather go back to school in person, talk to us about student loan options.  

Get an advanced degree.  It’s no surprise that the average income goes up with each advanced degree that individuals earn.  If you’re looking to advance your career, consider using one of our loansto finance an MBA, which is useful in virtually every field. 
Build your brand.  More and more, career changes and advancement can be built through the Internet and social media.  You can work on building your personal online brand or get training and a certification in all sorts of software and design to help others build their brand, making money in the process.
Learn another language or another culture.  There are very few job skills as portable as language and communication.  If you find yourself out of a job, knowing another language can help you get that next one lined up. Understanding different cultures makes it easy to move if the next job is across the country or even elsewhere in the world.
There are a lot of ways to invest in your future, but the one we tend to overlook is spending money to develop our jobs.  Unless you got in on the ground floor of investing in Google, you’re probably never going to find an investment that pays you more over the course of your life than the one you’ve made in your career. Don’t neglect it.

10 Facts About Credit Unions

In preparation for International Credit Union Day, October 15th, we thought we would share a few facts about credit unions. Being a member of a credit union is a coup for your finances for many reasons. Here are just a few facts that make credit unions a great option. 

Fact #1: President Roosevelt signed the Federal Credit Union Act in 1934 to promote thriftiness and prevent usury during the Great Depression. 
Fact #2: Credit unions are insured. Most credit unions are insured by the National Credit Union Administration (NCUA), which provides essentially the same coverage on funds as does the FDIC. If the word “federal” is in the name, they are insured. If not, check with your credit union. It may be state-chartered and/or have private deposit insurance.  Destinations Credit Union is chartered by the state of Maryland and Federally insured by NCUA.
Fact #3: Eligibility is fairly flexible at most credit unions. Most require residency in a certain community, city, or state, or that you are employed by the credit union’s sponsor company, also known as a Select Employee Group (SEG). But requirements are pretty broad on most, making eligibility at a credit union a possibility for almost anyone. 
Fact #4: Credit unions are not-for-profit institutions and are owned by the people they serve, not by a few shareholders. 
Fact #5: Credit unions can offer better rates on savings accounts, lower interest rates on loans, and little or no fees on accounts because they return their profits to the member/owners.
Fact #6: The credit union’s board of directors, which is elected by members, can set loan limits in an effort to help the credit union grow. 
Fact #7: Credit union members have democratic control of the credit union and can attend and participate in regular and special membership meetings. 
Fact #8: Nonmembers benefit from credit unions too. Competition for low rates keeps banks’ fees in check, thereby benefiting nonmembers. 
Fact #9: With more than 5,000 credit unions across the globe and access to tens of thousands of ATMs, credit unions are increasingly convenient on a national scale.  Destinations Credit Union is part of a national shared branching network, giving you access to your accounts all over.
 

Fact #10: Once you are a member of a credit union, you stay a member for as long as you maintain your deposit account (share), regardless of whether or not you continue to meet the original eligibility requirements.

College Credit: It’s On The Syllabus

No matter what you ask your professor over the course of the semester, the most likely response you’ll get is something like “It’s on the syllabus.” Yes, professors love to write up big documents governing every aspect of behavior in their class. In some instances, it might seem like the iTunes terms and conditions are easier to get through than that 30-page syllabus. Even worse are the instructors who offer a half-page of instructions while expecting you to interpret in a manner similar to applying the Ten Commandments to a dispute in your fantasy football league.

As exasperating as those syllabi might be, there’s something to be learned from them.  When you have a document that outlines your principles, it helps clarify confusing situations.  Do you have a syllabus in your life?  What is your policy for missing class?  What guidelines do you have for civil behavior?  How do you know if you’re living up to your principles if you’ve never sat down and tried to figure out what your principles actually are?  Without a syllabus, you’re just left to figure out every confusing situation as it comes along.

Your financial life needs a syllabus, too.  What’s your policy on work hours?  Will you pick up a shift during finals week?  Are you willing to quit your job if it interferes with school?  A budget can be your syllabus for spending to answer many of those questions.  For instance, if you know ahead of time that you can spend $20 per month on video games, then you know buying that video game you want this month means that you can’t buy another until the end of the year. It also means that, if you haven’t bought a new video game all summer, you don’t have to feel guilty about buying one now.  

This weekend, put together your syllabus.  Use one your professors have provided as your example … and fill in all the sections.  Start with who you are, what your expected outcomes for the semester are, and determine your tentative schedule.  Don’t worry about some of the odd sections until the end. You can probably find a way to incorporate them – for example, sexual harassment policies might become “dating principles” – but that’s something you can handle later.  For now, try to get down the most important principles to guide your path ahead.

Finally, after you know what you value, put together a budget.  Do you value time with your friends?  Then put more money aside to cover spending leisure time together.  Or maybe you value that time with your friends, but don’t value going out to eat or dancing on Saturday nights.  Maybe your budget should reflect that, so maybe consider putting money aside to host a dinner party or watch football.

Whatever plan you come up with, try not to deviate from it too much once you have it established.  That way, when a strange situation comes up in a few months, you’ve got a list of principles to help your decision process.  Tell yourself, “It’s on the syllabus” and use that to help guide you.  Creating a budget, scheduling your time, and formalizing your principles can be difficult, so drop us a line if you’d like some help.  You can find us here.