"Go Green" With Your Personal Finances

Want to help the environment? Here are a few ways to "go green" with your personal finances:

* Use Virtual Branch, our online banking product
* Log on frequently to check accounts for fraud
* Sign up for Bill Pay and pay your bills electronically
* Transfer money between accounts electronically
* Opt for Statement Express and receive paperless statements
* Choose direct deposit of your paycheck
* File your taxes electronically
* Use debit or credit to eliminate paper used to print checks
* Reduce junk mail (optoutprescreen.com)

Savings Week Also Encourages Responsible Spending

Saving money goes hand in hand with responsible spending during tough economic times, and America Saves Week - which ends Sunday - focuses on both.

Consumers came close to saving more money in the last three months of 2008 than in 2005 and 2006 combined. The personal savings rate jumped to 2.9% of disposable personal income as consumers squirreled away $310 billion in the final quarter of 2008 (fool.com Feb. 12).

While the increase in the personal savings rate is a step in the right direction for consumers, experts agree that the savings rate will need to climb to at least 6% to be an adequate amount for people to rely on during tough economic times (Businessweek.com Feb. 15).

So, how can you save and spend responsibly? For the third year in a row, hundreds of local and national organizations promote better savings and spending habits through events, positive press, and the Internet during America Saves Week. Visit Americasaves.org to enroll and make your dreams a reality.

In addition to the nformation provided through America Saves, here are a few tips to help you improve your savings habits:

• Re-evaluate spending. You may find extra money to sock away into savings. For example, you could skip one pizza a week, downgrade your cable package, or use the library instead of purchasing books.
• Look for layaway. Layaway programs provide an alternative to using your credit card. You pay a small fee up front, make regular interest-free payments over a period of time, and take the item home from the store once you've paid the full purchase price. But there are downsides to layaway. Not every retailer offers it, and typically there are cancellation fees and returned-check fees. Make sure that you're able to make the payments over the agreed time, and check the store's layaway policy before you plunk down your cash.
• Automatic deductions. Specify an amount to be automatically deducted from each paycheck and deposited directly into your savings account. Before you know it, you'll forget that the amount is being deducted from your paycheck and your savings will continue to accumulate. Ask the credit union or your employer how to set up the automatic transaction.

source - cuna.org

Tax Tips for Tough Economic Times

Don't be in a hurry to file your taxes this year or you may miss out on much-needed tax breaks. Check whether you qualify for deductions or credits, particularly if you lost your home to foreclosure, incurred job-hunting costs, or tapped your retirement accounts early (The New York Times Feb 10).

Tax year 2008 was anything but normal, and the tough economy has tax filers asking tough questions. In response, the Internal Revenue Service (IRS) has ramped up its website with a special section to address common questions. The answers could mean a significant boost to your refund.

Check how these situations affect your tax return before you file:

• Unemployment benefits. Although unemployment benefits were extended last year, those benefits are treated as taxable income. However, in most states you can choose whether or not to withhold taxes from unemployment benefits. If you have other sources of income--such as a spouse's wages, you may benefit from withholding unemployment taxes. But, if unemployment benefits are your only source of income, withholding is not necessary because you will owe very little when you file your taxes (USA Today Feb. 10)
• Retirement withdrawals. If you tapped your individual retirement account (IRA) or 401(k) and didn't repay it within 60 days, you owe income taxes, plus a 10% penalty if you're younger than age 59 ½. Ask about penalty waivers if you used the money for certain expenses, such as medical insurance payments, after you lost your job. You may qualify for similar penalty waivers for a 401(k) hardship withdrawal, unless you're younger than age 59 ½. Other exceptions: You're eligible for penalty-free withdrawals as long as you left your job the year you turned 55 or later. And you can tap your Roth IRA accounts penalty-free as long as you withdraw your own contributions but not investment earnings.
• Discharged debt. If you had debt forgiven on your mortgage, you will not owe taxes on that amount--up to $2 million, or $1 million for married people filing separately. This applies only to debt used to purchase, build, or improve your home.
• Earned income tax credit. More people qualify for the Earned Income Tax Credit: a married couple with two children and adjusted gross income less than $41,646 in 2008 may be eligible for a tax credit of $4,824. Even if you do not owe any taxes, you can receive the credit in the form of a check—but you must file to claim the credit.
• Child and Saver's tax credits. More taxpayers are expected to qualify for the child tax credit, the additional child tax credit, and the Saver's Credit. Married couples filing jointly must have adjusted gross income of $53,000 or less.
• Rebate checks. If you earned too much last year to qualify for the stimulus check, but your income has dropped (or you had a baby), you still may have a chance to claim it based on your 2008 income. Single taxpayers with incomes of less than $75,000 qualify for a $600 check. Those with incomes up to $87,000 will get a reduced amount. Married taxpayers filing jointly with income up to $150,000 qualify for the $1,200 rebate. Use line 70 on the 1040 tax return to claim the rebate.
• Medical expenses. Itemized medical expenses exceeding 7.5% of your adjusted gross income are deductible. This includes co-payments, deductibles, premiums, health insurance costs, and other reimbursed medical expenses.
• Miscellaneous deductions. To claim these deductions--which include tax preparation costs, safe deposit box fees, work uniforms, and job search expenses--all combined miscellaneous expenses must exceed 2% of your adjusted gross income. If you're job hunting, deductible costs include résumé paper and printing, travel expenses, long-distance calls and faxes, postage, meals, and lodging expenses. If you're forced to relocate at least 50 miles for a new job, expenses qualify. To claim the deductions, you must be searching for a job in the same business or trade as the one in which you were previously employed.

If you can't afford to pay your taxes, file anyway--on time--and pay as much as you can afford to avoid penalties and interest. Ask for an extension, payment plan, or some other form of relief.

The IRS website at irs.gov (search for "what if") offers more answers to your 2008 tax-related questions.

source - cuna.org

LifeWay Credit Union - A Family Affair

At LifeWay Credit Union, when you become a member, your family members also can become members. It's one of the many ways the people you know and care about can benefit from the great financial services you're receiving from .

If you enjoy the low loan rates and fees, convenient, friendly services, and higher savings rates you get from your credit union, share us with your family. Credit unions are member-owned nonprofit financial cooperatives dedicated to improving members' lives.

Your family can join because you currently are a member. Help improve your family's financial lives today--encourage them to become members of LifeWay Credit Union.

Experts Warn About Scams, Shady Collection Practices

The lineup of experts on Sunday's H&FF Radio show shares valuable advice on three timely topics: how to steer clear of foreclosure rescue scams, your rights when debt collectors call, and the social costs of not being financially literate.

Home & Family Finance airs Sundays at 3 p.m. EST on the Radio America Network. The show also is carried on American Forces Radio Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 90 million members, and is presented by CO-OP Network.

The Credit Union National Association (CUNA) and Radio America are podcasting Home & Family Finance through iTunes, Podcast Alley, Odeo, and other popular podcast library sites, as well as on Radio America and CUNA's websites.

Sunday's show, which you also can hear later via the Internet, features Paul Berry, Washington, D.C., journalist and broadcaster, discussing these topics with special guests:

• "Social Cost of Financial Illiteracy," with Jack Gillis, consumer advocate, author, director of public affairs, Consumer Federation of America, and president, Gillis & Associates, Washington, D.C.;
• "Foreclosure Rescue Scams," with Barry Wides, deputy comptroller of community affairs, Office of the Comptroller of the Currency, Department of the Treasury, Washington, D.C.; and
• "Fair Debt Collection," with Thomas Kane, senior attorney, Division of Financial Practices, Federal Trade Commission, Washington, D.C.

Home & Family Finance is a resource center for personal finance information at CUNA. The radio show is sponsored by CO-OP Network, the national credit union ATM network; Cabot Creamery Cooperative, maker of award-winning cheddar; Western Corporate FCU, also known as WesCorp, and its member credit unions; and the Defense Credit Union Council and member credit unions, serving those who serve our country worldwide.

source - cuna.org

It's Still a Good Time to Refinance - If You Qualify

With mortgage rates still near record lows, it makes sense for many homeowners to think about refinancing. Know what to consider, run the numbers, but don't expect to get the best rates unless your credit is squeaky clean (Bankrate.com Feb. 5).

Interest rates on 30-year fixed-rate mortgages fell to an average of 4.89% for the week ending Jan. 9 (U.S. News & World Report Jan. 23). Despite a slight upturn in rates in recent weeks, homeowners' interest in refinancing remains strong. But don't expect an instant "yes"--about half of applications are rejected because of mediocre credit scores, insufficient home equity, or negative equity (owing more on the mortgage than the property is worth).

Here's what you need to get the best rates:

• Keep your FICO score above 740. A score of 720--previously considered excellent--just isn't good enough anymore to get the best rates. About a third of your score reflects whether you pay your bills on time.
• Have equity in your home. Just to qualify for refinancing, you may need a minimum of 3% equity. You'll need a higher percentage to get the best rates. Seattle-based Zillow (Feb. 2) estimates that one of six American homeowners are underwater, meaning they have negative equity.

Before you refinance, do your homework:

• Calculate your breakeven point. This represents how soon you will recapture the cost of refinancing through lower monthly payments. If the cost to refinance is $2,125 and your monthly savings is $125, your breakeven point is 17 months (2,125 divided by 125).
• Ask about fees. If you're paying $4,000 in fees to slash monthly payments by $100, refinancing doesn't make sense if you plan to sell in three years.
• Opt for a fixed-rate instead of an adjustable-rate mortgage (ARM). Despite a slightly lower rate on ARMs, the differential isn't worth the higher risk of an ARM.
• Consider job stability. Switching from a 30-year to a 15-year fixed-rate mortgage lowers the total interest paid over the life of the loan. But if you lose your job, you'll likely be stuck with higher payments you might not be able to afford. If job stability is a concern for you, keep a 30-year loan and consider increasing your monthly payment now--while you have a job--to the rate it would be for a 15-year fixed-rate loan.

Credit Monitoring Services Don't Guarantee Protection

Recent security breaches - affecting millions of credit card users - have sparked renewed interest in credit-monitoring services, but experts warn that some companies use questionable marketing methods to get you to sign contracts laden with loopholes (SmartMoney.com Jan. 23).

Credit monitoring services may carry a hefty price tag--in some cases $180 a year or more. But despite the promises, the service providers can't guarantee that your credit or your identity will be protected, and they don't do anything that you can't do yourself.

If you're thinking of purchasing a credit-monitoring service, make your decision based on the facts:

• Know what will be - or won't be - reimbursed. Many services include identity theft insurance or sell it as an add-on. That so-called insurance entitles you to reimbursement for costs associated with cleaning up your credit--possibly some phone expenses or overnight packages--but it doesn't cover any money a thief takes from your savings or checking account.
• Ask whether the service pulls reports from all three credit bureaus. A promise to "guard your identity" may give you a false sense of security if the service only offers credit reports from just one of the three credit bureaus. You'll still need to be vigilant or you may miss suspicious activity.
• Read the fine print. When activating a credit card or cashing a rewards check from a credit card company, you unwittingly may be agreeing to sign up for a credit-monitoring service.

Finally, don't fall for just any free credit report offer. The report at FreeCreditReport.com isn't free. If you don't cancel before a free trial period is up, you'll be billed a monthly fee. If you forget, canceling the service after the trial period can cost you time and money. The only truly free credit report is available at annualcreditreport.com; federal law gives you the right to order one free credit report every year--from Experian, Equifax, and TransUnion--through this website or by calling 877-322-8228.

source - cuna.org

Surcharge-free ATMs

As a LifeWay Credit Union member, you have access to two surcharge-free ATM networks. Be sure to check the MoneyTower and Co-Op Network lists online.