If you’re mired in debt, you may perk up when you hear about a loan that promises to:
Maybe you’d be eager to jump at such an offer. But first, ask yourself some crucial questions.
What will really change?
You might consolidate your debts into one loan in various ways, if you qualify. You could take out a home equity loan for the total amount you owe in credit cards and other consumer debt. You could put several credit card balances onto only one lower-rate card. Or you could obtain a signature loan, unsecured by collateral, to cover the total debt amount.
But a debt consolidation loan often becomes a Band-Aid, experts say, because people don’t change the behavior that caused their debt problems. Studies show that 80% of borrowers who consolidate their debts end up repeating their mistakes and end up in deeper debt.
Can you afford the loan?
Let’s say you’re determined to mend your ways, and a debt consolidation loan is one option. You’ll replace lots of payments with one bigger payment. But be sure it fits into your budget.
Consider, too, the total you’ll pay over the life of the loan. If you consolidate credit card debts into a 15-year home equity loan or unsecured loan, you’ll be stretching a five-year debt to 15 years. You could end up paying as much or more in total interest and principal. The total payment is key, not just the monthly payment.
Can you trust the lender?
A reputable lender will determine if you can afford to pay it back before giving you a loan. But some lenders give loans to anybody just to make a buck. Work with the professionals at Cal Coast, a lender you know has your best interests at heart.
You’ve heard it from a million places: Budget your money! Make a firm plan and stick with it. It’s the pathway to prosperity!
For many people, though, that advice just doesn’t resonate. They feel constricted by a budget. Keeping cash in separate envelopes makes them feel like they can’t have a life. It takes too much planning and too much rigid denial. They break their budget and sometimes wind up in serious financial trouble.
Other people have an inconsistent cash flow, making creating and keeping a budget difficult. Maybe they’re freelancers who work gig-to-gig. Maybe they’re in commissioned sales. Maybe their hours fluctuate month-to-month. Whatever the reason, it’s hard to make a detailed plan when your bottom line changes every month.
The answer isn’t to give up on budgeting. The collective wisdom, that monitoring your expenses and income streams is the way to stability, still holds true. It might just require a different approach to budgeting: cash flow focus.
Cash flow focus is the strategy used by most businesses. They pay their fixed costs, and whatever is left is used to grow the business. You can manage your finances the same way. Just follow these four steps:
1.) Automate your savings
Even if you disregard everything else in this article, implementing this one tip can be life-changing. Figure out how much of your income you can save, then take that out as soon as you get paid. You can set up monthly transfers from your draft account to your savings account. You can also divide the money between the accounts on a per deposit basis. How you choose to do so is less important than doing so.
Like the saying goes, pay yourself first. This savings provides you the flexibility to cover big expenses or make major purchases on your schedule. It’s the single most important step in any budget, but it’s even more important with cash flow budgeting.
When you automate your savings, you remove the money you saved from consideration. You can’t spend it; you’ve already spent it on savings. The importance of this kind of savings will become clearer once you see this budget in action.
2.) Pay your needs and your priorities
Make a list of your essential expenses each month. Include your rent or house payment, your car loan and your utilities. Also include your student loan payments, your insurance and other necessary expenses. These are your “fixed costs.” They get paid after your savings contributions are made.
Next, make a list of your priorities. Include your charitable contributions, vacation savings and retirement account contributions. These are your “growth expenses.” They get paid after your fixed costs.
If you don’t have enough money to make these bills, you don’t need a better budget. You need to lower those bills or increase your income. No amount of spreadsheet magic will change that bottom line.
It’s helpful to automate savings for these expenses, too. That way, you never get caught short on these bills. Transferring this money to a check-only draft account can be a helpful way to ensure you don’t spend it.
3.) Spend the leftovers
This message may sound peculiar for personal finance advice. Remember, though, that you’ve already automated your savings. What you’re spending here is the leftovers – the extra that’s left at the end of the month.
Spend this money however you like – don’t worry about putting this much in entertainment and that much in travel. Just keep track of how much you’ve spent so you don’t accidentally overdraft your account.
This approach allows you to go out or indulge in a latte. You don’t have to worry about including it in your budget. Your spending habits might change as the month goes on, just like a business. If you know there’s a big outing before you get paid again, you may want to save some money for that. You don’t need to say that you can’t go because you didn’t budget for it.
4.) Roll over what’s left
If you’ve worked in a big business, you’ve seen departments desperately spending at the end of the fiscal year. Departments buy cases of pens and paper, knowing that they’ll lose whatever they don’t spend. Fortunately, you’re more flexible than a big business. You don’t have to spend it all. If you have money left over at the end of the month, then you have more to spend the next month.
If you have a month with slightly higher expenses, you can cover it from a previous month’s slightly lower expenses. Your spending will change from month to month, as might your income. So long as you keep the former smaller than the latter in the long run, you’ll be fine.
That’s what cash flow budgeting is about: flexibility. You don’t have to write your unbudgeted spending purposes in stone. You don’t have to mess with cash envelopes or other strategies. You can spend when you have money and save for when you don’t.
If you’re thinking about adopting a cash flow budget, California Coast Credit Union can help. A friendly, knowledgeable representative can walk you through the savings tools you need. You can automate your savings, flex your spending, and build toward financial security. Call, click or stop by today to find out how!
When you sit down and actually record where your money goes, there are always surprises. More money may be going to food and other expenses than you think. There may be areas in which you can easily cut corners that you won’t see until it’s in writing. Rather than sitting down and deciding how much of your income “should” go to expenses such as food, clothes, entertainment, savings, etc., keep track of where the money is actually going. Using a simple pad of paper, write down everything that you and the other members of your family spend money on every day. Do it for a full month.
After a month of tracking all expenses, add up the total expenses of each category. You can decide how specific you want to get. Standard expense items are:
With the numbers in front of you, you can create a spending plan. If you feel you are allocating too much towards one category and not enough toward others, see what you can do to change that. Continue keeping records until you feel the situation is exactly the way you’d like it to be.
Many people file away all their important-looking paperwork, yet they’re still not clear on their basic financial situation. Do you know roughly what your assets are and where they are? How much your total living expenses are? What about your total debt?
If you can’t answer these questions, don’t feel bad. You’re not alone. Although many people don’t take the time to do it, getting organized is easy and can be done in a single evening.
Here’s what you need to do to take control of your finances:
Start with a complete overview of your short-term and long-term living expenses. To find out how much money you need to maintain your current lifestyle, spend an hour or two reviewing your checkbook, credit-card records, bank statements, loans, and mortgage payments.
Identify all the costs that are essential, such as food, shelter, transportation, and health care. Total those up. Then, figure out the percentage of those expenses that your income covers and the percentage that comes from various other sources.
It can be a little frightening to realize how threatened your financial security would be if your income were suddenly cut in half. But, isn’t it better to find that out now than to wait until something happens?
Do you know which accounts are in your name alone and which you hold jointly with your partner? Examine your pension plans and retirement investments, too. When will you have access to those funds? What amount can you expect them to provide?
It’s a good idea to know what your health and insurance plans cover in case of an emergency. Now, while you have no emergency, you should find out whether you need authorization to get emergency treatment. Also, be sure you know where copies of life insurance policies are and whom you must call to file a claim.
Finally, you and your partner should both know where all your legal documents are and how to access them.
Once you have a grasp on your current situation, schedule a time to review your finances annually and note any changes. A good time might be shortly after you’ve filed your income taxes. Once you know where you ARE financially, you can begin to plan where you WANT to be.
Keeping the kids entertained while on summer break can be an expensive endeavor. Registrations for summer camps, day care and recreation programs are only the tip of the iceberg. You also need to consider transportation costs to and from these programs that you don’t normally attend during the school year.
But summer break doesn’t have to break your budget. You can still afford to take some quality family time-and you can do it all on a dime. Here are some great ideas to keep your children entertained while you are at work, and some fun family activities, all of which we consider cheap or free!
Have a camp out in your yard. If you can’t take time off work this summer, take advantage of the great weather and go camping in your own backyard. Put away the electronics and enjoy nature with the convenience of your own bathroom being just a few feet away.
Enjoy free movies. Many movie theaters today host free movies on weekday mornings. Ask your local theater for a schedule and get there early. Seats fill quickly!
Go to a movie or concert in the park. Local resorts, ballparks, and recreation departments offer movies and concerts featuring local musicians. Check the local or neighborhood sections of your newspaper for more information.
Be a tourist in your hometown. Get to know your town a little bit more by visiting the local (free!) museums and other attractions. You might be surprised by what you find.
Have a family boot camp. Exercise isn’t just good for your body, it’s good for your soul too. Agree on an exercise as a family-whether it’s karate, yoga, or strength training-and find instructional videos on YouTube. Participating as a family can help build self-esteem and make your family closer.
Send the kids to church camp. Many churches offer free or cheap day camps for working parents. Even if you don’t attend the church, this is a great opportunity to broaden your children’s horizons and introduce them to different ways of thinking in addition to giving them an opportunity to meet new friends.
Trade kids for a craft day. Work out an arrangement with another parent or two. Each household sponsors a craft day once a week for a month. One week, all the children visit your house and complete a craft you developed. The next week, it’s another parent’s turn.
Visit the library. Free to residents, the library offers numerous programs to help keep kids busy. And even if you don’t find a program that interests your child or your family, you just might find a few books you’ll like!
Redeem report card rewards. Bowling alleys, pizza joints, movie theaters and more offer free or discounted admissions for students who earned a high grade point average on their report card. Do some research and then redeem those rewards!
Make your own water park. If you have grass available to you, set up sprinklers, fill up some squirt bottles and water balloons, lay out the camping tarp, and get the hose ready. Let your kids of all ages loose on a homemade water day.
Summer doesn’t have to take a lot out of your pocketbook. It just takes a little bit of creativity and a little effort to find activities that the whole family can enjoy, while mom and dad enjoy a little budget relief. Have a great summer!
You can't make progress on your budget goals until you know where your money is going. That means it's time to track spending.
Get a grip--Recruit the whole family to help keep track of all expenses for at least a week or two--longer if you can manage it. You'll see patterns and how routine mindless spending can mean death by a thousand cuts to your budget.
You may decide to use a small notebook and record each expense. Or you may prefer to use software such as Quicken. It might work for you to collect all receipts and bills as you pay them. Whatever your choice, try to be consistent and pick a system you think you'll use and not abandon.
If that sounds too taxing, try this: Collect all your receipts for several days, then review each receipt. Put a plus sign or minus sign next to each expense--plus for on-budget, within your goals spending, and minus for off-budget, working against your goals spending.
Get a goal--You also won't make much progress unless you're monitoring spending for a reason--weighing your expenses against a larger goal or goals.
Give whatever tracking exercise you use a rest for a month and then repeat it. Do you see improvements? Or have the leaks just shifted to other categories? Use credit union tools--direct deposit and automatic deposits into savings--to help you keep your eyes on the prize.
The money experts at California Coast can help you review your budget or refer you to other community professionals who can help.
The back-to-school season is the second largest consumer spending time of the year, with the average family spending about $635 on back-to-school items--clothes, shoes, supplies and electronics--for school-aged children K-12 this year.
To avoid falling into debt at back-to-school time, include those expenses in your yearly spending plan. Make sure you budget enough money for school supplies, clothes, doctor check-ups, athletics, and books.
For more help saving for back-to-school spending, call or stop by one of Cal Coast’s convenient branch locations. We can help you develop a savings strategy.
You say it every year after the holidays: "Next year I'm going to spend less money." It's easy to get carried away. It can be just as easy to stay financially fit, even during the busiest shopping season of the year.
The Credit Union National Association, the trade association for credit unions, and the Consumer Federation of America, Washington, D.C., suggest these holiday spending tips:
1. Budget your spending and set goals: Start with a realistic idea of how much you can spend on holiday gifts, food, travel, and so on. Add it up and really give some thought to what you can afford. Think about where you might cut back and stick to your budget.
2. Make a list: Shop from a list to avoid impulse purchases that could leave you snowed under in debt at the end of the season.
3. Comparison shop: Take the time to find the best deal. Fight the urge to get your shopping over with as quickly as possible, and, for the procrastinator: Don't wait until the last minute!
4. Trim your interest payments: If you must pay with a credit card instead of using cash, use a card with a low-interest rate. Now is a good time to look for a lower-rate card--start at California Coast.
5. Open a holiday club account: Put some money in the account each month based on how much you spent last year; arrange to have that amount automatically deducted from your paycheck. This way, this year you'll have all the money you need. Plus, you'll earn interest rather than making big interest payments to finance next year's holiday shopping.
Consumers love their debit cards. Among the many reasons: convenience, security, and pay-as-you-go features. But, no matter how easy they are to use, if you don't keep track of your account, you could be in for a mess.
Keeping track of all debit card transactions is fundamental in keeping your account balanced. If you're one to lose receipts or have a hard time keeping track of them, try keeping all your receipts in one place and posting all transactions to your account each evening. Checking your account frequently online also will show you your current balance.
Whatever your debit card needs, Cal Coast can help. Call us today at (877) 495-1600.
You work hard for your money. When you're part of a couple you can't avoid the fact that at least part—and sometimes most—of your money becomes part of a pool. There are bills to pay and goals to save for. Whether you combine your paychecks, split everything 50/50, or pool some of your money and split some, there are accounts out there that can help you.
Joint share draft/checking accounts are good for shared household expenses. Once you've determined how much you need to contribute each month, direct deposit and automatic transfer of funds can be useful tools to disburse funds to appropriate accounts.
Also consider overdraft protection with your share checking account. That way, if withdrawals or checks fail to get logged in the shared check register—so there's actually less money in your account than you thought—funds from another account will cover any checks you've written. There's a fee attached but it's less than what it would cost you for bounced checks.
For shared transaction accounts, consider doing the following:
Avoid using debit cards attached to shared accounts. Use credit cards instead and then pay off the bills later.
Keep a record of the purchases you make to share with your partner.
Store all ATM and debit card receipts together in a safe place.
For joint savings accounts you may want to consider a dual-signature account—where both parties must sign before either partner can withdraw any money—especially if one partner has a tendency to dip into the account.
No business in the world would consider going into a year — or even into a quarter — without goals. Why shouldn’t your personal finances benefit from the same type of organization? Your own financial success is at least as important to YOU as the success of a company is to an executive. And since studies have shown that those who set specific, tangible goals are more likely to meet them than those who approach their lives with a “well, let’s see where this goes” attitude, the time and effort invested in setting a financial goal for yourself is well worth it.
So where do you want to be?
Take a quiet hour or two to write out your financial vision. Do you want to have a specific amount saved? For what purpose? Do you want to start your own business on the side? Become completely debt-free? Pay off the mortgage early? Take an early retirement? Remodel your home? Build an investment portfolio? Become a major supporter of your favorite charity? Go back to school and finish that degree? Have enough money so that work becomes a hobby and not a necessity?
Don’t limit yourself to what you THINK you can do. Give yourself the freedom to dream, to come up with your ideal financial scenario. And here’s an important tip: Write it as if it’s already in existence. Then put your ideas aside for a day or two and come back with fresh eyes and see what you’ve written. While it may not be completely realistic, chances are, you can find one solid goal that will bring you closer to your ideal financial scenario.
Set that as a goal for the coming year. It might be something small, such as putting 10 percent of your paycheck toward debt payments, and another 2 percent toward savings. But if you stick with it, your debt will eventually be paid off and you’ll have 12 percent to put toward savings. A small step? Sure. But there’s no telling where one small step in the right direction will take you.
Your personal finance is in your own hands. No one else can take responsibility for it. It’s a new year, the chance for a fresh start. Make it a successful one.
There are many ways you can spend less money on gas and reduce your overall fuel consumption. These gas mileage tips could help to reduce the amount of gas your car uses. If you already follow some of these tips, you might just be getting the best gas mileage your vehicle can deliver.
- Combine errands and trips
- Service your car so it will stay at peak performance
- Go lightly on the gas pedal
- Don’t pump your brakes
- Don’t idle for long periods of time
- Don’t use drive-up windows. Instead, park and walk in.
- Empty the car and trunk of extra items
- Put items in the trunk instead of on your roof
- Drive 55 mph instead of 65 (you could save 15%!)
- Don’t use your air conditioning
- Use your 5th gear whenever possible
- Keep your tires properly inflated
- Buy a Fuel Saver of some kind
- Use the lowest octane gas
- Don’t rev your engine
If the news describes someone as living paycheck to paycheck, you might have a pretty good idea of what their life looks like. You might imagine them struggling to get by just to cover all of their bills. You might picture them as constantly juggling those bills and relying on revolving credit card debt. Yet, a new report out of Princeton University suggests that this may not be an accurate vision of this group of people.
The report describes the habits of a group it calls the “wealthy hand-to-mouth.” 25 million of the 38 million Americans who live hand-to-mouth, that’s a staggering 65 percent, have a median income of $41,000, which is close to the national average of $43,000. This group includes a fair number of people in your community. You might even see a little of your own habits here.
These individuals tend to be somewhat older, with a peak age of 40. Their spending habits tend to expand in accord with their income levels. For instance, if they get a raise, they increase their discretionary spending. They might eat more meals out or take on another monthly payment. If they get a windfall, like a tax return or an inheritance, they splurge on a big-ticket item. They pay all their bills on time and don’t carry a tremendous debt load. They likely own a home and are building equity by paying down a mortgage. These folks are also more likely to be investing in a retirement account, like a 401(k) or IRA.
Make no mistake: these are important savings strategies. What they don’t offer, though, is flexibility. In a volatile labor market, anyone can lose their job at any time. Illnesses and accidents can strike without warning and lead to huge bills. Even inclement weather could result in home or car damage, requiring extensive repairs. If an emergency happens to someone in this group, they may be in for serious trouble.
The money in their home and retirement account is inaccessible. They might curtail their spending, but that won’t help if they need a large quantity of money in short order. They will have three options: sell their home, cash in retirement accounts or take on significant debt. None of these options offer much hope of a brighter future. One foul stroke of luck is all it would take to move them from “wealthy hand-to-mouth” to just plain struggling.
These kinds of misfortunes happen to everyone sooner or later. That’s why the factor most strongly correlated with financial security is regular savings. A “rainy day” fund separates a short-term financial problem from a life-changing tragedy. The “wealthy hand-to-mouth” think retirement funds and home equity will ensure their financial security. The tumultuous early 2000s showed us, though, that making it to that point is no sure thing.
Cal Coast members have a variety of tools that are available to them to help provide this measure of security. Consider the money you put into your special savings account to be a way of paying yourself. You pay your bills, your house note and your other obligations on time. Putting money into your special savings account is paying off the future trouble you don’t want to deal with when it happens. You can set up direct withdrawals from your paycheck or put in a specific amount each month. You and your partner could also put any unexpected windfalls, like bonuses or refunds, into this account.
If a disaster strikes, and you need the money, it’s there. You won’t need to worry about selling your house, cashing in your retirement fund, or taking on expensive debts. A special savings account is an inexpensive form of self-insurance. If nothing bad happens and you don’t use the money before you retire, it’ll still be there. You can use it to take your dream vacation, to buy an RV or a vacation house, or just to throw one heck of a retirement party. All the money you’ve saved will be gaining interest, and it will be a wonderful supplement to your retirement fund.
Your parents or grandparents may have kept their rainy day fund in a jar on top of the refrigerator. You don’t have to be that low tech. You can protect your financial future, insure against accidents and gain some peace of mind along the way. Head to one of our convenient branch locations and ask about opening a special savings account today!
Insurance coverage exists to protect you from costly repairs and replacement should an accident happen-at home or on the road; whether you’re at fault or not. But like all businesses, insurance companies are looking to turn profits. While there’s nothing wrong with that, it’s up to you, the consumer, to do your homework so you can ensure the best coverage at the lowest cost possible.
Insurance companies know that you’re busy and don’t often have time to research the best price on the coverage you need. So be smart about shopping around. Look for discounts, compare prices, and ask a lot of questions. Your insurance agent won’t thank you, but your savings account will-along with your financial partner: your credit union! Here are some things that your insurance company doesn’t want you to know but will get you on track for the right coverage at the right price.
1. You can probably lower your car insurance
New technology allows your auto insurance company to monitor your driving habits and to reward good driving with lower rates. A telematics device can track when and where you drive, how fast you’re traveling, as well as how you interact with the cars near yours. Insurance companies will reward those good habits with discounted rates. According to Forbes, about 1.4 million drivers have tried out the program and those who opted-in have saved 10 to 15 percent over the course of their policy. If you’re a good driver, ask your insurance company about having a monitor installed in your vehicle. But be warned: Up to now, there has been no penalty to those with less-than-perfect driving habits. That may change as companies look to subsidize the cost of the monitors and the discounts they provide.
2. Where you live matters
You chose your home for a reason, and location likely played a role into your decision to buy where you did. Just like you, your home insurer also feels more comfortable if you live in a gated community, near a local fire department, or if you have a home security system. When shopping for insurance coverage, be sure to mention any security or location information that may lower your overall insurance costs.
3. Unadvertised discounts are available
Just like the “secret” menus at trendy or popular restaurants, insurance companies also have discounts available that they don’t necessarily make public. For example, if your home security system includes gas-leak detection or cold-temperature monitoring, you could qualify for a discount. New wiring, roof upgrades, homeowners associations, and home renovations are just a few ways to earn discounts. The premise is simple: Anything that lowers the risk of damage to or theft from your house will save the insurance company in claims; and at least some of that savings should be passed along to you, the consumer. So even if it’s not listed on the policy, ask if a discount is available.
4. There’s an insurance buyer’s guide available. Use it.
Your insurance company likely does not want you to know that state insurance departments publish insurance buyer’s guides. These guides include a list of companies and often sample rates so you can compare sample prices before ever having to pick up the phone or scour the Internet. This allows you to quickly compare overall prices so you can see if your current coverage is in the ballpark of some of the other companies in your area. A simple online search for the insurance buyer’s guide in your state will get you started.
5. Try more than one agent
If you don’t have time to do your homework to find the best deal, working with an independent insurance agent might be the way to go. But each agent only works with a handful of companies, limiting the number of quotes you will receive. So call two agents and tell them you are shopping around-and that you’re working with another agent. The agents will work hard to find the best possible coverage for you, because they don’t get paid until you sign up for coverage.
6. Ambiguity will work in your favor
Interpreting an insurance policy can be a difficult task, especially if you’re in the throes of a crisis or claim. Fortunately for you, as the policyholder, any ambiguity in the policy is interpreted in your favor. According to Fight Bad-faith Insurance Companies, insurance companies write policies that can be unclear because they believe they aren’t responsible for payout if the coverage isn’t crystal-clear. This simply isn’t true. If the coverage or exclusions aren’t clear, they are obligated to pay the claim.
Insurance is a non-negotiable expense, but with a little homework and research, you can come out ahead. While your insurance company may not like your savvy new ways, as your credit union, we always want you to get the biggest bang for your hard-earned cash.
For many, the green movement has become less of a soapbox issue and more a genuine way of life. People are outfitting their refrigerators with sustainable, organic, locally grown produce and their closets are brimming with American-made sustainable non-sweatshop cotton clothing. Another big indicator of whether you’re truly green is whether or not you have energy efficient appliances. From TVs to refrigerators to convection ovens, the energy efficient appliance has long been a staple in homes.
Since energy efficient appliances have been around for quite a while, it’s inevitable to question whether these products are worth the price. Of course, it depends. It depends on the size and age of the appliance in question, as well as your definition of “savings.”
According to Energy Star and the Lawrence Berkeley National Laboratory, the average U.S. household spends $2,200 per year on energy – most of which is spent on heating and cooling. Energy Star-rated appliances consume 20 percent to 30 percent less energy, on average, than stated by federal standards. An Energy Star refrigerator, for instance, will reduce your utility bill by $165 over the lifetime of your fridge.
Some people who buy energy efficient don’t consider savings first, as many would think. Savings may not even be a thought at all. A recent study found that people don’t necessarily buy energy-efficient products for their eco-friendly properties nor do they do so for their savings in utility bills. Instead, they are motivated by the products’ side benefits.
But what exactly are these so-called side benefits? Wanting a longer battery life from a notebook computer, for instance, is one such perk. Another is design. In 2011, 96 percent of TVs were shipped with the Energy Star rating. Consumers go for flat-screen TVs the most, and flat-screens also tend to use less energy. Washing machines captivate 60 percent of the consumer market, and many are front-loading models, which are believed to be gentler on clothes.
Whether you buy an appliance for its design or productivity, and whether energy efficiency is a first or last thought when purchasing a product, at least you’ll have peace of mind that you’ll be saving money and the planet one appliance at a time.
Need to replace an appliance? Our personal loans may be the best financing available.
Every drip counts.Is your home leak-free? Find out by reading your water meter before and after a two-hour period when no water is being used. If the meter does not read exactly the same, there is a leak somewhere. If your faucet drips at a steady 100 drops per minute, that’s 330 gallons of water in a month, or nearly 4,000 gallons wasted per year.
Repair drips in your faucets by replacing washers. Once your faucets aren’t leaking make sure to turn them off completely and immediately after each use.
Another leak culprit is the toilet tank. Check for leaks by adding three drops of food coloring to the tank. If color appears in the bowl within 30 minutes, there’s a leak. If you use this test, remember to flush right away to avoid stains. Replacement parts for toilet tanks are fairly inexpensive.
Cut down on water used for laundry by folding clothing and hanging it up when you get undressed instead of automatically throwing it down the laundry chute. If it’s not dirty it doesn’t need to be washed. If you change out of your good clothes when you come home, you’ll avoid getting them dirty. If your laundry machine comes with settings for different size loads, make sure to set them. Otherwise, combine loads so you can operate the machine fully loaded. That goes for dishwashers as well.
Gas prices and other budget busters have many families plotting new ways to get away from it all--by staying at home for a "staycation." You can find lots of local resources, many free or at low cost, to make this kind of event memorable.
Visit your library. You can get free or very cheap DVD rentals. Some libraries have museum passes that give you no-cost admission to many area museums and attractions.
Go straight to the source--almost all museums have free days or partial days. Find out when they are and arrange your visit around those days. See if your children's museum, science center, zoo, or aquarium has free times or free special events.
If you're near a college town, find out about free performances by music department faculty or students. If your community has an orchestra or symphony, see if it allows free access, even if it's for rehearsal time.
Treat your hometown like a vacation destination; check its Web site and the local visitors' center to find neighborhood festivals and art fairs. Check out local factories and ask if they offer tours; a plant tour can be fascinating.
Ask yourself, what would I show a visiting friend? You'll discover things you never knew about your community when you approach it this way.
Make it a game to see how much fun you can have without spending a nickel. Have your kids compete to come up with ideas.
Your staycation may turn out to be so much fun that you'll repeat it even when finances take an upturn.
College students are gaining confidence in personal finance management but unfortunately also have become less competent. A survey conducted by High One and Everfi recently found that in 2014, college students were more likely to use more than one credit card than they did in 2012, according to USA Today.
Considering that nearly two-thirds of undergrads take out student loans, and college seniors are graduating with an average loan balance close to $24,000, if students aren't careful about spending, the first financial steps they take after college might send them in the wrong direction.
While college expenses may seem limitless, students can learn to manage them by avoiding these common money drains, according to CUNA's member education department:
While many Americans might feel confident in their ability to support themselves after they retire, thousands will reach the age of 65 without adequate financial preparation.
It is never too early—or too late—to focus on retirement savings. The Center for Retirement Research at Boston College estimates that you need about 70% of preretirement income to maintain your lifestyle in retirement.
Here’s another way of looking at it, from the National Foundation for Credit Counseling (NFCC):
Don't wait until you're in deep trouble to ask for a financial checkup at California Coast. We're here for you. Contact us today.
The Coverdell Education Savings Account is a tax-privileged savings vehicle that replaces and improves upon the old Education IRA (individual retirement account).
Contributions are limited to $2,000 a year per beneficiary, which amounts to about $166 a month. Bit by bit, those savings can accumulate into a tidy sum. For most families, $2,000 a year is enough...if you start saving early.
The chief feature of the Coverdell account is that it shelters investment growth from the tax collector. That means that savings set aside in such accounts--plus the earnings they make--are fully available for qualified school bills.
Besides protecting earnings from taxes, Coverdell accounts offer investment flexibility, transferability and tax-free withdrawals to cover education costs such as books, tuition, and room and board.
Coverdell contributions must stop when the child reaches 18, and the account must be spent on schooling by the time the beneficiary reaches 30, unless the student has special needs. Otherwise, the earnings could be subject to income taxes as well as a 10% penalty.
However, unused portions of the Coverdell account may be transferred to a relative--a sibling, niece, nephew, even cousin--to keep the education savings in the family and avoid tax penalties.
Make California Coast your partner—the professionals at Cal Coast can help you—and your family—get on track with saving:
Use direct deposit and automatic transfers from checking into savings. Chances are, once you set up transfers to savings you won’t even miss the disposable income.
Stop by or call today at (877) 495-1600. We are eager to help you make real progress on your goals.
Beefing up your emergency fund isn't as hard as you might think. The strategy is to start small. The payoff is priceless: a healthy financial picture for you and your family.
So how do you go from $600 in savings to six months of living expenses? Change your mindset, and change a few habits.
One question that pops up frequently is, "How can I build an emergency fund when I'm trying to pay off my debts?"
If you're starting from scratch with your emergency fund, build it up to one or maybe two months of living expenses, and then accelerate credit card payments above the minimum payments required. Once you have paid down your debt, go back and boost payments to your emergency fund so you don't go into debt again.
Myths about saving energy are widespread and deeply ingrained in many of our daily habits. Far from being energy-efficient, some practices actually waste energy and inflate our utility bills. Here are a few common myths.
Myth No. 1: “When an electrical device is switched off, it’s off.”
Many devices continue to draw energy even when turned off. That’s true of anything with a built-in clock or indicator light, or that you switch on and off with a remote control. The only way to stop the 24/7 power consumption is to unplug the device.
Myth No. 2: “I’ll wear out my computer faster by turning it on and off each day. It’s better to keep it running all the time.”
The switches and power supplies can endure many more cycles than the rest of a computer’s components. The latter are more likely to die first. Turning off a computer is the best way to save energy. The second best is to put it into hibernate or sleep mode.
Myth No. 3: “Turning lights off and back on consumes more energy than just leaving them on while I’m out of the room.”
You use a lot more energy leaving them on even just for a few minutes than you do in that split-second it takes for them to come on.
Myth No. 4: “Compact fluorescent lights (CFLs) save energy, but they produce unpleasant lighting and are bad for the environment.”
CFLs now produce warmer light similar to that of incandescent bulbs. CFLs do contain a little mercury. But more mercury is released by burning coal to make the extra electricity you’d use if you didn’t replace your regular lightbulb with a CFL. Contact your local public works department about how to dispose of CFLs properly.
Myth No. 5: “I’ll use less energy if I leave my thermostat set at the same temperature round the clock.”
Contrary to popular belief, you don’t consume more energy in the process of getting your house back to the desired temperature. Save energy by setting your thermostat to be in sync with your actual heating/cooling needs.
With heating prices up, it's time to consider saving energy with programmable thermostats, insulation, weatherstripping and upgrading windows and doors.
Electronic thermostats that lower the temperature while you are in bed or away from home are the fastest, easiest way to save energy. In a cold climate, you can save about 5% for a 5° setback that lasts for eight hours. Most of these thermostats sell for less than $100, and they're ultra-easy to install.
Floor of unheated attic: Check recommended insulation levels, and lay new insulation at right angles to the old.
Heating ducts: Insulate in unheated attic or basement by wrapping with fiberglass insulation.
Weatherstripping is a flexible sealer for the moving parts of windows and doors. Many new windows and doors require a specific type of weatherstrip, which you may locate in hardware stores or on the Web. The generic "V-strip" adapts to many doors and windows and can even be applied in cold weather. The weatherstrip at the threshold often needs replacement. If the door bottom is still leaky, add a door sweep to seal against the floor or threshold.
Caulking seals exterior cracks around windows, doors, pipes, and vents. Scrape away old caulking and dirt, then squirt caulking into the crack.
Everyone, from college students to recent immigrants, is likely to need the purchasing power a solid credit record conveys. And if you're married, but all credit is in your spouse's name, you definitely should establish your own credit history.
Three national credit bureaus--Experian, TransUnion and Equifax--track your financial behavior, so it's important to pay your bills on time. Any delinquencies appear on your individual credit report, as does positive payment information. You're entitled to a free copy of your credit report from each of the three bureaus annually, and you can request copies at annualcreditreport.com.
When deciding whether to grant credit, lenders use credit scores calculated from the information in your credit report. Some employers and landlords also check credit scores when evaluating applicants. Your credit score is a number assessing the likelihood that you'll pay back debt. The higher the number, the better; a high score indicates low risk of nonpayment while a lower score indicates higher risk.
If you don't yet have a credit history, start by opening a savings and checking account at California Coast Credit Union. Show that you can handle your accounts responsibly, then apply for a small loan. Department store and gasoline credit cards sometimes are easier to get than other cards.
You also might put your rent and utilities in your name—and be sure to pay on time. Make loan payments on time as well, and pay department store or gas card bills in full monthly. Each of these strategies will raise your credit score, and soon you'll probably qualify for a credit card.
Contact Cal Coast today at (877) 495-1600. We have a low-rate credit card that's just right for you.
Pay attention to credit card grace periods and due dates; they may tighten up without your realizing it. With the economy in turmoil, many credit card issuers are just waiting for you to trip up so they can increase your interest rates. Don't give them the opening, pay all your bills on time, every time. Use online bill payment services and reminders to help you stay current.
We've all done it. We're out shopping, ready to use our debit cards, and the sales clerk asks "debit or credit?" We really don't know what the difference is. It is a debit card, so we say "debit," right? Wrong.
By choosing "debit" and entering a PIN (personal identification number), your transaction is treated as an ATM transaction. Instead, when you're making retail purchases with your debit/ATM card, choose "credit." You'll bypass any potential fees and the funds still come out of your share draft/checking account. Another good reason: Credit transactions require a signature, which helps guard against fraud.
So save your PIN for ATM use and say "credit" when you're at the mall or grocery store. For more information about debit cards contact Cal Coast. We'll explain the differences between debit and credit cards and how debit cards can work for you.
Did you know that only 10 percent of Americans know their credit score?
Those are the findings of a survey commissioned by TrueCredit.com, a web subsidiary of the credit bureau, TransUnion. “It is shocking how little Americans know about their credit,” said John Danaher, president of TrueCredit.com. “Good credit is a cornerstone of your financial profile, enabling you to finance major purchases, such as a home, education, or car.” Then, he added, “Not knowing about your credit can expose you to higher interest rates which translates into less money in your pocket at the end of the day.” When you apply for credit, your credit scores help lenders determine whether or not you are able to repay the loan based on your past financial performance. With a higher score, you qualify for better interest rates, higher credit limits, and more types of credit than you would with a lower score. Your score reflects the way you use credit, and there are no tricks or quick fixes to getting a good score. However, you can raise your score over time by demonstrating that you consistently manage your credit responsibly.
Here are 10 things you can do to improve your credit scores.
1. Pay your bills on time. If you have a history of paying your bills on time, you’ll have an easier time getting a mortgage loan, car loan, or credit cards. Even if you’ve had serious delinquencies in the past, a recent history (24 months) of on-time payments carries weight in credit decisions.
2. Keep credit card balances low. High outstanding debt can pull your score down.
3. Check your credit report for accuracy. Inaccurate information on your credit report can be cleared up easily. Always contact the original creditor and the credit bureaus whenever you clear up an error so that the inaccurate information won’t reappear later.
4. Pay down debt. Consolidating your credit card debt or spreading it over multiple cards will not improve your score in the long run. The most effective way to improve your credit is by slowly paying down the amount you owe.
5. Use credit cards—but manage them responsibly. In general, having credit cards and installment loans that you pay on time will raise your score. Someone who has no credit cards tends to have a lower score than someone who has already proven that he can manage credit cards responsibly.
6. Don’t open multiple accounts too quickly, especially if you have a short credit history. This can look risky because you are taking on a lot of possible debt. New accounts will also lower the average age of your existing accounts which is something that your credit score also considers.
7. Don’t close an account to remove it from your record. A closed account will still show up on your credit report. In fact, closing accounts can sometimes hurt your score unless you also pay down your debt at the same time.
8. Shop for a loan within a focused period of time. Credit scores distinguish between a search for a single loan and a search for many new credit lines, based in part on the length of time over which recent requests for credit occur.
9. Don’t open new credit card accounts you don’t need. This approach could backfire and actually lower your score.
10. Contact your creditors or see a legitimate credit counselor if you’re having financial difficulties. This won’t improve your score immediately, but the sooner you begin managing your credit well and making timely payments, the sooner your score will get better.
These ideas won’t create a dramatic improvement in your credit score overnight, but over time, they will. Remember, it takes time to develop a strong profile. Once you’ve done it, you’ll find it easier to apply for credit and favorable interest rates.
Total up the credit card debt of all the people in America, and it gives each household a staggering balance of $7,115 according to the Federal Reserve. Among just those who have debt, the average balance is $15,252. About half of households regularly carry a credit card balance. With high rates of unemployment, circumstances often force people to use credit cards to finance their lifestyles. This “strategy” leads to significant levels of indebtedness and low chances for repayment.
Yes, this debt level is staggering. It can be the biggest enemy of people who are trying to build wealth. Let’s look at some of the costs of credit card debt and what you can do about it.
The financing costs are high
In February 2014, the average APR on a credit card was about 15 percent. That means, before considering potential late fees and other expenses, the “debt service” cost on the average household’s debt is $2,287. That’s the amount the debt will grow assuming that no other spending on the cards takes place. If you have a complicated credit history, your interest rate could be as high as 22 percent. Your debt service then grows to $3,355.
As your credit card statement is legally required to inform you, the debt service costs exceed the minimum payment. This cost will continue to grow forever, even if you never spend again. Interest rates, though, are only the tip of the iceberg.
Credit card companies also stack late fees, collection fees, and other miscellaneous charges on top of these fees. These fees then contribute to the debt load and are charged interest at the same rate. Carrying long-term and high amounts of credit card debt is among the worst things you can do for your personal financial health.
The hidden costs are high
One of the biggest factors in determining your credit score is a figure called your “debt utilization ratio.” This is the percentage of your available credit that you’re currently using. Say you have a credit limit of $5,000 and you carry a balance of $2,500. That means your debt utilization ratio is 50 percent. Anything higher than 7 percent can negatively impact your credit score, making it more difficult to get other kinds of credit (such as an auto loan or home mortgage).
It doesn’t stop there, though. That lower credit score also translates into higher interest for unsecured loans, like credit cards. This increase in cost eats up your credit limit faster, driving your credit score down, and contributing to even more debt.
Not only does it hurt you financially, but many employers now use credit checking as a way to assess the trustworthiness and long-term planning of a potential employee. Having a low credit score could cost you a chance at your dream job.
The investment opportunity is tremendous
Savvy investors always like to talk about “ROI” (or return on investment). That’s the percentage of the money they invest that they get back and the rate at which they get it. Warren Buffett, perhaps the shrewdest investor of our time, gets an average return on investment of 17 percent for his investment company. This is the best work that the best investors in America can hope to achieve. They have to hunt long and hard for places to earn that kind of return.
The interest rates on your credit card debt are right around 17 percent. Getting rid of your credit card debt can achieve those kinds of returns by saving you an extra 17 percent on every dollar you pay down. It’s the smartest investment decision you can make.
California Coast Credit Union can help
Most habitual credit card users fall into a trap. They charge a great deal to one card then sign up for another to take advantage of low interest rates on balance transfers. They carry this huge ball of revolving debt with them and don’t see much of a way out.
Fortunately, Cal Coast is here to help you get out of the crushing cycle of revolving credit card debt. You can get a debt consolidation loan that will help repair your credit score, consolidate your monthly bills into one payment and make that debt cheaper with a lower interest rate. Here’s how they work. You agree to a term of repayment, usually 60 months, and an interest rate. Cal Coast issues you a loan for your credit card balance. You then pay us the same fee every month for that 5 years until your debt is repaid. You walk away with an improved financial history and no debt. Congratulations, you are now ready to start saving and investing in your financial future.
Debt consolidation loans aren’t the silver bullet to your financial problems. They work in conjunction with credit counseling, financial education and budgeting help to get you on the path to financial well-being. It’s time to get control over your financial future. Stop by the credit union today to discuss a debt consolidation loan.
Credit scores are a serious source of worry for most folks. You already know they can affect the interest rates you are approved for on your loans, your car insurance payments, and even your job prospects. What you may not know is that, last week, the Fair-Isaac Corporation (better known as FICO), changed its rules governing the formulation of credit scores.
In a statement, the company said it was making these changes to better serve the changing demographics of borrowers. FICO’s new criteria will make it easier and cheaper for more people to borrow. They’re updating their standards in response to the financial reality that most Americans are facing. However, the changes could take as much as a year to take effect.
Consumer advocacy groups have been after FICO for years to ease their scoring criteria, and with good reason. Lawrence Yun, chief economist for the National Association of Realtors, says around 15 percent of home buyers have been turned down for mortgages because of what he calls “excessive tightness” in credit score procedures.
For an average consumer, the change will probably be about a 25 point increase. That’s often not enough to move a loan application from denied to accepted, but it is enough to improve interest rates for most borrowers.
The company was quick to point out that this was not about making it easier for people to borrow. Rather, the move was based on valuation. The old model was making credit seem too risky, leading to higher prices. The new FICO 9 scoring system provides a more accurate picture of the risks that are involved in lending.
This is a bold step for the credit scoring agency, and it will provide some much-needed relief to consumers. It could also help spur growth in the housing sector as more people get mortgages at lower rates. Let’s take a look at some of the highlights.
While not all lenders will adopt these standards immediately, most experts expect institutions will flock to the new standard. Industry leaders believe the most conservative institutions could take as long as 18 months to analyze the effects of implementation. Still, they will come around once they realize that FICO 9 offers them a chance to expand their lending portfolio with confidence.
While credit is a terrific money management tool, using it carelessly can affect your ability to get a job, lease an apartment or buy a vehicle. Follow this advice from the National Foundation for Credit Counseling and the Credit Union National Association for using credit cards:
Choose a low-rate, low-fee card. Make Cal Coast the first stop. Credit union credit cards typically have lower rates and fees than other financial institutions.
Don't charge daily living expenses. Refrain from using a credit card for daily living expenses such as groceries and gas. Consider using a debit card or cash instead, and monitor your account balance online to keep spending on track.
Don't charge more than you can pay for when the bill arrives. Think twice about charging a vacation, a new wardrobe or other items that won't be worth the debt if you can't pay for the items when the bill arrives. Instead, set up a special savings account for future purchases at Cal Coast.
Don't let anyone else use your card. If you allow a family member or best friend to borrow your card, it's still your responsibility to make payments and pay off the debt.
Protect your card. Identity theft often is committed by people the victim knows. Keep your credit card in a purse or wallet instead of lying around your apartment for all eyes to see.
Get a secured credit card from California Coast to help build or rebuild credit. "If you've dinged up your credit record with careless habits, it's hard to qualify for credit," says Susan Tiffany, certified credit union financial counselor and director of consumer periodicals, Credit Union National Association, Madison, Wis. "A secured credit card trades access to credit for your commitment to keep a certain amount of money in a savings account. Once you've made, say, 12 months or so of on-time credit card payments, you'll have developed or redeemed your credit record and be eligible to apply for a conventional credit card."
Stop by or call today at (877) 495-1600 to get more information about Cal Coast's secured credit card option.
Conventional financial wisdom for the last 10 years has been that you need a rewards card. Obviously, carrying a balance is bad, but if you pay your debt in full every month, it’s a no-brainer. You put all your expenses on your credit card, pay it off before you’re charged interest, and rack up those airline rewards. You cash those in for free flights, first class upgrades, lounge stays and other perks.
There’s another bit of conventional financial wisdom, though: there’s no such thing as a free lunch. Free rewards sound great, but are you really getting everything you’re promised? Airline companies, faced with rising costs for fuel and labor, have started to cut costs everywhere they can. To understand how airlines save money by cutting your rewards, it’s helpful to understand the rewards systems.
Airlines use miles systems to build loyalty. The more you fly, the more points you get. These points can be used for all kinds of travel perks. The intent of such a program is ensuring you consistently choose the same airline by giving you some kind of reward that’s commensurate with your amount of traveling.
Other companies, mostly major credit card companies, also want to reward you for using your card so you’ll use it more. They buy blocks of reward points from airlines and award them to you for card usage. The airline makes money from the sale and they also use the rewards as a way to promote their services.
When it comes to points, airlines can lower costs in two ways. They can make them more difficult to spend or they can give fewer of them. Right now, things are so bad for the airline industry that they’re doing both.
With the first approach, they make it difficult to redeem rewards. By making popular flights unavailable to rewards program customers, airlines can sell more tickets for cash. They still make the same dollar value from the sale of the miles, but they have to give less back in return. A recent survey of major airlines by IdeaWorks showed a significant drop for most major airlines. United Airlines, for example, had 8.6 percent fewer flights available for rewards members in 2014 than it did in 2013.
In the second tactic, the airlines give fewer rewards. Up until last year, airlines awarded miles based upon distances traveled. Now, according to The New York Times, they’re switching to awarding points based on dollars spent. This means that, unless you fly a lot, regularly make upgrade purchases, or otherwise spend a lot of money on air travel, you’ll be getting fewer rewards.
Given this change in policy, it might be time to take another look at your rewards card. Is it still the best bet for your money? If you’re thinking about cutting the card, check out these factors:
Is there an annual fee? If you’re paying money every year to use the card but you’re not getting more than that amount in rewards, your credit card is a losing proposition. Check your billing statement for this information – and don’t forget to check the fine print.
Is the interest rate extremely high? If you pay the balance in full every month, you might not ever think to check your interest rate. Suppose, though, that something unfortunate happened – you or your spouse lost your job, you lost track of the date, or otherwise forgot to pay the bill. You could rack up significant financing charges on one month’s expenses.
Is there a real grace period on interest? You might assume that if you pay your credit card bill before the end of the billing cycle that you wouldn’t get hit with any interest charges. This might have been the case when you first signed up, but the deal may have changed. Credit card disclosures are often difficult to read, so check carefully.
If any of the above are making your rewards card less of a reward and more of a chore or added expense, it might be time to look closer to home for your credit card needs. You may be able to save money on fees and interest, as well as save time and frustration dealing with big, unfriendly credit card companies. Instead of counting on programs for rewards you may never see, put the money you save with a low-cost credit card from California Coast into a vacation club account. Now that’s a real reward!
Think and read all the important documents carefully, then pick up the phone. Our friendly staff will gladly help you make the switch. Speak to a representative from Cal Coast today.
Do you have derogatory marks on your credit report? If you feel that the marks on your report are inaccurate, you can dispute them with the credit bureaus. The Federal Trade Commission offers steps of how to settle or remove derogatory history from your credit report. Click here to learn more about disputing errors on your credit report.
Also, if you find that you are a victim of identity theft, the State of California Department of Justice provides a checklist to help you clear up your records. Click here to learn what steps you should take to limit damage done by identity theft.
With offers of an additional 15% off your purchase or free merchandise, it's tempting to apply for credit cards from your favorite retail stores. Think twice, however, before signing up. If you don't pay the bill in full at the end of each month, you could end up paying much more than you originally would have saved.
That's because interest rates on retail cards average about ten percentage points higher than California Coast Credit Union credit cards.
Store cards usually offer special incentives for cardholders to increase loyalty and encourage them to spend more. The average household has about seven store-issued credit cards.
If you plan to buy a car or house in the near future, it can hurt your chances to get a loan at a favorable rate if you have many recently opened lines of credit. It's usually better to have one major credit card that you can use for all items you wish to charge.
The U.S. is poised to upgrade its debit and credit card (payment card) security systems in an effort to fight skyrocketing fraud costs. And while federal regulations already protect you, as a consumer, from liability for most fraudulent transactions a crook could make using your account, when payment industry participants are hit by fraud, everyone’s costs increase.
That’s why the U.S. industry plans to implement EMV (Europay, MasterCard and Visa) cards, which contain computer chips that authorize or validate payment-card transactions. We’re the last developed country in the world to do so. Here’s how the change will affect you:
If you have questions about EMV cards and how they will affect you, contact the professionals at California Coast Credit Union. Stop by or call today.
When you are in over your head financially, it's hard to see clearly. Sometimes a fresh eye on your situation can make all the difference. A Cal Coast Financial Fitness Counselor can help you size up your bills and your resources and see what might work to clear your debts, short of bankruptcy.
The key is to ask for help before it's too late.
While some advisers, bankruptcy lawyers, mostly, will tell you that bankruptcy has lost its former stigma, most people feel better about getting a fresh start by paying their bills. It won't necessarily be easy but it may be much easier in the long run than paying extremely high rates on any loan you make, losing a promising job opportunity, or being turned down for insurance coverage for the next 10 years. That's how long bankruptcy will stay on your credit record.
In a time of economic upheaval, some people may have to declare bankruptcy who never would have considered it in the past. Bankruptcy is meant to be a safety net for families without any other alternative. The question is, what's that point? One of our counselors can help you review your circumstances and suggest some options.
There are times when bankruptcy is the only answer to severe financial problems. But don't be too quick to assume that's your only option. Call (877) 495-1600 today and we can work together on a better answer.
Money worries are rampant among Americans.
A recent survey by Ohio State University found that 70% of the nearly 19,000 students surveyed reported feeling stressed about money. Half worried about not having enough money for daily expenses, and 60% were anxious about the cost of tuition.
But it’s not just college-age adults who worry about money. Another recent survey by CreditCards.com found that 62% of Americans were losing sleep over their financial problems.
The most common fears they expressed were not having enough money for retirement and educational expenses. If you find that money worries are keeping you up at night, here are some steps you can take:
1. Ask yourself some questions.The first one should be, “What are you really worried about?” Then ask yourself, “Is it something I have control over?” If it is something within your control, take steps to fix the problem. Living within your means can help you get on track to mend most money problems.
2. Develop an action plan. When there is a specific money problem nagging at you, it’s easy to avoid dealing with it and simply hope your circumstances will change. But to truly change the situation, confront it head on. Sitting down and taking an honest look at your finances, and developing a plan of action will help you feel more in control of your future.
3. Take specific measures today that will reduce your stress in the long run. Set aside a little money each paycheck, no matter how small, to begin an emergency savings account. Strive to put away enough to cover at least three months’ expenses; ideally, stretch it to as many as eight months. Don’t get hung up on how big this number is, just steadily keep adding to your fund. Develop a side gig, such as selling belongings or handmade items online or leveraging a skillset like freelance photography, so you have multiple income streams.
4. Meet with a financial adviser to make sure you’re saving enough for retirement. Whether you open an (IRA) individual retirement account at your credit union or a 401(k), start saving now. If your company offers to match your contributions to your 401(k), contribute at least the amount you need to in order to get the match. If you don’t, it’s like leaving free money on the table.
5. Visit California Coast Credit Union for help. As not-for-profit financial cooperatives, every credit union’s mission is to help members become better stewards of their finances. We offer multiple services, educational opportunities, and trained staff to help you conquer your money problems.
Part of bringing up children today is giving them all the tools they need to survive and do well in the world and environment in which they live. In the United States today, that means helping them understand the value of and the concepts of earning, using, saving and investing money.
Parents neglect teaching children about money for several reasons. Sometimes they don’t think it’s necessary. Sometimes they feel that, since they are not “financial experts,” they are not qualified to discuss it.
Robert T. Kiyosaki, in his best-selling book, “Rich Dad, Poor Dad,” gives the analogy of an agricultural society where children are not taught the basics of farming. Whether we like it or not, money is central to the lives of people in our country today. Therefore, it’s our responsibility as parents to give our children the basic understanding they need. That’s easier than you might think because, whether you realize it or not, you already have all the information that you’ll need.
Looking ahead and planning for later, not just thinking about “now,” is a sign of maturity. Explain to your children that just as an ant spends the summer putting away food for the winter, people need to put away some of the money they have now to save it for later. Saving can mean putting away a little money each week to pay for a large ticket item (bicycle, computer, CD player) or so that they will have spending money of their own to use on the family vacation.
Let your children save up for a relatively close purchase so that they can experience the pleasure of being able to buy something on their own after having controlled their urge to just spend it.
If you buy your kids everything they ask for, they will have no appreciation for money. Give them some leeway, together with guidance, in how to spend their earnings, gifts and allowance. At the same time, know where you personally want to draw the line. What will you buy for them, and what will they have to pay for themselves?
Some children want clothes in excess of what their parents deem necessary. Others are caught up in fads, such as collections and music, and just “have to have” a new item every few days. These are areas of parental discretion and may change as the child grows older. But, whatever you do, make sure there are at least some things your child will have to pay for herself.
When you teach your child about financial matters, do so in bite-sized pieces. Your goal should be to teach your child just enough to stimulate a genuine desire to learn more.
Teach your child to “pay himself first” by putting away part of his earnings and gifts.
Your child can open two accounts – either at home with you or at California Coast Credit Union. One can be to save for a large purchase, such as a musical instrument or equipment, and another for the faraway future. When a child accrues enough savings to purchase the object, you have taught him an important lesson: saving is really worth it. You don’t want him to resent the money that goes into savings for some nebulous, unknown future.
When your kids feel comfortable talking to you about money, you’ll have established an important bond that will grow in years to come as your child makes career and investment decisions as an adult.
When was the last time you spoke to your kids…about money?
You’ve read it a million times if you’ve read it once. Put money away. Save 10 percent of your income. Fund your 401(k) plan. Pay yourself first. Establish a nest-egg. Spend less than you earn.
But what if you can’t?
What if you simply don’t make it from one pay check to the next on a month-by-month basis? How are you supposed to “save” when there isn’t enough money to pay the bills in the first place?
There’s no easy answer to this question, but here are several solutions, depending upon what’s holding you back. In an honest moment, ask yourself which of the solutions apply to your situation. Once you’ve figured that out, it’s (just!) a matter of taking the steps to resolve whatever it is that’s making it impossible to save. In every case, you CAN pay yourself first. As it is with many of life’s solutions, the answer may be simple, but it’s never easy.
1. Too much spent on little things. That overpriced coffee in the morning or lunch at McDonalds three times a week really CAN make a difference. A small hole can sink a big ship. If pocket-change spending is robbing you of long-term security, keep track of your spending-ALL of your spending-for seven consecutive days. If you don’t like what you see, take 10 percent off the top before anything else, pay all your bills, and give yourself some pocket money from whatever is left over.
2. Too much spent on big things. Perhaps you’re careful with the day-to-day expenses, but are carrying a huge mortgage on a house that’s now too large for your needs…or perhaps it always was. Maybe your insurance or long distance phone bills could be much cheaper, but you haven’t reevaluated the options in years. Take a look at the big expenses and see if you can find unnecessary (but maybe very much desired) holes in the ship.
3. Lack of organization. Has it been so long since you last balanced the checkbook that you’re not sure what percentage of your income is going towards groceries, and what percentage towards fun? It’s time to get organized. Find a system that works for you and get it together. You may find that once you’re organized, your problem is in a different category. But you won’t know that until you get your ducks in a row.
4. Too much debt. You may feel that the best use of your money right now is getting out of debt. And you’re probably right. However, if your only focus is paying off the high-interest credit cards, what happens if you hit a bump in the road and need cash? You borrow again. That puts you right back where you started. So instead of putting as much as you can spare toward paying down debt, set aside at least a small percentage of your income, perhaps 3 percent, toward savings and put as much as you can after that toward debt. It’s a good habit that will ensure you won’t have to borrow in case of an emergency, and it will get you ready for the debt-free days ahead when you’ll be able to save a full 10 percent.
5. Wait to see what’s left after paying everyone else. If you do this, there will NEVER be anything left to put away. It’s human nature to spend everything you have…and then some. Pay yourself before you pay anyone else or you won’t pay yourself at all.
6. You’re not earning enough. Most people will quickly decide this is the category they fit into, but take a minute to evaluate this: do you have a job? Are you paying your rent or mortgage? Utility bills? Are there any luxuries, big or small, that you’re paying for? This is really a temporary category for those newly unemployed or those who have had a recent change in circumstances, such as a new baby or other additional household responsibilities. In this case, your only answer is more income. However, if your ship is sinking due to any of the reasons above or those which are not stated here, increased income will not resolve the issue.
Bottom line? Take something off the top. Even if you have to start with as little as 3 percent, you’ll naturally cut back on unnecessary expenses and have financial security to show for it.
How is it that, whenever you need new clothes, they’re at their most expensive? Of course it’s not sale season when you’re desperately in need of an all-new summer wardrobe because you just experienced a random growth spurt and none of your clothes fit you anymore. Or maybe that diet finally worked out and now all your clothes are too big. Whatever the case may be, there are still easy ways to save or make money for all your new needs.
First, always check online promotional websites for coupon codes. Sites often have great discounts and can help you save. If you’re shopping online, just copy the promo code. If you’re going to the store, use the print coupon option. Stores also often have text/email-signups that offer 10-15% off your first purchase if you subscribe to their list. Make sure to find the best offer and go save!
Another great way for building up your clothes budget is to hold a yard sale. This is a great time to get rid of all that junk that’s wasting away in your house and to make a buck off it! Yard sales can be enjoyable to do with friends or with family and they’re sometimes highly profitable. You’d be surprised at how much value your neighbor will find in your random scraps, and how much they’re willing to pay for something you were just going to chuck into the garbage.
Lastly, go to outlet malls. Though they may not be having a sale, they are definitely cheaper than the regular stores. They have great quality things, and can often have the same items that are sold in the retail store for much less!
Whatever you choose to do, you’ll definitely be closer to spending less and saving more!
If it seems like you’ve always been in debt and there’s just no way to get out, take heart - there is a solution.
Can you imagine a life without debt? A life where you’re not paying for yesterday’s expenses, but instead can use everything you earn for today … and possibly put something away for tomorrow too?
Here’s the good news: It can be done! The method is as simple as it is effective. However, it does require that you follow two steps consistently, and it will not happen overnight. Unfortunately, there is no magic bullet for wiping the slate clean. Stick to it, though, and you’ll be thrilled with the results.
The first step is to stop taking on more debt. No more buying things you don’t have the money for right now.
The second step is designating 20 percent of all income to pay down debt. No more, and no less. This means you’ll be living off 80 percent of your income until everything is paid off.
It would be wonderful if you could put another 5 or 10 percent away in savings so that, should an emergency arise, you’ll have the funds to get you through without having to borrow again.
This idea was presented in the book “The Richest Man in Babylon,” an excellent and quick read for anyone who might be interested in smart money management.
Make sure you differentiate between collateralized debt (home loans, auto loans, etc.) and uncollateralized debt, such as credit cards. Most collateralized debt is fine, (provided you’re buying a car or home you can afford) and may be difficult to do without. The other type of debt has no place in your life.
Come in to the credit union to discuss our debt consolidation loans. It’s one of our most popular loans — for good reason! Our Signature Loan (sometimes called a personal loan) helps turn hopes, dreams, and must-haves, into reality. Click here for more information.
It might take a while to pay your debt off, but if you stick to the plan, you’ll get it done. . .and you’ll be debt-free!
Your child wants a new longboard ($200) or the latest basketball shoes ($120) but it’s just not in the budget this month-or for the next three months. Rather than a flat-out “No”, work with your child to set a savings goal and then help her reach it. Here’s how:
Identify the goal. If your child has an item she’d like to purchase, the goal amount would be the purchase price. If the item is exceptionally pricey, offer to match her savings once she gets halfway there. Setting a reasonable goal amount will help her see when the end is in sight and provide more motivation to reach the goal.
Make a plan. What will she do to reach the goal? Sit down with your child and discuss ways to earn the money. Does she have a part-time job? Can she babysit? Are there additional chores she can do around the house to earn more money? Get creative! Together, figure out how much money she can save each week or month and how long it will take to reach her goal.
Set money aside. Make sure your child has a savings account or another method for savings. Spending can often be quite tempting if the cash is easily accessible. If your child is serious about saving, make sure she has a place put the money away.
Follow through. Once your child has reached her savings goal, follow through and allow her to purchase what she saved for. And if you agreed to match her savings, make sure you’re ready to do so, too.
Giving your child the knowledge and help to reach a savings goal is a life lesson that they will carry with them throughout their adult lives. You might even be surprised. Once your child has reached her savings goal, she may decide that the items she originally wanted to purchase aren’t worth the work she put into it and use those savings even more wisely.
Not everybody can afford to hire a professional to do their taxes. In fact, most people are now doing it themselves for a fraction of the price via tax software programs. However, for all the praise this do-it-yourself tax software has earned, it is not 100 percent perfect, which is why you need to be aware of some potential pitfalls that you could easily fall into. Let’s take a closer look at tax withholding.
Don’t let the government keep your money
Here’s a statement that is going to surprise you: getting a refund is a bad thing! Why? Because it means that you allowed the federal government to hold onto a portion of money you overpaid- interest free! Rather than overpaying each year so you can get a refund, it is better to actually underpay by a few hundred dollars. By doing this, you will have enjoyed accruing interest on this money for the year. In addition, paying the balance won’t feel like such a horrible blow to the wallet.
So, when you prepare your taxes, don’t apply any of your refund to the next year’s taxes. Instead, put that money in a dividend-bearing account at the credit union and focus on not overpaying on your taxes in the future.
The average American between the ages of 35 and 44 has just over $22,000 dollars saved for retirement. For people who are entering their prime earning years, this is far too low. If you want to retire at age 65 and live on $50,000 a year, you’ll need about fifteen times that much, assuming you live to the average age of 72. For most Americans, retirement seems like an always-distant horizon. They can always see it, but they never quite have enough money to reach it. As a result, they end up working long into their 70s.
There is a way you can save more for retirement while also saving on your tax bill and earning interest on your investment. It’s called an Individual Retirement Account (IRA). It’s a managed investment account, like a mutual fund, that will grow your wealth so you can enjoy your retirement.
If you work for a large company, you may have something like an IRA: a SIMPLE IRA (Savings Incentive Match Plan for Employees) or a 401(k). Even if you’re maximizing your contributions to these programs, you can still use an IRA from Cal Coast. The extra money you save in an IRA can pay for the things you’ve always wanted to do. You can spend your retirement travelling the world or going back to school. All you have to do is start planning now.
Successful investing in an IRA is more about starting early. If, at age 18 you deposit $5,000 into an IRA and it earns 8% per year, you will retire with $164,000 dollars, assuming you make no other savings. Doing the same thing at age 39 will build a nest egg of a mere $40,000. The key to successful retirement savings, then, is good and early planning.
The deadline for contributions to count against your tax burden for each year is tax day: April 15. The time to start investing in a brighter retirement future is now. Take a look at some benefits of investing in an IRA:
IRAs come in two forms: Traditional and Roth. A Traditional IRA is tax-deferred. You don’t pay taxes on the money you put into a Traditional IRA. Instead, you pay taxes on your withdrawals. If you’ll have less income after you retire, a Traditional IRA can save you money on your tax bill.
You fund a Roth IRA with post-tax assets. You invest in a Roth IRA with your post-tax salary. Then, you don’t have to pay taxes on the withdrawal. Roth IRAs make the most sense for people who expect to draw a significant post-retirement income. If you expect to have a significant pension or plan to start a profitable small business when you retire, a Roth IRA might be best for you.
The best part about retirement savings with an IRA is that it requires little direct management. You can set up direct deposit from your paycheck to your IRA, allowing you to grow your savings over time. You’ll receive a monthly statement, just like you do from your checking account. It will show you how much your investments have grown.
IRAs are also professionally managed. A full-time financial analyst directs the growth of the fund. Your retirement savings are in the hands of a professional who knows the ins and outs of the market and can make your money work for you. Rates of return on IRAs tend to be higher than Cerificate or savings accounts. This higher return can make sure you have enough money saved to enjoy your retirement.
IRAs offer some flexibility. Withdrawals before retirement incur a tax penalty and other fees, but the money in an IRA is accessible in the case of emergency. You can also change the size of your contribution month-to-month. This flexibility means you can take advantage of sudden windfalls or expenses.
IRAs are large, managed funds. They can take advantage of economies of scale that are unavailable to individual investors. Managers working with more capital can make safer investments while maintaining good returns. Trying to manage your own retirement investments limits you to working with just the money you have. Investing in an IRA at Cal Coast allows you to use the added savings power of your entire community.
Relying on Social Security or other guaranteed income for your retirement is not a good idea. The demands that are placed on these programs keep going up and contributions to them keep going down. It doesn’t take a professional financial analyst to see that these trends can’t go on forever. Take charge of your financial future, and do it now. Stop by one of our convenient branch locations and speak to a representative about opening a Roth or Traditional IRA today!
Most people have a checklist they go through before they leave the house. Is the stove turned off? Are the doors locked? Do I have my wallet, my keys and my cellphone? The only thing that has changed about that process in the last few years has been the addition of that last item on the list.
Today, 91% of Americans have cellphones and 61% of them have smartphones. This is a remarkable change from even two years ago. More than half of the people you see every day are carrying a computer that dwarfs the most powerful computing technology that was available a decade ago. It's also connected to all of the world's information, literally at our fingertips.
If you'd like to use your smartphone for more sophisticated purposes, plus add a ton of convenience and peace of mind to your life, consider mobile banking. With a couple of taps, you can access a whole suite of financial information. Let's look at four scenarios where mobile banking can save you some time ... and even some money.
1.) Say goodbye to security woes - Despite all of the data breaches that have been in the public eye over the past few years, no one has figured out how to compromise mobile devices as a platform. Security leaks have affected PCs, Macs and point of sale terminals, but no widespread security vulnerability has compromised mobile banking. Despite the fear, mobile banking is actually a fundamentally secure platform.
The first reason for this is the plurality of platforms. You and your neighbor may not be able to share cellphone chargers, much less apps or other experiences. This diversity makes it difficult for a single vulnerability to affect many users. Since there's less possibility of large scale attacks, hackers have very little incentive to dedicate time toward trying to compromise mobile platforms.
The second reason for this is the tight control placed on mobile devices. Because these devices have to send regular usage information back to your mobile provider, they tend to be far less prone to modification. There's just not as much you can do to an iPhone or an Android as you can to a PC. While some users might override those protections, such modifications are not widespread enough to justify attempted infiltration.
Mobile banking is secure and safe. Data transmitted from your cellphone to your provider is heavily encrypted. If you lose your phone, it can be remotely deactivated and passwords usually aren't stored on the device.
2.) You can check your balance any time - Rather than waiting for your statement every month or booting up that slow PC for checking your account balances online, you can view transactions while waiting for a bus or in line at a restaurant. You can stay vigilant against illegal account access any time you've got your phone and a spare few seconds.
The convenience of mobile banking can also keep you from making costly mistakes. If you know funds may be running tight, check your account balance while in the checkout line to make sure you can cover the cost of your purchases. You can see if your monthly rent check has been withdrawn from your account to avoid the costly fees associated with overdrafting. It's easier than ever to keep track of your finances.
You can also help to prevent errors with mobile banking. Accidental overpayment, duplicate payments and other errors are a regrettable reality of the modern high-speed economy. By regularly checking your account statement, you can catch these pesky problems before they turn into big issues.
3.) It's where you'll find the next big thing - Mobile payments and mobile check depositing are becoming more widely available and are already being used in many places. As technology gets better, these functions will become cheaper, faster and even more widespread. Getting involved in mobile banking on the ground floor will help you stay up to speed with this rapidly evolving world.
Imagine getting turn-by-turn walking directions to your nearest ATM. You could get alerts when new houses are listed for sale along your daily commute. You might pay for your breakfast by signing a receipt on your phone. These and other changes are coming and they are only the beginning. If mobile banking doesn't do something you need, wait six months. Someone will probably find an app for that.
4.) 24-hour-a-day instant access - Do you ever wake up in the middle of the night in a panic because you can't remember if you paid your electric bill? Ever have a tiny freakout on the bus because you suspect someone may have accessed your account? Are money worries preventing you from enjoying your vacation? If you have these concerns and are nowhere near your computer, you could just suffer through them.
As an alternative, though, you could use a mobile app to check your balance and transaction history. See if your monthly bills have cleared. Make sure your balance is safe. You can do all of this any time you've got your phone, day or night.
Mobile banking won't replace traditional, face-to-face interaction. There will always be a place in the credit union service standards for the human interaction. What mobile banking apps offer is a wonderful supplement to those high-quality services. Space-age convenience, top-level security, and blissful peace of mind are all available from your pocket, anywhere in the world.
As any kid knows, summer’s arrival means school is out. As any working parent knows, summer’s arrival means a child-care (and possibly a financial) headache.
Until they enter kindergarten, children of working parents are usually in year-round day-care programs or watched by a year-round sitter. But, as soon as your child begins school, she’ll want to have fun … and you’ll need to make sure she’s well cared for while you’re at work.
If you’ve decided on an all-day or part-time summer camp (or even a sleep-away camp), shop around carefully. Although lifelong memories and important values are solidified through the wonderful experience of summer camp, it’s important to choose the right camp for your child.
Before packing the duffel bag, consider the following:
The staff must be excellent! Get references on the counselors your child will have. At the minimum, make sure that the camp administration has done so.
The national average for staff-camper ratio is one counselor for seven campers. How does the camp you are considering compare?
What are the safety standards in high-risk activities?
Who are the other campers? Is your child going with friends? Do you expect her to make new friends once she arrives? Find out if all the children are from a specific geographic area because you don’t want your child to feel left out.
Find out what the menus are like and discuss any allergies or eating habits beforehand.
Does the cost seem reasonable? Shop around and compare prices.
Find out the accident/safety history of the camp.
Find out if there are religious viewpoints endorsed or disagreed with at the camp.
Ask about the camper return rate from last summer. That will tell you a lot about how much kids enjoyed their experience.
You may have heard that the Consumer Financial Protection Bureau (CFPB) issued new mortgage rules. While it now may be more difficult to secure a home loan, these rules are truly aimed at protecting you, the consumer. The rules are designed to prevent future housing bubbles in the wake of the Great Recession, thereby strengthening the country’s economy—and your bottom line.
If you’re in the market for a home, or want to refinance your current mortgage, you will want to educate yourself on the impact that these new rules will have on you as you work through the loan process. Here are some of the most important take-aways.
Debt-to-income ratio. One of the biggest changes to mortgage loans is that lenders must prove the consumers’ ability to repay the loan within a reasonable loan period. Lenders will look at your debt-to-income ratio, or how much you owe (including student loans, credit card payments, living expenses, etc.) compared to your monthly income. Generally, this ratio needs to be below 43 percent. To calculate this, total up all your monthly payment commitments and divide that by your gross (before tax) monthly income.
Maximum loan terms. Historically, loan terms have typically been 15 or 30 years, but some mortgage brokers offered loans beyond 30 years. New rules state that 30 years is the maximum. This doesn’t impact many consumers, but it does protect them from the additional interest accrual for loans that would be amortized over an additional 10 years or so.
Life of loan picture. In the past, lenders have qualified borrowers on “teaser rates,” or rates with special terms that expired after only a few months or years. Once the special terms expired, borrowers often struggled to make payments on the new, usually higher, interest rates or baseline payments. This is because the borrower’s debt-to-income ratio has increased with that the teaser being gone. The CFPB’s new rules require mortgage approval over the life of the loan—after the teaser rates expire.
More detailed history. No-doc and low-doc loans are a thing of the past, with lenders now required to document and verify applicants’ income, assets, credit history, and debts. While this means more paperwork and a longer process for consumers, you will get a much clearer picture of what you can afford and how your new mortgage payment will impact your bottom line.
No broker incentives. Part of what created the housing bubble and subsequent burst was the practice of mortgage brokers pushing through loans for consumers who really could not afford them—all to earn financial incentives for themselves. These “steering” practices are no longer allowed. Brokers are all tied to the same rules, thus protecting consumers from questionable tactics to get their loan approved.
Upfront fees. All mortgage applications come with fees—title insurance, origination fees, underwriting, processing, etc. CFPB’s new rules limit these fees to no more than 3 percent of the mortgage balance, which now makes those upfront fees more reasonable and predictable.
No more interest-only. Interest-only loans are considered a risky loan feature, causing the principle balance to continually increase even though the loan holder makes regular monthly payments. New rules prohibit these types of loans, as well as other risky practices, for qualified mortgages.
While these new rules may be difficult to understand and sift through, the loan officers at California Coast are talented and knowledgeable, and will work with you to identify your debt-to-income ratio and find the perfect home loan for you. As always, we welcome your questions and have always provided our members with responsible, affordable home loan options.
You say it every year after the holidays: "Next year I'm going to spend less money." It's easy to get carried away. It can be just as easy to stay financially fit, even during the busiest shopping season of the year.
The Credit Union National Association, the trade association for credit unions, and the Consumer Federation of America, Washington, D.C., suggest these holiday spending tips:
1. Budget your spending and set goals: Start with a realistic idea of how much you can spend on holiday gifts, food, travel, and so on. Add it up and really give some thought to what you can afford. Think about where you might cut back and stick to your budget.
2. Make a list: Shop from a list to avoid impulse purchases that could leave you snowed under in debt at the end of the season.
3. Comparison shop: Take the time to find the best deal. Fight the urge to get your shopping over with as quickly as possible, and, for the procrastinator: Don't wait until the last minute!
4. Trim your interest payments: If you must pay with a credit card instead of using cash, use a card with a low-interest rate. Now is a good time to look for a lower-rate card--start at California Coast!
5. Open a holiday club account: put some money in the account each month based on how much you spent this year; arrange to have that amount automatically deducted from your paycheck. This way, next year you'll have all the money you need. Plus, you'll earn interest rather than making big interest payments to finance next year's holiday shopping.
If you set aside pretax dollars from your paycheck to pay for health-care expenses, find out how much is left. You have until March 15 to apply eligible expenses toward your previous year's balance--after that, you lose the unused portion. Common eligible expenses include prescription and office visit co-pays, over-the-counter drugs prescribed by a physician, vision expense, dental work, and expenses applied to medical plan deductibles. Ask your human resources department for the list of eligible expenses or for the benefits vendor's Web site.
It's common—if undocumented—wisdom among lawyers that about 50% of Americans die without a will, letting state law dictate who gets what of the property they leave behind. To make matters worse, many of those who do have wills have not kept them up-to-date.
In addition to the many lifestyle issues dictating periodic attention to your estate plans, there is also a very compelling reason for many people: federal and state estate tax.
In any case, whatever happens on the federal level, at least one-third of the states have "decoupled" from the federal estate tax system and now have far lower tax exemptions. Where the federal estate tax exemption is $5.25 million in 2013, for example, New Jersey has frozen its exemption from state estate tax at $675,000.
Even if your estate is not likely to be subject to federal estate tax, a properly drawn will may save your family a great deal of money in state estate taxes.
Seek professional help if you are in a blended family, wish to establish a trust to direct the disposition of assets after your death, own property in more than one state, want to leave more to one child than to another, own all or part of a family business, have a disabled or handicapped dependent, anticipate family conflict over your will, or own expensive assets not easily valued.
For more information or to schedule a complimentary consultation with California Coast Financial Services, call (858) 636.4241.
There is no magic formula to know what the right time is to invest in the stock market, or the right time to get out. Instead of jumping in and out of the market, it's typically a better idea to stay in and ride it out—as long as you will need the money in the distant future.
Don't try to "time the market," or rely on your financial planner to pick market tops and bottoms. Instead, be conservative. Diversify properly and rebalance periodically. This way you don't have to worry about tops and bottoms.
No matter how well you and your significant other jibed while dating, marriage brings new things to think about—and money is one of them. Ironing out any potential sources of friction makes for a happier couple. Get the conversation rolling and ask these questions before marriage:
What do you earn?
No one should be in the dark about his or her partner’s income, even if, at first, bringing it up feels awkward. Income level affects everything from day-to-day lifestyle to your future tax bracket.
What’s your credit history?
If your spouse doesn't have a great credit score or has a lot of debt, you may not qualify for a good interest rate on your mortgage. Though it can be tough to talk about, financial secrets cause many more problems than less-than-perfect credit.
What is your debt picture?
Debt affects everything from monthly bills to long-term savings. Be respectful with each other when discussing student loans, credit cards or loans from family. If the financial inventory uncovers debts or other financial challenges, figure out how to tackle the issues together.
Are spending and saving priorities in line?
Talk about how you’ll handle major purchases such as appliances and vacations, as well as regular expenses such as groceries and utilities. Discuss what amount of money is OK for one person to spend without consulting the other. Talk about your values around saving money.
Who will handle your budget and bills?
Talk about how the two of you are going to divide household finances. Talk about whether you’ll have individual or joint California Coast accounts—or both.
What are your future plans?
How would you feel if your future spouse planned to stop working to pursue an expensive graduate degree or volunteer opportunity? It’s important to also discuss whether both of you will continue to work if you have children.
The professionals at California Coast Credit Union can help you and your partner get on the same page for your new life together. Stop by one of our convenient branches or call today.
With all the ups and downs in the financial markets, it's hard for investors to know what to do and when. How do investors typically respond to change?
So what's an investor to do? Know where you want to be and when, and implement a plan to get there based on goals and tolerance for short-term volatility. Diversify, and then stick with your plan.
*The author of this article is not a registered investment adviser. Readers should seek independent professional advice before making investment decisions.
Organize all your financial files to take account of everything you own and everything you owe. File your papers by category and weed out old documents such as expired insurance policies that have no possibility of claims, outdated mutual fund annual reports, and records from vehicles you no longer own.
Calculate your net worth
Create a net worth statement. For your assets, include the current value of your home, vehicles, personal property, savings, investments, retirement accounts, and any life insurance cash values or any other assets. For your liabilities, include any mortgage, credit card balances, loans against life insurance policies, or other outstanding debt. Then see where you stand by subtracting your liabilities from your assets.
Prepare for the possibility of incapacity
A durable power of attorney for finances allows you to designate someone you trust to manage your financial affairs. A durable power of attorney for health care allows you to appoint someone to make decisions about your medical treatment. And a living will spells out your wishes regarding the use of life-sustaining procedures.
Write or update your will
Any property you don't leave through these methods is governed by the state intestacy laws. The intestacy laws in most states make no provisions for those who aren't related to you by blood, marriage, or adoption. Consequently, you'll lose out on the chance to leave anything to anyone unrelated to you under the state definition, including stepchildren, unmarried partners, and friends.
Check your designated beneficiaries and how your assets are held
Review your designated beneficiaries on your investments, retirement plans, annuities, and life insurance policies. The designations on these documents supersede your will instructions. Also review the title registrations on all your assets to ensure they meet your current needs and to ensure that your property will be passed to your beneficiaries in the most tax-efficient manner.
Take steps around probate with a few forms
For savings and money market deposit accounts, checking accounts, certificates, and Treasury securities, you can complete a pay-on-death form. For brokerage accounts, if allowed in your state, you can complete a transfer-on-death form. With these designations your beneficiary has no right to the assets in your accounts until your death, so you retain complete control during your lifetime.
Consider whether trusts should be part of your estate plan
Technically, a trust is a legal relationship in which a person or trust company holds property for the benefit of him or herself or another beneficiary. Trusts can help you avoid probate, make charitable gifts, or help manage your affairs if you become disabled. If you have substantial assets, setting up certain types of trusts also can help reduce estate taxes.
Keep your plans up-to-date
Review your plans to make sure they still meet your needs and that they comply with the new federal and state estate tax laws. If you experience significant changes in your life, update your will and other estate planning documents.
Many Americans are concerned about someone stealing their credit card, check, or debit card numbers, but they may be ignoring one easy way thieves can access financial accounts: receipts.
Disregarding receipts that have valuable information greatly increases the risk of credit and debit card fraud. Thieves easily can find receipts with valid account numbers in trash cans. Some easy steps you can take to prevent thieves from stealing your financial information:
• Shred all preapproved credit offers, credit and debit card receipts, insurance forms, financial statements, and other paperwork containing personal and financial information;
• Check credit union statements and other financial statements monthly for discrepancies and order a credit report once a year to make sure no one else is using your personal information to obtain credit cards or services;
• Don't print your Social Security number on your checks and don't carry your Social Security card in your wallet; and
• Be hesitant about giving personal or financial information over the telephone—make sure you know the caller and know how the information will be used.
It can happen to anyone.
You open your credit card statement and are shocked to find that the credit card you keep only for emergencies has racked up more than $7,000 in charges you know nothing about. Or, you apply for a mortgage and are denied because your credit report lists numerous credit defaults and open accounts you never applied for.
These are examples of credit fraud, in which criminals steal credit cards or, even worse, identities. They then obtain fraudulent credit and quickly spend as much as they can. Most people have never experienced credit fraud and believe it will never affect them. Others are aware of the danger, but think that all they have to do is call the credit card issuer if it does happen, and the matter will be taken care of. Visa, MasterCard, or American Express will cover the losses, and it won’t cost them anything, right?
But, ultimately, we all pay for credit card fraud. When criminals buy goods and services on credit using stolen information, everyone pays through higher prices and more expensive credit terms. And, when a scam is successful, criminals continue cheating others using similar schemes. This is why occurrences of credit fraud are increasing dramatically each year.
Your passwords protect your information online. Wouldn’t it seem that they need no protection themselves?
Yet, they do. Because your passwords are the key to your accounts, hackers and identity thieves are itching to get their hands on them. You need to take every precaution to make sure that they can’t. Aside from changing your passwords often and not giving them to anyone, make sure they’re not stored where they can be easily found. Keeping them only in your own memory is best. If you put them somewhere like a PDA or a file in your computer, you’ve just put the key to your car under the mat.
Even though your car is locked, the reality is that it’s more likely to be stolen than if the key were on a ring in your pocket. Most importantly, select passwords that are easy for you to remember, but that should be impossible for less-than-ethical characters. For example, instead of a password like janesmith, which is easy for hackers to figure out, try something that is meaningful to you, but not to others. Take an old movie you loved, your college address, a football team, your child’s birthday, or your first significant other’s name, and work it into a password that no one will be able to figure out.
For example, if you love the book A Tale of Two Cities by Charles Dickens, you could create a password using the title and the author’s name: atotccd. Okay, that’s something. Now, take it a step further and convert some of the letters to numbers. The “o” can become a “0” and the “t” representing “two” can be replaced with the numeral “2.” Capitalize the other “t” and the “d” and you have: aT02ccD. Take it a step further by replacing the “0” with two bracket symbols “()” and changing the “2” to a “3.” Now you have: aT()3ccD. That’s a tough password to crack, but will be easy to remember if you just retrace your steps. But, is it worth the bother? Just ask anyone who has been a victim of identity theft.
Don’t let hackers get the key to your accounts.
Protecting oneself from theft used to be as basic as securing the doors and windows of your home. But in today’s modern age, an enterprising thief can take control of your assets without breaking a window. Identity theft continues to be one of the fastest-growing crimes in the United States. According to the Federal Trade Commission (FTC), approximately 10 million Americans have their identities stolen each year.
So how do you secure your identity?
Clues to your personal and financial information are often buried throughout your personal paperwork and mail. One search through your mailbox or trash could garner enough evidence for a thief to take control of your identity — and your finances. Thieves use credit cards, financial statements and utility bills to obtain and exploit that personal information.
The first line of defense is to destroy documents that contain your personal information before anyone can access it. Private documents and credit or debit cards, which contain sensitive information, should be destroyed once you no longer need them.
Here are some suggestions for properly destroying those personal documents:
A paper shredder will transform your documents into unidentifiable strips of paper. If you don’t have a shredder, but there’s one at your workplace, check with your management to know if it’s okay for you use it for your personal paperwork. If not, there are several organizations throughout most communities that host “shred days” by partnering with firms that specialize in secure on-site shredding. Or you can purchase a pair of multi cut scissors to shred your documents by hand.
This option is more time-consuming, but it can be a great rainy day activity. If only a small area of a document contains sensitive information, hole punching that area will make the document useless, and you’ll get lots of homemade confetti.
Expired credit cards are still critical, and need to be disposed of properly. Rubbing a magnet across the card a few times will disable the magnetic strip on the back. You should also cut the card into pieces, making sure that each set of four numbers is cut in at least two places. Then smash the chip (if applicable) and dispose of the pieces in different garbage bags.
Old computer drives may have data or imaged copies of documents. With that in mind, be sure that the drive is securely erased – or physically destroyed – before selling or recycling your old computer.
Using these basic steps to destroy your personal documents can protect your information, and your finances. As a general rule, it is better to have as few physical documents on file as possible. Switch to online banking, and opt-out of paper statements. Keeping your finances digital will help simplify your daily chores and help protect you from fraud.
As your credit union, it’s important to us that you take every precaution to protect yourself from fraud. Here are some simple steps you can take to avoid becoming a victim of this growing crime.
Review your credit reports annually
Review your accounts online
Protect paper documents
Protect yourself online and on the telephone
Did you know that using your cell phone for mobile banking actually can be safer than banking online with a computer?
The reason: Cell phones in the U.S. run on a variety of operating systems, making it tough for hackers to create malware or viruses that can target phones across different platforms.
Still, there are a few mobile schemes you should watch out for. Phishing can occur with mobile Internet browsers. There's also smishing: Crooks send text messages, claiming to be from your financial institution, and request information such as your PIN (personal identification number) or account number. And if you store account information or logins on your device, you could be at risk for identity theft if your phone is lost or stolen.
Stay safe by taking simple precautions with your phone:
If your phone has Bluetooth—a feature that allows mobile phones to communicate wirelessly—make sure you turn it off when you're not using it.
If you follow basic security measures, mobile banking can be a convenient and safe tool to manage your accounts.
If you'd like to set up California Coast mobile banking on your phone, give us a call, stop in or click here to find out how to get started.
When you’re online, you can unwittingly leave behind a trail of breadcrumbs that thieves will track hoping to stumble across the 24-hour buffet that is your identity. And the thieves will keep coming back for more, as long as most Americans continue to ignore some simple precautions.
Your financial identity is worth protecting. You must be especially vigilant if you are active on social networking sites or posting information about yourself online.
Start with these precautions:
If you have Internet access, you may be under attack--a phishing attack, that is. This high-tech scam involves three components:
Spoofing is creating a replica of an existing Web site.
Spamming is unsolicited, or "junk" e-mail.
Phishing is the act of using spoofing and spamming to lure unsuspecting victims, hoping to deceive you into disclosing your Social Security number, credit card and checking account numbers, passwords or other sensitive information.
The Federal Trade Commission recommends the following tips to help you avoid getting hooked:
Q: Recently, when I've made purchases over the phone, merchants have asked for the three-digit security code on the back of my credit card. Why is this?
A: This is to verify that the card definitely is in your possession. It generally follows the 16-digit card number on the back of the card. It's information that wouldn't be available to someone who has intercepted your card number and expiration date.
That said, make sure you know to whom you're giving this information over the phone or on websites.
Con artists often are able to obtain partial information about a potential victim's account, and then contact the person masquerading as a company representative to "verify" the account by requesting additional details such as the three-digit security code. But they might just as well ask for other pertinent details--for example, they may provide the last four digits of your account number (which typically show up on sales receipts) and request the other 12 digits to "confirm" it. Or they already may be in possession of your full account number and request the expiration date of the card, or your billing address. Any of these individual bits of information may be just what the scammer needs to "fill in the blanks" and gain full access to your account, so beware.
Keep in mind, though, that legitimate businesses or financial institutions may request your three-digit security number (known as "CVC2" by MasterCard and "CVV2" by Visa) to authenticate a transaction. Just be sure you know whom you're talking to before giving it out.
Identity theft is one of the most common crimes in the U.S. with millions of new victims each year. It's easy to rack up criminal charges on car loans, credit card charges, and other bills if a thief has your name and Social Security number. Protect your number—be as stingy with handing out your Social Security number as possible. Always ask why it's needed and if you can use different identification instead.
Reduce your chances of being a victim of mail fraud—receive your Cal Coast statement electronically.
Even though identity thieves are finding new ways to steal information over the Internet, the original theft—for example, taking out a credit card in your name—tends to be a low-tech crime. According to the Federal Trade Commission, about half the country's victims know how their information was swiped, and in many cases the breach was paper—bills, credit card solicitations, and financial statements—pilfered from garbage cans and mailboxes.
Banking and paying bills online not only cuts off thieves' access to the papers they need to commit ID theft, but also helps detect the crime sooner. This is because consumers who bank online check their accounts much more frequently—nearly four times a month compared with once a month for those who receive statements by mail.
Receive your statement electronically and enjoy safety, timeliness, and convenience. For more information about eStatements, or to sign up to receive them, call Cal Coast at (877) 495-1600 or click here.
Keep your computer's content secure by creating strong passwords, keeping them secret, and keeping track of them. A compromised password could lead to identity theft or other dire consequences. A criminal could use your information to apply for credit cards or mortgages, or to make online purchases or other transactions.
The first rule of thumb for creating strong passwords is to use a different password for each of your accounts. It may be easier to keep track of just one password, but if a crook discovers that one password, he or she can access all of your accounts.
The second key to a robust password is to make it lengthy. At a minimum, your passwords should be eight digits long, and 14 digits or more is ideal. Using the greatest variety of characters possible in your passwords—letters, numbers, symbols—makes them harder to guess or uncover with malicious software.
After creating your password, you can test its strength with one of the "password checkers" available online such as Microsoft's Password checker and The Password Meter. Use your search engine to locate these and others. If your password tests as weak, make it more complex.
Some password don'ts include:
Using personal information such as family names, birthdays or your address.
Using sequences or repeated numbers, like abcd, 1234 or 9999.
Using any words listed in a dictionary—they're easy for scammers to guess.
To help you keep track of your passwords, write them down and store the list where others won't find it, but in a place you'll remember. Don't share your passwords with others—children, particularly, may unwittingly pass them on to others. And don't enter them into computers in public places—these machines may have malicious software that can capture your keystrokes for a criminal's use.
If a password is compromised, monitor all information it protects for suspicious activity. If you see such activity, notify the authorities and contact California Coast Credit Union at (877) 495-1600 for help with related financial matters. But remember, the stronger your passwords, the less likely this is to happen.
Facebook reports having more than 1 billion active users, with more than 50%—that's 618 million users—logging on daily. Twitter has more than 500 million registered users, and LinkedIn has more than 225 million members worldwide.
There is no denying that social media use has exploded. It makes sense to be online. But it comes with a price—your privacy.
A 2012 survey of 2,303 hiring managers and human resource professionals by CareerBuilder.com found that 37% of employers use social networks to screen job candidates. A third of employers who scanned social media reported finding content that made them disqualify a candidate—half of them cited inappropriate photos and information as the reason.
As a young adult using social media, you must be careful what you post. Here is a list of suggestions from Dan Schawbel, personal branding expert for Gen Y and author of "Me 2.0: Build a Powerful Brand to Achieve Career Success":
Join the "big three" networks—Twitter, Facebook and LinkedIn.
Consider how you want to position yourself, and then create your profiles to reflect this personal brand.
Use the same full name and picture on all social networks.
Use Twitter to make initial contact by following someone, retweeting them or sending a direct message. Then take those connections to other online platforms.
Use privacy settings if you choose not to use a particular network for professional use.
For your posts: Share successes, post interesting articles, showcase achievements or share something from an organization you're involved with—anything that strengthens your presence.
Monitor your image. Search yourself online and set up a Google alert for your full name and any nicknames or common misspellings.
It may be obvious, but must be said: Don't post damaging pictures or posts.
Usually we think of a mobile phone as a tool that offers convenience and personal safety. But it also can be a weapon used against us to steal personal information.
Experts say that the same types of attacks that have plagued the online world are migrating to mobile. The National Credit Union Administration, Alexandria, Va., reports that members of credit unions across the country have been targets of cell phone scams, mostly phishing.
These phishing scams have been in the form of vishing or SMiShing attacks. Both aim to trick people into revealing sensitive private information, such as Social Security numbers, credit union account numbers, personal identification numbers (PINs), and passwords.
In vishing, the fraudster calls someone, using a pirated recording of telephone services from a financial institution, to try to extract personal information. For example, the recording informs you that your credit card has been used illegally and asks you to call a fake 800 number, where you'll be asked to confirm account details. Or you may receive an email asking you to call a toll-free number. The consumer's answers are recorded, or saved, and later used to commit identity theft.
The term "SMiShing" comes from SMS plus phishing (SMS stands for "short message service," used for mobile text messaging). In SMiShing, criminals are after the same sort of information as in vishing, but they send a text message on a mobile phone instead of calling.
A common SMiShing ploy goes like this: You receive a text message, seemingly from your credit union, stating that your account has been closed. To reactivate it, you're told to call a toll-free number. When you do, you're asked to enter your account number and PIN.
The best protection against either vishing or SMiShing comes down to a simple strategy: Don't respond.
If it's a vishing scam, refuse to answer questions and hang up. If it's a SMiShing attack, don't do what the text message instructs you to do. Then report the incident to California Coast Credit Union immediately.
And remember, Cal Coast would never ask you for personal information over the phone or by email. We already have this information on-hand.
The numbers are staggering. Some 12.6 million Americans were victimized by ID theft in 2012, the second-highest total since the Federal Trade Commission began counting victims in 2003, according to the 2012 survey by Javelin Strategy and Research.
Even more shocking is the fact that more than 1.5 million victims knew the person who committed the fraud in 2012. Lower income consumers were more likely to be victims of familiar fraud. The information most likely to be taken via familiar fraud includes name, Social Security number, address and checking account numbers.
Financial experts say parents who destroy their own finances increasingly are tempted to "borrow" their children's good credit. As co-signers, all they need is a birth date and Social Security number, information they either know or have easy access to.
Other family "thieves" include children, siblings, cousins, aunts and uncles. Unfortunately, the only options for victims of familial credit abuse are paying off the debt in large chunks or filing a complaint that could send your relative to jail.
Experts recommend you order a copy of your credit report annually at annualcreditreport.com from each of the "big three" credit reporting agencies: Experian, Equifax and TransUnion. Victims should request that a red flag be placed in their file to help prevent anyone else from opening fraudulent accounts.
It can be confusing to see two different types of balances in your account. But there’s a reason why this happens. Current Balance shows the balance that’s updated every time a transaction actually posts through a deposit or withdrawal. This amount does not reflect holds or pending transactions.
Available Balance is different. This is the portion of your balance that’s available for use. It’s the current balance minus any holds or pending debits. If you use your ATM/Debit Card for transactions or purchases, those transactions may not post immediately. That’s because CCCU electronically requests the amount of the purchase from the vendor at the time of purchase so it can be approved or declined by the merchant. However, the actual charge can take days to be approved by the merchant’s processor and withdrawn from your account.
It’s important to know that if the available balance in your account is negative, your account is considered to be overdrawn.
Deposit checks with your phone using Cal Coast's mobile deposit option.
Though we love to see you, stopping by a branch to deposit checks can be a pain if you're running short on time or if you're out of town. Making a mobile deposit is simple and takes just seconds to complete. You can make one anywhere, anytime.
Simply use Cal Coast's mobile banking app to deposit checks into your accounts using your smartphone. Snap a pic of the check you wish to deposit and use our mobile app to send it to us.
For details about Cal Coast's mobile deposit option, click here or call us today.
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