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Declining home values already impacting teenagers

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MADISON, Wis. (12/31/08)--The recent drop in home values has ripple effects beyond homeowners. The economic crisis also affects teenagers, according to youth educators at the Credit Union National Association. “Teenagers are already affected by the seismic ripple that flows from the plunge in home values,” says Rena Crispin, managing editor, Googolplex. And as painful as it’s been, it could get worse. Although home values nationally have dropped an average of 19% from their peak in 2000, they still haven’t reached their traditional relationship to household income, according to a USA TODAY analysis of home prices since 1950. Recent analyses from that same source indicate home prices still would have to fall another 17%. How does this affect teenagers?
* Tight job market with a lot of competition; * Scarcity of student loans and grants; * Clamped-down car loans; and * Increased cost of living.
If home values drop to their 1950s’ relationship to income (three times income), "we'll need another bailout of banks similar to what we just did," says Susan Wachter, professor of real estate at the University of Pennsylvania. Include teenagers in your serious talks about finances. They are mature enough to anticipate and solve financial problems. Let them know that home prices will affect them and provide the reasons. Here’s how you can help them survive:
* Re-visit the discussion about your student’s career path as well as a supportive part-time job while in high school. * Weigh the advantages and disadvantages of enrolling in advanced placement (AP) classes. AP classes can save hundreds because they allow students to apply test scores toward college credit. “The catch is that if the student doesn’t attain a high enough score, there will be no credit awarded,” says Bridget Widdowson, sophomore at Robert E. Cook Honors College at the Indiana University of Pennsylvania. * Encourage your high school student to take a money management class either at school or through your credit union, and get armed with sound financial information. * Help your student create a savings plan for a used car. Find out how your credit union can help. * Re-evaluate college choices and costs--consider junior colleges, work colleges and technical schools. * Research scholarship opportunities and brainstorm new solutions for paying for college. Widdowson advises you “start at fastweb.com and broaden your base with more unconventional scholarship searches.” * Consider enrolling in an apprenticeship program while in high school. Widdowson says that if the goal is to enter the job market after graduation, getting students involved in apprenticeship programs is essential.

Coupon clipping pays off

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NORTH PALM BEACH, Fla. (12/29/08)--The recent spike in food prices has triggered an increase in coupon use, and Steven Boal, founder/ CEO of Coupons.com, estimates savings can be as much as $150 to $200 a month (Bankrate.comDec. 5). That savings can be a significant boost for a family trying to make ends meet in today’s economy. Using coupons can help control costs at the grocery store--all you need is access to the internet, a printer, or the weekly newspaper. That’s reason enough to start clipping and use the money you save for other expenses or for a slightly higher contribution to your company-sponsored retirement plan. According to a poll conducted by the Consumer Reports National Research Center for ShopSmart magazine, the average female grocery shopper spends approximately $116 a week, or over $6,000 per year (ConsumerReports.org March ). To counteract the effects of higher food prices, trim your grocery bill by clipping coupons:
* Take a risk. Instead of buying the same thing every week, use a coupon to try a new product at a lower price. Store-brand items can be half the price and just as good as name-brand products. But if the coupon is for a more expensive name-brand product, you may not experience any savings with a coupon if the price already is high. * Be loyal. Shop at stores that offer a loyalty card--a reusable electronic coupon you swipe at the register. These cards offer savings on hundreds of items every week on both name-brand and store-brand options. You may be able to save even more by combining loyalty card offers with manufacturer’s coupons. * Go double. Call local stores and ask if they have double coupon days. Check the rules to see if your 50-cent coupon may be worth a dollar. It may pay to switch your shopping day to take advantage of the coupon deals. • Go online. Get manufacturer’s coupons from the Web. Sites such as SmartSource.com, Coupons.com and CoolSavings.com are just a few. Use your search engine to find coupons for specific items. * Check for weekly deals. If you shop at a regional grocery chain, check the Web site for special offers. Although you can get coupons from newspapers and magazines, many retailers are economizing by going electronic with their circulars. * Stock up. Use coupons to fill your cupboards--especially when you can get 50% or more off the regular price. If you have cupboard and freezer space, buy the maximum amount the coupon allows, but only if you actually will use perishables before the expiration date. If you have storage space, buy paper products, cleaning supplies and items with a long shelf life.
For more information, read, Tough Times Series: Gouged by Groceries” in Home & Family Finance Resource Center.

HandFF Radio Tips to put your financial house in order

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WASHINGTON (12/26/08)--Wondering how to deal with the post-holiday credit card hangover? This week’s H&FF Radio show includes a guest who has valuable tips to help you get your personal finances organized in 2009 and beyond. Home & Family Finance airs Sundays at 3 p.m. EST 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. The Credit Union National Association (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. Sunday’s 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:
* “How to Be the Family CFO: 4 Simple Steps to Put Your Financial House in Order,” with Kim Snider, CEO of Snider Advisors and author of “How to Be the Family CFO: 4 Simple Steps to Put Your Financial House in Order,” Dallas, Texas; * “The Truth About Identity Theft: Why Be Me When I Can Be You?” with Jim Stickley, founder, vice president of engineering and chief technology officer, TraceSecurity, San Diego, Calif., and author of “The Truth About Identity Theft: Why Be Me When I Can Be You?”; * “Coupon Comeback—Saving You $$,” with Steven Gray, chief operating officer, Money Mailer, Garden Grove, Calif.; and * Listener Q&A.
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; Western Corporate FCU, also known as WesCorp, and its member credit unions; and the Defense Credit Union Council and member credit unions, serving those who serve our country worldwide. For more information, read “Sending Out an SOS--Finding Help for the Small-Business Owner” in Home & Family Finance Resource Center.

Return policies more lenient this holiday

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BOSTON (12/22/08)--Good news for shoppers: Expect the majority of stores this holiday season to implement more lenient return policies, making for happier returns (ConsumerWorld.org Dec. 15). Reversing a trend of more restrictive policies in recent years, some stores this year have reduced restocking fees and extended deadlines for returns, according to results from the ConsumerWorld.org annual return policy survey. That’s not the case for all stores; some retailers continue using shortened return periods, or no refunds at all, so it pays to ask before you pull out your wallet. And many stores require stricter return policies for electronics than for, say, clothing--referred to as a tiered return policy. To increase your chances of experiencing a no-hassle return in the coming weeks, follow guidelines from the National Retail Federation:
* Ask about returns before you buy. If the policy is not prominently displayed, ask a sales associate or manager to explain it to you. * Save all receipts. Don’t expect retailers to exchange merchandise without a receipt. Without one, your request to return an item may be denied, or you may be given credit for the lowest price the item was sold for during the holiday season. * Ask for gift receipts. Include the gift receipt in the wrapped gift making it easier for recipients to do their own exchange. * Give gifts in original packaging, with tags. Resist the urge to open a sealed package or play with the item. * Know the return policy for online purchases. Ask who pays for shipping the return, where you make the return, and whether there’s a service center that handles returns.
For more information, read “What Happens to Unused Gift Card Cash?” in Home & Family Finance Resource Center.

ID theft expert Why be me when I can be you

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WASHINGTON (12/19/08)--This week’s H&FF Radio show features a security expert who explains how--and why--identity thieves continue to find new and improved ways of stealing your identity. Home & Family Finance airs Sundays at 3 p.m. EST 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. The Credit Union National Association (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. Sunday’s 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:
* “How to Be the Family CFO: 4 Simple Steps to Put Your Financial House in Order,” with Kim Snider, CEO of Snider Advisors and author of “How to Be the Family CFO: 4 Simple Steps to Put Your Financial House in Order,” Dallas, Texas; * “The Truth About Identity Theft: Why Be Me When I Can Be You?” with Jim Stickley, founder, vice president of engineering and chief technology officer, Trace Security, San Diego, Calif., and author of “The Truth About Identity Theft: Why Be Me When I Can Be You?”; * “Coupon Comeback--Saving You $$,” with Steven Gray, chief operating officer, Money Mailer, Garden Grove, Calif.; and * Listener Q&A.
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; Western Corporate FCU, and its member credit unions, also known as WesCorp; and the Defense Credit Union Council, and member credit unions, serving those who serve our country worldwide. For more information, read “Sending Out an S.O.S.--Finding Help for the Small-Business Owner” in Home & Family Finance Resource Center.

Year-end tax planning with some twists

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NEW YORK (12/17/08)--Although many time-honored tax planning strategies still work for many people, this year may be a bit trickier because of recent stock market woes (The Wall Street Journal Dec. 3). It’s estimated that there have been more than 500 changes to the Internal Revenue Code this year, and it’s possible another economic stimulus package may contain even more. But that’s not a reason to procrastinate--some advice may be worth heeding sooner rather than later. Visit with your financial and tax professionals about the implications of these actions:
* Consider taking the standard deduction. A new tax law stipulates that even if you claim the standard deduction for 2008, you can take an additional amount to reflect real-estate taxes. This means that some people who itemized in the past may be better off taking the standard deduction, depending on their situation. If you choose this route, you also may be better off deferring charitable donations and state and local taxes into next year, when you might again choose to itemize. * Watch out for AMT. If you’re trapped by the alternative minimum tax (ATM), this may be another situation in which you’re better off not prepaying your state and local taxes due in early 2009. * Dump losers. If some of your investments suffered significant losses, consider getting rid of them before December 31. Those losses may turn into valuable tax savings. * Put excess RMD into IRA. If you’re receiving distributions from your qualified retirement plan, consider rolling over the entire balance—or your distributions in excess of any required minimum distribution (RMD)—into an individual retirement account (Meridian Star Nov. 23). To avoid paying taxes on those distributions, though, you must do this as custodian to custodian, or within 60 days, and there may be restrictions or limitations. Speak with a financial adviser to see if this strategy is right for you. * Gift without the gift tax. This year, you can give up to $12,000 (per donor, per recipient) without triggering gift taxes. Next year, the gift tax exclusion increases to $13,000. * Set aside college funds. Take advantage of a law that lets you give a single contribution—covering five years—to a 529 college savings plan. For example, you can give a maximum of $60,000—or five years of gifting—per recipient tax-free in one year. * Hire a good accountant. The money you save by hiring a smart professional likely will be more than the price you pay for tax preparation. And you’re likely to be that much further ahead for next year.
For more information, listen to, “Choosing Your Tax Preparer and Volunteer Income Tax Assistance Program (VITA)” in Home & Family Finance Resource Center.

Teach your little ones about holiday gift giving

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MADISON, Wis. (12/15/08)--Even in good economic times, holiday gift-giving can be a bust-the-budget enterprise. Year-end holidays often encourage runaway expectations that bring out the worst in all of us. And what we do, our children mimic, often for a lifetime. Turn your holidays into a fun learning experience for your child by showing what makes a gift special—not its price tag, but its meaning. Philip Heckman, director of youth programs at Credit Union National Association, Madison, Wis., offers these tips:
* Help your child make gifts that don’t cost money. Thrive by 5 (creditunion.coop, click Thrive by 5 logo) is a free website for parents who want to teach their preschoolers about spending (or not spending) and saving. One of the activities contains ideas for no-cost gifts suitable for young children to make. * Establish inexpensive holiday traditions that involve your child. Decorating, baking, and visiting special people can result in feelings and memories that last far longer than the latest hot toys. * Spend quiet time alone with your child. Nothing is more precious than the gift of time, says Heckman. Regularly schedule a few minutes before bedtime for you to sit together with your child. Read, sing, and tell stories about your childhood, bringing your fondest holiday memories to life in another generation.

Radio Manage money during financial crisis holidays

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WASHINGTON (12/12/08)--With the holidays fast approaching, it’s crunch time for shopping and planning. H&FF Radio guests weigh in on gift card do’s and don’ts, creating positive and affordable holiday memories, and how to manage finances during the current economic crisis. Home & Family Finance airs Sundays at 3 p.m. EST 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. The Credit Union National Association (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. Sunday’s 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:
* “Creating Holiday Memories,” with Alisa Cohn, executive coach and consultant, Brookline, Mass.; * “Managing Personal Finances During a Crisis,” with John Ulzheimer, president, Credit.com Educational Services, New York; * “Fresh Money Management Ideas From the Editors of Home & Family Finance,” with Susan Tiffany, director of personal finance information for adults, CUNA, Madison, Wis.; * “Gift Cards or Gift Horse?” with Anthony Giorgianni, associate editor, Consumer Reports, Yonkers, N.Y.; and * Listener Q&A.
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; Visa; and Western Corporate FCU and its member credit unions. For more information, read “What Happens to Unused Gift Card Cash?” in Home & Family Finance Resource Center.

Women on their own face greater financial challenges

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WASHINGTON (12/10/08)--Women who are single, separated, or divorced face far greater financial challenges than other Americans, including a substantial income gap and an even greater wealth gap compared with all households. The Washington, D.C.-based Consumer Federation of America (CFA) analysis was released last week. Researchers used the most recent data collected by the Federal Reserve Board’s Survey of Consumer Finances to compare all households with households headed only by a woman. The differences were striking:
* Median net worth of women on their own was $32,850, compared with $93,001 for all households; * The typical (median) household income of women on their own was $22,592, compared with $43,130 for all households; * Only one out of three women on their own saves regularly, compared with 41% of all households; * One out of three women on their own doesn’t save any money at all, compared with 24% of all households; * Despite reporting a need for emergency funds of $2,500, divorced or separated women reported that only half (50%) had a savings account or money market deposit account. Of those who report having some savings, the average balance was only $1,600, leaving them vulnerable to unexpected expenses and economic woes.
A Transamerica Center for Retirement Studies survey, released in September, revealed that although single women need to have saved $500,000 by retirement age, most women fall far short (USNews.com Sept. 19). One out of three single female respondents had less than $25,000 stashed away for retirement, and only one out of 10 reported having more than $100,000 in savings. The survey also revealed that saving for retirement was the greatest financial priority for only 17% of single women, putting a significant percentage of women at risk of outliving their money. For more information, read, “Knowledge, Experience, Action Quell Women’s Money Fears” in Home & Family Finance Resource Center.

Small biz owners Online chat offers year-end tax help

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WASHINGTON (12/8/08)--Small business owners who have questions about tax law changes, year-end tax planning, and mistakes to avoid can participate in an online chat with the Small Business Administration (SBA) on Wednesday from 1 p.m. to 2 p.m. EST. “Getting Your Small Business Ready for Tax Season” features Thomas P. Ochsenschlager, vice president of taxation, American Institute of Certified Public Accountants, Washington, D.C. As the host, Ochsenschlager will answer questions and give year-end tax planning tips to reduce 2008 tax bills. To join the chat on Wednesday, visit sba.gov and click “Online Business Chat.” To post questions online anytime before the chat begins, visit app1.sba.gov/livemeeting/dec08/. For more information, read “Self-Employed Need Year-Round Tax Planning” in the Credit Union National Association’s Plan It: Retire Ready Toolkit.

HandFF Radio holiday tips--Giving spending saving

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WASHINGTON (12/5/08)--The focus of this Sunday’s H&FF Radio show is about having a safe and affordable holiday. Topics covered include charitable giving, regifting, gift card do’s and don’ts, and how not to overspend. Home & Family Finance airs Sundays at 3 p.m. EST 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. The Credit Union National Association (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. Sunday’s 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:
* “Click and Give: Contributing to Charities Online,” with Steve Delfin, executive director, National Credit Union Foundation, and chairman, America’s Charities, Washington, D.C.; * “Regifting: Gifts That Keep on Giving,” with Kim McGrigg, community manager, Money Management International, Denver; * “Holiday Giving: Cash vs. Gifts or Gift Cards,” with Eric Porter, executive vice president, Business Development and Marketing, CO-OP Financial Services, Rancho Cucamonga, Calif.; * “Five Holiday Shopping Tips and Tools for Tough Times,” with Edgar Dworsky, consumer advocate and founder, ConsumerWorld.org and MousePrint.org, Boston; and * “Spendster.org and the Cost of Unnecessary Spending,” with Paul Golden, communications project manager, National Endowment for Financial Education, Greenwood Village, Colo.
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; Visa; and Western Corporate FCU and its member credit unions. For more information, read “Retailers revive layaway to counter credit crunch” and “What Happens to Unused Gift Card Cash?” in Home & Family Finance Resource Center.

Shop closeout sales--carefully

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NEW YORK (12/3/08)--As more retailers feel the effects of the economic slowdown, be on the lookout for steep discounts. Many financially strapped retailers are hoping to lure enough spending this month to stay in business in 2009 (smartmoney.com Nov. 17). Several major retailers--such as Circuit City, Linens ‘N Things, Tweeter, Sharper Image, Footlocker, Ann Taylor, and Comp USA--already are calling it quits or closing some of their doors. Low prices on liquidation sales can be sweet deals for bargain hunters, especially if you shop early before the shelves start to look bare. But those sweet deals can turn sour if shoppers aren’t careful. Here are tips to protect your purchases from retailers in trouble:
* Give final sales special consideration. When you see the “all sales are final” sign, inspect the item for dings, damage, or missing pieces. Take it out of the box, turn it over, try it on. Determine if the item is worth the risk. A rug isn’t likely to break, but the speakers on a flat-screen TV could fail, leaving you with an expensive, worthless object. Remember that the item probably cannot be returned. That said, final sales can be great bargains for the savvy shopper. * Ask for the return policy. Some retailers allow a short period of time for returns so long as you have the receipt. If so, give all the product features a trial run. You may not need the French language option on a VCR very often, but if it’s necessary for that one special film, make sure it says “Oui.” * Look for the warranty. If you’re buying appliances or items with electronics, be sure it comes with a warranty from the manufacturer (read it, don’t just find it). If the store offers an extended warranty, ask who covers it. If it is an unrelated, third-party company, the store’s financial situation shouldn’t be cause for worry. Take the time to research whether or not you need an extended warranty. If common potential repairs cost less than the cost of the warranty, you may choose to save the money and self-insure with a savings account. * Shop with a credit card. Your credit card may give your purchase extra protection. If goods are defective or if you don’t receive the product, you can dispute the charge. Check with your credit card provider for details before making a final sale purchase, especially if it’s a high-ticket item. Some credit card companies provide additional extended warranties for some card holders. If so, you don’t need to purchase an extended warranty from the retailer. * Use gift cards soon. According to the National Retail Federation, more than $26.3 billion was spent by last season’s givers. If you still have a gift card in your wallet from a retailer in trouble, use it soon. Gift card holders are considered “unsecured creditors” in bankruptcy court. That means everyone else gets paid before you do, and the likelihood of using the card is limited.
For more information, read “What Happens to Unused Gift Card Cash?” in Home & Family Finance Resource Center.