Parkville

Check Fraud & Swiss Cheese

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Just about every article you read about fraud, security and identity theft is based on the idea that with increased technology comes increased security.  In fact, we do everything we can to bring as much cutting edge technology to your defense as possible. Unfortunately, some of the greatest vulnerabilities in your security come from low-tech attacks.

Think about it this way: A dedicated criminal wanting to get into your checking account has to spend thousands of dollars on an RFID skimmer, a device to crack your PIN, and other technological marvels out of a “Mission: Impossible” movie, but when they get access, our fraud protection kicks in after only a very small expenditure.  So, why would a criminal spend thousands of dollars when they could get the same benefits from spending $5 on a blunt object with which to threaten you physically? Why steal RFID signals out of the air when you can pick pockets and shop online?  Why go high-tech and hassle with all our security experts when a criminal can go low-tech and wait for you to slip up?

It helps to think of your financial security as a metaphorical block of Swiss cheese.  Every layer of security may have a few holes, just like every step you take to protect yourself has holes.  The idea is that, if we put enough layers of cheese on top of each other, we can make sure that none of the holes go all the way through the cheese, leaving you vulnerable.  In that spirit, we’ve identified a low-tech hole in the cheese, and we’re putting down another layer.  We’d like to make sure you put down some cheese, too.

Check fraud is still a major problem, and it could get worse as EMV chips and software security make ATM and point of sale transactions more secure.  Check fraud is an umbrella term for a variety of strategies scammers use, ranging from creating blank checks on computer software to stealing and using old checkbooks.  Your checkbook is a source of fraud vulnerability for many of these strategies, but the ways to protect yourself are fairly simple. 

1.) Treat your checkbook like cash.  The easiest thing to do is to just not give thieves access to your checks.  You wouldn’t put an envelope of cash in your mailbox with the flag up, would you?  Then don’t do it with a utility check.  If you’re going to mail a check, drop it into a blue USPS box on your way to work.  You can also see what’s available to pay online.  Our online services are really impressive, and if you set up an automatic payment through us or use our online banking, you never have to mail a check again.

 2.) Balance your checkbook every month.  It may seem like a chore, but balancing your checkbook is the easiest way to make sure you’re the only one spending your money.  We have special buttons built into our online account view to make this as easy as possible. If you want a little personal guidance, come talk to us and we’ll walk you through the process.  It’s easier than it looks. If it takes you forever every month, you might not be using all of our features! Call Destinations Credit Union at 410-663-2500 and we’ll help you make the process much easier. 

3.)  Destroy your old checkbooks and order new ones regularly.  For whatever reason, you might have found yourself with old checks lying around.  Maybe you were running low on checks and ordered a new checkbook but decided not to finish the old one  because they came so quickly. Maybe you’ve moved and didn’t bother to finish the set with your old address. If that’s the case, destroy them.  It’s worth the cost of a checkbook or the effort of a few minutes at the office shredder to keep from leaving yourself vulnerable. Also, don’t put your driver’s license number on the checks when you order them.  It might take a few extra minutes at the register, but that inconvenience is a lot worse for a scammer holding your checkbook than it is for you.  If you need to order a new checkbook, you can do it here:  https://orderpoint.deluxe.com/personal-checks/home.htm. 

It’s a different world for your checkbook than it was even a few years ago. Nationally, we’re writing fewer checks in fewer places and many of us don’t carry a checkbook at all.  Across the country, speech teachers are showing “I Have a Dream” to their students and they have to pause the video to explain what a promissory note is and why Dr. King is talking about writing a check for freedom. They may seem old-fashioned, but that’s exactly why they represent such an important vulnerability in your financial security:  They’re just paper and ink.  No chips to crack, no PIN, no online security protocols.  Don’t let your Swiss cheese have holes that go all the way through. Protect yourself from check fraud.
Sources:

http://money.usnews.com/money/personal-finance/articles/2008/05/19/frank-abagnales-tips-on-avoiding-check-fraud
http://www.consumer.ftc.gov/articles/0159-fake-checks#Youandyourbank
http://www.ckfraud.org/ckfraud.html

Your Greatest Strength Might Be Your Greatest Weakness

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We’ve all had that moment when we were shopping on eBay at 3 a.m. and spotted the deal of the century -an Omega Speedmaster Moonwatch for just $100? That’s the watch that’s been on the moon! Then we realize the price is too good to be true when we see that our newest find will ship from the other side of the planet and the listing features mysteriously blurry photos that obscure key details. Maybe that Moonwatch spelled Saturday with a “B,” because some scams are really easy to spot.  We’ve all seen the scam and after catching ourselves, we’ve all asked ourselves the same question:  Who falls for this garbage?

From behind a computer screen, spotting a scam is as easy as a stroll in the park on a beautiful Saturbay afternoon.  What investigators have realized is that it gets much tougher when fraud happens in person.  In person, all of those skills we’ve developed online go away and we become easy marks.  

The IRL problem

It’s easy to act differently online.  No one knows us there, so we can make up the life we want to live or act without repercussions. Otherwise calm and decent people can become maniacs online if certain topics come up – from vaccinations to the recent play of the local professional quarterback.  For others, the digital world is a place of exploration and indulgence in hobbies that are unavailable offline, as players of World of Warcraft or the thousands of people who left reviews on Food.com’s recipe for ice cubes can attest.  However we change behind the computer, it’s easy to see that we think of ourselves and others differently while online.  Offline, you wouldn’t constantly harass your friends about a farming game, would you?

The same is true when it comes to scams.  When we sympathize with people, we lose the critical distance we need to spot scammers.  If we can connect with a person, we are far more likely to fall for a scam, and talking to them away from the computer increases that personal connection.  

Think about it this way:  The FTC says the most common forms of scams all involve human interaction, not computers.  The most common form of online identity theft isn’t breaking into your credit union — we’re really good at security — it’s phishing, where scammers convince victims to willingly give up their credit card information.  The most common phone scam is the grandparent scam, in which the bad guys use our natural concern for our family to get money out of us. The most common scam ever might be the basis for the modern home improvement scam: using a hard-luck story or the victim’s greed to convince them to pay up front, then never actually do the work.

How to avoid in-person scams

1.) Be wary of surprises and secrets.  Two things that should tip you off right away are really big surprises and really private secrets.  If you won money in a contest you don’t remember entering, you probably didn’t enter it.  If you’re getting a big payday, but you can’t tell anyone about it, you’re probably not getting a big payday at all.  If a company runs a contest, they want to get publicity. If you’ve got contest winnings coming, that company probably made you put down your email address and a bunch more info.  It probably took a while for them to get all of your data.  You’d remember.  Even in old TV shows they understood that surprises and secrets were a bad sign – if a 1960s sitcom hero inherits a mansion from an uncle they’ve never met, you better believe it’s going to be haunted.

2.) Take your time.  If someone needs you to act quickly, that’s often a clear sign of a scam, particularly if the sudden rush is coupled with a surprise as described above.  Scammers understand the power of groupthink – which is what psychologists call that trend among humans to make worse decisions in groups than by themselves – largely stems from an impending time deadline. By denying you time to catch your breath, scammers are trying to rush you into a bad decision and keep you from getting advice from someone with distance and perspective.

3.)  Try to be a robot.  NPR’s “Planet Money” podcast aired an episode covering the danger of our humanity very well.  In it, a banker named Toby convinced dozens of people to help him perpetrate a large-scale fraud simply by telling them his hard-luck story.  He claims that not one of them turned him down.  The case made in the episode is that for each person who heard the story, the ethical decision to commit a fraud and the rational decision to trust a scammer was completely overwhelmed by our sense of sympathy and injustice. Don’t let that be you.  

Hopefully, you’re not going to have to deal with in-person scammers very often. If you do, be sure to contact the FTC here: https://www.ftccomplaintassistant.gov/#crnt&panel1-1 and the FBI here: http://www.ic3.gov/default.aspx 

If you think you may have been the victim of a scam, identity theft, phishing, or any other security threat, let us know immediately.  The sooner we know, the safer your accounts at the credit union.  You can email us at info@destinationscu.org or call us at 410-663-0859.

Sources:
http://www.food.com/recipe/ice-cubes-420398 
https://www.citizensadvice.org.uk/consumer/protection-for-the-consumer/scams/spotting-and-reporting-scams/how-to-spot-a-scam/ 
https://www.fbi.gov/scams-safety/fraud 
http://tvtropes.org/pmwiki/pmwiki.php/Main/OnOneCondition 

http://www.npr.org/sections/money/2012/04/17/150815268/why-people-do-bad-things

New School Year’s Resolutions

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Ah, autumn.  That wonderful time of year when the leaves change color, football takes over the television for five uninterrupted months and students head back to school. Alright, it’s not actually autumn, it’s August. It’s still summer outside, and more of the country is watching grass turn brown than observing the leaves transitioning to orange. School is starting, though, and you’ve probably already gone through a lot of the rituals that accompany a new school year, so you may be in a back-to-school mood. 
Here’s a tradition you might not have tried: Have you made a new school year’s resolution?
We’re not talking about those promises you make to yourself every year about doing homework on Friday nights or not wearing sweatpants to class.  Have you made a resolution for this year that you actually intend to keep?  Now is the perfect time to make a change, while you’ve got a new planner just waiting to have milestones and goals written into it.  We’ve got some tips to aid you in keeping your resolution this school year.
 
First, set a clear goal.  Goals are only as useful as they are attainable, and goals are only attainable if they’re clearly articulated.  For example, “I want to eat better” is an admirable goal, but it’s difficult to figure out if you’ve actually done it or how that affects your decisions. Eating two cookies is better than three, for example, but would you have eaten three cookies before?
That’s why it’s important to be specific. Instead of saying, “I want to be better with money so I won’t need to eat toast sandwiches at the end of the month,” try making a resolution like “I won’t date freshmen” or “I will set a budget every month.”  You can tell if you’ve set a budget even if you don’t always do a good job of following it.  Having a tangible goal gives you freedom as well.  Are you being good with your money if you buy a latte every once in a while?  Who can tell?  But if you have a budget, you can clearly see when you can afford a latte, and what else you might have to give up to get it. 
You also need to keep the goal simple enough so it is achievable.  “I’m going to work out for two hours every day” sounds great … for about a week.  Then it sounds like a hassle.  What do you do for two hours every day that you’re willing to give up?  Sleep? Homework? Xbox?  An easy to achieve resolution might be something like “I will spend Monday afternoons cleaning,” or “I’ll save $1,000 to put a down payment on a car within a year.”  Saving $1,000 might sound harder than working out, but it’s really not.  Put $85 per month away for a year or $43 per month for two years.  Even if you make minimum wage, $43 is only about one day’s salary each month.
It’s easy to fool yourself into believing you’re living up to your resolutions, which is why you need someone to keep you accountable and help you out when you need it.  That’s a place where Destinations Credit Union can really help.  We’ve got internal experts in budgeting and financial counseling partners who’d love to talk to you, and we offer great rates on Kasasa Cash Rewards Checking, Savings Certificates, Holiday Club accounts, and all sorts of savings plans to make saving for that down payment even easier.  We also have tools, such as MoneyDesktop and simple budgeting software.

The Shoulds Of Retirement

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When it comes to retirement, the variety of ways to save money can be so confusing that even the most diligent investors might wonder if they are looking at the right information, doing the right thing or if they’re even on the right track. Would you know if you should be using a fancy savings plan?  Should you put more in? Less?  Should you panic?  While we’ll get to the rest of the questions, the answer to the last one is no, you should not panic.  There is no retirement plan anywhere that does better when you panic.

For anyone confused about retirement, there are lots of sources that explain who, what, how, when and why, but very few places to turn for one of the most important questions – should.  This guide is meant as a quick reference to that really tricky word, with some of the most common “should” questions answered. Like any other guide, though, it can’t be as specific as you’d like, so if you have more questions, get in touch with us at 410-663-2500, or ask questions our Facebook page.  Ask us your shoulds or see what shoulds other people are asking.  If you’ve got a question, it’s a safe bet you’re not alone. 
Question:  How much money should I have when I retire?
Answer:  This is the most common “should” question in America right now, probably because of its importance.  The answer that most experts give, “as much as you’ll need” isn’t particularly helpful.  A better, although still maddeningly incomplete answer involves some simple math you can do on the back of a napkin: take your annual income the year before you plan to retire and subtract your annual retirement income (Social Security, pension, trust, etc.) from it. Whatever that difference is, multiply it by the number of years you expect to live after retirement, probably 15-20.  That’s how much you need, give or take a bit.
For example, if your Social Security and pension pays you around $50,000 per year and you’re making around $150,000 before you retire, the difference is $100,000.  Multiply that by 20, and you’ll probably need around $2 million.  If that sounds like a whole lot of money, that’s because it is a whole lot of money.
Question:  How much should I be saving now?
Answer:  Another question that all-too-often results in a frustrating answer. You should save as much as you can, but not more than you can.  A better answer is that retirement should be your savings priority, ahead of college funds or other long-term savings simply because you can’t get a loan to retire, but you can for virtually everything else.  If you feel like your monthly contributions are just drops in the bucket, stop focusing on the bucket.  Instead, take a look at your monthly picture.  Make a pie chart with five big slices:  Bills, debt, spending, short-term savings and long-term savings.  This isn’t yet the time to go through and figure out how to trim your bills or refocus your spending, just look at those five. How much of your long-term savings is being used for retirement?  Could that number be higher?  If so, put more into retirement.  If you want to find ways to reduce your costs so you can save more money for retirement, look at those categories again and start making cuts from right to left.  First, cut some spending from other long-term savings.  Then short-term savings, spending, debt and finally bills.
Question:  When should I start saving?
Answer:  If you read the last two questions and have sharp pattern recognition skills, you might expect a frustrating answer, but this one is actually easy.  If you haven’t started, start today.  Like, right now. Seriously, either click this link for information on our IRA programs. It only takes a few minutes, and you’ll feel so much better.  Remember the motivational cliché: the best day to plant a tree was 20 years ago, the second-best day is today.
 
Question:  What kind of retirement account should I get (or get next)?
Answer:  There are three major considerations when selecting a retirement account.  First, how many years do you have until you retire?  The answer to that question should help determine your risk.  The second question is how much money do you make?  The answer to that question determines whether you’d like to be taxed on the income now or in retirement.  Unfortunately, you’ll have to pay taxes on it at least once.  Finally, have you maximized the benefits of another account?  If you’re past the point of getting your employer to match your 401k, look at all of your options.  If not, put in as much as you can that your employer will match. You’re not going to find a lot of retirement plans that pay more than the 100% rate of return your employer is offering by matching funds, and if you do find one that can consistently outpace your employer’s contributions, it’s probably illegal.

Once you have the answers to those questions, check the link above or drop us a line at info@destinationscu.org and we’ll set you up with the best plan we can.

There are a lot of retirement guides out there, but most of them aren’t very good at those “shoulds” that matter so much in our daily lives. Hopefully, this guide has given you enough information to know what questions to ask.  We’d love the opportunity to talk about these shoulds or any others you might have. For now, check out our Facebook Page and join in the conversation!

Sources:

http://www.investopedia.com/university/retirementplans/529plan/

http://www.savingforcollege.com/articles/coverdell-ESA-versus-529-Plan
http://money.cnn.com/retirement/guide/basics_basics.moneymag/index7.htm
http://money.usnews.com/money/personal-finance/articles/2014/12/19/7-retirement-savings-accounts-you-should-consider

Shop Local!

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Your credit union is built on the idea of people helping people.  You already know we can do a better job looking after your money than a mega-chain bank that answers to shareholders, because we know you and our community.  So why give that up when you find a bargain online?  Shopping locally is better for the community, better for the environment and the best way to find something unique that can make all of your friends say “wow.”  

Shopping locally benefits your community. 

When you shop locally, the money you spend stays in the community.  Buying a new pair of shoes from a local shop takes dollars out of your pocket and puts them into the pockets of a local resident, of course.  What you might not consider is that those dollars get spent by the business owners as well, and they’re also likely to spend their money locally.

American Express estimates that about 68 cents out of every dollar spent in local shops stays at home, and if that dollar is spent locally three times, it means that – for every dollar you spend at local shops – $1.45 goes back into the community.  It’s what economists refer to as the multiplier effect, and it’s very powerful.

Fun fact:  The multiplier effect is why the government is still willing to make pennies, even though minting them costs more than one cent.  The multiplier effect is powerful enough to justify all that loose change in the jar next to your bed, and it’s powerful enough to make shopping locally a force for change.

Of course, that money doesn’t just go to shopkeepers and restaurant owners. The local government takes out its share in local taxes.  Even if you hate the idea of taxes, and we all may grumble in April, local taxes go to schools, firefighters, and other services in the area.  Buying dinner at a local bistro can be the reason the town has enough money to fix the potholes on your street. Not a bad dessert.

 Shopping locally is better for the environment. 

You already know about the danger of greenhouse gases and the effects of global warming.  If you don’t remember anything else, you probably remember Al Gore’s visual of a polar bear floating away. What’s easy to forget is that everything you buy had to come from somewhere.  If you’re drinking imported spring water from Fiji, that water flew halfway around the world.  If your new pants were made in China, they racked up frequent flyer miles, too.

It’s really hard to avoid foreign manufacturing, but many local businesses have locally made goods for sale, which eliminates at least one flight your product might take, saving on fuel and greenhouse gases.  Even if the product you’re buying was manufactured overseas, buying it locally can shave a flight or two off the product’s carbon footprint.

Shopping locally is the best way to find hidden gems. 

There’s nothing quite like the feeling of finding something your friends have never seen before. Whether it’s jewelry from a local metalsmith, a purse from a local boutique or pottery from a local artisan, local shops have the best potential for one-of-a-kind, where-did-you-get-that, I-love-it-so much uniqueness out of any shopping you can do.  Anyone can get on Amazon or check out a department store.  It takes a real connoisseur with a real eye for style to shop locally and find the best products.  Show off your personal style with buys from local artisans. The Parkville Towne Fair or the many ethnic festivals are great places to look for local crafts.

One final benefit of shopping locally is that many of your finds come with a story.  Those earrings might be from a local artist who got the inspiration from the nursery rhyme her mother told her, or those plates might borrow their pattern from the artist’s love of pop art.  Whatever the story, local artists will tell you how they came up with their unique designs.  Part of the fun of local shopping is the connections you can build with local artists, and hearing their stories is part of it.

San Francisco started recognizing the historic contributions of local businesses by listing important shops on its historic registry.  Looking around Parkville and Baltimore, which businesses would you nominate for historic status?


And, don’t forget to keep your banking local.  Destinations Credit Union (along with many other credit unions and local banks) is right here in Parkville offering world-class financial services and access wherever you travel.  We’re owned by our members and the money is invested back into our residents and our communities.

Check out the Parkville/Carney Business Association to see many local businesses who support our community.

Sources: 

http://ilsr.org/why-support-locally-owned-businesses/  
http://www.usatoday.com/story/money/business/small%20business/2014/11/21/small-business-strategies-shopping-local/19259277/ 

http://money.usnews.com/money/personal-finance/articles/2011/10/28/how-consumers-and-communities-can-benefit-from-buying-local

Tax-Free Weekend … Every Weekend

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Tax-free weekend will end this Saturday (8/15/15) for Marylanders.  It’s a heady rush, getting our Black Friday fix in the sunshine of August  The kids are ready to head back to school with new clothes (that they don’t yet hate) and school supplies (they haven’t yet lost).  But what about the people who missed out?  What about the kids who just need one more thing? What about mom and dad who deserve a tax-free spree, too?  Is there a way to shop tax-free every weekend without ending up with the IRS coming after them?
The answer is yes, you can shop with a 10, 15, or 20 percent discount every day and do it without breaking the law. Some of our favorite tips for keeping costs down are below. They also come with a plan for turning your shopping savings into long-term savings, because it’s not enough to keep money in your pocket, you’ll want to put it to good use, too.
When you’re done reading, hit up our Twitter feed or Facebook page to share your favorite tips and post pictures of your best hauls.
Bring your smartphone.  Don’t buy anything in a brick and mortar store without pricing it online first. If you’re the kind of shopper who frequently buys on impulse, just bring your smartphone and do a few searches of the most likely places you’d find the item you’re looking at, like eBay, Zappos or the website for the store where you’re shopping.  The Amazon app even lets you scan a barcode with your phone’s camera and does the searching for you.  You can save a lot with this simple 30-second step.
Shop for used gift cards.  We all know the feeling of getting a gift card we’ll never use.  Well, a variety of websites offer a place for people to sell their unwanted gift cards, often for well below the face value of the card.  Everybody wins: The seller gets some value out of a gift card that would otherwise be sitting in a junk drawer and the buyer gets a nice discount.
So, before you check out online or in-store, search Gift Card Granny and Gift Card Zen.  They have some gift cards that will transfer to you in five minutes or less, allowing you to save 10-15% right away.  All gift cards are backed by the site, so you don’t have to worry about scams.  For many of the big chain stores like Target and The Gap, those online codes work in store as well, so you can save money while you wait to check out.
Clear your cookies.  Retailers are smart, so they know that getting you to make a quick purchase on your first visit means they’ll probably get you to shop at their store for life.  They’ll offer you a coupon for 10 or 20 percent off of your first purchase if you sign up for promotional emails on your first visit. Those offers often expire within 24 or 48 hours.  As smart as retailers are, their websites are not quite as intelligent.  It’s easy to make websites think it’s your first visit so you can get that coupon every time you visit.  All you need to do is visit the site from a different browser than you usually use.  If you don’t have more than one web browser, you can download Chrome, Mozilla or Opera for free, and use that for this trick next time, too.  Sometimes you just have to use your phone. If none of that works, try clearing your cookies and browser history. Then, all you need is an email address you haven’t used at that site, and most of us have a few of those just waiting to be used.
Turn your everyday savings into long-term savings.  It’s great to save a few dollars every now and then, but it doesn’t always feel like you’re really getting anywhere.  But you were going to spend that money anyway, so if you put it in savings, it wouldn’t be a sacrifice.  You can pull up our website at www.destinationscu.org or use mobile banking and transfer that money to savings before you even leave the store.  If you put an extra $25 away every month, that’s $300 per year … without really trying!
If that seems like a lot of work, you can also work the gift card trick into your monthly budget.  If you normally spend $25 per month on coffee, buy a $25 Starbucks gift card online from Gift Card Zen for $20 at the the beginning of the month, then put $5 into your savings.  Now you’ve got the savings and an easy way to stay on budget.  The gift card can go into their app so the whole family has it on their phones – it’s like Starbucks is paying you $5 to make your life easier.
You can do this for all the places you shop.  For instance, do you budget $100 for clothes, $300 for gas, $50 for eating out, $25 for coffee and $25 for movies each month?  If you get gift cards for those stores at 10 percent off, you’ll save $50 each month, totaling $600 per year.  If nothing else, you can put that in one of our Holiday Club accounts and have it at the ready to take care of your holiday shopping!  
Sources:

https://www.starbucks.com/card

http://www.giftcardzen.com

http://www.giftcardgranny.com/

Lessons from the Richest Nation Ever

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As of June 2015, America is the richest society ever, after a strong spring in which Americans accumulated $1.4 trillion in total assets. With the Dow and NASDAQ recently hitting record highs and home prices finally reaching pre-bubble levels, there’s no telling what records might be broken in the future.

Not everyone is enjoying this windfall, though, and you may be one of those who are wondering where your gold-plated Ferrari is or why your etched crystal brandy decanter isn’t as jewel-encrusted as your neighbor’s.  If so, it might be a good time to take stock of your surroundings and draw some lessons from the country about accumulating wealth.

Who has all that money?

A very small number of people have a very large share of American wealth in 2015, as many middle class families are still feeling the effects of the 2008 financial crisis and The Great Recession.  A recent Pew study found the gap between the rich and the middle class is at a 30-year high, and most of the typical American’s net worth is tied up in their home.

While America’s total net worth is at a record high, the typical American household’s net worth is $81,200, down two percent in the last five years.  The top 10 percent of households are worth about 40 times more than the typical household, with an average of $3.3 million.  The top one percent of the top one percent of American households is even more staggeringly rich, with about 16,000 families owning 12 percent of American wealth, about $630 million each, on average.  More distressing, about half of  

Americans have a net worth of $0 or less.

Who are the rich people in the country?

The rich tend to be older than the country as a whole, with millionaires being 57 years old on average, while the typical American is in his or her late 20s. Millionaires typically come from more humble backgrounds, with about 80 percent being first-generation millionaires.  They are likely to be married, have two children and live in middle-class neighborhoods.  In other words, millionaires look a lot like the middle class, except a few years older and wiser.

What do I need to do to become a millionaire by my 50s? 
The first steps to accumulating wealth are the things you’d expect: 

  • Spend less than you earn
  • Save the rest
  • Invest patiently and
  • Own your home

It might seem obvious, but those four steps can be difficult and the difference between understanding the concepts and achieving them can be daunting.  If you’re looking for some guidance, Destinations Credit Union can help. Our online accounts and tools such as MoneyDesktop make budgeting a breeze and we offer a variety of savings products for members of any financial background. We have home-buying specialists who can guide first-time homebuyers through the process, from putting together a down-payment to securing one of our competitive mortgage rates. 
What might be more surprising is that the rich tend to own their own businesses, with about 4 out of every 5 American millionaires identifying as self-employed or retired from self-employment.  There are 28 million small businesses in the United States, defined as companies with 500 or fewer employees, and small businesses have created nearly 2 out of every 3 net jobs in the last 20 years, currently employing more than half of all working Americans.
Owning a piece of the American economy is a clear path to wealth, and with the knowledge base that comes with 21st century technology, that path is more well-worn than it has been in the past.  Seven out of 10 new small businesses with more than one employee survive for at least two years, half last for at least five years, and a quarter of those new small businesses are expected to still be going strong in 2030.  Over half of the small businesses created this year will operate out of their owners’ homes, often starting as an extension of their founder’s favorite hobby. 
Are there any other ways to grab the brass ring?
If you’re not interested in starting a business, you can still build a comfortable savings account by putting away part of each paycheck. It may be difficult, but it’s not impossible.  Of course, there are other options too. One woman in Las Vegas won the lottery four times in the last 25 years, so you might want to borrow her lucky rabbit’s foot.

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Take Your First Steps Before They Take Theirs: Financial Planning For The New Parent

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The first few days after you bring your baby home is an exciting time that can also be a bit stressful. So can the first few weeks. Many parents also find the first few months stressful, while others are stressed over their parental commitments a while longer. It’s easy to get caught up in sleepless nights, organic baby food, and reading every book you can find, but sometimes parents forget an obvious priority: teaching and helping your child to save money as they grow up.


1.  Set up a savings account for your child and make regular deposits.

You don’t have to know what you want to do with your child’s savings yet. However, the first step is as simple as opening a savings account for your child. Studies show that young adults who had savings accounts as children make better financial decisions, are more prepared for financial emergencies and plan better than their peers who didn’t grow up with savings accounts. So, for now, open a savings account, put a few dollars into it every paycheck and invite your child to participate by making deposits of their own when he or she is old enough. Destinations Credit Union offers savings accounts specially designed for kids. They offer dividend rates and we have educational resources so your child can learn to be smart with their money. You can find out more here: http://www.destinationscu.org/accounts/savings/youth-accounts.html.

2.  Start saving for college now.

Most parents know they need to save for their child’s college education, but few seem to realize how much college will cost. Education costs have been rising much faster than inflation, and if you’ve been out of school for a few years, you might be shocked by the costs. To make matters worse, and more expensive, many universities are receiving fewer public dollars, and getting a larger portion of their income from tuition, thus passing the cost on to students.

All told, experts expect four years of public school to cost around $250,000 by 2030. It could be even higher. While it’s difficult to imagine saving that much money, don’t give up or neglect to even try. First, think of college costs as a pie that’s been split into thirds. The first third will be paid for by your loans and awards your child earns. You’ll pay for the second third using the income you earn at the time. Only one-third needs to come from a college savings fund. Granted, one-third of $250,000 is $83,333.34, and that’s a lot of money. Take a deep breath, because you have decades to save it, and you have a secret weapon: compound interest, which Einstein called the most powerful force in the universe.

Destinations Credit Union offers Coverdell Education Accounts, which allow you to contribute up to $2,000 a year and withdrawals are tax-free.

3.  Focus on what you can control.

If you’ve been a parent for more than a few minutes, you’ve had at least one moment of pure panic while thinking about the future. Perhaps, on one of the few nights your baby allows you to sleep, you decided to keep yourself up by listing every terrible thing that could happen to you, your partner or your child. There’s so much you can’t control, of course, so place your focus on the things you can control.

Disaster sometimes strikes, and when it does, it’s usually unexpected. But there’s nothing you could do to prevent it. We don’t like to think about life ending, but it is inevitable. Instead of panicking over it, plan for it. While you’re at it, start planning for some of the less dramatic problems that might crop up. Start with life insurance, then look into other savings products and programs that are designed to protect your family.

One mistake many new parents often make is to immediately start throwing money at college savings while ignoring their overall financial picture. If you read the numbers in the previous point, it’s easy to see why. Start by building a nest egg that can carry you through 6 to 9 months of lean time, and then build your retirement fund. Money market accounts are a good way to build your short-term nest egg, because you can access your money if you need it.

As for retirement, you may not have given it much thought since your initial conversation with HR. Now is the time to see what else you need. Remember, you can take a loan to pay for college, but you can’t get a loan to retire. Even if you want to put college money away now, you can still get tax incentives if you contribute to your retirement at the same time. Browse Destinations Credit Unions‘s retirement options, or call us at 410-663-2500 if you want some help figuring out what’s right for you.
Sources:

http://finance.yahoo.com/news/why-toddlers-savings-accounts-much-170151606.html

Don’t Panic: A Last-Minute Guide To Tax Preparation

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It’s the second week in April. Spring is in the air. The flowers are blooming. We’re just past opening day for the Orioles (Go O’s!). As you begin to enjoy the pleasantness of this time of year, do you have that lingering feeling that you’ve forgotten something?

April 15 is Tax Day. That’s the day all returns must be postmarked or e-filed to the IRS. If you haven’t started yet, you may be feeling a bit of panic as the deadline races up to meet you.

In the immortal words of Douglas Adams, “Don’t panic!” There’s still plenty you can do, and so long as it’s in the mail or in the Internet tubes by midnight on April 15, you’ll be fine. Take a deep breath, grab a cup of coffee, and make a plan. Also consider these three handy tips: 

1.) You can file for an extension

If you do nothing else to prepare for tax day and there’s no hope for getting your return done on time, do this. The IRS will, in most cases, approve an automatic 6-month extension for individuals. Form 4868 asks you to estimate your tax obligation, your total payments and the balance due. If you’re due a refund, there’s no problem. You’ll get your refund as soon as you file your return and you’ll have until Oct. 15 to do so. If you owe additional taxes, Form 4868 also includes a way to send estimated payments.

If you’re filing on behalf of a corporation or partnership, you can still qualify for an automatic extension of five or six months, depending upon the entity type. The form to fill out there is 7004. It’s a bit longer, but requires the same basic information and also includes the option to pay your estimated tax immediately.

There’s a penalty involved in late payment. You’ll be charged 5% each month or part of a month your return is late, to a maximum of 25%. These charges will be at least $135 or the balance of your taxes due, whichever is smaller. The IRS may excuse these penalties if there’s a good reason you didn’t file on time. Attach a statement to your return explaining why you didn’t pay on time (not your request for extension) and the IRS may forgive the penalty amount. These exemptions are typically granted for people who were out of the country or deployed to a combat zone for a significant part of 2015.

You’ll be responsible for interest on the amount due, plus penalties. The IRS charges 0.5% per month or part of a month your account is past due. They’ll charge that on the whole unpaid amount. So, if you were to pay your tax bill in full on April 16, you’ll be charged a full month’s interest.

As expensive as filing for an extension can be, it’s better than the alternative. If you don’t file, the IRS will eventually file for you. They don’t have any incentive to get you any deductions or credits. If you end up owing more than $25,000 in interest and penalties, the IRS will be knocking on your door!

2.) Filing isn’t actually that hard

For most people, filing your taxes takes less than half an hour. If you worked only one job, have one bank account, and don’t have a lot of deductions, you won’t have to fill out more than a few forms. The 1040-EZ is pretty accurately named. It is, in fact, easy.

You really only need your W-2 and you can file from your computer desk. Make a game of it. Set a clock- see if you can beat a 20-minute time goal!

3.) Don’t forget the little deductions!

If you’re really scraping to cut your tax bill, there are a few easy deductions you might miss. For example, if you subscribe to a financial newsletter, that’s a deductible expense. If you consulted with an attorney or another paid professional to prepare a will or trust for your assets, that’s also deductible.

Your medical expenses can be somewhat flexible, too. For instance, if you installed a hot tub on the advice of a physical therapist, that can be deductible. Laser eye surgery can also be a deductible expense if it promotes the proper functioning of the body.

There’s a thin line to walk with aggression. It’s very unlikely you’ll get any grief from the IRS provided you can prove most of what you’re claiming. At the same time, saving a few bucks on your taxes isn’t worth a massive headache.

If you’re getting a refund, make sure to directly deposit it to your Destinations Credit Union account!


SOURCES

Financial Literacy Month – Celebrate Knowledge!

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“April showers bring May flowers” goes the old saying. It’s also a great lesson about the importance of saving – where weathering some light showers can pay dividends during the nicer days that are to come.

April is Financial Literacy Month, and a great time to think about some important lessons everyone can learn about finances. Whether you’re a parent looking to make talking money with your kids easier or a professional looking for a few tips, there’s always something to learn. Here are some fun activities you can do to expand your financial knowledge.

1.) Make a financial date night

Most people dread doing anything with their money. Unless there’s a serious issue, they don’t think about their bills or their paychecks. When something serious comes up, they do little more than panic and figure out how much money to throw at it so it’ll go away. Money is scary, and not dealing with it is the easiest thing to do.

If you want to improve your knowledge of finances this month, schedule a financial date night. It doesn’t matter if you’re partnered or on your own, it works the same way. Pick a day when there’s nothing good on TV, no major social events and no serious distractions. Put some light music on. Pour yourself a glass of wine. Sit down with your bills, your paycheck and anyone else who matters to your finances, and figure out where you stand.

This can be a time to make dealing with your finances fun. You can do a little daydreaming and figure out what your future looks like. Jot down some goals and think about how you can achieve them through your monthly budget. Make a financial date night part of your monthly routine!

2.) Build a list of needs and wants

One of the best ways to build an efficient budget is to start from a list of priorities. What do you spend your money on each month? Make a list of all your expenses. Then, break them into one of three categories.

The first category is the essential, non-negotiable bills. These are your big-ticket essentials that have serious consequences for missed payments. Your auto loan, your rent or mortgage, your utilities and your taxes go here. This is the bare minimum you need to bring in each month.

The second category is the essential, negotiable obligations. These are unsecured loans such as credit cards and student debt. You need to pay them, but if you have to miss a payment, these are the ones to miss. Paying these off is a priority after you make your essential payments, and you may have some room to negotiate and reduce these payments if things get dicey.

The third category is the inessential spending. This is everything else you spend money on each month. This is the best place to make cuts when you want to shift your priorities.

Making a list of priorities is the first step to making solid plans and reshaping your own financial destiny. When you know where your money is going, you can start to move from financially existing to intentionally spending. That’s the beginning of improved financial literacy.

3.) Take charge of your retirement planning

Financial security means planning for the day when you can’t work anymore. Financial literacy is all about taking an active role in thinking about that future. There are a few concrete steps you can take in April to put yourself ahead of the game.

If you’re not already doing so, contribute to your employer’s 401(k) program. Most employers will match contributions up to a certain level. If you’re not contributing enough to get the full amount of that match, you’re leaving money on the table. Set up automatic contributions out of every paycheck to automate that savings.

April 15 is the last day to contribute to an IRA for 2014. Even if you’ve already filed your taxes, you can file an amended return to get credit for your contribution. More importantly, you can add to your retirement nest-egg and take advantage of the tax benefits of those accounts. Visit Destinations Credit Union to open your IRA today.

There’s also no shame in asking for help. Retirement laws are complicated, and it takes an expert to really understand their intricacies. Speaking with a qualified financial planner can take some of the guesswork out of it. This conversation can also help you clarify what retirement looks like: what your goals are, how much you need to save to achieve them and what programs are available to help you get there.

If you’re counting on Social Security to provide for your entire retirement, you’re in for a rude awakening. Benefits are shrinking and the fiscal solvency of the program is always in danger. Taking an active role in your retirement planning is the best way to get some peace of mind about your future. It’s never too late. Retirement planning you do at 50 is better than retirement planning that never gets done!

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