Check your credit report for unpaid medical bills

We expect a late car payment to bring down a credit score a few notches. We accept that a maxed-out credit card won't look good on a credit report. But what a shock to find medical bills sent to collection on your credit report, especially if it's the first time you've seen them.

An estimated 14 million Americans are dealing with medical bills they believe have been sent to collection agencies in error (The New York Times Dec. 17).

Darryle Watson of Willow Park, Texas, first learned of his outstanding bills when he and his wife attempted to refinance their mortgage. Despite a solid record of paying back credit on time, their low credit scores would cost them more than $9,000 in closing costs. Four unpaid medical bills, the largest only $400, had gone directly to collection.

Hospitals, labs, and physicians are more likely to sell unpaid medical bills to collection agencies for just pennies on the dollar, avoiding the rules and regulations of creditors who report unpaid debts.

"Collections are weighted more heavily than other unpaid or late bills," said Rod Griffin, director of public education at credit reporting agency Experian. "They will have a more serious effect on your credit score. This can stain a credit report for seven years, even after the bill is paid. Pending federal legislation would require paid medical debt to be removed from credit reports after 45 days.

Follow this prescription to monitor the effect of medical bills on your credit score:

• Order a free credit report. Medical bills are sometimes sent months after service; it can be difficult to decipher what portion is still unpaid. Play it safe and review your credit report at least annually. You can get a free report from each of the three major reporting agencies at annualcreditreport.com. Order from one agency in January, another in May, and the third in September for thorough monitoring.
• Dispute errors in writing. If you find an unpaid medical bill on your credit report, send documentation showing payment to all three major bureaus. The Federal Trade Commission's website offers guidelines for disputing errors.
• Negotiate payment. Even if it's the first time you've seen the bill, work with the collection agency. If it's a legitimate charge for which you are responsible, secure a promise in writing to remove the bill from your credit report if you pay.

In the same region, shepherds were staying out in the fields and keeping watch at night over their flock. Then an angel of the Lord stood before them, and the glory of the Lord shone around them, and they were terrified. But the angel said to them, "Don't be afraid, for look, I proclaim to you good news of great joy that will be for all the people: today a Savior, who is Messiah the Lord, was born for you in the city of David.

Luke 2:8-11 (HCSB)

Merry Christmas and Happy New Year from the staff of LifeWay Credit Union.

Get breaking news from the IRS

As tax laws change in this uncertain economic climate, you can get reliable federal tax news directly from the Internal Revenue Service (IRS) (MSNBC Dec. 8).

Congress is rushing to finalize a $900 billion tax deal that will affect all Americans, and you can arm yourself with information in a variety of ways (The New York Times Dec. 6):

• Twitter: The newest route is via the Twitter news feed, @IRSnews. Twitter's feed will provide tax tips, law changes, information about the Earned Income Tax Credit, "Where's My Refund," and how-to sections such as "how to e-file." You can even sign up for text messages from this site. If you're not familiar with Twitter, sign up and log in to Twitter.com. Then go to IRSnews and click on "follow."
• YouTube: If video is your favorite way to get information, subscribe to the IRS tax information channel on YouTube to get tax tips and help about filing for free. Click on "subscribe." You can set up a YouTube account at the link. Then go to IRSvideos and choose how you want to be notified of new material.
• iTunes: You can download free MP3 files with answers to typical tax questions from iTunes. If you aren't familiar with using an iTunes account, you can hear the same podcasts on the IRS website.
• E-mail: Sign up to receive tax tips from the IRS via e-mail--every business day during the tax-filing season and periodically throughout the year.

More consumers consider strategic default viable

More and more consumers are thinking the previously unthinkable: that a strategic default--when a borrower who can afford to pay walks away from an underwater mortgage--is a viable tactic.

In a survey of 2,034 homeowners and renters conducted in November, RealtyTrac and Trulia found that 48% of homeowners with a mortgage said a strategic default is an option they would consider if they owned more on their home than what it was worth (The Palm Beach Post Dec. 7). That was a seven percentage point increase from a study earlier this year.

That backs up results of a study by researchers from the European University Institute, Northwestern University, and the University of Chicago in July that reported the strategic default trend among homeowners with an equity shortfall of at least $100,000 was "large and rising." As of March 2010, the study concluded, strategic defaults accounted for 35.6% of all foreclosures, compared with 23.6% in 2009 (The New York Times Dec. 2).

"It's one thing when consumers default because they lost their jobs or suffered some other hardship and could not afford to make their payments," notes Jim Hanson, of the Credit Union National Association's center for personal finance. But The New York Times reported that affluent homeowners have been walking away from second homes and investment properties even though they can afford to make their payments.

"Some money advisers say this is just good business strategy. And there has also been speculation that more consumers are reacting to the robosigning underwriting that went on among many mortgage lenders," Hanson continued. "These individuals are saying, 'If banks don't have to play by the rules, why should I?'

"What's that old adage, two wrongs don't make a right?" Hanson said. "Keep in mind the effect a strategic default will have on your credit rating and your ability to get credit in the future." Such a move may make short-term economic sense but likely will keep you from getting a loan of any other kind for seven to 10 years.

In June, Fannie Mae announced several new penalties for strategic defaults, including a ban for at least seven years from qualifying for a Fannie Mae loan.

And walking away doesn't mean lenders have no recourse. In some states, lenders can sue borrowers who had the capacity to pay and did not complete a workout agreement with their lender. In nonrecourse states, lenders can sometimes go after borrowers who strategically default on a previously refinanced property if the mortgage was not for a first purchase.

Charitable giving: Be wise this holiday season

'Tis the season for giving to family and friends, and donating to charity. But before you donate, make sure you're giving to an organization that will put your money to good use and that you're donating wisely and safely (USAToday.com Nov. 30).

The Charities Review Council, St. Paul, Minn., recommends taking these steps before making a contribution:

• Verify the charity. Research the organization at the Charities Review Council website (smartgivers.org) to confirm that it's legitimate. Look at the online giving guide to find more about the organization, its mission and programs to know what your donation supports. Don't just give to an organization because it has a heart-warming story on TV.
• Beware of phony sites. Scammers often use Web addresses that are similar to official addresses of legit organizations to trick users.
• Review the organization's privacy policy. Check the website or ask the organization for its policy to learn how it will use and safeguard your information.
• Protect confidential information. Look for "https" in the browser to make sure you're on a secure site. Never click on links in unsolicited e-mail appeals asking for confidential information such as passwords, credit card numbers, or financial account numbers. Also beware of attachments--they may contain viruses that can harm your computer.
• Observe check donation safety. If you're donating through the mail and not online, make your check payable to the charity, not to the individual collecting the donation, recommends the Better Business Bureau. Never send cash.

Mortgage loans

Thinking about refinancing your mortgage? See us first! With rates as low as 3.625%, you'll save money!

Call us today at 615-251-2089.

Holiday shoppers, be wary of these sales pitches

If you visited a mall or discount store last weekend, you might come to the conclusion that shoppers are just cavemen with better fitting outfits. The grabbing, the grunting, the dashing, the darting--you'd think we were fighting for survival, not the last pair of cashmere socks on the rack. Oddly enough, you're right on target, and so are retailers.

Here are several sales pitches aimed at tricking our hunter-and-gatherer brains (SmartMoney.com Nov. 10).

• Spend $50 today; get $10 off later. This now-and-later technique is geared to bring you back into the store to see the newest merchandise and overspend your budget. Think twice before heading to checkout. Perhaps you can hold off on a few items until your next trip.
• Limit two. This brings out the competitor in us all. If the store is setting limits, it must be a great deal. Or is it? Before scooping up one for Uncle Chuck and another for cousin Bill, compare to ensure it's really worth the asking price.
• Five-hour-only sale. Yes, some retailers are aiming to scare you into buying. Limited-time sales are meant to move you now on the fear that all the bargains will be gone tomorrow. While this may be a great sale, it's clearly not the last and may not even be the best.
• Get 23% off. What happened to "save 20%"? It became invisible. Odd numbers grab our attention, suggesting a bargain that has already been marked down. This is just an attention-getting device, so go ahead and give it your attention--then your scrutiny.
• Save $150! Who doesn't want to save $150? By drawing our attention to the savings (rather than the price), a retailer creates the illusion that the actual price is more reasonable. So if you're shopping for a Blu-ray player and find one you like for $99, stick to your guns--even if you can save $60 on another model for $119.

Happy Thanksgiving

This Thanksgiving may your home be filled with the Lord's loving presence and bountiful blessings.

Happy Thanksgiving from the staff of LifeWay Credit Union!

Home prices not done falling

Look for home prices to slide perhaps another 7% between now and midyear 2011, according to FiServ, a market analytics company based in Brookfield, Wis.

If that forecast is right, home prices nationally will have dropped 34% from their peak by the time they hit bottom.

For as many as three million Americans, the dream of owning a home has faded. Home ownership has declined from its peak of 69.1% in 2005 to 66.9% today (CNNMoney.com Nov. 2). Additionally, the vacancy rate among homes designated owner-occupied is 2.5%. Housing starts are at 600,000 a year, well below the normal replacement rate; few new homes are being built.

Despite low mortgage rates, which averaged 4.3% in September for a 30-year fixed rate and 3.8% for a 15-year rate, "people aren't going to be in the market if they can't find jobs--or feel insecure about keeping their jobs," says Susan Tiffany, CUNA's director of consumer periodicals.

Young people have been hit hardest by the economic turmoil. For those younger than age 35, home ownership dropped 9%, with 39% owning homes, compared with 43% at the beginning of 2005. Also hit hard, Americans 35 to 44 saw their ownership rate fall 7%, from 70% to 65.2%; 45- to 54-year olds saw ownership drop 5%, to 73% from 76.5%; and homeowners 55 to 64 saw a 3% decline to 79% from 81.8%.

If you're in position to leverage today's low rates, Tiffany has these suggestions:

• Shorten the term of your mortgage. You'll probably need a strong credit score and at least 20% equity.
• Look to free up some cash. Refinancing can reduce your monthly payments or help you save money with a lower interest rate and/or shorter term for repayment.
• Expand your real-estate holdings. If you are looking for a second home, or an investment property, it looks like a buyer's market over the next year.

Tiffany offers one caveat: "Most forecasters are saying mortgage rates may rise gradually through 2011."

Fresh saving ideas as holiday season approaches

Air fares and gas prices take their toll on consumers' wallets as the 2010 holiday season approaches.

Airline travelers are spending nearly 50% more this year than in 2009 for Thanksgiving holiday fares. And the price at the pump offers little relief for those planning to skip the airport. The cost of a regular gallon of gas increased 6% during the first week of November (moneywatch.bnet.com Nov. 10).

As a result, consumers who combine travel plans with holiday gift-giving are left searching for new ways to tighten their belts and still spread the holiday cheer. Here are three alternative methods from Yahoo! Finance to help you save some cash this holiday season:

1. Share your skills. Are you handy with computers, a do-it-yourselfer, or a master chef? Whatever your skill set, deliver your talents and expertise as a gift. It's a thoughtful present that also helps both giver and receiver save money.
2. Move the holiday. Agreeing with others to celebrate shortly after a holiday allows you to share the season and the savings. You'll be able to take advantage of after-holiday sales, enjoy festivities with others, and possibly avoid hectic travel days.
3. Check your supplies. Inventory supplies before stocking up this holiday season. You may find you have plenty of wrapping paper, cooking ingredients, and gift boxes to satisfy your needs and prevent unnecessary purchases. Besides, who needs four rolls of half-used transparent tape?

Don't be tricked by Medicare scams

Medicare scams cost taxpayers billions of dollars every year, and the schemes are not always big and obvious (The New York Times Oct. 29).

Yes, large crime groups do get arrested and charged for Medicare fraud. In October, a 40-plus member crime syndicate stole the identities of doctors and thousands of patients and used them at bogus health clinics in 25 states to bill Medicare for more than $100 million.

But, thieves work other schemes on a smaller scale. A criminal may offer you medical supplies or diabetes screenings, simply to collect your Medicare number. Then he will bill you for other supplies and services you never receive. Of course, the swindler pockets the reimbursements.

You might think you can relax, knowing that you probably won't have to pay--but guess what? Your medical and insurance records could be compromised and the problems show up later. It could be the day you need a wheelchair, and Medicare denies it because you've "already had one for five years."

Here's what you can do to protect yourself or a loved one from Medicare fraud:

• Guard your card. Protect your Medicare card the same way you guard a credit card or Social Security card. Likewise, never give your Medicare number over the phone to a stranger or allow a friend or relative to use it. Report a lost or stolen card immediately.
• Beware of free services. If someone offers you medical service, equipment, or supplies for free, he or she doesn't need your insurance information. Walk away. If you're offered something you don't need or you already have, let it go. It could be a scam to collect your Medicare number.
• Examine your statements. When you get your monthly Medicare Part D and/or regular Medicare quarterly statements, look for doctor visits that never happened, unfamiliar provider names, and supplies and equipment you never received. Call your medical provider first to clear up a possible error. If it's more than that, report it immediately.
• Be cautious during enrollment. On Nov. 15 you can sign up for or change plans. This is also high-crime time when scammers offer bogus plans, services and products to unwary seniors. Before you sign up for a plan, check the Medicare plan finder to see if you can find it. If you can't, the plan may not be real.
• Review your credit report annually. Look for unpaid medical bills and make sure they're legitimate.

It's always a good idea to keep a record of all medical services you receive so you can compare your records with unexplained charges. If you find errors, double-check them with your medical provider first. Then, if you still can't explain the discrepancies:

• Go online. Visit the fraud section of the Medicare website to find out how to report your findings.
• Contact your state Senior Medicare Patrol office. The staff will help you determine if you've been a victim of fraud and facilitate your complaint to government investigators.

If you're a Medicare recipient and want more information about preventing and reporting Medicare fraud, check the fraud section of the "Medicare and You" handbook that you should have received in the mail recently. You also can order the handbook online.

Limit the expense of teenage car insurance

On the plus side, your new teenage driver will be eager to run all those errands that eat up so much of your free time. Unfortunately, adding your young "gofer" to your car insurance policy is going to cost you--about $621 more a year on average (Insurance.com Oct. 27).

Insurance premiums reflect the company's assessment of risk. Inexperience makes teenage drivers the highest risk group compared with any other age, including drivers aged 75 and older. In fact, teenagers are four times more likely to crash than older drivers, according to the Centers for Disease Control and Prevention.

Click for larger view

So you're going to have to adjust the family budget for your new driver. Your auto insurance premiums will jump by an average of 44% if you're a one-car family, 58% if you own two cars, and 63% if you have three cars (see chart).

Here's how the Credit Union National Association's Center for Personal Finance editors say you can minimize the increased expense:

• Buy adequate coverage. Experts recommend coverage amounts much higher than those typically required by state law. And considering your potential liability for the medical and legal consequences of an accident, you're wise to buy more than the minimum protection. Consider at least $100,000 bodily injury coverage per person for each accident, $300,000 bodily injury an accident, and $100,000 property damage for each accident.
• Ask about discounts. Many car insurance companies offer "good student" discounts for grade point averages above a certain level or membership in some civic organizations. Certain driver-training classes or installation of a monitoring device in the car may qualify for other discounts. In addition, safety features such as anti-lock brakes and anti-theft devices can reduce insurance premiums.
• Hold your teenager accountable. Of course, the best way to save on insurance is to make sure your teenager keeps his driving record clean. John E. Whitcomb, author of "Capitate Your Kids: Teaching Your Teens Financial Independence," recommends making your child responsible for his driving behavior by means of a written agreement with mutually agreed-upon provisions, such as curfews or passenger limits. In addition, you might agree to pay a bonus for each accident-free year if your child agrees to pay some portion of the damage, including increased insurance premiums, for an accident. By spelling out what you expect of your teenager behind the wheel, and the consequences of misbehavior, you're more likely to make your child a willing partner in managing family car costs.

Check credit record before future employers do

If you're looking for a job, chances are you've spent a lot of time making sure your résumé is perfect. You should pay close attention to your credit record as well (USAToday.com Oct. 26).

While only 13% of companies conduct credit checks on all job applicants, almost half check credit histories for employees with financial responsibilities and senior executives, according to the Society for Human Resource Management, Alexandria, Va.

Many employers believe that credit reports contain relevant information about applicants--especially those applying for jobs where they'll have access to large sums of money or merchandise.

Here's help understanding your credit history:

• Realize the difference between credit score and credit report. Your credit score is a three-digit number that summarizes your credit history, and in many cases is the most influential factor in a lender's decision to grant you credit and at what rate, according to editors from the Credit Union National Association's Center for Personal Finance. A credit report shows a record of your past borrowing and repaying habits.
• Check your credit report yourself. You're eligible for a free credit report annually from each of the three major credit bureaus--Equifax, TransUnion and Experian--at annualcreditreport.com. Use the website to request one or call 877-322-8228.
• Know your rights. The Fair Credit Reporting Act requires employers to obtain your consent before reviewing your credit report. While you can say no, if you decline giving an employer authorization to pull your report, your chances of getting the job may decrease.

New rules affect 2011 flex spending accounts

Fall means football games to watch, maybe some raking, and, for those of us with flexible spending accounts (FSAs), it's time to plan how much to set aside for 2011.

While contributing to a health-care FSA is a great way to use tax-free payroll deductions to cover medical expenses, health-care reform will change the ways you can use funds in 2011 (Kiplinger Oct. 15).

Here are some examples:

• Over-the-counter drugs no longer qualify without a prescription. Starting in 2011, you'll no longer be able to use FSA money for non-prescription drugs, except insulin. Further, if your employer gives you until March 15, 2011, to use up the money in your account from 2010, you still won't be able to spend it on over-the-counter drugs without a prescription after Dec. 31.If you regularly use over-the-counter medications, such as pain relievers or allergy medications, ask your physician for a prescription. You may qualify for reimbursement in 2011 by submitting the prescription number along with the receipt.
• New rules may cover adult children's expenses. Since many employers have expanded the definition of dependent to include any child younger than 27 at the end of the year, you may be able to use money in your FSA for adult children's out-of-pocket expenses. Previously, this worked only if the child was a dependent for tax purposes.
• FSA limits will be lower in the future. FSA limits aren't changing next year, but the maximum limit will shrink to $2,500 in 2013. So if you're considering a medical procedure that isn't covered by insurance--such as laser eye surgery--you might want to schedule it in 2011 or 2012.

New rules for nest eggs affect 72 million AmericansNew rules for nest eggs affect 72 million Americans

Do you know exactly how much your 401(k) account costs you? You will, thanks to new rules announced Oct. 14 by the Labor Department (USA Today Oct. 14).

By Jan. 1, 2012, an estimated 72 million Americans who participate in 401(k) plans will have access to much-needed transparency--in user-friendly formats--about what their plan fees actually cost and how those fees stack up against other investments. Better yet, the new rules may result in bringing down those fees.

The new rules are intended to educate workers about more than half a dozen fees for things like administration, recordkeeping, investment advising, brokerage, and management services.

The goal of shedding light on fees is to help workers make better decisions. For example, if your operating expense is 2.5%, the new rules require that you also be told that the fee amounts to a cost of $25 per $1,000 invested. Compare that with an investment having an operating expense of 0.19%--or a cost of $1.90 per $1,000. Bottom line: The lower the fees, the better your return on investment.

Most workers don't realize that high fees eat away at balances over time. A 2006 report by the Government Accountability Office estimated that increasing fees on a worker's $20,000 401(k) account by just one percentage point could cut the plan's total value by 17% after 20 years (wsj.com Oct. 14). And for many workers, their 401(k) is the sole source of retirement income besides Social Security (National Public Radio News Oct. 15). That's why it's so important to compare fees.

Here's what you can expect by January 2012:

• Regular reporting. You'll see all administrative expenses on your quarterly statements, and they'll also be available online.
• Apples to apples comparisons. You'll see an explanation of all fees and expenses as a percentage of assets held and also as a dollar amount for each $1,000 invested.
• Performance data. You'll see information about how each investment option has performed in the past--including one-, five- and 10-year investment results--as well as comparisons with appropriate benchmarks.
• Comparison chart. You'll see a chart--or similar format--that makes it easier for you to compare each investment option.
• Glossary. You'll be given a simple, plain-English glossary of terms so you can understand your investment options.
• Website. You'll be given a website to visit for additional information.

Employment gaps and slow growth hinder job seekers

Unemployed and underemployed job-seekers continue to face an uphill battle in today's economy. Slow economic growth is leading to weak hiring even though unemployment claims fell during the first week of October to their lowest level since July (businessweek.com Oct. 14).

Those with large gaps in employment history on their resume face additional hurdles. Potential employers may view a disruption in work history as a lack of commitment, focus, or a bad work experience a job seeker is attempting to hide (wsj.com Oct. 18).

All is not lost for job-seekers with large gaps in their work histories. Here are three ways to help potential employers better understand your situation and put to rest any doubts that may arise due to resume gaps:

1. Clarify connections. No matter the reason behind employment gaps, use a brief sentence in your cover letter to help explain the situation in a positive light. Describe how your situation gives you unique insight and experience that will directly benefit your potential employer.
2. Amplify activity. Amplify entry-level stop-gap jobs, training, or other time-fillers like volunteer work. Your experience with customers or learning a new competency may have provided you with valuable skills and understanding that uniquely qualify you for a position.
3. Demonstrate development. Emphasize what you learned if you left a previous employer on bad terms. Use this as an opportunity to emphasize character growth and your ability to learn from a miscalculation. This demonstrates a level of responsibility and maturity that may separate you from other applicants.

Congratulations!

Congratulations to the following winners of gift cards at yesterday's Member Appreciation Day:

$25 Olive Garden - Diane Rivers and Christy Adkins
$25 Outback - Ken Braddy and Pat Tamburri
$25 Cheesecake Factory - Tina Loudermilk and David Grant
$25 Chili's - Karen Bell and Cordelia Wakefield
$100 Best Buy - Chris Johnson

Member Appreciation Day

Be sure to stop by the office on Thursday, October 21 for Member Appreciation Day. We'll have cookies in the morning, popcorn in the afternoon, and you can register for prizes while you're there. We'll see you then!

Change your driving habits to avoid costly repairs

It's not just your imagination: U.S. thoroughfares are bad and getting worse. According to recent analysis of Federal Highway Administration data, the average annual cost of wear and tear on your car due to rough city streets and highways is $400 a year (TRIP Sept. 22).

TRIP's report shows that San Jose, Honolulu and Los Angeles top the list of U.S. cities with more than 60% of road pavement in poor condition. As a result, drivers in those areas can expect to pay extra annual operating costs of more than $700 a car.

As if that news weren't bad enough, the prospects for short-term improvement appear dismal. The Department of Transportation estimates that planned expenditures for the next 15 years are $189 billion short of what's needed to keep streets and roads in their current condition. Making improvements will require an additional $375 billion.

While you wait for Congress and taxpayers to address those needs, here are some things you can do to minimize year-round pothole damage to your car, courtesy of the Credit Union National Association's Center for Personal Finance:

• Keep your car in shape. Resist the impulse to underinflate your tires, thinking they'll smooth your ride. Tires with less than proper pressure wear out faster and may cause expensive wheel damage. Letting your car's shocks and struts go soft can be dangerous, too; a sloppy suspension reduces your car's traction and braking ability.
• Slow down. Because force equals mass times velocity, doubling your speed doubles the amount of impact your tires and suspension must absorb. Driving slower also gives you more time to take evasive maneuvers if necessary.
• Try alternatives. Don't let force of habit blind you to choices that will prolong the life of your car. Reroute your daily commute to avoid particularly bad stretches of road. Carpool and split the cumulative wear and tear with a co-worker. Better yet, cut down on short trips and use a bicycle or public transportation when convenient.

2010 LifeWay Benefits Fair

LifeWay's Benefits Fair is in CL42 on Tuesday, October 12. We'll see you there!

Do homework before enrolling in a private college

As many Americans try to earn more education to get ahead in the tough job market, more questions are being raised about for-profit colleges. Accreditation issues and high student-loan debt are some indicators that may put up a red flag about a school (USAToday.com Sept. 29).

Many for-profit college students take on mountains of debt while in school. The Department of Education has proposed penalizing for-profit colleges whose students graduate with more debt than they can afford. Congress began a series of hearings this summer to investigate whether federal aid to for-profit colleges is being put to good use.

Protect yourself before enrolling to make sure you're getting what you're paying for in a private school, advises Michelle Dosher of the Credit Union National Association's Center for Personal Finance, Madison, Wis. Here's how:

• Check accreditation--Ask if specific programs are accredited and by whom. For job-specific training, ask if there are licensing or registration requirements beyond the earned degree and if the program prepares students to take any required exams upon graduation. Then verify the information.
• Check graduation, placement and retention rates--The National Center for Education Statistics, Washington, D.C., is a good place to start.
• Search for complaints--Most attorney general offices have consumer complaint divisions that log grievances against educational institutions. If not, state education departments should point you in the right directions. Searching the Web also can turn up information about lawsuits, scams, or accreditation issues.
• Find earning potential--You can find wage data from the U.S. Bureau of Labor Statistics. The Labor Department breaks down information by specific career and location.
• Talk to potential employers--Ask employers if they are familiar with certain private school programs and if they've ever hired its grads.
• Compare community colleges--Community colleges and public, nonprofit technical schools often offer programs similar to those at private schools--and typically at a much lower cost.

You can deal with overdue payments

Although the Federal Reserve reports a drop in total consumer credit card debt this year, it's actually a case of financial institutions writing off more delinquencies (Smart Money Sept. 21).

Consumers who have missed a payment can recover by considering these suggestions:

• Keep emotions out of it. It's best to put aside any feelings of awkwardness or embarrassment when a payment is delinquent--especially if they prevent you from taking action. When dealing with the lender, keep in mind that this is business, not personal.
• Seek help immediately. Don't wait. Consumers who find themselves falling behind should start by meeting with a nonprofit credit counselor. An experienced counselor can explain the options and establish a plan. To find a counselor, contact the National Foundation for Credit Counseling (nfcc.org or 800-388-2227) or ask for a referral at your credit union.
• Start a debt repayment plan. Settlement and bankruptcy are rough on a credit score. Consumers who can make their minimum payments should opt for debt management plans. Often, a credit counselor can negotiate a plan that employs a reduced interest rate and a realistic payment schedule.
• Avoid debt-settlement offers. In the past, debt-settlement companies have been a trap for consumers more often than a helpful service. Many of these companies charge large fees for services you can do yourself.

Save money with our home equity specials

Struggling under the weight of heavy expenditures, like home improvement projects, medical bills, tuition, or even a family wedding? A home equity loan from LifeWay Credit Union may be just the financial muscle you need.

A home equity loan gives you up to 90% of—you guessed it—the equity in your home. Since your house secures the loan, the interest rate is much lower than what you'd pay on a credit card or personal loan.

And the rate is even more competitive at your credit union than other financial institutions. Our variable rate home equity line of credit has an introductory rate of just 2.9% for the first six months, with terms up to 15 years.* And our fixed rate home equity loan has a rate of just 4% for up to 5 years.

Here's what makes our home equity loan such a smart way to pay off your big expenses:

·The potential for tax-deductible interest (consult a tax adviser)

·Low interest rates

·Personal service to help you match your goals with your budget

Why look elsewhere for a home equity loan when your credit union membership can get you the money you need, for less?

Call us today at 615-251-2089 and exercise your right as a member to lower borrowing rates. Your credit union membership could be the beginning of a whole new you.

* See loan officer for details

Job loss changes credit card usage rules

If you already lost your job or expect to get a pink slip in the near future, throw out some commonly held bedrock principles for using credit cards. Your No. 1 priority is to conserve cash (CreditCards.com Sept. 17).

In good times, the rules are clear: Pay credit card bills in full, or at least pay more than the minimum due. Use windfalls--tax refunds, bonuses, inheritance--to make extra payments and zero out existing balances as quickly as you can. Use credit cards for emergencies.

When faced with a job loss, the rules change. It's not a good idea to use credit cards as a fallback. If you've relied on credit cards because the equity in your home dried up, you already may be overextended. And lingering economic troubles could make it difficult to find another job--up to six months or more (Walletpop.com Sept. 20).

Follow these revised rules so job woes don't turn into credit card woes:

• Build an emergency fund first, then reduce card balances. When faced with the choice of saving vs. paying down debt, experts agree that beefing up your reserves--to at least six months of living expenses--takes precedence during hard times. At the same time, continue to make minimum payments on all debts: Draw up a budget and cut out or cut back on anything that's not necessary. Find spending leaks by tracking where your money goes each day. Stash the cash you save in an insured account. Obviously, building your emergency fund will be easier before you lose your job.
• Avoid late payments. The late payment fee is the least of your worries: Employers can look at your credit report before hiring you. If you're unemployed, missing payments, and your credit score drops, you're less likely to get hired.
• Drastically cut back on credit card use. You don't want your balances to balloon out of control if you're unemployed or think a layoff is looming.
• Don't use credit cards to prop up your lifestyle. The sooner you make changes to your spending habits, the less likely you'll wind up in credit trouble if your job search drags on for several months.
• Stop thinking of plastic as a financial backup plan. Card issuers can reduce your credit lines at any time, and new credit is not easy to get. Experts advise you use existing lines of credit wisely. Even a small increase in spending could trigger a review by some bank card issuers, and changes could result in higher interest rates or lower credit limits, which could hurt your credit score.
• Switch to cash when you can, but avoid cash advances. Pulling out cash makes you more conscious about your spending, but using cash advances will cost high interest rates and fees, leading to even more debt.

Finally, this rule holds true in good times and bad: Come clean with your creditors. Don't wait until you miss a payment. Call creditors and explain your situation--the advance warning likely will give you more leverage if you need to negotiate a payment plan. Ask if they'll temporarily lower your monthly payments and reduce interest. Do this before your situation becomes dire.

Act now for energy tax breaks

Act soon to save some green while going green. Energy tax incentive deals expire at the end of this year and it's unclear if Congress will renew them (msn.com Sept. 10).

Consider these tax breaks but be sure to read the fine print when making purchases. Not everything advertised as "energy saving" or "energy efficient" qualifies:

The nonbusiness energy property credit equals 30% of the cost of energy-efficient products. Qualifying products include energy-saving doors, windows, insulation, metal and asphalt roofs, water heaters, biomass stoves, and heating and cooling equipment. Basically you can spend up to $5,000 on single or multiple products for your principal residence that you own and live in and get $1,500 (30% of $5,000 = $1,500) back as a tax credit. This credit can be used in 2009 and 2010. If you got the entire credit in 2009, you can't get an additional break in 2010.

Shop carefully because not all products qualify. Check the Energy Star's website and ask for the manufacturer's certification statement that verifies the product qualifies for the tax credit. Be sure to check on installation costs; they aren't covered for all products. Projects must be completed by Dec. 31.

Use Internal Revenue Service Form 5695 to claim the credit. Remember to save your receipts, any contractor certifications, and the manufacturer's certification statement.

The energy efficient appliance rebate program provides an incentive to replace older, inefficient models. Each state and U.S. territory designed its own rebate program and a few already have used up allocated funds. Some rebates require preregistration with a mail-in rebate form; others provide a voucher to use at time of purchase. Check the U.S. Department of Energy (DOE) website for details. This site is the only official DOE-sponsored site; be cautious of fake sites.

Online car buying is growing

Will the car-buying process shift to the Internet in the next 10 years? That's the view of some analysts speaking with CNNMoney.com, which reported an increase in online car buying (CNNMoney.com Sept. 10).

Some large dealerships--Autonation, the country's biggest chain, and Sonic Automotive--are experimenting with upfront Internet pricing that serves as the initial point of contact for buyers.

Most consumers already use the Internet to window shop and gather information. But now more are completing the transaction online--hoping to avoid those dreaded face-to-face sit downs with a salesperson.

For consumers, the struggle between dealers and shoppers is shifting in favor of the buyer while dealerships, already faced with slim margins, look for a faster sales turnaround. The practiced online shopper can pit dealers against one another from home.

The appeal of online shopping is simple for consumers: There's less hassle. It's fast and convenient. Online car buying has become more streamlined and competitive, according to Edmunds.com. It has shopped online exclusively for its fleet-testing vehicles during the past eight years.

Michelle Dosher, managing editor of Home & Family Finance Resource Center and MoneyMix at the Credit Union National Association, Madison, Wis., offers this advice:

• Line up your financing so you can be a cash-paying customer. Shop around for rates, starting first at your credit union.
• Know exactly what you want to buy--the make, model, options, even the color.
• Avoid going to the dealership. Call, send an e-mail, or employ a car-buying website to get bids from competing dealerships. Ask them to send you a copy of the window sticker and the invoice price, which is what you are really after. You'll be surprised how many will do so when they know they are bidding against another provider.
• Don't fill out a credit application from the dealership before you have a firm price. Dealers use it to see whether you're a qualified buyer.
• Resist the temptation to go to the dealership before getting a firm quote. Remind dealers that other providers are meeting your request for a firm bid.

If you buy from an individual or through an unknown provider, Dosher also reminds online shoppers to beware of potential fraud.

Visit a loan officer at LifeWay Credit Union to discuss auto financing details.

Your portal to 'the land of the free'

The good old U.S.A. is called the land of the free, and no one knows this better than the smart consumer. Anyone willing to take the time to look--and ask--around is sure to find bargains at the best price of all: nothing.

Where to begin? How about the place that has catered to cheapskates since the days of Benjamin Franklin? As one Minnesota credit union member told readers of the Credit Union National Association's (CUNA's) Home & Family Finance Resource Center:

"Visit your local library--if you haven't been there for a while, you'll be surprised, as I was, to see what they have to offer. Aside from current books and magazines, you can get free or very cheap DVD rentals. In addition, our county libraries have free museum passes--they give you no-cost admission to many area museums and attractions. No strings attached. It's a great way to get truly free entertainment."

One library resource you're sure to find useful is the annual list of "fabulous freebies" from Kiplinger's Personal Finance magazine (Sept. 1). But there's much more.

Libraries all around the country are coming up with ways to offer unusual services for free or a small fee. For example, at many branches you can rent framed artwork for your home. Some libraries circulate toys for kids and household tools for grownups. You might even be able to check out an electricity monitor to modify your home electrical use or borrow an e-reader to take on vacation.

Ask library staff to help you track down free opportunities in your area. Many communities have neighborhood festivals and art fairs. 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.

Depending on where you live, the opportunities keep coming. For example, if you're in 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.

Who has an 800+ credit score?

Some people go a lifetime striving to hit a hole-in-one in golf or bowl a 300 game. Others are reaching for an 850 credit score.

Ismat Sarah Mangla interviewed several individuals with high scores and asked them to share their success stories (Money Magazine Aug. 26).

Chris Peplinski, a stay-at-home dad from Rogers, Ark., has a score of 813. He reads up on the elements that make up a FICO credit score and checks his number every three months.

Leland Lim, 41, has a score of 806. The San Francisco Bay Area doctor checks his reports regularly. However, his score suffered from a single error until he had it corrected.

Brenda, 69, and Dick Husemann, 66, have matching scores of 818. The retired Wilmington, N.C., couple keeps balances low, charging less than 10% of their available credit. While this keeps their scores low, they also commit to never missing a payment. Payment history accounts for 35% of the FICO score, and making timely payments is the No. 1 way to improve a credit score.

FICO, the Minneapolis-based company that created the widely used credit score model, considers five elements when calculating a score:

• Payment history;
• Amount owed;
• New credit;
• Amount of available credit; and
• Types of credit used.

myFICO.com also offers information about the basic elements that determine a score.

Those interested in seeing their credit scores can request a free annual credit report from each of the three main credit bureaus from AnnualCreditReport.com. Users can report any errors directly to the report provider.

Mark September 16 for the "Money Talk"

Money skills are crucial to the next generation's ability to live responsibly and independently. Will they get all the important personal finance information they need at school this fall? Probably not. But, there's something you can do about it. Prepare yourself and your child for National Money Talk Night (Forbes Aug. 25).

Taking advantage of the back-to-school atmosphere, American Express, with Jean Chatzky, is sponsoring National Money Talk Night, a time for parents and their children to talk about personal finance on Sept. 16. The idea for the night arose from discussions Chatzky, a nationally known personal finance author and media personality, held with American Express, the Jump$tart Coalition and the Council on Economic Education.

Chatzky has prepared the tools, information, and even the words you need to have the Money Talk with your child. The information is available for three age groups: middle school, high school and college students.

Here's what you do:

• Visit MoneyNightTalk now. Download and view resources so you can get your own questions answered in advance. Pledge to have the Money Talk with your child. Print the talking points appropriate to your child's age group.
• Mark Thursday, Sept. 16 on your calendar and ask your teenagers and young adult children to do the same.
• On Sept. 16, sit down with your kids and have the Money Talk. You can use the MoneyNightTalk website or personal finance information on your credit union's website during your discussion to help answer your kids' questions.

Take note of the money attitudes and ideas that come out of your discussions. If you don't have children, invite your spouse or significant other to this national event. Use the talking points to help you discuss your financial goals.

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How to NOT run short of money in retirement

What are the chances you'll run short of money in retirement? The Employee Benefit Research Institute, Washington, D.C., predicts that 47% of early baby boomers ages 56 to 66 and 43% of late boomers ages 46 to 55 are at risk of having insufficient income in retirement to cover basic retirement expenses, as well as uninsured health care costs (EBRI July 27).

To help, Smart Money.com (Aug. 20) identifies six relatively painless ways to close the income gap:

• Ditch high-cost debt. Aim to step into retirement debt-free. Pay as much as you can afford on highest interest-rate debts first while still making minimum payments on all other debts. Once you pay off the highest-cost debt, keep whittling away until you pay off all of them. Getting rid of mortgage, auto, and credit card payments in retirement could save you thousands of dollars or more a year.
• Weed out unnecessary insurance. You probably don't need a disability policy in retirement. Similarly, weigh the pros and cons of cashing in your life insurance policy if you no longer have dependents and your spouse could easily support him or herself. When making the decision, calculate the financial loss to your family if you die, and then factor in the cost of the premiums.
• Scale down this old house. Fewer rooms and square footage translate to lower expenses--upkeep, maintenance, utilities and taxes. Or, move to a less expensive area.
• Get rid of energy guzzlers. Replace older appliances with new Energy Star models, switch to compact fluorescent bulbs, and ask for a free or discounted home energy audit. Visit doe.gov for guidelines to conduct an audit on your own.
• Trim high investment fees. You may be paying too much if your fees are more than 1% of your portfolio value. Ask for a fee reduction if you think you're being overcharged, or search for a fee-only adviser at NAPFA.org.
• Lose the landline. If cell phone reception is a problem, consider getting a signal booster. Visit BillShrink.com for the low-cost cell phone plans.

How retailers get you to buy more

Spending more than you planned while shopping lately? It could be because retailers are doing more to target your senses and emotions in ways you may not notice (Chicago Tribune Aug. 15).

A consumer's best defense is to be aware of tricks and traps that entice you to indulge, according to Martin Lindstrom, author of "Buyology: Truth and Lies About Why We Buy":

• Touch. You're more likely to buy a product because you touched it. A smart book store clerk won't simply point you to the right aisle, but will retrieve a book and place it in your hands.
• Start high, end lower. A salesperson's best way to increase buyer spending considerably is to frame a decision by asking the customer to make choices. The customer is shown a full-featured product and asked which features to eliminate, rather than starting with the basic model and asking what to add. In most cases, the customer will not want to "give up" features not originally considered.
• "Sincere" flattery. Salespeople use comments that may not be sincere but sound like it. You might not believe a clerk who says, "That dress looks great on you." But if she says, "I had to tell another woman that dress didn't look good on her, but it looks great on you," the compliment sounds more sincere.
• Live models. Customers are more likely to buy clothes they see on a live model than on a mannequin, according to a new field of research called neuroeconomics. That's because neurons in the brain associated with empathy are stimulated by a human, but not by a mannequin.
• Music. Does that tune make you feel happy and relaxed while in the store? Playing music with a rhythm slower than your heartbeat helps buyers linger longer, and ultimately spend more.

One way to avoid getting sucked in by retailer tactics is to shop with a list. Retailers want consumers to linger in the store so they can persuade them to buy additional or more expensive items. If you don't have a shopping list, you're more likely to be a good target for their agenda.

Another option: Wait to buy. Shopping can raise the dopamine levels in the brain, creating a rush. Building in a 48-hour waiting period for discretionary purchases can help answer that "Do I really need it?" question.

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Teens and older adults need help with auto choices

Teenagers and senior citizens share one thing when it comes to choosing a car: They don't always make the best choices (CBSNews Aug. 4).

Teenagers may want flashy, fast cars--a parent's nightmare--but what they need are reasonably powered cars with good test results and numerous safety features.

Senior citizens have different issues but, like teenagers, they're making auto-buying decisions based on a lack of information. Many seniors aren't aware of the new brands and models that could meet their age-specific needs.

A common misunderstanding is to give a teen the biggest car possible. But big cars are more difficult to control, and teenagers are the least experienced drivers on the road. Give them a car that handles well, is agile, and has as many safety features as possible.

This usually means getting your teenager a new car, rather than handing down an old one. And it means not giving them a large SUV or pickup, which have high centers of gravity, making them more prone to roll than other vehicles, or a sports car, which can tempt drivers to go fast. Sports cars also are involved in a higher rate of accidents than other cars.

Look for a reasonably sized sedan that has safety features such as electronic stability control and curtain air bags, good crash-test results, not too much power, and a strong structure. When researching safety features, be aware that electronic stability control has different names from different manufacturers.

Earlier this year, Consumer Reports named 11 models safe for young people, based on test results as well as government and insurance-industry crash-test results.

Among the top picks:

• Three small sedans: Hyundai Elantra SE (2008 or later), Mazda3 (2007 or later), Scion xB (2008 or later)
• Three midsized sedans: Acura TSX (2004 or later), Honda Accord (2008 or later), Kia Optima (2007 or later)
• Two small SUVs: Honda CR-V (2005 or later), Nissan Rogue (2008 or later)

Mature drivers have different needs than teenagers. For example, they often need more time to process events and to react. Complicated vehicle controls can cause confusion, waste precious time, and increase the chances of an accident. Older drivers need easy in-and-out access, good visibility in all directions, a comfortable driver's seat, and easy-to-read and understand controls.

Consumer Reports recommends five new models that perform well, are reliable, and have the kinds of features suitable to the needs of an aging population. They are:

• Minivan: Honda Odyssey
• Small SUV: Subaru Forester
• Upscale sedan: Hyundai Azera
• Family sedan: Honda Accord
• Microvan: Kia Rondo

The 2010 Honda Accord is the only vehicle to make both lists. For teenagers, it has enough performance to make them happy, has standard stability control, handles easily, and is crashworthy. These features are important for older drivers as well, even if for different reasons. In addition, seniors appreciate the ease of getting in and out of the wide seats; the simple, well-marked controls; the supportive seats; and excellent driving position with impressive visibility.

Regardless of age, everyone needs a car with good safety features and crashworthiness.