When Santa Plays Favorites
What happens when your child wants to know why Susie next door got her dream Barbie doll, but she didn't?

It's that time of year again. Little boys and girls are trying to be extra good so that the Man in the Red Suit remembers them in his upcoming trip through the night. Meanwhile, their parents struggle to balance the checkbook that finances Santa's stop at their hearth.

Even though Santa's gifts are linked to "being good," some children end up with a sack full of goodies, while others are lucky if they get two or three small gifts regardless of their behavior. And while parents try their best to fulfill their child's wish list, it isn't always feasible.

What happens when your child wants to know why Susie next door got her dream Barbie doll, but she didn't? How do you explain to Alex that Freddie got the Game Boy every kid on the block wants, but that it's beyond your budget, uh, I mean, Santa just didn't bring that this year?

The good thing is that by the time children begin to notice the inconsistency in what different kids get, they're close to realizing that Santa Claus doesn't exist outside the mall and their imagination. But, for those two or three years when they're mature enough to notice, yet still believe in the magic of the season, how does a parent handle a child's emerging sense of financial inequality?

Surprisingly, children already understand more than we give them credit for. So, while they say that "it's not fair," what they may really mean is, "I don't like the situation and wish I could have more." Once you understand what they're really asking, you'll be in a better position to offer a good answer.

If the problem is envy of what other kids have, you can explain that Santa gives every boy and girl exactly what's best for each one. That's something kids won't always like, but they can accept it without loosing their faith in Santa Claus.

Then, show your child that there are others who have even less and that she has so much to be grateful for. Consider involving her in a charity project or take her along to a soup kitchen to help out. It will help her realize that, although not everyone has the same things, not all people have more than she does. Some have less.

This may be your child's very first glimpse of the inequality and "unfairness" that is so much a part of the world, but it most certainly won't be the last. Help her deal with it now and you'll develop healthy attitudes that will last a lifetime.

This Year, Make it a Merry, Debt-Free Holiday!
Does anyone really want to go into debt? Yet the mall is screaming your name, you still need to buy things for various people on your list, and you don't want to disappoint anyone or have them think you don't care because your gift is a 'cheap' one. With some planning, however, you'll be able to stick to a budget that leaves debt out of the picture (completely!) and without hurting anyone's feelings.

And that's the holiday gift you give yourself.

Here's a great website we found. It's filled with ideas for a joyous, yet financially smart, holiday season. Check out www.betterbudgeting.com and use both the gift list and holiday spending worksheets. Both will help you design-and stick to-a budget. The web site also lists 63 inexpensive gift ideas. Here are some of them. Feel free to use the ideas that best fit the people on your list, but also use them as a springboard for coming up with your OWN ideas. After the holidays, you'll be glad you did.

  • Gourmet coffees with a personal coffee cup
  • Journal with special inscription inside
  • Deck of cards and book of card game rules
  • Homemade cocoa mix in a pretty jar
  • Gel pens and pretty stationary
  • Bottle of sparkling cider
  • Home baked bread with a recipe included
  • Basket filled with deli cheese and fruit
  • Holiday serving bowl or platter
  • Pretty basket filled with special jams or mustards
  • Decorative napkins and napkin rings
  • Fancy chocolate bars tied with a ribbon
  • Photo album - hand decorated is even better
  • Homemade cookie mix with instructions for baking
  • Gourmet popcorn and flavored oil
  • Locally made barbeque or steak sauce with basting brush
  • Pancake or waffle mix and a bottle of real maple syrup
  • Specialty cookbook
  • Pretty glass jar filled with candy
  • Movie theater gift certificates
  • Muffin mixes with muffin pan
  • Books - there are still a few for under $10
  • Set of dish towels and dish cloths
  • Pepper mill and fresh peppercorns
  • Pretty box for keepsakes
  • Address book
  • Christmas ornaments
  • Puzzles
  • Favorite quote embroidered on a nice handkerchief
  • Makeup brush set
  • Expensive socks - still under $10
  • Special soaps and bath puff
  • Home baked cookies in a pretty tin

If you've already spent more than you wanted to this year, clip this article and start a 'money-smart holiday' file, adding your own ideas for gifts and money-saving things you can do. And of course, if you haven't set up a special savings account for next year's Christmas, do so right away and start putting $20 into it every week.

Reduce Your Holiday Stress by Planning More
What is it about November and December that causes so many people to stress out? Isn't that brief stretch of time that Thanksgiving, Christmas and New Years occurs supposed to be one of reflection, celebration and renewal? Those don't sound like reasons to feel like pulling your hair out, skipping sleep or feeling down.

The reasons are simple; money and time.

A simple fact of life and the society we live in today is that the two most precious resources are our income and the time we have. Often, in chasing after one, we reduce the availability of the other. This unbalancing act can cause stress and fatigue that may make the holidays a little less merry.

So what can you do about it?

While there is no surefire way to overcome this challenge, planning ahead can help you get back into balance with your finances and your time.

By creating special savings accounts and regularly placing a small portion of your payroll into the savings account with each deposit, you'll have saved (and earned dividends on) money that can be used on your holiday spending.

Or, if you know there will be upcoming holiday related expenses but don't have the cashflow to finance them all, make sure you have a low (or 0%) rate credit card in your hands so the credit card bills don't linger into summertime.

Just some thoughts and ideas to help to make your 2007 holidays a little merrier this year.

Saving on Utility Bills
Every Drip Counts!

You've just received your utility bills in the mail. Here are a few simple ideas for cutting utility bills without feeling it.

Every drip counts.Is your home leak-free? Find out by reading your water meter before and after a two-hour period when no water is being used. If the meter does not read exactly the same, there is a leak somewhere. If your faucet drips at a steady 100 drops per minute, that's 330 gallons of water in a month, or nearly 4,000 gallons wasted per year.

Repair drips in your faucets by replacing washers. Once your faucets aren't leaking make sure to turn them off completely and immediately after each use.

Another leak culprit is the toilet tank. Check for leaks by adding three drops of food coloring to the tank. If color appears in the bowl within 30 minutes, there's a leak. If you use this test, remember to flush right away to avoid stains. Replacement parts for toilet tanks are fairly inexpensive.

Cut down on water used for laundry by folding clothing and hanging it up when you get undressed instead of automatically throwing it down the laundry chute. If it's not dirty it doesn't need to be washed. If you change out of your good clothes when you come home, you'll avoid getting them dirty. If your laundry machine comes with settings for different size loads, make sure to set them. Otherwise, combine loads so you can operate the machine fully loaded. That goes for dishwashers as well.

Cut Down on Dryer Usage. If you have a backyard or a porch, get yourself a clothesline and some clothespins and start utilizing those sunny days for laundry drying. If you feel too self-conscious you can hang up your clothes in the garage or laundry room, though they will take longer to dry. Not only will you save money, but your clothing will wrinkle less.

Common Sense. A lot of electricity saving is just common sense. Turn off the lights in rooms you are leaving. Provide small lamps on desks and tables, so you don't have to illuminate a whole room to be able to work. Use compact florescent light bulbs for light fixtures that will be in use for two hours or longer because they use up to 75 percent less electricity and also last about 10 times longer than incandescent light bulbs.

You don't have to deal with extreme temperatures to save on your cooling and heating bills either. Just lowering the thermostat one degree in the winter can save you up to 3% on your heating bill, while raising the thermostat one degree in the summer reduces your cooling bill by 2%. As with the dripping faucets, it's important to insulate your house by installing thermal insulation. Remember that you want to heat or cool your house, not the Grand Outdoors.

This article is just the tip of the iceberg of utility savings. The important thing is to realize it's possible and to get started. A quick search on the Internet will yield many more suggestions. Most of them are not difficult to implement. All these changes might seem small at first, but they really add up. Just check your next utility bill and see the difference.

10 Things You Can Do to Improve Your Credit Score

Did you know that only 10% of Americans know their credit score? Those are the findings of a survey commissioned by TrueCredit.com, a web subsidiary of the credit bureau, TransUnion.

"It is shocking how little Americans know about their credit," said John Danaher, president of TrueCredit.com. "Good credit is a cornerstone of your financial profile, enabling you to finance major purchases, such as a home, education, or car." Then, he added, "Not knowing about your credit can expose you to higher interest rates which translates into less money in your pocket at the end of the day."

When you apply for credit, your credit scores help lenders determine whether or not you are able to repay the loan based on your past financial performance. With a higher score, you qualify for better interest rates, higher credit limits, and more types of credit than you would with a lower score.

Your score reflects the way you use credit, and there are no tricks or quick fixes to getting a good score. However, you can raise your score over time by demonstrating that you consistently manage your credit responsibly. Here are 10 things you can do to improve your credit scores.

  1. Pay your bills on time. If you have a history of paying your bills on time, you'll have an easier time getting a mortgage loan, car loan, or credit cards. Even if you've had serious delinquencies in the past, a recent history (24 months) of on-time payments carries weight in credit decisions.

  2. Keep credit card balances low. High outstanding debt can pull your score down.

  3. Check your credit report for accuracy. Inaccurate information on your credit report can be cleared up easily. Always contact the original creditor and the credit bureaus whenever you clear up an error so that the inaccurate information won't reappear later.

  4. Pay down debt. Consolidating your credit card debt or spreading it over multiple cards will not improve your score in the long run. The most effective way to improve your credit is by slowly paying down the amount you owe.

  5. Use credit cards but manage them responsibly. In general, having credit cards and installment loans which you pay on time will raise your score. Someone who has no credit cards tends to have a lower score than someone who has already proven that he can manage credit cards responsibly.

  6. Don't open multiple accounts too quickly, especially if you have a short credit history. This can look risky because you are taking on a lot of possible debt. New accounts will also lower the average age of your existing accounts which is something that your credit score also considers.

  7. Don't close an account to remove it from your record. A closed account will still show up on your credit report. In fact, closing accounts can sometimes hurt your score unless you also pay down your debt at the same time.

  8. Shop for a loan within a focused period of time. Credit scores distinguish between a search for a single loan and a search for many new credit lines, based in part on the length of time over which recent requests for credit occur.

  9. Don't open new credit card accounts you don't need. This approach could backfire and actually lower your score.

  10. Contact your creditors or see a legitimate credit counselor if you're having financial difficulties. This won't improve your score immediately, but the sooner you begin managing your credit well and making timely payments, the sooner your score will get better.

These ideas won't create a dramatic improvement in your credit score overnight, but over time, they will. Remember, it takes time to develop a strong profile. Once you've done it, you'll find it easier to apply for credit and favorable interest rates.

Unitus can help:

Get Out of Debt...And Stay That Way
Debting is an ancient art. Yet, as recently as the 19th century, those who couldn't pay their bills on time were usually thrown into dark, dismal, cobweb-filled cellars known as debtors' prisons. It was a sane option considering the alternatives-indentured servitude, disfigurement, or death. Talk about debt to die for. These days, penalties aren't as brutal. However, the emotional toll of overwhelming debt can create a personal prison equally painful.

According to the former Federal Reserve director, Alan Greenspan, consumer debt has been hovering over $2 trillion during the past few years. For each household with one credit card, the average total debt is approximately $23,000 per household, with credit card debt alone at a staggering $9,000.

Consumer debt has increased as jobs have decreased. Americans may be unemployed, but that doesn't stop them from borrowing. Apparently, when unemployment gets tough, the tough go shopping. Personal savings have dropped to a pathetic 0 percent of after-tax income even though the rate was more than 10 percent as recently as the seventies. Not surprisingly, credit card delinquencies are on the rise.

Stairway to Heaven
If you want to buckle down the spending belt, experts agree on tried and true measures for viewing the light at the end of debt's tunnel.

  • Step one: Just say, No. The first step to a debt-free existence is to stop accruing more debt. Temptation is the devil's playground. In order to resist a chronic descent into debtor's Hades, you often have to cut up your cards.

  • Step two: Track your daily spending for 30 days and compare it to your income. If your expenses exceed your income, you'll need to either cut back your spending or increase your earnings in order to get out of debt permanently. Once you have these numbers, you can develop a spending plan consistent with your cash flow.

  • Step three: Consolidate your debts into one account. Choose a low-interest credit card or, if you're a homeowner, take out a home equity loan. Cutting your interest will enable you to pay off your principal more quickly. Unitus Community Credit Union can help you find solid, safe ways do this.

    There are other, more risky ways to consolidate debt, but they're not available to everyone. You can borrow against your life insurance policy's cash value which you can then generally repay at a comfortable pace. Interest rates are usually below commercial ones.

    As a last resort, you can borrow 50 percent of your 401(k) monies, if your plan allows. But beware-there are three drawbacks. One, the loan must be paid back within five years; two, if you leave your job, the loan is payable immediately; and three, if you're under age 59 1/2, there's a 10 percent early withdrawal penalty.

  • Step four: Begin a savings plan. Even if it's a small amount, it's important to get into the habit. Replace your old pattern of getting deeper into debt with a new pattern of saving to prevent it.

It's okay to want the better things in life. But, if you learn to live within your means, the happiness and peace of mind you'll acquire will be worth more than all the debt in the world. You may discover that BMW can also mean Becoming Money Wise. The devil will no longer be able to "make you do it."

Emergency Funds
Quick: How much money do you have put away in case of an emergency?

Though no one likes to think about it, anything can happen. Jobs are lost. A car needs major repairs. A medical expense comes up that insurance won't cover. Most people actually have less than they would need should an emergency arise. Financial advisors encourage people to set aside a minimum of three to six months' worth of income which you can easily tap into when you have unforeseen expenses. Of course, you may feel more secure with a larger stash, but make it a goal to accumulate savings of at least three months' worth of income.

How can you save so much? Have a percentage of your income put directly into your Unitus savings account every month, until you've amassed enough that you feel secure about emergency situations.

Some experts argue that it's better not to keep too much of your emergency funds in low-risk accounts because you may risk losing too much buying power to inflation. If you feel that way, too, consider keeping a portion of your funds in a variety of short-term investments which you can sell if you are ever in need of emergency cash.

Small Change Spending and What You Can Do About It.
Have you ever noticed how quickly single dollar bills and change disappear from your pocket? Somehow, you always have money for a candy bar, gourmet coffee, or cigarettes, but often come up short when it comes to the bigger ticket items. Wouldn't it make sense to save your small change and watch it grow so that you really could afford that vacation home or boat without taking out a loan?

Not so simple, say economists. A "small thing" is something that you can purchase NOW, without having to wait. You get the momentary satisfaction of being able to buy something right now, while you have to save up for a big-ticket item. Delaying gratification is never easy!

The solution? Give yourself an allowance at the beginning of the week or month and stick to it. Put any additional, small change away for the things you'd love to have, but will need to save for.

It may also help to analyze your expenses using financial management software. Just seeing how much money is spent on "little things" may be enough motivation to start cutting back - and saving up for something larger.

Couples and Money: Truth of Friction?
Money is one of the most sensitive topics couples face. Disagreement over spending and saving habits is one of the most frequent causes of friction in a relationship. Truthful, frank discussion and mutual financial planning can go a long way to resolve the tension.

Budget: A Dirty Word?
Does the mere mention of a budget start your teeth grinding? For many, it evokes the same enthusiasm as going on a diet. In this case, a money diet. Begin by changing your focus. Agree with your partner to create a spending plan. Agree to review it and adjust it periodically. A plan is adjustable and should suit your lifestyle, not imprison you.

The first step is to carefully track expenses. Save every receipt for a month so you have a clear picture of your spending. Be open about your spending. In a relationship, silence is not golden.

Set savings goals. "Pay yourself first" is the first rule of financial success. Agree to commit a percentage of your take-home pay to savings. Ten percent is a good place to start. Increase the amount as you can. Maximize contributions to retirement or 401(k) plans where an employer provides matching funds.

Discuss big expenditures. For example, agree to consult over purchases of $200 or more.

Keep an agreed-upon amount of cash of your own in an individual account. Each of you should have money to spend on small indulgences with no questions asked. Agree in advance what types of expenses are personal. For example, is a magazine subscription "personal" or part of your overall spending plan? Deciding in advance will leave little room for argument later.

Don't criticize each other in public about money. Keep financial discussions private.

Review your plan periodically. Every year or so, sit down to determine if your goals have changed or if your plan needs adjusting.

Creating a Family Budget
When you sit down and actually record where your money goes, there are always surprises. More money may be going to food and other expenses than you think. There may be areas in which you can easily cut corners that you won't see until it's in writing. Rather than sitting down and deciding how much of your income "should" go to expenses such as food, clothes, entertainment, savings, etc., keep track of where the money is actually going. Using a simple pad of paper, write down everything that you and the other members of your family spend money on every day. Do it for a full month.

After a month of tracking all expenses, add up the total expenses of each category. You can decide how specific you want to get.

Standard expense items are:
Housing (rent/mortgage)
Utilities
Telephone
Medical/dental Insurance
Auto expenses
Food
Clothing
Housewares
Personal care
Child/adult care
Education
Savings
Debt repayment
Entertainment
Gifts
Contributions
Miscellaneous

With the numbers in front of you, you can create a spending plan. If you feel you are allocating too much towards one category and not enough towards others, see what you can do to change that. Continue keeping records until you feel the situation is exactly the way you'd like it to be.

Organizing Your Finances
Many people file away all their important-looking paperwork, yet they're still not clear on their basic financial situation. Do you know roughly what your assets are and where they are? How much your total living expenses are? What about your total debt?

If you can't answer these questions, don't feel bad. You're not alone. Although many people don't take the time to do it, getting organized is easy and can be done in a single evening. Here's what you need to do to take control of your finances:

Start with a complete overview of your short-term and long-term living expenses. To find out how much money you need to maintain your current lifestyle, spend an hour or two reviewing your checkbook, credit-card records, bank statements, loans, and mortgage payments.

Identify all the costs that are essential, such as food, shelter, transportation, and healthcare. Total those up. Then, figure out the percentage of those expenses that your income covers and the percentage that comes from various other sources.

It can be a little frightening to realize how threatened your financial security would be if your income were suddenly cut in half. But, isn't it better to find that out now than to wait until something happens?

Do you know which accounts are in your name alone and which you hold jointly with your partner? Examine your pension plans and retirement investments, too. When will you have access to those funds? What amount can you expect them to provide? It's a good idea to know what your health and insurance plans cover in case of an emergency. Now, while you have no emergency, you should find out whether you need authorization to get emergency treatment. Also, be sure you know where copies of life insurance policies are and whom you must call to file a claim.

Finally, you and your partner should both know where all your legal documents are and how to access them.

Once you have a grasp on your current situation, schedule a time to review your finances annually and note any changes. A good time might be shortly after you've filed your income taxes. Once you know where you ARE financially, you can begin to plan where you WANT to be.

What to Do if You're the Victim of Identity Theft
Call the fraud departments of the three major credit bureaus to get copies of your credit reports. Have fraud flags and statements added to your reports saying that all potential creditors should contact you to verify credit applications.

The three credit bureaus and their phone numbers are:

  • Experian: (888) 397-3742
  • Equifax: (800) 685-1111
  • Trans Union: (800) 916-8800

Report the identity theft to local law-enforcement authorities, including the police, postal inspectors, and U.S. Secret Service.

Contact all credit unions, banks, and companies where your name may have been used fraudulently, sending a copy of a police report or other documentation to show that you have been a victim of identity theft.

If these initial steps fail to protect you from the consequences of identity fraud, you may want to consider retaining a lawyer.

Protecting Your Passwords
Your passwords protect your information online. Wouldn't it seem that they need no protection themselves?

Yet, they do.

Because your passwords are the key to your accounts, hackers and identity thieves are itching to get their hands on them. You need to take every precaution to make sure that they can't.

Aside from changing your passwords often and not giving them to anyone, make sure they're not stored where they can be easily found. Keeping them only in your own memory is best. If you put them somewhere like a PDA or a file in your computer, you've just put the key to your car under the mat. Even though your car is locked, the reality is that it's more likely to be stolen than if the key were on a ring in your pocket.

Most importantly, select passwords that are easy for you to remember, but that should be impossible for less-than-ethical characters.

For example, instead of a password like janesmith, which is easy for hackers to figure out, try something that is meaningful to you, but not to others.

Take an old movie you loved, your college address, a football team, your child's birthday, or your first boyfriend's name, and work it into a password that no one will be able to figure out.

For example, if you love the book A Tale of Two Cities by Charles Dickens, you could create a password using the title and the author's name: atotccd.

Okay, that's something. Now, take it a step further and convert some of the letters to numbers. The "o" can become a "0" and the "t" representing "two" can be replaced with the numeral "2." Capitalize the other "t" and the "d" and you have: aT02ccD.

Take it a step further by replacing the "0" with two bracket symbols "()" and changing the "2" to a "3." Now you have: aT()3ccD.

That's a tough password to crack, but will be easy to remember if you just retrace your steps. But, is it worth the bother?

Just ask anyone who has been a victim of identity theft.

Because your passwords are the key to your accounts, hackers and identity thieves are itching to get their hands on them.

5 Things You Can Do to Prevent Fraudulent Use of Your Checking Account

Are you concerned about identity theft?

Many people are, and the truth is that you can't be too careful these days. Here are 5 things you can do when you order new checks to help ensure that your identity remains yours and yours alone.

  1. Have your checks printed with your initials and your last name only, rather than spelling out your full name. That way, if they get into the wrong hands, the thief will not know if you sign your full first name or your initials. They won't even know what your full name is but your credit union will.

  2. Never have your Social Security number printed on your checks. Write it manually if you
    need to.

  3. Use your work phone number on your checks if you can, instead of your home phone number.

  4. If you have a Post Office box, use that instead of your home address.

  5. When writing checks to a credit card company, don't put the complete account number on the "for" line. Rather, use just your last four digits. The credit card company knows the rest, but anyone who might be handling your check as it passes through the check processing channels will not.

Simple Steps to Protect Yourself from Fraud
As your credit union, it's important to us that you take every precaution to protect yourself from fraud. Here are some simple steps you can take to avoid becoming a victim of this growing crime.

  • Review your credit reports annually.
  • The FACT Act allows you to receive a free credit report every year from each of the three major credit reporting agencies.
  • Order your free annual credit reports at www.AnnualCreditReport.com.
  • Review your accounts online.
  • People who monitor their financial accounts and transactions online lose significantly less per fraud incident than those who rely on paper statements.
  • People who use the Internet to check their bank and credit card accounts have an average loss of $551 per incident, according to one survey. Those who wait for paper statements to arrive averaged $4,543 in losses ? more than eight times as high.
  • Receive financial statement electronically.
  • Electronic statements are an effective way to prevent mail fraud. Mail theft occurs any time of the year, but most frequently from January to March when your annual statements and tax documents are arriving.
  • Protect paper documents.
  • Shred confidential documents and credit offers before discarding.
  • Receive your financial statements online instead of in the mail.
  • Review account statements promptly.
  • Use secure mailboxes to send and receive mail.
  • When you complete an application for a merchant discount card or similar item, ask what security measures are in place to protect your personal information and how your application will be disposed of when it is no longer needed.
  • Protect yourself online and on the telephone.
  • Use caution when asked for personal information over the Internet. Don't provide personal information by phone unless you initiated the call.
  • Be aware of current scam tactics such as phishing and spoofing.
  • Use firewall protection on your computer.
  • Download Windows updates.
  • Install antivirus and anti-spyware programs on your computer.

Have You Taken these Simple Steps To Protect Yourself From Fraud?

Avoid Dot-Com Scams!
Many websites on the Internet claim to offer exciting products and "opportunities." Here are five rules to keep you and those you care about away from scams and let you benefit from legitimate offers that may be hard to find offline.

  1. Call the telephone number listed on the website and speak to a live person. If the website does not offer a telephone number, do not order their products.

  2. Check to make sure the website offers a money-back guarantee. Are you satisfied with the amount of time they give you to take advantage of that guarantee?

  3. Check out the website company's street address. Make sure it is not a Post Office box. No street address, no money.

  4. Check out the website to see if they belong to any consumer watch organizations, such as the Better Business Bureau.

  5. If all the above requirements are met, and the web site company's products are not to your liking, at least you know that you can find someone there to turn to for a refund.

Protecting Your Identity While On Vacation
Summertime often means vacation time. It's a happy, fun time of year-but it's also a time when you really need to go the extra mile to protect yourself from identity theft.

Here are some common sense pointers you can follow this summer to make sure that you keep your identity your own:

  1. Never leave your purse or wallet unattended.

  2. Memorize all PIN numbers and passwords so that you don't have to carry them with you. Also, be aware of your surroundings whenever using an ATM or other PIN entry situation, so that you can avoid being taken advantage of.

  3. Don't carry extra credit cards, Social Security cards, or other identifying information that you don't immediately need in your wallet unless absolutely necessary.

  4. Don't bring frivolous documentation with you. Talk with a travel professional before you leave and find out what you will and won't need to bring with you. Only pack the paperwork that you'll definitely need.

  5. Make two photocopies of all important paper documentation and keep them in separate areas of your luggage.

  6. Before you leave, contact your post office and local newspaper (if necessary) and have your mail stopped. You don't want mail or newspapers to pile up while you're away.

  7. Keep a list of the credit cards and personal documentation you've brought with you (be sure not to list account numbers!) and store it in a safe place wherever you're staying. That way, if something goes wrong, you have a quick inventory to refer to.

  8. If you discover that some of your personal information is missing, contact the authorities, credit card companies, etc., as soon as possible.

Most of all, help yourself avoid identity theft by following your instincts. Always be aware of your surroundings and never give criminals the opportunity to take advantage of you. Follow these simple tips and you'll find that this year's family vacation will truly be a happy one!

Summer Vacation - Make Memories This Summer!
Summertime is just around the corner. Have you geared up for that all-important family vacation?

If your answer is that you don't think you have the cash to take a trip this year, think again. Our credit union offers simple vacation loans that can help you get the money you need now for that memory-making trip.To make the most of vacation savings, arm yourself with information. Call travel agencies, local tourist associations, and visit your library to pick up some travel guides that may help you determine where you can save. Another great idea is to call the Chamber of Commerce for the city you'll be visiting. They will often have special deals for meals, lodging, attraction tickets, and more to entice you during your stay.

Lastly, while you're away, reconsider purchasing armloads of souvenirs for your friends and family. Most people would be just as happy to receive a scenic postcard (under one dollar, including postage) that tells them you remembered them. Save yourself effort and cash by passing on buying t-shirts, shot glasses, and snow globes to document your stay. And, bring your own camera. That way, you won't have to spend extra money on disposables or on purchasing pricey professional photos at tourist attractions.

Whether you're going to Disneyland, Hawaii, or just a short trip to the beach or mountains, a family vacation can be the once-a-year event that you all look forward to. Spend time together, make memories, relieve stress, and do it without creating a headache about finding the cash to do it. Contact Unitus and start planning for that much-needed summer vacation today.

Make Memories This Summer!

Choosing a Summer Camp for Your Children
As any kid knows, summer's arrival means school is out. As any working parent knows, summer's arrival means a child-care (and possibly a financial) headache.

Until they enter kindergarten, children of working parents are usually in year-round day-care programs or watched by a year-round sitter. But, as soon as your child begins school, they'll want to have fun and you'll need to make sure they're well cared for while you're at work.

If you've decided on an all-day or part-time summer camp (or even a sleep-away camp), shop around carefully. Although lifelong memories and important values are solidified through the wonderful experience of summer camp, it's important to choose the right camp for your child. Before packing the duffel bag, consider the following:

  1. The staff must be excellent! Get references on the counselors your child will have. At the minimum, make sure that the camp administration has done so.

  2. The national average for staff-camper ratio is one counselor for seven campers. How does the camp you are considering compare?

  3. What are the safety standards in high-risk activities?

  4. Who are the other campers? Is your child going with friends? Do you expect her to make new friends once she arrives? Find out if all the children are from a specific geographic area because you don't want your child to feel left out.

  5. Find out what the menus are like and discuss any allergies or eating habits beforehand.

  6. Does the cost seem reasonable? Shop around and compare prices. If you think a loan might be necessary, visit a Unitus branch to see how we can help.

  7. Find out the accident/safety history of the camp.

  8. Find out if there are religious viewpoints endorsed or disagreed with at the camp.

  9. Ask about the camper return rate from last summer. That will tell you a lot about how much kids enjoyed their experience.

Does It Pay to Refinance Your Mortgage?
It seems that every time mortgage interest rates drop to an "all time low," they're destined to drop even lower. You may have refinanced several years ago and are now considering a mortgage refinance again because rates have fallen or you're afraid they're going to rise even higher. But, is it worthwhile?

Before you agree to meet with the next telemarketer who interrupts your dinner, consider the following:

  1. Amortization. In the early years of your mortgage, you pay more interest than principal. As the years go by, more of your payment is applied towards principal and less towards interest. Does going back to the beginning of a mortgage term make sense for you? Run the numbers and see what you'll save monthly, but also calculate how little the principal will decrease in the early years of a new loan.

  2. Closing costs. Based on what you'll save with the new mortgage, how long will it take you to recoup the closing costs?

  3. Points. If you paid points for a lower rate on your current mortgage, that money is lost when you refinance.

  4. How much longer are you planning to stay in the house? It's not worth the cost of refinancing if you'll be selling shortly.

All in all, the decision to refinance should be based on more factors than interest rate or monthly payment. Speak to one of our friendly home loan experts at Unitus Mortgage or click here for more information.

Financial Considerations Before Buying a Home

  1. Use a real estate agent. Attempting to purchase a home without a professional's help is not really cost-effective because when you are negotiating, you lose the buffer between you and the seller.

  2. Get a referral from a friend who was happy with her real estate agent.

  3. Anticipate your future needs. Consider buying a larger home than you need now, provided you can afford it, rather than buying now and having to look again in a few years.

  4. Buying a "handyman special" can make sense financially. Run the numbers with your mortgage specialist and see what makes sense.

  5. Don't stretch yourself to buy a home you really can't afford. If the monthly payment doesn't feel comfortable, look for another house - or wait another year or two.

  6. Keep in mind that anything financed (repairs, closing costs, points) will have to be paid for over 15-30 years. Do you really want to do that?

  7. Unitus Mortgage offers MyCommunityMortage for members who can't afford much of a down payment or don't meet typical loan requirements. Contact one of our friendly home loan specialists for all the details.

Do You Have the Wrong Mortgage?
According to Alan Greenspan, former chairman of the Federal Reserve Board, many Americans have the wrong mortgage. In a speech to credit unions, Mr. Greenspan said that "many homeowners might have saved tens of thousands of dollars had they held adjustable-rate mortgages rather than fixed-rate mortgages during the past decade."

Yet, according to a mortgage bankers' association, fixed rate loans accounted for 81% of mortgage originations in 2005. Why? Because most home buyers don't like risk, and a fixed-rate mortgage protects them from the possibility that interest rates will rise over the life of the loan.

But, as real estate prices rise, long-term loans are becoming a more expensive option. By selecting an ARM (adjustable-rate mortgage), you can cut your monthly payment drastically.

On the other hand, opting for an adjustable-rate mortgage now is essentially taking a bet that the low rates will continue. If they do, wonderful. But, if rates go up, it would mean losing out on the current, low, fixed-rate mortgages.

Call the Unitus Mortgage for a personal consultation with a mortgage professional who can help you make a decision that best suits your needs.

Mortgage Loan Fees: Are You Paying Too Much?
Although there are a host of legitimate, third-party charges that home buyers are required to pay, many fees are just creative additions to the mortgage broker's bottom line.

Standard fees include the cost of running a title search, title insurance, flood certification, home appraisal and survey, credit report, and pest inspection.

Other fees, however, are "lender fees," which means they are charged by the lender at the lender's discretion. These include mortgage processing fees, an application fee, charges for document preparation ("doc prep" fee), and "administration" fees among others.

Because it's not always clear to home buyers which charges are necessary and which are not, lenders can get away with it—usually. A 2003 survey by financial publishers Bankrate.com found total loan fees as high as $11,395. And borrowers continue to pay, often not even knowing exactly what it is they're paying for.

Until changes are made to the current fee-disclosure rules, you're on your own in trying to figure out exactly what you'll be charged for the loan before your paperwork hits the settlement table. When you get as much information up front as you can, you can help yourself avoid paying more than you should.

By law, your lender is required to honor your request for a copy of your finalized HUD-1 form which is a summary of your total loan and settlement fees. The lender must provide this to you at least 24 hours before closing.

Ask for it and, as you read through the HUD-1, compare it with the costs quoted in the Good Faith Estimate that was given to you at the time of your application. If you see any additional "administrative" charges or other questionable fees that don't appear on your Good Faith Estimate, contact the loan officer immediately and inquire about the charge.

If you really want to avoid unnecessary fees, finance your home through Unitus Mortgage. We're YOUR financial institution and we never charge more than is absolutely necessary to cover our costs.

Remodeling? How to Find a Good Contractor
If you're hiring a contractor for your home improvement project this summer, these ten tips can help ensure that your contractor measures up.

  1. Hire only licensed contractors.

  2. Check the contractor's license number through your state's contractor licensing board.

  3. Get at least three bids.

  4. Get at least three references for the contractor you choose - and be sure to contact these people so that you can review the work he's already done.

  5. Ask for a written contract and don't sign anything until you fully understand all the terms.

  6. Pay no more than 10% or $1,000 down, whichever is less.

  7. Keep records of payments and don't let payments get ahead of work.

  8. Don't make the final payment until you're satisfied with the job. Put into the contract what that means. For example, some people put into their contracts that the contractor will only receive his final payment when the work passes its final building inspection or when the local Building Department grants a Certificate of Occupancy.

  9. Never pay cash.

  10. Keep a file of all papers related to your project.

The lowest quote may not actually be the cheapest. Do your research. Ask friends, neighbors, and family for recommendations and check with your Better Business Bureau. Remember, cutting corners on a construction project can be costly in the long run in terms of later repairs or reduced resale value.

Ok, Mom, I've Saved Some Money. Now What?
If you've successfully discussed money management with your child and you feel your child is ready, consider teaching him the basics of investing. At the risk of oversimplifying an important concept, we bring you a discussion on investing that most children (aged 8 and up) should have no problem following. You can share the article with your child or prepare a discussion based on these concepts.

Say you put $1000 away in a box ten years ago. Today, it has only $600 worth of buying power, that is, the bottle of milk that cost $1.00 ten years ago costs $1.60 today.

Since the purpose of money is to buy things, we measure the value of money by how much we can buy with it. So, if you put away $1,000 ten years ago when it could have bought you more, your money has lost value.

The loss of buying power every year is called inflation. Even a small yearly inflation of 3% or 4% will eat away at any money you save. So, you have to find a way to overcome the loss caused by inflation.

A credit union will pay to use your money. If a credit union pays you 3, 4, or 5 % to use your money for a year, you will keep ahead of inflation..maybe. If inflation were 4% and you earned 4%, you broke even. If inflation were lower than the interest rate your money is earning, your money will grow.

Here's another thing: the government takes about one third of every dollar you earn in interest. This is called taxes. Between inflation and taxes, keeping money in a simple savings account is not the wisest course in the long run.

There are, however, other options that allow your money to grow at a quicker rate.

Interest Earns Interest.

This is an exciting concept. Once kids understand the magic of compound interest, their own desire to invest grows.

Say you invest $1,000 at 5%. At the end of a year, it's worth $1050. But, at the end of two years, it's worth $1,102.50. This is because the first year's interest was $50 and the second year's interest is another $50. In addition, the second year, you also earned $2.50 (5%) for the first year's interest, meaning that your interest earned interest! At the end of five years, the original $1,000 is worth $1,283.

That may not seem like a lot of money, but if you let the same $1,000 stay invested at 10% for ten years, it will be worth $2,207; at twenty years, $7,330; at thirty years $19,842; and at forty years, $53,715.

But..remember taxes? Uncle Sam trims off one out of every three dollars your money earns. So, instead of starting year two with 10% in interest, it's 10% minus one third.

To give you an idea of what that means, $1,000 invested at 12% with one third of earnings paid to taxes every year would be worth about $90,000 in thirty years. Without paying taxes, that same $1,000 would be worth approximately $190,000. That's a huge difference. If the government allowed you to pay taxes later, wouldn't that be helpful? It would mean that you could earn interest on every dollar you earn without having to worry about taxes, at least for now.

Actually, the government does have such an arrangement. It's called "tax-deferred" investing, which simply means you delay the obligation to pay taxes now. In the simplest program, you defer it to a later date. The government allows you to put away $2,000 each year without paying taxes on the earnings until years later.

You may have heard of IRAs, Keoghs, and 401(k) plans. These are ways you can shelter, or protect, your investment from taxes. At the age of 59 ½, you can use the money and pay taxes on just what you use. The difference in earnings between tax-deferred and regular taxed earnings is tremendous.

Start investing early and you give your money more time to grow. If an 18 year old puts $1,000 a year into an IRA account (at 10% interest) for 8 years, for a total of $8,000, and never puts another penny in, the original $8,000 will be worth over $500,000 when he reaches the age of 65. Start saving at the age of 40, and the numbers are not nearly as high.

But, where can you get 10% for your money? For short-term savings, a lower interest rate is fine, and a savings account at the credit union is perfect. For more long-term savings where you don't need the money and don't want to touch it until years later, you can get a higher rate of return through different investments.

You can invest in the stock market. However, unless you have a lot of time to research different stocks and become an expert, you may be better off purchasing shares of many companies managed by a team of experts. The advantage is, you will have a diversity of many companies and industries as well as experts who monitor your investment.

Owning shares of major companies is a good idea if you diversify into numerous companies and industries. It's easy to understand that you don't want to have all your stocks in, say, a company as large and as "stable" as WorldCom or Enron. Buying into many companies and leaving the work to financial experts is simple today: just invest in a mutual fund.

Many mutual funds will accept a minimum investment of $100, so it's easy for a child or teen to get started. Because all earned money is reinvested automatically, children can enjoy watching their investments grow.

There is a lot more, of course, to learn about investing. But, by giving your child a basic explanation of how money, saving, and investing work, you've given him the keys to learn more on his own and become, eventually, financially independent.

Beyond Babysitting and Lawn Mowing
Babysitting and lawn mowing are tried and true moneymakers for kids, but not every child has interests in those areas. So, if your children express interest in making money (but are not yet ready for even a part-time job), help them figure out what they're good at. That way, they'll begin exploring ways to making money that are just right for them.

Think out of the box. If your child does well in math, can she help tutor a younger child who is having trouble? If she enjoys baking, why not sell her own brand of cookies? Is your son interested in building model planes? Help him brainstorm for ways to make it profitable.

Your kids will need your help, but your time (and sometimes money) is a good investment here. Even if they make mistakes, you've taught your children to think like entrepreneurs and come up with enjoyable ways to handle money. These are both important skills that are not taught in schools, but will help them deal with the real world later on.

Talking to your Kids about Risk versus Reward in Investments
Take the time to discuss the relationship between risk and reward in investments with your children. They already know that the greater the risk is, the higher the potential payoff will be. After all, that rule exists in every aspect of life.

Explain that, although they'll most likely feel more secure with a lower risk investment, it will give them less of an opportunity to make more money.

On the other hand, tell them not to risk something they can't afford to lose. Sometimes, though, they'll have some extra money and want to try a high-risk investment. They might be hesitant, but they could also find this very rewarding. The most important thing to remember is, "never put all your eggs into one high-risk basket."

Advise your children that when something looks too good to be true, it probably is. Your best advisors are CPA's and attorneys, not the guy who's trying to sell you shares in a company that's "a sure thing."

Discussing finances with your children is important. Keep the lines of communication open so that they'll know there's always someone they can talk with and get advice from.

Spring Cleaning Your Finances
Springtime is about more than just cleaning out the attic and sprucing up your home. It's also about cleaning up and clearing out your finances as well.

Here are four ways in which you can get your financial information in tip-top shape- before you get in way over your head.

  1. Prune the credit cards. Experts say that most people only need one or two cards. For those who pay off their balances each month, it makes most sense to stick to only one card- preferably one that pays cash rewards or frequent-flier miles. Limit your spending to one card and you'll reap the rewards much quicker.

    2. For people who tend to carry over their balances, the two-card approach might work better. Use one card for purchases that can be paid in full every month. Use the second one for rolling over outstanding debt. Of course, you should try to get the lowest possible interest rate on that second card so that "what you owe doesn't grow" more than you can handle.

  2. Consolidate banking accounts. Many families have multiple bank accounts- checking, savings, CDs, money market accounts . . . You can often earn higher interest rates or qualify for loan discounts by moving all those accounts to a credit union.

  3. Cut back on the mutual funds. According to the Investment Company Institute, households that have mutual funds hold an average of seven of them. Holding so many from various sources can add up to a large expense because you're likely to be paying fees for each investment management company. Start looking at your funds and decide which of them plays which role in your portfolio. Many times, investors can clone that same strategy by investing in one to three diversified funds. And, if you look into collecting all of your funds under one roof, you might find that it saves you a significant amount of money.

  4. Merge or rollover your 401(k) accounts. If you have multiple 401(k) accounts leftover from various employers, take the opportunity to roll them over into one account or with one investment company. That way, you'll know precisely where your money is, and it will usually give you more flexibility when it comes time for withdrawals.

Beware of These Common Tax Scams!
Unfortunately, there are unscrupulous people out there who have figured out that tax season is a great time to rob hard working people of their money. Here are some of the most common tax schemes:

  • Phony Tax Payment Checks. Con artists sell you a check (that looks like a money order) to pay your tax bill. The checks are worthless, and your funds are stolen.

  • African-American Refund. This scam gets you to pay someone to prepare a tax form so that you will receive a credit related to reparations for slavery. Tens of thousands of African-Americans were cheated using this scam.

  • Offshore Transactions. Common examples are offshore credit cards, trust, and investment opportunities. The IRS now requires taxpayer's disclosure of these so-called "tax shelters."

  • Identity Theft. Thieves use tax documents to fool people into disclosing personal information. This information is then used to open credit cards and to steal your funds.

  • Pay the Tax. Then Get the Prize. You are told you have won a prize and all you have to do to collect it is to pay the tax. Remember, payments go to the IRS and not to some unknown caller.

  • Social Security Tax Scheme. These scam artists claim they can get you a refund of the Social Security payments you have made by simply paying a paperwork fee and a percentage of any refund received.

  • Phony IRS "Agent" Comes to your Home to Collect. All IRS agents carry proper ID and will normally contact you prior to any on-site visits.

Remember, if something sounds dubious, a quick call to the IRS will clarify things. Even if you're just not sure, give a call. You can also contact them via the website www.irs.gov.





Taxes: Where Do We Go from Here?
Congratulations! You've finally finished this year's tax return. But, you're wondering, are things going to get better? The answer is, probably not.

Tax rates will almost certainly rise in the years ahead - and the increases could come sooner rather than later. After all, we have a Federal budget deficit of almost $500 billion. And we have the prospect of ballooning Medicare and Social Security benefits for an increasing population of retirees as time goes by.

But, instead of just accepting this fate, consider revamping your finances today with the goal of avoiding steep tax bills later on.

In fact, higher rates are built into the tax code. Unless Congress acts, the tax breaks introduced in recent years will disappear between now and 2011. What to do? Try this strategy recommended by the Wall Street Journal.

Paying Ahead
Suppose you are in your 60s and you've just retired. You know you will have to start taking required minimum distributions from your retirement accounts at age 70½, at which point your withdrawals will be taxed at 25% and possibly more.

Here's an idea: begin drawing down your retirement accounts now, generating enough income each year to get to the top of the 15% income-tax bracket.

This type of tax management isn't just for retirees. Let's say you get laid off and you have a year with scant income and low taxes. To profit from your own misery, convert part of your individual retirement account to a Roth IRA.

Sure, you will have to pay some income taxes on the sum converted. But, in return, you will enjoy a handsome payoff in retirement when your Roth withdrawals will be tax-free.

Paying taxes is never fun. But with some thought and planning, you can keep more money than the government wants you to.





Building Wealth: Understanding IRAs
When you think of a retirement plan, what comes to mind? The most popular retirement plan is the IRA account. IRA stands for Individual Retirement Arrangement, allowing individuals (as opposed to groups of people) to arrange for their retirement. Strictly speaking, then, an IRA is not an investment, but simply money the tax code treats differently than the rest of your earnings.

It helps to think of an IRA as a bucket. Put $3,000 into that bucket, and the IRS allows you to use that money to buy investments. As long as you keep the money in the bucket for the required length of time, you won't have to pay taxes on the profits you earn. Because you paid no taxes on the growth of that money, it's referred to as tax-deferred growth.

Money that is not taxed grows quicker than money that is, so tax-deferred growth is a real benefit. The idea of an IRA is to take money that ordinarily is not sheltered from taxes and shelter it. If you keep the investment until retirement, that too becomes tax-deferred. Normally, the interest is all that's sheltered, unless you wait until retirement.

The IRS allows contributions to an IRA to shelter money from taxes up until April 15th. But the financially savvy member makes his or her IRA contribution as early in the year as possible.

Why?

With an IRA, you are saving money, not spending money. The additional interest you earn over the year can really add up. According to Ric Edelman, author of The Truth About Money, you will have $53,000 more over 30 years by opening your IRA account on January 1 instead of April 15. His calculation, however, is based on an investment that gives you a 10% return. But, even at a lower rate, you're still looking at a significant chunk of change. Put the money away NOW and reap increased benefits at retirement.

Questions? E-mail us at for additional information on IRAs and how they can affect your future.





Income Tax Basics
Income taxes, while not popular, are an important part of everyone's financial life. They can be a complicated issue that many just accept as part of the cost of living in America . While the top marginal federal income tax rate has dropped from 70% in the early 1980s to 35% in 2003, almost everyone feels they pay more in taxes than they would like.

And, it is not just Federal income taxes. Your income is also subject to state, Social Security, Medicare, and, in some cases, local or city taxes. All in all, most Americans end up paying from one-fifth to one-half of their income to some governmental body. Here are some tips to keep in mind when filing taxes:

    Be tax wise, not tax driven
    Making financial decisions based only on the income tax implications is almost always a bad idea. The key is to have an understanding of the tax implications and include them in your decision-making process.

    Tax Advantaged
    The most common form of tax advantaged investing is using the beneficial income tax rates applied to long-term capital gain. If you own stock for more than one year and sell the shares for a gain, the maximum income tax rate on that gain is 15%. This compares with the top rate of 35% on other types of regular income or on investments held for less than one year. Be sure to remember this if you are considering selling shares close to the one-year anniversary of your purchase.

    Tax Free
    The most common type of tax-free investing is the purchase of tax-free bonds issued by a municipal, state, or local government agency. The tax laws provide that most of these bonds are exempt from Federal income taxes. However, they may be subject to state or local income taxes. Be sure to ask your financial advisor about this. Because interest from these bonds is not subject to Federal tax, they often pay a lower interest rate than similar bonds that are taxable. Compare your after-tax returns to make sure tax-free bonds are the right investment vehicle for you.

    Tax Deferred
    Another less well-known, but very powerful, tax reduction strategy is to position your funds so that any tax on earnings is deferred until later. This results in your ability to continue to earn returns on money that would have otherwise been paid in taxes. With a tax-deferral strategy, you still have to pay the tax some day, but you control when that day is.

    Two of the most common ways to take advantage of income tax deferral are through the use of Individual Retirement Accounts and certain insurance contracts called annuities. Below is an example that demonstrates this point with an IRA.

    Example
    Megan is 30 years old and wishes to save for retirement. In this example, her combined Federal and state income tax rates are 33% (28% for federal and 5% for state income taxes). She is evaluating the benefits of $2000 annual contributions to a "regular" IRA compared to simply saving $2000 each year in a credit union savings account.

    In this example, let's ignore any aspects of deductibility of her IRA contributions and assume the same earnings rate of 6% for the IRA and the bank account. For the IRA option, there are no taxes due annually, but they must be paid when money is withdrawn. For the bank account option, income taxes are paid annually which reduces her after tax return to 4%. The example assumes the additions to the IRA and the savings account take place at the end of the year.

    The key question is how much money Megan will have at age 60 after all taxes are taken into account.

    Year Total Contributions IRA Value Savings Account Value
    1 $2,000 $2,000 $2,000
    2 $4,000 $4,120 $4,080
    3 $6,000 $6,492 $6,244
    4 $8,000 $9,012 $8,494
    5 $10,000 $11,734 $10,832
    10 $20,000 $28,974 $24,012
    15 $30,000 $54,304 $40,048
    20 $40,000 $91,524 $59,556
    30 $60,000 $226,566 $112,170
    Taxes Due $-66,266 None
    Net After Tax   $159,940 $112,170
    Funds      

    As the chart shows, Megan will be almost $60,000 ahead by deferring taxes with the IRA option. However, what happens if Megan is in a higher income tax bracket in year 30 when she takes out the money? If Megan's tax bracket increases to the top Federal bracket of 35% and her state rate is 5%, she would pay taxes of $66,626. This would still leave her with $159,940, or almost $48,000 further ahead.

The results of increasing the contributions to $3000 or earning more than 6% would demonstrate even further how an IRA can be a preferred investment vehicle. Tax deferral is a very powerful wealth building tool.