Tuesday, August 23, 2016

From Summer Job To Just Plain Job: How To Turn Your Internship Into A Promising Career



You've fetched coffee, made copies and done all the typing and filing for an entire department. Congrats! You've finally finished your summer internship! In many ways, just going back to school would be a wonderful relief, but you might be looking for more.

You took this internship as a stepping stone in your career. If you want to take the next step, though, you'll need to transition it into an actual job. That can be an intimidating process.

Here's the the good news: You've made it through the door. Most companies prefer to hire and promote from within. They don't want to go through the interview process again any more than you do.

The bad news, though, is that doesn't make it automatic. If you're expecting the company to do the work of finding a place for you, you're going to be disappointed. That said, it's not impossible. It just takes the right combination of accomplishment, luck and know-how to get the position you've been dreaming about.

If you're struggling with planning how to convert your internship into a full-time position, remember these five pointers!

1.) Ask for a specific position

One of the biggest mistakes job-seekers generally make is asking the broad question "Are you hiring?" The answer may be yes, but it's unlikely - especially at large firms - that anyone knows about every possible position. For external applicants, doing the legwork to track down potential openings is tricky. That's one of the advantages of the internship.

Keep an ear to the ground for new projects, new teams or new promotions. Those are places where there are likely to be new positions opening. Your immediate supervisor may not be in a position to make a hiring decision, but they can probably put you in touch with the person who is. A recommendation from someone within the company will go a long way toward putting you in that office.

2.) Time your ask

The last day of your internship is not the right time to have the first conversation about your future with the firm. Timing like that makes you seem like a procrastinator. You're giving the impression that you put off thinking about your future until the last possible minute. This is not a trait companies want in their employees.

Ideally, you'll want to ask about a new position after a big win. If you've just finished a major project, you've got the limelight, but only for a brief window. It doesn't have to be one of those cinematic, vital to the life of the company projects, but it should be a significant success that shows your skills and determination.

When you reference this accomplishment, always do so with a humble-brag. Ask your immediate supervisor if the task was done to their satisfaction. Getting them in the headspace of singing your praises will make them much more likely to recommend you for another position.

3.) Be everywhere

Part of the benefit of an internship is the chance to see the inner workings of a company. Yes, you're gaining experience doing a specific set of tasks, but you're also learning about different aspects of a business in your field. You don't do that by keeping your head down and doing the work in front of you.

Instead, take every opportunity to visit and work with other departments and people. You never know who you might impress! The more people in the company who know your name, the more likely it is you'll get to stay.

4.) Become indispensable

Lack of experience is typically seen as a liability by employers, but you can turn it into an asset through your internship work. That you don't have any experience provides you with tremendous flexibility in how you tackle tasks. Find some piece of technology, new practice or set of procedures you can master. This means taking every training opportunity and looking over the shoulder of as many folks as possible. Your objective is to become an expert at the company in something.

The truth is, it doesn't matter what. If you're the only one in the department who knows how to run the copier, that's a strong argument for keeping you on. Running the copier may not be your dream job, but it can get you in the door.

5.) Be professional

The best attribute you can display in your internship is follow-through. That means showing up on time every day, dressed like you're there to work, and taking on every task -- no matter how menial -- with enthusiasm and dedication. Demonstrate to your employer that you're the kind of person they want to hire.

The summer internship can be a great start to a great career, but -- like every opportunity -- you get out of it what you put into it. With a lot of work and a little luck, it can be the first in a series of career successes.

SOURCES:


Brought to you by Destinations Credit Union.

Thursday, August 18, 2016

Adjustable-Rate Mortgages (ARM)


A first mortgage typically has a set interest rate. The monthly payment stays the same regardless of the term. It doesn't matter how much the economy, the Federal Reserve or your income change. Your interest rate is locked in over the life of the loan.
An Adjustable-Rate Mortgage (ARM), on the other hand, has an interest rate that can change periodically. These loans usually have a period of time in which the interest rate is fixed, commonly called the "initial rate," which can last from as little as a month to as much as 5 years. After that period, the rate can change. How frequently it can change is determined by the adjustment period. In the most common type of ARM, a 5/1 ARM, the initial rate is set for 5 years and the adjustment period is 1 year. This means that after the first 5 years of the loan, the rate can change every year.
ARMs look very attractive at first glance because they're usually listed with much lower interest rates. That rate is only the initial rate, although there are a few limitations on how high the interest rate can go after that period. If interest rates go up, that adjustment can have you paying more once the initial term completes. However, if interest rates go down, an ARM can actually become less expensive!
The Index and the Margin
The adjustable rate isn't set arbitrarily. They're set by the rate of return on some major investment vehicle. The most common one is the London Inter-Bank Offer Rate (LIBOR). This is the interest rate that the world's largest banks charge each other for short-term loans. Investors feel confident that these loans will be repaid, so the LIBOR is a benchmark for safe investments, like mortgages. This rate serves as the index for the ARM rate at many financial institutions.
Because individual home buyers are less secure than the world's largest banks, investors take on more risk by putting their money into an ARM. To reflect that increased risk, ARMs also include a margin. This is an additional interest rate the lender tacks on to the index rate. The margin is typically locked in for the duration of the loan. The two together are the fully indexed rate, and that's the rate you'll be charged once the adjustments begin.
Periods and Caps
Fortunately, there's a limit to how often a lender can change the rate of the mortgage. This adjustment period provides some measure of stability. Typically, ARMs don't have adjustment periods that are any longer than one year (after the initial period) or any shorter than one quarter.
There are also limits on how much the interest rate can increase in one period, called a periodic cap. No matter how high the index goes, your interest rate can't be increased in one period by more than a set percentage. If your ARM includes a 2% periodic cap, and the underlying index rate increases by 3%, your rate will still only increase by 2%.
That extra 1% isn't gone, though. Many ARMs include a carryover provision, which means rate increases that were prevented by a cap may be applied during the next period. Even if the underlying index decreases, your rate could still be increased by any amount that was capped out.
Another kind of cap that exists for ARMs is the lifetime cap. These caps provide a limit on how high the rate can go during the term of the loan. If your initial rate is 6% and your ARM has a lifetime cap of 6%, your interest rate can never go above 12% no matter how high the underlying index rates get.
When are ARMs a good idea?
The riskiness of ARMs makes them a tough option for many people, especially on a primary residence. Unless you're in a financial position to survive a mortgage payment doubling over the course of 10 years, an ARM can be hard to swallow. However, there are situations where the initial lower interest rate can make sense.
If you're planning on selling the property before the initial period is over, the ARM can save you significantly on loan costs. If you intend to "flip" the house, or if your career involves frequent relocation, an ARM could be ideal for you. In this case, the gamble you're making is less about the performance of an index and more about the performance of your area's housing market. If demand drops, you could wind up holding on to an expensive mortgage or selling the house at a loss.
Some people choose ARMs because they plan to refinance after the initial period. The lower initial interest rates let them make extra principal payments, and they can then get better terms on a 15- or 30-year fixed rate for the remainder of the loan. This can also be a risky move if the value drops. The refinance may not be enough to cover the initial mortgage amount, leaving borrowers in a difficult position.
In general, choosing an ARM means planning to pay the balance of the loan before the end of the initial period. Otherwise, the unpredictability of the mortgage payment can make financial plans too complicated. Be sure to read and understand the terms of any mortgage, fixed or adjustable, before you sign!

Tuesday, August 16, 2016

When A Savings Account Isn't A Savings Account


For many credit union members, a savings account is a formality. They know, in theory, that saving is important. Maybe they got a bonus at work and stuck $50 in a savings account. Other savings options  that come with higher rates, such as IRAs or 401(k) accounts, took priority and that initial deposit was quickly forgotten.

Tax-advantaged retirement accounts are fantastic, but it's unlikely that retirement is your only savings goal. When it comes time to put a down payment on a house, buy your next car or plan an exciting vacation, the money in those retirement accounts will be locked up tight. There's no way to get to it without taking on massive penalties and paying a lot in taxes.

If you want your money to be there when you need it, no matter when "it" is, now might be the time to take another look at the humble savings account. Even if it's not your primary savings vehicle, a savings account can offer tremendous benefits. Let's look at some ways to get the most out of it!

1.) Dividend rate isn't the only consideration

Many experts shun savings accounts, citing low interest/dividend rates as their chief concern. If you're looking to maximize your returns, putting all your money in a savings account isn't the smartest plan. It's unlikely that your financial plans call for maximizing returns on all your investments, though. While it's true that higher return investments do exist, savings accounts offer unique benefits.

First, savings accounts are NCUA insured up to $250,000. If something unthinkable happens, you're promised to be reimbursed for your losses. That's quite a lot of security for your hard-earned cash.

Another benefit of savings accounts is their liquidity. If you need the money in your savings account tomorrow, you could get it. You can withdraw cash in person, at a branch or from an ATM. You also have access by using our online banking or mobile banking to transfer funds to another account to make payments on a loan. You can also transfer funds to your checking account to conveniently use your debit card without worries of overdrafting.

2.) Automate, automate, automate!

You know that exhausted feeling you get after you've been shopping? It never seems fair. Sure, there was some walking involved in your day, but the total amount of physical activity was fairly limited. All you did was make a ton of decisions.

That feeling has a name. It's called decision fatigue. Making a commitment to something takes willpower and energy, and you've only got so much in your tank. Waiting until the end of the month to decide what to do with your household surplus can encourage splurging. Thinking about sensible decisions takes willpower, and you've already used your allotment for the month.

That's why it's great to know your savings account can be automated. You can set up automatic transfers between your checking account and your savings account or even make it part of your employer direct deposit. Make that decision once and then never have to think about it again. You can save your willpower for more important decisions, and let your cash reserve grow.

3.) You need an emergency fund

Even if you have a high-paying job, you've only got as much security as the economy allows. Your company could succumb to competition.Your job could be eliminated. You or a loved one could get sick, requiring you to leave your job or cut back to fewer hours.

Other emergencies could happen. Your car could break down. You could face a big medical bill or fall victim to a scam. What would you do to cover your costs in these situations?

Situations like these are among the leading causes of bankruptcy. People find themselves forced to rely on credit to get through such circumstances. With no way to repay those charges, people are stuck in a constant cycle of debt repayment that ruins financial plans for years.

The best way to avoid this calamity is with a strong emergency fund. How much should you have saved? Most experts agree that 6 months of living expenses is a good target, though that number may need to be higher if you work in an industry with a tight labor market. What's a living expense? Count anything that you couldn't cut if you absolutely had to do so. For example, your housing, utilities, insurance, debt maintenance and food. Don't include luxuries like dinners out or monthly subscription costs that you could stop paying if money got tight.

It's important to keep that emergency fund accessible. If it's in a brokerage account, you risk needing to access that money when the market is down. A savings account provides the security and flexibility that you need for your rainy day fund.

4.) Keep your funds separate

If you already have an emergency fund, you may have some other savings goals. Suppose you plan to start a business, but need start-up funding to do so. You might want to put away money gradually over time to make your dreams a reality.

If you keep that money in your checking account with the rest of your funds, there can be a real temptation to spend it. Resisting that urge depletes some of that willpower, which makes it easier to make impulsive choices in other areas. Instead of relying on your self-control to keep those savings safe, you can build separate accounts for each specific savings goal. This will let you track your progress while also keeping the money safe from an Amazon splurge.

Look for ways to increase your dividends

At Destinations Credit Union, we have an easy way to increase your dividend rate - it's our Kasasa® Cash Rewards Checking Account.  By doing easy things that you probably already do, you can earn a really high rate on your checking account and attach a high rate Kasasa Saver to that account.  Then, at the end of the month, your rewards are automatically swept into the savings account.

Thursday, August 11, 2016

It's All Fun And Games 'Til Someone Loses A Credit Card: Safety In Online Games


Before the cellphone era, gaming was a pretty secure business. You went to the store, bought a disk, a cartridge or deck of cards, and played it many times over until you grew bored of it. On the surface, today's gaming seems like an improvement. The majority of gaming apps are free and they're always available to play regardless to time and place. This convenience, though, does come with costs. 

Obviously, the news surrounding the robbery of "Pokemon Go" players in O'Fallon, Missouri is one type of threat that mobile apps can pose. Be aware of apps that others can use to predict your location, and always keep an eye on your surroundings. That will keep you safe from the most obvious threats, but not from all of them. 

It is incredibly convenient to have all your games on a single device you can keep in your pocket and have with you at all times. The downside is that everything else -- your phone number, your email address, even your financial information -- may all be on that device, too. With everything on one device, it's become easier for online scammers to take what they want. Fortunately, there are some steps you can take to protect yourself. Be on the lookout for these three ways mobile games take your money, and know what you can do about them. 

1.) In-app purchases 

In-app purchases are deceptively simple. You "buy" a free game in the app store, thinking you got a bargain. You play the game for a few minutes, enjoying yourself as you assemble an army or destroy your friends at trivia or pop some bubbles. After a little while, though, you hit a snag -- you've maxed out the number of games you can play in one day, and you'll have to wait 24 hours to play again. You're frustrated and upset. You're willing to do anything you can to keep playing. And, lo and behold, the game offers you a solution. You can pay a small fee of $0.99 to continue playing -- and paying. 

Unfortunately, there's no simple solution to this one: Either you cough up the $0.99 or you don't. In cases like this, sometimes the best move is just not to play that game. The golden rule of the internet works here, too: if you're not paying for something, you're not the customer. You're the product. Don't support business models that work on addiction and deception. Find a different game. Sometimes it's even better to find a game you have to buy once to feel a little more secure in knowing you won't have to keep buying up to keep playing. 

2.) Phishing scams 

This scam, too, starts with the purchase of an innocent-looking app. In order to use it, the app claims, you need to set up an account with the app manufacturer's website. Citing security reasons, it says the account will ensure mysterious strangers cannot come in and mess up your process playing tic-tac-toe and hangman. All it needs is your email account, and then for you to create a username and password. You input your email account, you come up with a username, and then you use the password that you use for everything. Just like that, you've given a company you know nothing about access to all the details of your online life. Any other system you use that password for can now be compromised. 

Another version of the scam is the fake game login screen. An email looking like it's from the game company will soon arrive. It will tell you to login through a link in the email to receive a fabulous in-game prize. Of course, there is no prize, and the email was a tool for scammers to collect your login information.
The best way to prevent this is through research. A quick search for the app you're considering and the word safe is all you need. Look at the top three results. You can then make the smart decision about whether or both to give that app your email address.
3.) "Bonus credit" 
This one begins in the same way an in-app purchases scam does. You buy the app, you play the app for awhile, and it suddenly says you can't play anymore today. In this case, though, it's not that you've run out of time, it's that you've run out of credits, coins, or some other form of in-app currency that lets you play the game. Once you've paid all your coins for the day, there's nothing for you to do but wait. All you have to do to get more is watch an advertisement or take an IQ quiz. The advertisements are, surprisingly, almost always legit, but the "IQ quiz" will include an agreement to pay $10 a month on a phone bill!
This scam is especially sneaky because crooks don't need access to a credit card number or a login. All that's necessary is for one user on a family plan, even a child, to click through a service agreement without reading it carefully. Then, the whole family's on the hook. If you don't go through your bill carefully every month, these charges can add up, and fast.
For this one, awareness and common sense are the keys. Once you know that the quiz is a scam, simply avoid taking the quiz - at least the quiz that asks for your phone number. Avoid apps that ask you for purchases to play the game. Research apps before you give them any personal information.
The gaming industry has long passed the simplicity of Pong and Pac-Man, but as long as you keep your personal security your number one priority, they can still be just as fun.

SOURCES:
https://www.baekdal.com/opinion/how-inapp-purchases-has-destroyed-the-industry/
http://www.scambusters.org/onlinegamesscam.html

https://www.theguardian.com/technology/2016/jul/10/pokemon-go-armed-robbers-dead-body

Tuesday, August 9, 2016

Adjustable Or Fixed-Rate Mortgage - Which Is Right For Me



If you're mortgage shopping, you may be overwhelmed by the number of options. Dozens of lenders, each with their own rates, terms, conditions and costs, can make the decision feel that way. But it doesn't have to be that difficult! The choice of which mortgage to go with starts with a simple question: fixed-rate or adjustable? There are many different terms, points and rates associated with each, but narrowing your search to a category can really simplify the process.

As an overview, fixed-rate mortgages are the more traditional choice. You and a lender agree to a length of time (or term) and an interest rate. That interest rate stays the same throughout the term of the mortgage.

Adjustable Rate Mortgages (ARMs) are a slightly newer offering. These loans have a segment of time during which the interest rate is fixed. After that, the rate is determined by an economic indicator. If you've seen the notation "ARM 5/1," that means an it is an adjustable rate mortgage with a set rate for the first five years of the loan, and then a new rate every year after that. There's more to it than that, but this basic explanation will get us started.

So, which is the right one for you? The answer really depends on several factors.

How long do you plan to own your home?

One thing you'll notice right away when shopping for mortgages is that ARMs have lower interest rates, sometimes by as much as 0.50%. On a $200,000 mortgage, that saves you as much as $70 a month! The initial rates are lower because the lender is taking on less risk. With a traditional mortgage, if rates go up, the lender is stuck with a lower return. With the ARM, you're agreeing to pay more as the lending market offers more.

That doesn't matter as much if you're not planning on owning your home five years from now. If you're in a line of work that moves you from place to place every few years, taking the monthly savings on an ARM and sticking it in your 401(k) is a good move. If you intend to buy the house, make some improvements and resell it for a profit, the ARM will lower your costs while you're living there.

There's still risk involved in the ARM even if you plan to sell the house. If demand drops in your neighborhood, you may have trouble finding a buyer. In that case, you're stuck with the loan and a likely increasing interest rate. If you can find a buyer, but not for the price you paid for the house, the difference between the sales price and what you owe will follow you around, draining your monthly income until you finally get it paid off.

On the other hand, if you're in your house for the long haul, the savings are likely to get wiped out once the adjustment period starts.  Interest rates are at historic lows right now, and will likely increase in the next five years. The half-point savings in interest rates will seem trivial compared to the several-point increase you'll face after the initial period.

How much can you afford to put down?

An ARM can be easier to qualify for and provides you with an interest rate that you might not get without a 20% down payment. If you don't have enough cash on hand to make a large down payment, an ARM might give you some time to build equity. Refinancing your mortgage after the initial period is over can put you in a better position. You can use the equity you have in your home, plus whatever you've saved during that time, to put more money down and get a better fixed-rate mortgage.

Of course, this strategy is not without risk either. If the value of your home decreases, you may have a difficult time refinancing for the balance of the loan after the initial term. This would leave you stuck paying the higher interest rates of the ARM. If you can't make the payments, you still lose your house, regardless of the equity you've established.

If you've got the cash to make a 20% down payment or are buying in an up-and-down housing market, a fixed-rate mortgage provides you with a good rate that you won't need to worry about. Your mortgage payment stays the same from month-to-month and there's no uncertainty about what global economies do in the interim.

What's your risk tolerance?

At the core of the choice between fixed-rate and adjustable-rate mortgages, is a quick and dirty shortcut. Fixed-rate mortgages are the safer, more conservative choice. Adjustable-rate mortgages are the riskier alternative, but offer the possibility of savings.

If you have the room in your budget to accommodate a potentially fluctuating mortgage payment and enough security in your work, savings, and other financial priorities, an ARM does offer the potential to lower your monthly payment. If you're confident that the value of your home will increase faster than interest rates, an ARM might be a wise investment.

If you'd rather have the security of a fixed-rate mortgage, there's quite a bit to be said for that. If you've found the house you want to raise a family in, the stability of a fixed-rate mortgage may be desirable. If you're trying to find the simplest path to homeownership, you may find the simplicity of the fixed-rate mortgage very appealing. It might be easier to be financially aggressive in other aspects of your life, and not put the place where you live at risk.