Friday, December 7, 2012

Make Your Holidays Merry and Bright (and Affordable)



 Article courtesy of Accel Financial Counseling

The 2012 holiday shopping season is underway and Destinations Credit Union (in partnership with Accel) wants to remind budget-minded shoppers that it’s never too late to start planning for an affordable holiday season. “Now is the time to get together with family and friends and discuss a game plan for the rest of the holidays,” said Mark Munzenberger, Accel’s director of education. “While there may be discussion around where the holiday meal will be this year, you also should determine gift giving rules and budgets.”

In honor of the season, Accel financial counselors have put together a list of holiday shopping to-dos to undertake now:

Start saving and budgeting: Set a specific and reasonable amount for each person on your “must-buy-for” list. Before you start socking the money away, make certain the amount won’t impact your ability to manage your existing monthly expenses.

Dial down the holidays: Consider asking family and friends to downsize the holidays to something less commercial, with fewer purchased gifts, more valuable time spent together and a “less is more” sentiment. You’ll be well on your way to a very meaningful holiday that doesn’t evolve into overwhelming financial stress in early 2013.

Make your own: Gifts made from inexpensive materials can go a long way in showing someone you care because people do understand the value of your time. It can be extremely meaningful to your relationship and to the holiday, not to mention light on the pocketbook. Some ideas include wrapping up homemade treats, framing a grandchild’s one-of-a-kind art piece, or making a “coupon” good for a house cleaning, one weekend of free babysitting, etc. All offer opportunities to save, while delivering a whole lot of joy to recipients.

Think beyond the mall: Is there someone who would love knitting lessons from the local wool shop? Or a snowboarding lesson from an instructor at the local ski hill? Out-of-the-box ideas like this take more creativity and less money, while delivering a thoughtful gift to a very appreciative loved one.  

Multiply: If the expectation is quantity, giving a number of small, less expensive gifts and wrapping them individually will help create the illusion that you are giving more.

Combine resources: If a family member’s wish list includes an expensive item, consider asking others to go in on it with you.

Save on wrapping: Inexpensive wrapping paper (even a brown paper bag), combined with a nice bow or a well-placed flower, pine cone or holiday ornament, work wonders for adding significance to an inexpensive gift. If you don’t have a talent for wrapping, find someone who does and enlist their help.

Don’t end up shopping at the gas station: As the old holiday joke goes, don’t wait until the last minute or you may be shopping at the 24-hour GasMart. Plan your shopping early on. If you wait until the last minute, you may end up spending more just to get the shopping done quickly.

Buy your gifts with cash: Studies show that people spend less if they pay with cash! Add the savings to your stash and use it to pay down some debt when the holidays are over; you’ll be off to a good start in 2013.

Start a Holiday Savings
Open a Holiday Club Account and save a little out of each pay.  Next year, your wallet will thank you!

Wednesday, November 14, 2012

Car and car loan bargains to be had this Fall?

End of the year model close-out sales have been a staple in the car buying arena as far back as I can remember.  This year, though, dealers may not have a glut of 2012 cars sitting on their lots ready to move.  For whatever reason (better inventory management, better sales), many dealers just don't have the inventory that they normally do at this point in the year.  The availability may depend on the car you want to buy.  For example, a local inventory search for a Ford Mustang convertible (a car I would love to get) shows only 2 within 100 miles of the Baltimore area.  I did the same search on a Chevy Silverado truck and found over one-hundred 2012 models left within that same 100 mile radius.

Dealers are offering some rebates and low rate vehicle financing, but only on selected models, and for the financing portion, only if you have great credit.  Usually you have to choose between a rebate and low rate financing and almost always, the rebate is the better option. (Our website has a good calculator in the AutoSmart section to help you evaluate your choices.)

When you're buying a car (new or used), do your homework.

Research the vehicle you want to buy.  Know what you should pay for it.  Get pre-approved for your car loan so that you don't have to waste time in the dealership and you can negotiate the best cash price.  Your Credit Union has some of the lowest car loan rates in BaltimoreLet the Credit Union loan officer look at the offer before you commit - if the dealer is trying to pull a fast one, we can often spot it for you.  We also have car buying services that can help you save money.  Make sure you include the Credit Union as a valuable trusted partner in the car buying process!

Carol Szaroleta
Director of Marketing & Business Development
Destinations Credit Union

Thursday, October 18, 2012

AVOID Identity Theft by Fighting Back

This post is by our guest blogger: Jeff Rupp, President/CEO of Incred-A-Shred

Identity Theft is a rapidly growing crime.  Every 3 seconds, someone’s identity is stolen.  It is scary, it is real, and it is serious.  Identity theft occurs when your personal information is stolen and used without your knowledge to commit fraud or other crimes.  Identity theft can and will cost you time and money.  It can destroy your credit and ruin your good name.  It is something that can occur to anyone, regardless of income level or social status.  So, it is important that you do everything in your power to protect yourself from becoming a victim of identity theft.   

Here are some suggestions on ways to protect yourself:
  • Don’t give out your personal information on the phone, through the mail, or the internet unless you know who you are dealing with.
  • Never click on links sent in unsolicited emails; instead, type in a web address you know.  Use firewalls, anti-spyware, and anti-virus software to protect your computer.
  • Protect your social security number.  Don’t carry your Social Security card in your wallet or write your Social Security number on a check.
  • Don’t use an obvious password like your birthdate, your mother’s maiden name or the last 4 digits of your Social Security card.
  • Keep your personal information in a safe and secure place at home or at work, especially if you have a roommate, employ outside help or are having work done at your house or office.
  • Shred financial documents and any paperwork with personal information (Destinations Credit Union is holding a free community shred day on 10/27/2012 from 1 - 4 pm).
Be alert to signs that require your immediate attention:
  • Unexpected credit cards of account statements
  • Denials of credit for no reason
  • Calls or letters about purchases you did not make
  • Charges on your financial statements that you do not recognize
  • Bills that do not arrive as expected
Defend against Identity theft as soon as you suspect it:
  • Place a “Fraud Alert” on your credit reports, and review the reports carefully.  This alert tells creditors to follow certain procedures before they open new accounts in your name or make changes to existing accounts.
  • Contact the security or fraud departments of each company where an account was opened or charged without your okay.
  • File a police report.  This will help you correct your credit report and deal with creditors who may want proof of the crime.
  • Report the theft to the Federal Trade Commission.
Common Ways identity theft happens:
  • Dumpster Diving.  They rummage through trash looking for bills and other paper with your personal information on it.
  • Skimming.  They steal credit/debit card numbers by using a special storage device when processing your card.
  • Phishing.  They pretend to be financial institutions, companies, or the government, and send email or pop-up messages to get you to reveal your personal information.
  • Hacking.  They hack into your email or other online accounts to access your personal information, or into your company’s database to access its records.
  • Old-Fashioned Stealing.  They steal wallets, purses, mail, new checks, tax information, pre-approved credit offers.  They steal personnel records from their employers, or bribe employees who have access.

Thursday, September 27, 2012

Why Credit Unions Cut Your Costs

Each time I go out to talk about the credit union, one of my first questions is "Who can tell me the difference between a credit union and a bank."  I am still surprised that most people don't understand why we're different.  Most people can tell me that credit unions offer the same kinds of products and services as banks....checking, check cards, car loans, credit cards, online banking and so on.  That's true. Some even know that it's cheaper to do business with a credit union than a bank. That's also true. But most can't articulate why our credit union has some of the best rates and the lowest fees in the Baltimore area.

We credit unions are not-for-profit.  Period.  We don't have to pay outside stockholders.  We pay you, the members who own this cooperative organization.  The way we do that is by providing lower loan rates, higher savings rates and low or no fees.

One objection that I hear a lot is that credit unions are not easily accessible.  While that may still be true of some, times have changed.  Destinations Credit Union participates in two ATM networks that allow you to access your money from more than 60,000 locations all over the country (more than some of the largest big banks!).  Chances are, wherever you live, work or travel, you can get to your money.  You can also use one of the 4,600 shared branch locations throughout the U.S. to conduct routine banking transactions.  And, of course there is the free online banking and bill payment, not to mention mobile banking through your cell phone.  These days, it's easy and convenient to do business with Destinations Credit Union.

If you are already a member of a credit union, good for you!  If not, you're missing out on easy ways to cut your banking costs.

Thursday, September 13, 2012

Pick Your Payment....Really?

I originally wrote this for the Parkville/Overlea Patch, but felt it was worth sharing on our blog as well.

There's a trend in car dealer financing that really bothers me. You see the ads...pick your car, pick your payment. How can you pick your payment? Yes, I'd like a brand new expensive hybrid that gets great gas mileage, but I only want to pay $200 a month for it. Really?

There's basically only one way to pick your payment: extend the term of your loan. Your interest rate is based on factors such as your credit rating, and possibly the term of the loan or how much you put down. The car price is whatever you negotiate it to be. That only leaves how long you plan to pay on the loan, or term of the loan.

It used to be that 48 months was the typical repayment period on a new car. But, like everything else, the car prices have gone up. For people to be able to afford the payments, traditional lenders (including my credit union) have extended terms of 5 to 6 years. That's still fairly reasonable — most of us expect to keep our cars that long, and a car that's 5 years old isn't likely to have a lot of problems.

So, how is the pick your payment financing going to work? Let's say I'm going to be a little more reasonable about my payment: I will pay $400 per month to get the $30,000 Prius I want. And, let's say I qualify for a rate of 5% based on my credit history. 
At a traditional lender, a 5 year loan will cost me $566 per month, but I want to pick my payment at $400 per month.  What does that do to my loan? 
  • First it will extend the loan from 60 months to 90 months: about 2 and a half years longer. 
  • Next, it will cost me about $2,100 in extra interest over the life of the loan. 
  • Third, by the time the car is paid off, it will be nearly 8 years old.
Imagine if I stuck with my $200/month payment!  My house would probably be paid off before the car! 

Think long and hard about the facts before you "pick your payment."  Personally, I think I will just look for a car that fits my $400 per month budget!

Thursday, August 9, 2012

Keeping Up With Your Bills

Sometimes it can be difficult to keep up with your bills.  Maybe they have come in the mail and you put them aside to deal with later.  You get busy, and suddenly you're late on a payment.

While everyone can slip once in a while and be late on a payment, doing so can affect your credit rating. The lower your credit rating, the more it will cost you in many ways.  So, you're a good person, you don't mean to pay your bills late.  How can you get a better handle on making sure you pay things on time?

Fortunately, technology has given us great choices when it comes to staying on top of bills.  In my opinion, the best way to keep on top of your bills is to use online bill payment. It doesn't cost anything (at Destinations, it's free if you pay at least one bill per month).  It's easy to set up and use.  And, best of all, you can schedule your payments to go out when they are due...enter them as soon as you get the bill, then forget it.  You enter they payee information only once, then any time you want to pay, just click the payee then enter the amount and the date to pay the bill.  You can also schedule recurring payments if the amount doesn't change.  Set up the payment to go out monthly on a specific day of the month. It's safe - there are many layers of security to protect your account.

There are other ways to use technology as well.  You can generally go to the company website for payments such as your mortgage, BGE, phone, etc.  These sites permit you to set payments to come out of your account automatically.  The drawback to this method, is that it takes the control away from you and puts it in the hands of others.  Being the control freak that I am, I want to schedule the payment myself.  It is also more difficult to stop your payments if you need to.

If you are a true technophobe, you probably wont be reading this blog anyway.  For those who don't want to pay online, look for simple low-tech ways to organize your bills.  Before the days of the internet, I used to have a desk calendar that I knew I would refer to every day.  I used to put my bills in the calendar for the day that I needed to write the check and mail it.

Whatever method you use, make sure to pay all of your bills on time, every time.  That will help maintain a high credit rating and save you money on loan interest, insurance rates, and more.

Friday, June 29, 2012

Independence Day

The 4th of July is coming up....a time to celebrate our freedoms.  One of the basic freedoms that we all aspire to is financial independence.  Like our other freedoms, financial freedom does not come easily or without sacrifice.

Many people, especially since the downturn in the economy, struggle to live paycheck to paycheck.  Many have lost jobs and have been unable to find work.  If you are fortunate enough to be working, I challenge you to take charge of your finances and begin building a solid financial future. 

Your first step in achieving financial freedom is to assess how you are spending your money and create a budget that you can live with.  Destinations has online tools (Money Desktop and BudgetSmart) and free, unlimited financial counseling to help you with that.

Be brutally honest with yourself when deciding if you need to spend money.  When you buy a car, do you really need to spend $30,000 to get the car of your dreams?  Or could you get by spending $16,000 for a viable mode of transportation?  Do you need to eat fast food, or can you pack a lunch?  

Are there cheaper ways to get what you need -- discounts on cell phone packages or less expensive electricity providers?  Have you gotten new insurance quotes lately?  It pays to shop around every couple of years to make sure you're still getting the best deal.

Find ways to cut costs and begin saving that money.  The easiest way to save is by automating the process.  If you deduct a certain amount from your paycheck each week, and automatically put it into a savings account, chances are you will barely miss the cash.

Keep your credit score up...it will cost you less in the long run.  Better credit ratings get you better interest rates when you need to borrow.  Better credit ratings will save you money on other things, like insurance.  Better credit ratings may even help you get a better job!  Businesses are more willing to trust you if you show you can manage your finances and maintain good credit.  If your credit score is not as high as it could be, again, take advantage of our free financial counseling.  They can give you concrete steps to take to improve your score.

Start an IRA or put the maximum into a company-sponsored 401K, especially if they are matching your deductions.

In short, come up with a plan that will serve as a roadmap to your financial freedom.  Celebrate this Independence Day by making a commitment to your own financial independence.

For more financial tips, follow us on Twitter: @Tweets4UrWallet or "Like" our Facebook page.


Wednesday, June 6, 2012

Credit Unions Vs. Banks - The Choice is Clear

Obviously, banks and credit unions offer a lot of overlapping services. Both banks and credit unions take in deposits, administer checking and savings accounts, issue credit and debit cards, and provide home loans in addition to consumer loans. 

The key difference: Ownership structure 

Banks are corporations - owned by their stockholders. Typically, and especially with larger banks, these shareholders are Wall Street institutions. However, there are many smaller neighborhood and regional banks with more local ownership. Credit unions, on the other hand, aren't owned by stockholders on Wall Street; we're owned by our members on the local Main Street!

True, neither banks nor credit unions are in business to lose money. We both need to make profits on our goods and services to stay in business. The difference is this: When a bank makes money, they send their profits to their stockholders. When a credit union makes a profit, on the other hand, we pass it on to our members. This can be in the form of a dividend or credit, better rates, technological investments and a variety of actions that bring greater value to members of the cooperative. And because we're not so focused on pleasing distant shareholders through issuing a dividend every quarter, we can frequently offer services and loans with lower costs than banks.

Our mutual ownership structure gives us another advantage too: Wall Street can't pressure us to make unwise decisions for short-term gains at the expense of our membership. Every decision we make is solely in the long-term, best interest of our shareholders.

For example: In normal economic times, credit union and bank failures are very rare. That story changed during the mortgage crisis of 2008-2009. Leading up to the crisis, publicly traded banks were under intense pressure from Wall Street to make loads of questionable loans so they could keep short-term numbers up. Credit unions were free to make sound and rational decisions that were in the best interests of members, not Wall Street. According to information published by the Federal Deposit Insurance Corporation and the National Credit Union Association, banks were failing at a rate 3 times higher than credit unions in 2008, and had a failure rate of five times that of credit unions.

In good times, credit unions have a great track record. And when times are tough, there's no comparison.

Thursday, May 10, 2012

Financial Self Defense



Identity Theft and Technology - Including Social Media

A recent study put together by The Javelin Group has some disturbing findings: The incidence of identity theft was up 13 percent, compared to the previous year. The total amount stolen was about the same, but the thieves successfully scammed more people. Facebook, Google+ and LinkedIn users take heed: The study found that there were specific factors that put social media users at elevated risk of getting scammed:
  • 68 percent of social media users publicly shared their birthday.
  • 63 percent shared the name of their high school.
  • 18 percent shared their phone number.
  • 12 percent shared their pet's name.
All of the above information represents the kinds of things a company would use to verify your identity, according to the study's authors. In some cases, scammers have been known to bluff their way through customer service representatives to get access to other important information - and even wipe out entire accounts. When young or vulnerable people share this information, it could make them more susceptible to stalkers or sexual predators.

The Smartphone Factor 

The study also found that smartphone users were a third more likely to be victims of identity theft than non-smartphone users. This doesn't mean, necessarily, that smartphones are to blame. But it does seem to indicate that the people who use smartphones are doing something to make them more vulnerable or attractive to scammers.

What can you do to avoid being a victim?
  • Password protect your phone.
  • Don't use credit cards for Internet transactions over public networks. Thieves have "sniffers" that can extract that data.
  • Don't store credit card numbers or bank account information on your laptop.
  • Use different passwords for mobile banking apps on your phone than passwords you do for your phone and email.
  • Promptly report any suspicion that your sensitive personal information has been compromised.
  • Keep documents that list Social Security numbers off of your laptop, or encrypt that data if you do store there.
  • Keep private information private. If any company uses specific information about you to verify your identity - your mothers' maiden name, pet names, birthdays, etc., keep it off Facebook and any other social media site.

Tip:  Is your mother on your Facebook page? Does she use her maiden name? You are vulnerable.
Pro tip: If your mother is on your Facebook page, and you share your date of birth, you are a prime candidate for ID theft.

Wednesday, April 11, 2012

April is Financial Literacy Month: Where Do You Stand?

April is one of our favorite months here at Destinations Credit Union.  Spring is in the air and it is Financial Literacy Month. Helping our members understand and manage their money is something we are passionate about. 

Unfortunately, too many Americans are financially illiterate.  Your credit score may be a good indicator of where you stand on managing your money.  Of course, there are circumstances beyond our control that affect our credit score (such as loss of a job or medical issues), but for the most part, the better you have managed your money, the better your credit will be.

If you don't know your credit score, you should find out.  If you have recently applied for credit, see if the financial institution will share the score with you. You can get your credit report for free at annualcreditreport.com - one free per year from each of the three major credit bureaus.  These reports don't have your actual credit score, but for a small fee, you can request that number. 
Financial Literacy Month is designed to bring attention to the need for early intervention in teaching kids and young adults how to manage their money before they have the chance to make costly mistakes that may haunt them the rest of their lives. 

For several years now, we have devoted some of our web resources to educating young adults through the Destinations On Your Way site.  We encourage teens and young adults to learn more about their money by providing great incentives to interact with the site.

This month we introduced our newest web addition, Centsables, geared toward kids ages 8 to 12.  This group of super-heroes will guide kids through lessons about money in an entertaining way.  There are TV episodes, games, activities, and more, all designed to help kids get the basics of personal finance.  April 22 - 28 is National Credit Union Youth Week.  If you haven't opened an account for the children in your life, do it now.  You can even apply online.

If you have children or young adults in your life that may need a leg-up in the personal finance area, check out these educational tools and share them.  It doesn't cost a thing except a little bit of your time!