Tuesday, October 17, 2017

International Credit Union Day: Dreams Thrive Here

Are you as excited as we are to celebrate International Credit Union Day on Oct. 19, 2017?

It’s a day to share your experiences as a member and to reflect upon all the benefits you enjoy by being a part of your credit union. It’s also a day to have fun! We will have cider and donuts at all of our branches on October 19 to celebrate ICU Day so make sure you stop by!

Each year, CUNA and the World Council of Credit Unions choose a theme for ICU Day. This year’s theme, which was selected via an online poll of credit union professionals, is “Dreams Thrive Here.”

As a credit union member, you know this statement is true. Credit unions help your dreams thrive by helping to make them possible. In the spirit of ICU Day, let’s take a quick look at four factors that make credit unions the best choice to allow your dreams to thrive.

1.) Members first 
As a member of a credit union, you own a piece of the organization. That’s why it’s often referred to as a cooperative. Your credit union only wants what’s best for you. This means we can focus on offering superior service and policies that are as member-friendly as possible.

2.) Lower fees 
Banks earn much of their profit through fees and pushing unnecessary products on their customers. While a credit union will also have fees attached to products and services, these tend to be lower than similar fees you’ll find at a bank.

3.) We’ve got your back 
A credit union will be willing to work with you through rough patches. While a bank is more likely to turn down a borrower who has a poor credit history, a credit union member representative will be happy to meet with you and work to find a loan that best suits your needs. If necessary, we can also help you learn the basics of budgeting and may offer programs to help you cover unexpected expenses.

4.) Better dividend rates 
Credit unions offer higher dividend rates on savings accounts and lower interest rates on loans. We only need to cover operating costs, and all the money we save is passed down to our members in the form of favorable rates, enhanced services, community giving, increased operations and more.

As you can see, we’ve got lots to celebrate! Stop by on Oct. 19 so we can show our appreciation and celebrate everything that makes a credit union special. Can’t wait to see you!

Tuesday, October 10, 2017

7 Common Life Insurance Myths Debunked

Many of us let popular misconceptions about life insurance convince us that we don’t need it. Read on to see how seven of the most widespread life insurance myths are easily debunked.

Myth #1: I’m single and I have no dependents. I don’t need life insurance. 
Actually, you do. Every person should have funds to cover their funeral costs and end-of-life medical bills. Also, you can leave a legacy by choosing a cause to be the beneficiary of your death payout.

Myth #2: I’m a stay-at-home parent who doesn’t earn an income. 
My partner needs life insurance; I don’t. The tasks that currently fill your time will need to be outsourced to hired help should you suddenly pass on. Nannies, cleaning help, and cooks cost money. That money can come from the insurance payout of your homemaker’s policy.

Myth #3: Why would I waste money on insurance when I can invest it to earn higher returns? 
You’re better off putting your money somewhere safe with a guaranteed payout – like a life insurance policy. You don’t want to leave your dependents with an iffy source of funds when you pass on. The only exception to this rule is for the truly wealthy, who have more than $1 million in liquid assets and already have their funeral costs and medical bills covered.

Myth #4: I can’t afford life insurance. 
A recent Life Happens study revealed that 80% of uninsured people who claimed life insurance is too expensive, had overestimated its cost. In fact, a 20-year level term policy for a healthy 30-year-old usually falls in the ballpark of just $150 a year.

Myth #5: I’m too young to worry about life insurance. 
Actually, there’s no better time to purchase a life insurance policy than when you’re young. The premiums are far less expensive for those under age 35, and most people in that stage of life do not have sizable assets to pass on to their dependents. Most importantly, dependents of the 25-35 age group will be too young to be financially independent and will need the death payouts for basic survival.

Myth #6: My children are independent adults. Why would I need life insurance? 
Leaving your dependents with an inheritance that helps them purchase a home, start a business or put some money away for a rainy day will keep you in their thoughts long after you’re gone. Also, you don’t want to burden your children with funeral expenses and medical bills when they’re grieving.

Myth #7: My job offers a life insurance policy for employees. If I leave my job, I can take it with me.
Unfortunately, this is false. Most employer-offered life insurance policies are not portable. Since there’s no way to know that you’ll remain at your current workplace forever, it’s best to purchase a separate life insurance policy.

Your Turn: Which of the above myths did you always believe to be true? Do you know of any others? Share your thoughts with us in the comments!

Thursday, October 5, 2017

Fall Into Tax Planning

The leaves are changing. The nights are getting longer. There’s a cool breeze blowing, and apples are falling off the trees. Everyone knows what that means: It’s tax planning time!

While most people don’t start thinking about their taxes until February or even April, the best time to make changes is this year. If you haven’t thought about your taxes since you paid them in the spring, you’re still in good shape. For most tax matters, changes made by Dec. 31 are assumed to be in effect for the whole year. Let’s look at 3 areas of tax planning you should aim to tackle as quickly as you can.

1.) Make any necessary changes to your retirement accounts 
If there’s anything that is further off than tax planning, it’s retirement planning. Still, one of the most compelling reasons for making contributions to your retirement is preferential tax treatment. For starters, you should be contributing the maximum to either a Roth or a Traditional IRA.

From there, it gets a little trickier. If your income dropped this year, say, because you or your spouse lost your job or had a significant reduction in hours, you might not get much benefit out of the tax deduction that is presented by a Traditional IRA. You can take this opportunity to switch a portion of your Traditional IRA to a Roth IRA. Essentially, you’re “paying” the tax on a portion of your IRA in a year when it won’t cost you as much, then switching it into a tax-free growth account.

You also need to make sure you’re contributing to your employer’s 401(k) program. Those contributions are also made pretax – so you can deduct your portion of the matching funds from your tax burden. If you haven’t been contributing, see if you can make “catch-up” contributions to take advantage of the preferential tax treatment.

2.) Spend your “use-it-or-lose-it” funds 
Many employers offer plans like Flexible Spending Accounts (FSA). These programs also offer preferential tax treatment, but many of them empty out at year-end whether you’ve used the funds or not. These programs are a great way to save for unplanned medical problems, but if you were lucky enough to avoid those costs, you’ll need to spend that money before it goes away.

There are a few common tricks you can use to spend the money without wasting it. Obviously, if you’ve been putting off a minor medical procedure (a mole removal, an eye exam, new contacts) that’s the easiest place to spend. Otherwise, you may need to get creative. A few staple goods are FSA eligible. Over-the-counter painkillers, first aid kits and supplies,bb and some disaster preparedness supplies are generally eligible for reimbursement. Consider getting first aid kits as Christmas gifts for young children or donating them to community programs.

3.) Plan your charitable contributions 
If you’re going to donate to a charity, you can give in a way that maximizes your tax benefit. One of the easiest ways to do that is to give stock. Not-for-profit organizations don’t have to pay the capital gains tax, so they can sell it for the full amount. This means you get to take credit for the full value of the gift. This is also true if you plan to give real property (houses, buildings, land, etc.) or use another complex giving strategy to maximize the value of your contribution.

However you give, make sure you keep detailed records about your gifts. You want both a receipt from the organization and another form of proof, like a copy of a check or a bank record. Not-for-profit organizations are almost always overworked and understaffed, so counting on their bookkeeping can sometimes be an exercise in frustration. Keep your own records just to be sure.

Remember, no one can offer you accurate tax advice without a careful review of your finances. If you have questions about filing your taxes, you should speak to a tax planning professional. For most people, though, a little bit of knowledge is enough to get started paying less to Uncle Sam and keeping more in their retirement funds.

Tuesday, September 26, 2017

How to Spot a Credit Repair Scam

Credit repair scammers tell you they can make credit repair quick and easy. Unfortunately, when they’re done, your score may still be low, you’ll have lost a nice chunk of change, and you could even be facing criminal charges. Here are the warning signs of a credit repair scam:

1.) Upfront payment
Under the Credit Repair Organizations Act (CROA), credit repair companies are forbidden to request or receive payment until they’ve completed the services they’ve promised.

2.) Big promises 
Scammers may claim they can remove negative information from your credit report, even information that is accurate and current. Don’t believe them; no one can do this. They might also promise to boost your score in just a few weeks. This isn’t true either. It takes at least 30 days for changes to be evident on your credit report.

3.) Offers a “new credit identity” 
In these scams, companies promise to create a new credit identity for a fee. After you pay, the company will provide you with a nine-digit number. They may refer to this number as a CPN – a credit profile number or a credit privacy number. Alternatively, they may direct you to apply for an EIN – an Employer Identification Number.

The company instructs you to use this form of ID to apply for credit, telling you it is legal. However, it’s not – and you’ve just been scammed. These companies are selling you a stolen SSN. They walk away with your money and leave you in hot water because you’ve just committed multiple federal crimes. Falling for a credit identity scam could mean facing fines or prison time.

4.) Tells you to dispute accurate information on your credit report 
Disputing accurate information on your credit report is illegal.

5.) Evasive when questioned 
The Credit Repair Organization Act made it illegal for credit repair companies to lie about your rights and their services. These companies must provide:
  • A written contract detailing your legal rights 
  • Your three-day right to cancel the contract without charge 
  • The anticipated time it will take until results are evident 
  • The total cost you will pay for their services 
  • Their guarantee 
If you’ve hired a credit repair company that hasn’t lived up to its promises, you can choose to sue the company in federal court. Along with other victims, you can file a class action lawsuit against the company.

Finally, it’s best to report the scam to your local consumer affairs office or to your state attorney general. You can also file a complaint with the Federal Trade Commission (FTC). File your complaint online at ftc.gov/complaint or call 1-877-FTC-HELP.

Need help understanding your credit report? Community Financial is here to help and will provide a free credit review. Simply visit a branch near you or call (877) 937-2328.

Tuesday, September 19, 2017

Dealing With a Financial Setback

Financial setbacks come in all shapes and sizes. It can be an expensive household repair, a medical emergency, getting laid off, or the birth of a baby. Whatever the situation, it’s impossible to plan for every financial hit you will take in your lifetime. But don’t fret. If you’re hit with hard times, here are some tips to keep in mind.

1.) Don’t panic 
Keeping calm will allow you to think more clearly and resolve your deficit quicker. As difficult as things seem now, they’ll always look a little better after some levelheaded planning.

2.) Crunch the numbers 
Sit down and work out exactly how much more money you’ll need to cover your new expense or to fill the gap of income loss.

3.) Work twice as hard 
The only ways for stretching a deficit to cover your needs are to either earn more or spend less. Since tightening your budget is almost always stressful, try finding ways to add to your income first. If possible, put in more hours at work. Consider freelancing or consulting. Take a side job for some extra cash. Do whatever it takes!

4.) Trim your spending 
Now it’s time to see which expenses you can trim. First, you’ll need to prioritize. List all the expenses you cannot do without and those that would be irresponsible to neglect. Then, take an honest look at your remaining expenses to see where you can cut back. Shop the sales to cut your grocery bill in half. Trim spontaneous purchases by only using cash. If you’re a two-car family, consider cutting back to one car for now. Push off your vacation plans until things start looking up.

5.) Contact your creditors 
If you cannot make some of your minimum monthly payments anymore, contact your creditors before they come calling on you. Most creditors will be happy to work out a reasonable payment plan with you.

6.) Reach out to family and friends 
Tell your family and friends what’s going on. They’ll support you and encourage you until you get back on your feet, and they may even be able to help out with employment opportunities or contacts.

7.) Be proactive 
Hindsight is always 20/20. Harness the urgency you feel now to get into the habit of building up an emergency fund. As soon as you’re back on your feet, start putting away money for protection in the event of future setbacks. Experts recommend having 3-6 month of living expenses saved up in case you can’t work for any reason.

Do you need help recovering from a financial crisis? We can help! Call us at (877) 937-2328 or stop by your local branch for help with money management or debt consolidation.

Your Turn: How have you maintained your equilibrium during a financial setback? Share your best tips and advice with us in the comments!

Community Financial Credit Union, P.O. Box 8050, Plymouth, Michigan 48170-8050;
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Federally insured by NCUA.
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Federally insured by NCUA.