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Consumer Archive

Consumer

NCPW focuses on financial facts of life

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MADISON, Wis. (3/3/08)—This week is the 10th annual National Consumer Protection Week (NCPW), with organizers promoting the theme of financial literacy as a sound investment in your future. These questions are pertinent to all ages:
* Do I get a good grade when it comes to the financial facts of life? If yes, you make smart decisions when shopping for a mortgage or other loan, reconciling statements, choosing retirement plans, comparing insurance policies and even when paying for everyday purchases. If you don’t get an “A” when it comes to the financial facts of life, you may be wasting money on expensive alternatives, paying for services you don’t need or want, or making yourself vulnerable to identity theft or other forms of fraud. * How can I boost my financial IQ? The Federal Trade Commission recommends you visit consumer.gov/ncpw and click “consumer info.” You’ll find an array of resources to help you make well-informed decisions--saving for an emergency or unplanned expense, investing for your retirement, and everything between. Your credit union is another solid resource for personal finance education. * What’s my best line of defense? Educate yourself. Take time to develop a spending plan, learn how to manage your money wisely, shop around for everything from purchases to insurance policies, and know the signs of a rip-off.
Current economic woes require some belt-tightening and a lot of financial finesse. Make smart decisions now, and you’ll have a solid financial foundation in the coming months and years.

HandFF Radio Tips for students investors

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WASHINGTON (2/29/08)--Guests on Sunday’s H&FF Radio show delve into a range of how-to’s, including teaching high school students about money, saving for sky-high college costs, investing in tough times and freezing your credit. Home & Family Finance airs Sundays at 3 p.m. EST on the Radio America 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:
* “Saving for College,” with Joe Orsolini, president, College Aid Planners Inc., Glen Ellyn, Ill.; * “Financial Education and the High School Student,” with Lisa Moore, teacher, NEFE High School Financial Education Program, and students, Arlington, Va.; * “Investment Strategies for a Volatile Market,” with Joe Saari, CEO, Precision Information, and publisher of “The Educated Investor,” San Diego, Calif.; * “Freezing Your Credit,” with John Ulzheimer, president, Credit.com Educational Services, Atlanta, Ga.; and * Listener Questions: Support team for your first business; make a bigger impact on your retirement nest egg; escape estate probate; trends and new issues for business entrepreneurs.
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, makers of cheddar cheese; Visa; and WesCorp. For more information, read “Stay Up-to-Date to Claim Deductions, Credits for College Costs” in Home & Family Finance Resource Center.

Teach teens about income taxes

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MADISON, Wis. (2/27/08)--With the looming April 15 tax deadline, it’s a good time to teach working teenagers about money and taxes, says the Credit Union National Association. Many teenagers don’t understand that the total amount they earn isn’t all “theirs.” According to Denise Witmer, author of the book, “The Everything Parent’s Guide to Raising a Successful Child: All You Need to Encourage Your Child to Excel at Home and School” and contributor to About.com, teenagers can benefit from some key lessons about income taxes:
* Be familiar with some tax forms. The teenager will fill out a W-4 form when starting a job, and deductions will appear on the pay stub. Explain these forms with the help of irs.gov or suggest he talk to the employer’s personnel department. At the beginning of the next year, he’ll receive a W-2 form needed when filing taxes. And if he was self-employed--mowing lawns, for example--he even may need to fill out a Schedule C form. * Age is not a factor in paying taxes. If your teenager receives a paycheck, explain that the company will deduct taxes from the gross or total amount paid. If she makes more than a certain amount in a given year--$5,350 in 2007--she’ll have to file an income tax return and pay taxes. If she makes less than that, she may be due a refund but can get it only if she files an income tax form. * Money from babysitting and mowing lawns is considered earned income. Your teenager must pay self-employment taxes if the amount is more than the Internal Revenue Service's limit for the year--$5,350 for 2007. * Unearned income of $850 or more must be reported. This could include investments, dividends or interest, or capital gains. If the teenager has both earned and unearned income, she needs to file a tax return if earned-plus-unearned income totals $850 or more, or if earned income plus $300 is more than $850. * Tax money helps run the country. Taxes U.S. citizens pay are vital for public schools, police and fire services, repair of national highways, military spending, aid to foreign countries, and more. Without taxes, these services may not exist. * Emphasize the importance of saving. Feb. 24 through March 2 is America Saves Week. Take advantage of teachable moments--such as when a child starts to earn money--and help the child set savings goals and make plans to reach those goals. When it comes time to buy a car or shop for a mortgage, good saving habits early on can mean the difference between financial independence and financial instability in adulthood.
For more information, read “Taxes--Just Do It” in Googolplex.

Millions of seniors will get rebates if they file

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NEW YORK (2/25/08)--Calling all senior citizens who haven’t had to file a tax return in the past: If you want an economic stimulus rebate check this year, you need to file a 2007 federal tax return (CNNMoney.com Feb. 15). If you’re like most people, you won’t have to do anything extra to get the rebate--simply file your 2007 tax return and show at least $3,000 in qualifying income. But if you had at least $3,000 in earned income--and therefore qualify for the rebate--but otherwise weren’t required to file a return, now you must file if you want the rebate. Both the Internal Revenue Service and AARP are making a special effort to reach out to about 12 million low-income seniors who may not realize they need to file a tax return to get their rebate. Here’s what you need to know:
* You must file. Since the rebate is based on your 2007 income, you can’t get the rebate until you file your 2007 tax return and show at least $3,000 in qualifying income (CNNMoney.com Feb. 11). If you file by April 15, the Treasury Department estimates you can expect a rebate check sometime between May and early July. If you file an extension, you may not see the rebate check until the end of the year. * Other benefits count. If you’re a Social Security recipient, veteran, and/or retired railroad worker who otherwise wouldn’t need to file a tax return, now you must file to get the rebate (irs.gov February). Perhaps you had $500 in earned income, plus at least $2,500 in qualifying benefits; in this case, you’re eligible for the rebate. Report those benefits on Line 20a of Form 1040 or on Line 14a of Form 1040A. The only other lines to fill out are name, address, and Social Security number. * Make it clear. Write “Stimulus Payment” at the top of any form you file. * Opt for direct deposit. It’s the fastest way to get your refund and rebate payments. If you opt for high-cost refund anticipation loans (not recommended by consumer advocates) or any other loan agreement with your tax preparer, your rebate will be sent via check so it doesn’t go into the tax preparer’s account. * Keep ‘em separate. Rebate checks will be sent separately from any 2007 tax refund amount you’re expecting. * Already filed? As long as you filed and reported at least $3,000 in qualifying income, you’ll receive the rebate and don’t need to do anything else. If you filed but your qualifying income was less than $3,000, consider filing an amended return (Form 1040X) if you discover you really did receive enough total income to qualify for a rebate. * Need help? Don’t spend $100 or even $50 on a tax preparer if you’re getting a $300 or $600 rebate check. Instead, visit one of the IRS’s Volunteer Income Tax Assistance program (VITA) sites, which offer free tax preparation for lower income and elderly individuals. VITA volunteers typically are located in community and senior centers, shopping malls, libraries or schools. Call 800-829-1040 or 888-227-7669 for tax counseling for elderly individuals.
Note that anyone who owes back taxes or past-due child support will have at least part of the rebate applied to those or other nontax federal liabilities. It’s estimated that 117 million low- and middle-income households, 20 million senior citizens receiving Social Security payments, and 250,000 disabled veterans will get a rebate check (CNNMoney.com Feb. 11). In general, most individuals will receive payments of up to $600 (up to $1,200 for joint filers). Each qualifying child increases the amount by $300. For income thresholds and more information, visit irs.gov.

HandFF Radio guests discuss recession savings gambling

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WASHINGTON (2/22/08)--Experts on this Sunday’s H&FF Radio show cover a range of money topics--including recession fears, savings challenges, the $5 bill makeover, and an alarming trend in gambling. Home & Family Finance airs Sundays at 3 p.m. EST on the Radio America 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:
* “The New $5 Bill: What Improved Security Features Mean to You and Counterfeiters,” with Dawn Haley, chief, Office of External Relations, Bureau of Engraving and Printing, U.S. Department of the Treasury, Washington, D.C.; * “The U.S. Economy: Headed for a Recession?” with Steve Rick, senior economist, CUNA, Madison, Wis.; * “Internet Gambling: What It Costs You and Me,” with Keith Whyte, executive director, National Council on Problem Gambling, Washington, D.C.; * “America Saves Week,” with George Barany, director of financial education, Consumer Federation of America and national organizer, America Saves, Cleveland; and * Listener Q & A: Free help with your taxes; how to pay down credit card debt; adjustable-rate-mortgage options; trends for new businesses.
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, makers of cheddar cheese; Visa; and WesCorp. For more information, read “Financial Fitness Challenge April—Make Saving a Habit” and “Calculator: Should I Pay Off Debt or Save?” in Home & Family Finance Resource Center.

Five rebate spending tips for tax first-timers

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MADISON, Wis. (2/20/08)--It’s official: President Bush approved legislation last week that will deliver tax rebates to U.S taxpayers who have filed for the 2007 tax year, and checks will be mailed in late May (Associated Press Feb. 13). For many young adults, this will be the first time they receive any kind of check from the U.S. government. And young adults filing their first-ever tax return may be getting both a tax rebate and a tax refund. Faced with the potential for a substantial windfall, what are some of the best ways young adults can put Uncle Sam’s check to use?
* Pedal power. Spring is around the corner, and the environment is a major concern. Consider purchasing a new bike, particularly if you live in an area where you can commute to school or work with your new wheels (MotleyFool.com Jan. 28). You’ll save money on gas, get exercise and reduce your carbon footprint. Don’t forget your helmet. * Help others. Feeling charitable? Consider donating a portion or all of your new money to a worthy cause. Current economic woes affect charities as well as businesses and consumers (MarketWatch.com Feb. 4). Giving to your favorite cause will help others and make you feel warm and fuzzy. A side benefit is that your charitable donation may be tax deductible, which will help if you itemize on your 2008 tax return. * Invest in yourself. Place your refund or rebate check in a savings account, share/certificate of deposit, Roth IRA or other investment vehicle. Whether it’s a rainy day fund or a start on a down payment for your first home, your credit union can help. * Act locally. Purchase goods and services within your community. Hire a local painter to fix that failed weekend project in your condo, dine out at a locally owned restaurant, or head down to the local electronics store instead of a large retailer to grab that new video game you’ve been eyeing. This multiplies the economic impact your dollars have in stimulating the local economy, and in turn boosts the national economy (ToledoBlade.com Feb. 9). * Knock down debt. It may not be the most exciting option, but it will help you pay off credit cards, student loans, and other forms of debt, putting you in a better position to make big purchases in the future.

Dont stop feeding your 401k

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NEW YORK (2/18/08)--Given recent economic woes and volatility in the stock market, it may be tempting to stop contributing to your company-sponsored retirement plan until the outlook is brighter. But experts agree that’s not the route to take (CNNMoney.com Feb. 4). If you invest based on emotions, you’re almost sure to lose money. To make money on investments, you need to buy when the price is low and sell when the price is high. So pulling the plug on your 401(k) now--when many investments aren’t doing so well--is like walking away from a sale. Historically, stocks have proved to be the best hedge against inflation. And given the Rule of 72 (72 divided by your yield is how many years it takes your money to double), a modest return of 6% still means your money will double in 12 years. What’s a nervous investor to do these days? Invest more, not less, and here’s why. Annual 401(k) contributions of $7,200 at 6% will accumulate to $100,000 just as quickly as contributions of $5,000 at 12%, but your odds of getting 12% returns anytime soon are dwindling (CNNMoney.com Feb. 5). If you’re taking advantage of your employer’s 401(k) plan, consider bumping up your contribution even one percentage point--you probably won’t notice much difference in your paycheck. If you’re among the 22% of eligible employees who don’t participate in a 401(k) plan, start now. Besides building up retirement savings, the tax advantages can’t be beat. If your paycheck is $1,000 and you contribute 5% ($50), you’ll only be taxed on $950.

HandFF Radio Experts key in on consumer debt

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WASHINGTON (2/15/08)--Experts on this Sunday’s H&FF Radio show focus on one important topic: consumer debt--how we got there, how we can get out, debt collection rights and responsibilities, and where to go for help. Home & Family Finance airs Sundays at 3 p.m. EST on the Radio America 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:
* “Consumer Debt and Saving,” with Steve Brobeck, executive director, Consumer Federation of America, Washington, D.C.; * “Financial Consumer Hotlines,” with Gigi Hyland, board member, National Credit Union Administration, Alexandria, Va.; * “Debt Collection: Your Rights and Responsibilities,” with Ruth Susswein, deputy director of national priorities, Consumer Action, Washington, D.C.; and * Listener Q&A: How to handle errors in your credit report; teach your preschooler about money; develop a spending plan; what to do before you need auto repair.
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, makers of cheddar cheese; Visa; and WesCorp. For more information, read “Timing Rules Student Loan Consolidation” and “Credit Savvy Is Key to Avoiding Costly Missteps” in Home & Family Finance Resource Center.

Bundling can save you a bundle

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NEW YORK (2/13/08)--Don’t toss that telecommunications offer in the trash too quickly. You could save some loot by bundling services (MarketWatch Feb. 5). Bundling means you’ll receive Internet, TV (cable or satellite), and phone service from the same company--generally at a lower cost than you’d pay for individual services from different companies--and all on one bill. To find if bundling might be for you, pay attention to these points:
* Real rate. Know what you’ll be paying when the promotional period ends. To get the best deal, you may have to commit to a year or two of service (ChicagoTribune.com Jan. 27). Or, bundle promotions might come with extras such as additional TV channels at no cost. But when the promotion ends you could be billed for these services if you don’t cancel the extras on your own. * What you’re paying for extras. Your first month’s bill might be quite high. In addition to monthly fees and taxes, look for start-up costs and charges for remotes or cable boxes. If you selected premium channels, you’ll be billed for those as well. * Same phone number. Most companies will let you keep your old number unless you’re moving or trying to maintain a nonlocal number. If there’s a charge for switching numbers, ask the phone company to waive it--most will do this to hook a new customer. * Service limitations. If you make too many calls you might be charged for the extras. Or, your Internet upload and download speeds might be affected if your computing habits typically exceed the company’s bandwidth limits.
Though bundling might save money for most, it’s not for everyone. If you’re happy with the services you’re already getting, you might not want to risk sacrificing quality or service. Maybe you don’t want all your eggs in one basket. Maybe you don’t need all three services or you don’t use some or all of the services often. And if you use a cell phone for most calls, you might not need a landline at all.

Crooks use rebate checks to snare victims

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ATLANTA (2/11/08)--Crooks are drumming up new ways to heist money from victims’ financial accounts. Some of those scams use the government's new economic stimulus package's proposed rebate checks as bait (Associated Press via CNNMoney.com). Despite well-publicized warnings, victims unwittingly hand over personal information--such as account numbers or Social Security numbers. Internal Revenue Service (IRS) officials warn that a variety of scams could be around through the end of the tax season and beyond (irs.gov Jan. 30). Be on the lookout for these phone and e-mail scams:
* Give account info for direct deposit of rebate. The caller claims to be from the IRS and promises a sizable rebate in return for bank account information--which supposedly is required for the direct deposit. If you refuse, you’re told you can’t receive the rebate. Hang up--it’s a scam. * Click on link for refund claim form. This bogus e-mail message looks legitimate, but if you respond and enter personal information, expect your accounts to run dry. * Click on link because your return is being audited. The link prompts you to complete forms with personal and account information. Hit the delete button and keep identity thieves at bay. * Check not cashed--please verify account info. The caller claims to be from the IRS and to have sent out a check. But don’t comply with any request for an account number over the phone--or in an e-mail message.
Bottom line: Don’t let rebate-check anticipation cloud your senses. If a tax preparer tries to convince you to take out a short-term advance loan on your stimulus rebate check, just say no. Consumer advocates expect these loan products--which carry excessive interest rates typically aimed at people who can’t afford them--to pop up as soon as rebate checks are in the mail.

HandFF Radio Advice for investors families working kids

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WASHINGTON (2/8/08)--In addition to giving advice about how working kids can invest some of their earnings, experts on this Sunday’s H&FF Radio show will talk about how to calculate portfolio return, how adult children can avoid conflict when divvying up family treasures, and how checking account holders can put their money to work. Home & Family Finance airs Sundays at 3 p.m. EST on the Radio America 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 these guests:
* “Roth IRAs for Working Kids,” with Nancy Granovsky, professor, extension family economics specialist and regents fellow, Texas AgriLife Extension Service, Texas A&M University System, College Station, Texas; * “How to Determine How Much Money You Made in Your Portfolio This Past Year,” with Barbara O’Neill, extension specialist, Financial Resource Management, and professor, Rutgers University Cooperative Extension, New Brunswick, N.J.; * “Who Gets Grandma’s Yellow Pie Plate,” with Marlene Stum, founder and professor, Family Social Science, University of Minnesota, Minneapolis/St. Paul, Minn.; * “What Makes a Good Checking Account and Other Banking Tips,” with Ed Mierzwinski, consumer program director and advocate with the National Association of State Public Interest Research Groups (U.S. PIRG), Washington, D.C.; and * Listener Q&A: Generic medicines; lower your homeowners insurance cost; save money at the gas pump; improve your credit score.
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, makers of cheddar cheese; Visa; and WesCorp. For more information, read “Make a Will to Have the Last Word” and “Online Banking Makes Money Management Simple and Safe” in Home & Family Finance Resource Center.

Scholarship money at your fingertips

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CHICAGO (2/6/08)--Hoping for a scholarship to help curb the high cost of tuition? Start applying now, because many applications are due within the next two months (Sun-Times Jan. 21). With the average size of a scholarship around $2,000, knowing where to look for scholarship money is key. About 6.9% of undergraduate college students receive private scholarships. Several free scholarship databases, such as fastweb.com and scholarships.com, are available on the Internet. The College Board, collegeboard.com, also has a list of scholarships. In addition to searching the Web, talk to a high-school guidance counselor or college financial aid adviser. Other places to find scholarships:
* School activities, academic clubs, or athletic organizations; * Student's employer; * Parent's employer * Parent's union; * Church or religious organization; * Local government; * Local businesses; * Local newspaper; and * Credit union.
For more information about acquiring scholarships, read “Make Up for College Savings Shortfalls” in Home & Family Finance Resource Center.

Struggling homeowners have access to resources help

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McLEAN, Va. (2/4/08)--Last week’s housing reports painted a bleak picture for homeowners already struggling as subprime rates begin to adjust upward, but there are resources available to help (USA Today Jan. 30). More than 1% of homeowners faced foreclosure in 2007, up 79% from 2006, according to a report from RealtyTrac (Jan. 29), a real estate marketing company based in Irvine, Calif. As home prices fall, homeowners discover that the mortgage exceeds the value of the house. To make matters worse, U.S. Census data put the home vacancy rate at 2.8%, with 2.18 million homes on the market in the fourth quarter. Refinance inquiries have spiked since the Federal Reserve lowered interest rates twice last month, ABC News reported Jan. 30. However, many borrowers are stymied by lower appraisals that prevent them from refinancing into loans with easier terms (Reuters Jan. 29). What’s a financially strapped homeowner to do? Seek help immediately:
* Contact your loan servicer. Don’t wait, and don’t be embarrassed. Provide detailed information about your income and expenses. Foreclosure is a cumbersome, expensive process, and reputable servicers prefer to avoid it. * Check out online resources. One excellent website is MyMoney.gov, which recently added new resources for homeowners facing foreclosure, according to the Credit Union National Association's center for personal finance. Click “Home Ownership” and then “Foreclosure Resources for Consumers” for links to agencies and organizations that can help. * Call the HOPE Now hotline. Dial 888-995-HOPE for access to Department of Housing and Urban Development (HUD)-approved credit counselors. The hotline was established by Treasury and HUD officials in August 2007, at the direction of President Bush. * Be on the lookout for scams. Predators are stalking distressed homeowners, hoping to cash in on the mortgage mess. So-called rescuers may trick you into selling your home for a fraction of what it’s worth, or dupe you into signing documents that transfer the title out of your name.
If you’re thinking of refinancing, contact your credit union, and take advantage of online mortgage comparison calculators, such as federalreserve.gov/apps/mortcalc/. For more information, read “Calculator: Do I Want a Fixed or Adjustable Rate Mortgage?” in Home & Family Finance Resource Center.