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Carefully check Medicare drug coverage

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WASHINGTON (11/30/11)--You may already know that Medicare's 2012 basic monthly Part B premium for outpatient care will rise only slightly for most recipients--about $3.50--and premiums for prescription drug plans, known as Part D, will not change. But a new study brings distressing news: Co-pay increases for preferred brand-name drugs will average 40% in 2012 (Associated Press Nov. 17).

It's not much better for nonpreferred and specialty brands. Those co-pays will see an average increase of 30% to 32% in 2012.

The study, by Avalere, a Washington, D.C., data analysis firm that serves industry and government, reinforces the importance of carefully checking your prescription coverage before open enrollment ends Dec. 7, 2011.

As you compare your current plan with what is offered for 2012:

  • Don't just look at premiums. Plans with the lowest monthly premiums may leave you with the most expensive co-pays for the drugs you take.
  • Make sure your drugs are covered. While last year's plan may have covered your prescription drugs, don't assume that this year's plan will.
  • Keep your eyes on the donut hole. Depending on how the plan you choose negotiates retail drug prices, you could reach this phase earlier or later than someone else on the same prescriptions. AARP has a free, online calculator that can help you avoid falling into the coverage gap. To access the calculator and information about how to use it, type "AARP donut hole calculator" in your browser bar and click "enter."
The donut-hole phase begins when the total retail cost of your covered drugs--not just what you spend on co-pays--reaches $2,930. After you hit that number, you pay a percentage of those costs. Before the health care reform law of 2010, it was 100%. In 2012 it's 50% on all brand-name and biologic drugs and 86% on generics and Part D-covered supplies used to administer insulin.Your donut hole costs will decrease every year until 2020, when you will only have to pay 25% of the cost of any drug in the gap.

And for more information about that Dec. 7 enrollment deadline, read "Medicare NOW: Enroll or Switch" in the Home & Family Finance Resource Center.

Make the most of Cyber Monday

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NORTH PALM BEACH, Fla. (11/28/11)--Nice to know you didn't miss out on all the bargains by sleeping in on Black Friday. You can garner the benefits of early shopping by hitting the keyboard on Cyber Monday (bankrate.com Nov. 18).

Online-only retailers especially pull out all the stops for this peak shopping day. Last year, online shoppers spent $1.028 billion on Cyber Monday, the heaviest online shopping day to date.

Employ these tactics to make the most of this holiday shopping spree:

  • Make a list. The old rules apply, new technology notwithstanding. Your list includes not only items you want to check out, at what prices, and for which recipients. It also should include an inventory of what you already have on hand so you don't end up spending needlessly.
  • Use the Web for research before you spend. Check for online reviews from other consumers, available bargains on price and shipping, and retailer coupon codes--all tools that help you get the best products at the best prices. Some useful sites include CouponWinner.com, CyberMonday.com and bargain message boards like Slickdeals.net and FatWallet.com.
  • Look for return rules. A bargain will backfire if you can't return or exchange it without hassle or expense, say, for return shipping or restocking fees.
  • Rein it in. The lure of great prices and the threat of sellouts can trigger spending more than you planned.
  • Curb the "one for you--and one for me" shopping impulse. If you're shopping for yourself, be mindful of keeping it within your overall spending plan.
  • Use your credit card. Credit cards give you protection in dealing with merchants, which can come in handy later if things go awry.
  • Confirm that you're on a secure site. Look for the "s" for secure in the Web address: https (ftc.gov Nov. 1).
For more information, read Create a Spending Plan for a Special Holiday in the Home & Family Finance Resource Center.

Financial fix-ups food prices on HandFF Radio

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WASHINGTON (11/23/11)—Sunday's H&FF Radio program discusses financial fix-ups, food prices, saving strategies, and identity theft protection for kids.

This is a rebroadcast of an earlier H&FF Radio program.

The show, which you also can hear post-broadcast via the Internet, features Paul Berry, Washington, D.C., journalist and broadcaster, discussing these topics with special guests:

  • "The 3 Worst Things We Do to Sabotage Ourselves Financially and What We Can Do to Fix It." Pam Krueger, executive producer and host of "MoneyTrack," and board member for the Jump$tart Coalition for Personal Financial Literacy, San Francisco, covers solutions for common savings mistakes.
  • "Food Prices: Why Do They Keep Increasing?" Phil Lempert, food-industry analyst known as the Supermarket Guru and host of "Food Sense," Santa Monica, Calif., lists factors affecting food prices.
  • "The Cost of Skipping Vacations." Susan Tiffany, certified credit union financial counselor and director of consumer periodicals, Credit Union National Association (CUNA), Madison, Wis., explores the unacknowledged cost of saving money by forgoing a vacation.
  • "How to Protect Your Child's Identity: 7 Tips for Parents." Adam Levin, founder and chairman, Identity Theft 911, Scottsdale, Ariz., highlights steps parents can take to prevent theft of a child's identity.
 

Home & Family Finance is a resource center for personal finance information at CUNA.  The radio show is sponsored by CO-OP Network, the national credit union ATM network; Cabot Creamery Cooperative, maker of award-winning cheddar; and the Defense Credit Union Council and member credit unions, serving those who serve the country worldwide.

Home & Family Finance airs Sundays at 3 p.m. (ET) on the Radio America Network. The show also is carried on American Forces Radio Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 90 million members, and is presented by CO-OP Network.

CUNA and Radio America are podcasting Home & Family Finance through iTunes, Podcast Alley, Odeo, and other popular podcast library sites, as well as on Radio America's and CUNA's websites.

For more information, read "Vacation Means Re-Creation" and watch the "How to Prevent Identity Theft" video in the Home & Family Finance Resource Center.

Charities anticipate holiday giving

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SACRAMENTO, Calif. (11/21/11 )--Children and retailers aren't the only ones eagerly anticipating the holidays. Charitable organizations have their hopes set on a big return for the fast-approaching 2011 holiday season.

And for good reason. A recent study commissioned by Harris Interactive reports that 51% of Americans are more likely to give a charitable gift, despite planning to spend less on holiday presents this year. The report also found that 80% of adults prefer to receive gifts that help others else instead of a traditional holiday gift (SacBee.com Nov. 14)

Whether you plan to give charitable gifts or simply to donate to your favorite organization during the holidays, it's especially important in today's economy to make sure your charitable dollars have the greatest impact. Here are a few suggestions:

  • Distinguish your dollars. Focus on organizations you or your loved ones care about most. While all charities appreciate your support, concentrating on one organization allows your donation or purchase to have a greater impact.
  • Curb administrative costs. Organizations typically collect a percentage of cash donations or gift purchases for administrative costs. Find out how much of what you give will actually go to your intended cause by contacting the charity or researching it online. The Better Business Bureau has an excellent online resource at bbb.org/charity.
  • Think cash instead of cans. Dollars go further than already purchased goods. Food banks are able to leverage relationships within the community to buy more with a cash donation than you can at your local grocery store. Consider donating the amount you would have spent in lieu of buying items to donate.
For related information, read "Smart Spending Puts Holiday Shoppers in Control of Cart" in the Home & Family Finance Resource Center.

iHandFF Radioi spotlights holiday hyperspeed shopping

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WASHINGTON (11/18/11)--Sunday's Home & Family Finance Radio program covers holiday "hyperspeed" shopping, the return of layaway, money personalities, and elder financial abuse.

The show, which you also can hear later via the Internet, features Paul Berry, Washington, D.C., journalist and broadcaster, discussing these topics with special guests:

  • "Shopping at Hyperspeed." Britt Beemer, chairman and founder, America's Research Group, Summerville, S.C., explains why holiday shoppers will be in "hyperspeed" mode on Black Friday.
  • "Layaway Makes a Comeback." Michelle Dosher, managing editor, Credit Union National Association (CUNA), Madison, Wis., discusses the resurgence of layaway plans at many stores.
  • "Your Money Personality." Dr. Kathleen Gurney, founder and CEO of Financial Psychology Corp., Sarasota, Fla., and author, "Your Money Personality: What It Is and How You Can Profit From It," shares what you can learn from understanding your financial habits.
  • "Shedding Light on Elder Abuse." Robert Blancato, national coordinator, Elder Justice Coalition, Washington, D.C., highlights warning signs of elder abuse and strategies to prevent it.
 

Home & Family Finance is a resource center for personal finance information at CUNA. The radio show is sponsored by CO-OP Network, the national credit union ATM network; Cabot Creamery Cooperative, maker of award-winning cheddar; and the Defense Credit Union Council and member credit unions, serving those who serve the country worldwide.

Home & Family Finance airs Sundays at 3 p.m. ET on the Radio America Network. The show also is carried on American Forces Radio Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 90 million members, and is presented by CO-OP Network.

CUNA and Radio America are podcasting Home & Family Finance through iTunes, Podcast Alley, Odeo, and other popular podcast library sites, as well as on Radio America and CUNA's websites.

For more information, read "Create a Spending Plan for a Special Holiday" and "Identify Signs of Elder Financial Abuse" in the Home & Family Finance Resource Center.

New rules tools help cash-strapped college borrowers

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NEW YORK (11/16/11)--Recent student loan repayment rule changes will ease the burden of skyrocketing tuition for millions of borrowers, but read the fine print: Not everyone qualifies (The New York Times Nov. 2).

College students who graduated in 2010 faced a double-whammy: the highest average debt on record ($25,250, up 5% from the previous year), and the highest unemployment level (9.1%) for new college graduates in recent history (The Project on Student Debt Nov. 3).

To speed up relief for struggling borrowers, President Barack Obama announced the new "Pay as You Earn" proposal on Oct. 25 that will allow about 1.6 million current students to cap loan payments at 10%, down from 15%, of discretionary income starting as early as 2012. The plan also allows loan forgiveness after 20, rather than 25, years of responsible payments.

Starting in January  an estimated six million students and recent graduates will be able to consolidate their federal student loans into a single Direct Consolidation Loan, with an interest rate reduction of up to 0.5%, potentially reducing the monthly payment by hundreds of dollars.

Despite clear objectives, the plan has raised a lot of questions. Understand the finer details of the loan consolidation changes:

  • Borrower eligibility: You must have at least one loan owned by the Department of Education and at least one commercially held Federal Family Education Loan (FFEL). The new plan only affects new borrowers--federal student loan borrowers who are new since 2008 with at least one loan that originated in 2012 or later. You're not eligible if you have loans from 2007 or earlier, or if at least one loan is not from 2012. This includes those who graduated in 2011 or earlier.
  • Loan eligibility: Federal loans eligible for the special consolidation program include FFEL Subsidized and Unsubsidized Stafford Loans, FFEL PLUS Loans, and FFEL Consolidation Loans. Loans must be in grace, repayment, deferment, or forbearance status. Perkins Loans, private student loans and many federal loans for people entering health professions are not eligible. Also, you are not eligible if you consolidate your loans into a traditional Direct Consolidation Loan before Special Consolidation Loans are available.
  • Limit: There's no limit to the number of federal loans you can consolidate.
  • Default: If you're in default on the loans, you're not eligible to consolidate.
  • Time frame: To qualify for the Special Direct Consolidation Loan, you must consolidate between Jan. 1, 2012 and June 30, 2012.
  • Wait: Even if you think you're eligible, it's critical that you don't take any action now. Eligible borrowers will be contacted by their federal loan servicer early next year with information about how to consolidate. For more information, visit studentaid.ed.gov/specialconsolidation.
Two additional components of the plan include changes to the Income Based Repayment (IBR) plan, which lowers the payment cap to 10% of the borrower's discretionary income and allows forgiveness on remaining loan balances after 20 years:

  • Take advantage: More than 36 million Americans have federal student loan debt, but fewer than 450,000 participate in IBR. Eligibility is based on income and family size. Visit studentaid.ed.gov/ibr or IBRinfo.org to determine if IBR is right for you.
  • Weigh your options: If you work in a lower-income position that qualifies you for public service loan forgiveness after just 10 years, consolidating to a 20-year loan doesn't make sense.
  • Remember dates: The new IBR terms don't go into effect until July 1, 2012, in contrast to the consolidation timeframe that ends June 30, 2012.
Take advantage of websites and tools. Visit studentaid.ed.gov and click Special Direct Consolidation Loans, or call 800-4-FED-AID (800-433-3243). Check out the financial aid shopping sheet at consumerfinance.gov/students/knowbeforeyouowe/. And visit consumerfinance.gov/students/repay/ to use the Student Debt Repayment Assistant.

For more information, use "Calculator: What Will It Take to Save for a College Education?" in the Home & Family Finance Resource Center.

Pay those fines or credit score suffers

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WASHINGTON (11/14/11)--Maybe you ignored a speeding ticket you got while traveling because you figured you wouldn't be back in the area soon enough for it to matter. Or maybe you simply forgot about that pesky parking ticket you got while downtown. Whatever the situation, you'd be adding to the millions of dollars in unpaid tickets that municipalities deal with every year.

Now an increasing number of cities are trying a new tactic to get violators to pay up--and if those drivers don't, their credit scores could take a major dent (TIME Nov. 3).

Many cities are sending unpaid traffic and parking tickets straight to collection agencies. If you continue to ignore a ticket once it's in a collection agency's hands, you could lose serious points from your credit score.

And a minor ticket can affect your score as much as more serious types of debt. "For scoring purposes, the credit formula doesn't make a distinction between a $25 parking ticket you got when your meter expired and an outstanding credit card debt of $25,000," according to the TIME article.

This could mean higher rates or flat-out rejection the next time you need an auto, mortgage, or other type of loan--even if your credit was formerly spotless.

"Someone with a 680 score could lose roughly 50 points from the addition of a collection of this nature," said Fair Isaac Corp. spokesperson Barry Paperno in a recent Washington Post article (Oct. 31). "For someone with a 780 score--very, very good credit--the appearance of one of these collections could lower their score by as much as 105 to 125 points."

So far, a number of large cities and their suburbs have adopted this practice. New York went this route in 2010, in an attempt to collect on $700 million in parking tickets alone. Suburbs of Washington, D.C.,  and Chicago have followed suit.

The best way to protect your credit score? Don't write off those tickets. Even if you think you can get away with not paying them, the consequences for your credit score could be much more costly in the long run.

However, if an unpaid ticket does hurt your score, you can take steps to build it back up again. To learn more, watch the "Build Your Best Credit Score" video in the Home & Family Finance Resource Center.

Find the real best deal this holiday season

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McLEAN, Va. (11/9/11)--Consumers hungry for some holiday shopping will have no problem finding bargains this year. Add a coupon to a rock-bottom price and get an even better deal. Web searches using coupon-related terms were up 119% at the end of October compared with the same time last year (USAToday.com Nov. 2).

And despite economic uncertainty, Americans are spending--consumer spending rose 0.6% last month--and saving at the lowest level since the start of the Great Recession, according to the Commerce Department (USAToday.com Oct. 28).

With retailers touting more than 10,000 deals online daily, it's hard to know if you're getting the best deal. Here's how to comparison shop wisely:

  • Ask for a price match. Many large retailers will offer to match the price of other retailers. You'll generally need to show proof of the other store's price, so carry the ad circular with you or bookmark the ad on your smartphone and have it available to show a clerk.
  • Use online coupon codes. Try RetailMeNot to search for codes that haven't expired.
  • Check several stores or websites before making a final decision. Check sites PriceGrabber and Shopzilla--you'll get a more realistic range of prices on products than the multiple items you'll get just conducting a Google Product Search. Be aware, though, that these sites typically offer prices only for retailers with whom they have contracts. Consumersearch.com combs all the review sites and summarizes the legit ones.
  • Use sites that aggregate all available deals. For example, computers and staff members for sites like bradsdeals and dealnews choose reputable retailers and best prices on popular products.
  • Don't buy something just because it's a good price. Some retailers offer deals on low-quality merchandise and unknown brands. Make sure you're getting a quality item before you fall for a "good" deal. Consumerreports.org can help you find the most for your money.
  • Be wary of model numbers. One large retailer in particular has been known to use its own model numbers for the same brand TVs sold at other stores. You won't be able to find a better price when you try to comparison shop because this retailer is the only one with the unique model number.
 

For more advice about how to get the best deal when shopping, read "Shop by the Rules With Coupons" in the Home & Family Finance Resource Center.

Speak up to reduce healthcare costs

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SUNNYVALE, Calif. (11/7/11)--Open enrollment season this year will see more workers  facing higher out-of-pocket costs after updating their health insurance plans (FinanciallyFit.Yahoo.com Oct. 31). Employee-sponsored plans are expected to jump 9% from 2010 levels, to $4,129 for families and $921 for singles, according to a recent study from The Kaiser Family Foundation (kff.org Sep. 27).

You might not be able to control health insurance premium increases, but you can ease your overall health care expenses. Consider these moves to offset the anticipated premium increases:

  • Tell your doctor. Make sure your doctor knows you're trying to reduce these expenses before you schedule treatments or walk out with a prescription. The physician might prescribe generic medications, alternative treatments, or work with you to schedule appointments in a way that takes advantage of when insurance allowances renew.
  • Ask for samples. Many doctors and some pharmacies often have samples of products and health care items. Be sure to ask for samples related to your treatment during your next visit.
  •  Go generic. Buying generic medications and finding pharmacies with special pricing options for some medications will help reduce annual health-related expenses. Worried about the effectiveness of generics? Doctors say generic medications are just as effective as brand-name medications because they use the same active ingredients and manufacturing specifications.
For related information, read "Health-Care Reform Changes Flex-Spending Reimbursement Rules" in the Home & Family Finance Resource Center.

New financial tools credit rules on IHandFF RadioI

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WASHINGTON (11/4/11)--Sunday's Home & Family Finance Radio program discusses working mothers, aging, new financial tools for consumers and credit management.

The show, which you also can hear later via the Internet, features Paul Berry, Washington, D.C., journalist and broadcaster, discussing these topics with special guests:

  • "Working Mothers." Jennifer Owens, editorial director, Working Mother magazine, New York, shares results of a new study that reveal how working mothers believe they are viewed and what this means for employers and spouses.
  • "Myths About Aging." Laura L. Carstensen, professor of psychology at Stanford University in California and author of "A Long Bright Future, Happiness, Health, and Financial Security in an Age of Increased Longevity," clears up myths about growing older.
  • "My Money Checkup." Gail Cunningham, vice president of communications, National Foundation for Credit Counseling, Washington, D.C., discusses a new money management tool that is free for consumers to use.
  • "New Rules for Credit." Steve Bucci, financial expert and author of "Credit Management Kit for Dummies Updated for Today's Financial Landscape," Narragansett, R.I., discusses new federal rules and explains why people with high credit scores are being turned down for credit cards and loans.
Home & Family Finance is a resource center for personal finance information at CUNA. The radio show is sponsored by CO-OP Network, the national credit union ATM network; Cabot Creamery Cooperative, maker of award-winning cheddar; and the Defense Credit Union Council and member credit unions, serving those who serve the country worldwide.

Home & Family Finance airs Sundays at 3 p.m. ET on the Radio America Network. The show also is carried on American Forces Radio Network. The one-hour program devoted to consumer finance issues is brought to you by America's credit unions and their 90 million members, and is presented by CO-OP Network.

CUNA and Radio America are podcasting Home & Family Finance through iTunes, Podcast Alley, Odeo, and other popular podcast library sites, as well as on Radio America and CUNA's websites.

For more information, read "Stay-at-Home Spouses Face Credit Restrictions," watch the "Build Your Best Credit Score" video, and use the "Budget Blueprint" calculator in the Home & Family Finance Resource Center.

Resource Links

Back to the future Layaway plans resurge

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SYRACUSE, N.Y. (11/2/11)--Consumers pondering how to pay for items this holiday season, but without accumulating debt, are turning to an old standby--store layaway programs (YNN Oct. 22).

Many large retailers are either starting layaway programs or expanding existing ones, while marketing them hard to consumers who are strapped for cash or credit (The Press Enterprise Oct. 22).

Layaway lets you get the things you want by putting them on hold and paying for them over time. Once you pay off the balance, you get to take your purchases home. Toys, electronics, and apparel are the most popular layaway items, but some consumers use layaway for whatever they need. The best thing about the programs? You've paid in full and haven't racked up credit card charges.

But before you slap money on the table and reserve those things you just can't live without, understand how layaway programs work. Consider:

  • Your budget--Before deciding to use layaway, know the payment schedule and read the fine print. Be realistic about how layaway payments fit into your spending plan and what you really can afford. A good guide: Make sure the fees are less than 10% of the value of the item you're buying.
  • How you deal with credit cards--If you pay off your credit card balance each month there's no reason to use layaway. You'd be out money once you pay the layaway service fees.
  • Policies and fees--Understand the layaway policy, including time between payments and schedule of payments, late fee policies, refund and exchange policies, and what happens if a product is damaged while on layaway. Many layaway programs include service fees. Some programs have minimum purchase requirements and down payments of 10% to 25% of the purchase price. Cancellation fees can be as high as $35. You'll usually have 60  to 90 days to pay off your balance, sometimes longer. Staple a copy of the store's layaway policy and your payment records to the original store receipt.
  • Item availability--Layaway purchases are appealing for hot, hard-to-find items and limited editions.
  • Store reputation--Until you pay off the items in full, the store has your money and your merchandise. If the store goes out of business, you'll lose both. Know the business you're dealing with and shop only at reputable stores.
 

If you prefer to shop online, don't worry. Several retailers offer layaway services through eLayaway.com. You'll pay a 1.9% fee for every $100 worth of merchandise, and pay a $25 fee if you cancel your purchase.

For more ideas about controlling holiday spending, read "Smart Spending Puts Holiday Shoppers in Control of Cart" in the Home & Family Finance Resource Center.