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Tax credits for green home improvements

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MADISON, Wis. (6/1/09)--If you can come up with the cash, make energy-efficient home improvements now to receive savings from both tax credits and lower energy bills (Credit Union National Association’s Center for Personal Finance, May 28). Thanks to recent stimulus package changes, you may be eligible for federal tax credits, which are generally more valuable than tax deductions. A tax deduction lowers your taxable income based on your tax bracket, while a tax credit gives you 100% of the credit back and is not income based. Here’s an example: If you are in the 35% tax bracket, a $1,000 deduction reduces your tax bill by $350, but a $1,000 tax credit reduces it by the full $1,000. Claim the credit on your federal income tax form. Tax credits are available for 30% of the cost of these energy-efficient home improvements, up to $1,500, through 2010 for existing primary homes only:
* Energy-efficient furnace, air conditioner, heat pump, or boiler; * Insulation; * Skylights and storm windows and doors; * Non-solar water heater; * Roofs (metal and asphalt); and * Biomass stoves.
Tax credits are available for up to 30% of the cost of these energy-efficient improvements, with no maximum dollar amount, through 2016 for existing primary homes, new home construction, rentals, and secondary homes:
* Geothermal (ground-source) heat pump; * Solar panels; * Solar water heater; and * Small wind energy system.
For a more detailed breakdown of energy-efficient improvements, tax credits and qualifications, visit Alliance to Save Energy at ase.org, the Weatherization Source at weatherizationsource.com and Energy Star at energystar.gov.

HandFF Radio Financial fitness in tough times

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WASHINGTON (5/29/09)--Guests on Sunday’s H&FF Radio show share valuable, timely tips for the tough economy, including what to do if you fall behind on car payments, how to fine-tune your financial fitness, and how to manage your personal cost of living. Home & Family Finance airs Sundays at 3 p.m. EDT 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:
* “Five Tips if You Are Falling Behind on Car Payments,” with Eric Hoffman, spokesman, AWARE, Washington, D.C.; * “Intergenerational Wealth Planning: New Ways to Handle an Age-Old Process,” with Eric Aanes, founder and president, Titus Wealth Management, San Mateo and Larkspur, Calif.; * “Financial Fitness: More Than a Good Credit Score,” with Brad Stroh, co-founder and CEO, Bills.com, San Mateo, Calif.; * “10 Techniques to Manage Your Personal Cost of Living,” with Kathy Kristof, senior writer, Los Angeles Times; and * Summer travel and identity theft; filing for bankruptcy--other choices: Your Questions Answered by Host Paul Berry.
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 (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 “FAQ: Credit Scores” in Plan It: Retire Ready Toolkit.

Thrifty travel tips for summer fun

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LOS ANGELES (5/27/09)--More Americans are planning to stay put during the summer travel season due to financial concerns. Only 42% of Americans plan to spend their time and money on a vacation this summer, compared with 49% who planned to travel in 2005. A third have already cancelled at least one trip because of squeezed budgets (LATimes.com May 19). Despite the pressure on purse strings during tough economic times, there are ways to have frugal fun in the sun without burning a hole in your wallet (Readers Digest June):
* Budget basics. Identify how much you have to spend on your excursion. Consider expenditures on meals, souvenirs, transportation, lodging and entertainment. Be sure to include funds for unexpected expenses, and take into account any membership or organizational discounts such as AAA. * Flight control. If possible, check flights and cost information at 12:01 a.m. Wednesday in the time zone where the airline is based. You also can track the price of flights before, and after, you book them. Websites like yapta.com will notify you if the rate drops, enabling you to contact the airline for a refund of the price difference. * Wheels and lodging deals. Use bargain travel sites like Hotwire.com to search for low rates on rooms and rental cars. When renting a vehicle, choose a location close to your hotel or airport to avoid airport convenience fees. Use Hotels.com when searching for lodging. The site offers discounted rates on rooms and a price match guarantee. * Travel insurance. This relatively inexpensive “extra” may save you a lot of hassle and expense even if your trip costs only a few hundred dollars. Basic travel insurance will cover things like delays, lost baggage and emergency medical expenses. Use insuremytrip.com to compare plans. * Last minute planning. When you have little time to plan, use lastminute.com to find travel packages that include transportation and lodging. Other sites, like airfarewatchdog.com, list reduced prices for last-minute air travel.
For more information, read “Rental Cars: Two Wrongs Don’t Make a Right” and listen to “Travel Tips That Save You Money” on Home and Family Finance Resource Center. Also watch “Keep Your Travel Money Safe” on MoneyMix: Launch Your Life.

HandFF Radio Memorial Day tribute to troops

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WASHINGTON (5/22/09)--This Sunday’s H&FF Radio will pay tribute to our nation’s troops, with a special focus on personal finance programs and tools available to military families. Home & Family Finance airs Sundays at 3 p.m. EDT 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:
* “History of the National Memorial Day Parade,” with Tim Holbert, program director, American Veterans Center, Arlington, Va.; * “Department of Defense Financial Challenge Road Show,” with Arty Arteaga, president, Defense Credit Union Council, Washington, D.C., and Frank Emery, Office of the Secretary of Defense, Military Community & Family Policy, MOS Center Family Program, Arlington, Va.; * “Money and Mobility: A Publication for Military Personnel and Families,” with John Gannon, senior vice president for investor education and president of the FINRA Investor Education Foundation, Financial Industry Regulatory Authority (FINRA), Washington, D.C., * “Troops Against Predatory Scams (TAP$),” with Andrew Roth, director of education and outreach, California Department of Corporations, Sacramento, Calif.; and * Listener Questions & Answers.
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 (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 “Tough Times Series: Services, Sites Help Veterans Navigate Benefits Maze” in Home & Family Finance Resource Center.

Moving home to make do

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NEW YORK (5/20/09)--More people are living under the same roof with their parents or adult children to ride out recessionary pressures associated with job loss, the foreclosure crisis and the credit crunch. The trend toward multigenerational homes is expected to increase. Besides the financial challenges, these long-term family “guests” can pose a remodeling challenge as families carve out space to accommodate either their aging parents or adult “boomerang” children (SmartMoney.com May 8). Research from The Network on Transitions to Adulthood indicates that since the 1970s, the number of 20-somethings living with their parents increased by 50% (washingtonpost.com April 26). AARP Bulletin’s Multigenerational Housing survey, released in March, revealed that 33% of respondents age 18 to 49 live with their parents or in-laws, 11% of people age 35 to 44 live with their parents or in-laws, and 11% of people age 50 and older live with their grandchildren or parents (PRNewswire-USNewswire March 3). Boomerang children used to mean young adults moving back home with parents, but the economy is forcing people in their 30s and 40s--and their children--to live with mom and dad again. Lisa Orrell, author of Millennials Incorporated, cites the pros and cons of these new living arrangements on her Generation Relations blog. For some, there may be a space issue. For others, the help around the house or with babysitting can make a big difference in quality of life. If you are considering a multigenerational living situation--or are forced into one--make it a workable living situation (time.com Feb. 19):
* Discuss expectations up front. You can’t guarantee how long it will take to find a job, but you can set some goals for getting out of debt. How long is the new living situation expected to last? What are other options if it doesn’t work out? * Share expenses and chores. Parents who have lost equity in their homes may be pinching pennies themselves and welcome financial and household assistance. Agree on a rental charge or amount contributed to bills. Will these amounts change as the adult child’s financial situation improves? Determine who will do certain chores like cleaning, lawn mowing and making meals. Some parents find help around the house more valuable than payment. * Decide whose rules to follow. There may be differences of opinion when it comes to child-rearing. Discuss details like what young children can and can’t play with and who will handle disciplining. Adults may need to agree on guidelines for guests, use of personal items, menu choices, and how much to spend on groceries and entertainment. * Set up private space. If possible, designate some space as private even if only on a limited daily basis. Parents may like being empty nesters and their children have learned to live alone. Decide on how much togetherness works for your family. * Don’t drain mom and dad’s retirement funds. Financial planners warn parents about making financial sacrifices for their adult children. If they use retirement savings to help a child, they may need to turn to their children for financial help later in life. Parents need to be clear about expectations on the money front. Is it a loan or a gift? If it’s a loan, consider a contract that spells out terms of repayment.
For more information, listen to “Audio: Helping Senior Parents” in Plan It: Retire Ready Toolkit.

Beware companies pushing debt-settlement trap

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SAN FRANCISCO (05/18/09)--As millions of hardworking Americans--many of them unemployed--struggle to pay debts, they’re increasingly being targeted by debt-settlement companies offering nothing more than false hope and steep fees, triggering investigations of some operations (MarketWatch May 7). In response to consumer complaints, New York Attorney General Andrew Cuomo has launched a nationwide investigation of 14 debt-settlement companies. The companies are under scrutiny for allegedly charging hefty up-front fees but failing to deliver on promises of debt relief. Complaints include company representatives telling clients to stop making payments and start saving for a negotiated settlement. Few clients, however, are able to complete the program because they lack sufficient financial resources; they’re left in an even worse spot than when they began. While saving for the anticipated settlement, they face creditors who are demanding payment, charging late fees, and imposing penalties. With no contact from the debt settlement company, creditors often ding victims’ credit reports and scores, putting their long-term financial security at even greater risk. Before you get snagged in a trap, know your rights and responsibilities:
* Contact creditors directly. You can negotiate credit debt by avoiding the middleman and personally contacting the issuer. Debt-settlement companies won’t receive any more favorable debt negotiations than individuals who call directly (Consumer Reports April 14). * Seek a certified credit counselor. The National Foundation for Credit Counseling employs professional counselors to help you pay down debt. Locate counselors at nfcc.org or debtadvice.org. * Don’t pay ahead. The problem with advance payment is that the company has your money independent of the results it delivers. Some debt-settlement companies collect huge up-front fees yet fail to deliver on promised services. * Watch the time frame. If a company tells you the debt-settlement process will take four years or more, just say no--you’ll likely be sued by your creditors during that time.
There are legitimate debt-settlement companies that can help, but always check with the Better Business Bureau (bbb.org) to obtain a reliability rating first. For more information, read “Tough Times Series: Steps Before, During Layoff Make It Easier to Cope” in Home & Family Finance Resource Center.

HandFF Radio explains foreclosure counseling scams

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WASHINGTON (5/15/09)--The housing crisis has created a new crop of foreclosure rescue scams, resulting in a renewed interest to provide foreclosure counseling and debt management to vulnerable homeowners. Experts on Sunday’s H&FF Radio show explain how to build a savings strategy and steer clear of scam artists. Home & Family Finance airs Sundays at 3 p.m. EDT 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:
* “Building a Savings Strategy,” with Skye Tyler, education coordinator, Consumer Credit Counseling Service, Savannah, Ga.; * “Foreclosure Counseling, Debt Management, and Credit Counseling,” with John Willis, president, Consumer Credit Counseling Service, Savannah, Ga.; * “Foreclosure Rescue Scams and Credit Counseling/Debt Management Fraud,” with Michael Liggins, senior investigator and computer fraud specialist, Federal Trade Commission, Atlanta, Ga., and * Audience 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 (WesCorp) and its member credit unions; and the Defense Credit Union Council and member credit unions, serving those who serve the country worldwide. For more information, read “Tough Times Series: What to Do When Your Arm Is Due” in Home & Family Finance Resource Center.

Unemployment foreclosures fuel Internet scams

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YONKERS, N.Y. (5/13/09)--The recession is feeding a wave of cybercrime estimated to cost consumers $8 billion as crooks capitalize on online job searches, desperate homeowners seeking to avoid foreclosure, the soaring popularity of social networking sites, and poorly protected computers (ConsumerReports.org June 2009). One of five online consumers fell victim to Web crime in the past two years. Crooks snagged almost two million online shoppers’ identities; other IDs were compromised via hacked computers, e-mail scams and financial transactions. And about seven million consumers dished out sensitive information to online phishing attacks. The Federal Bureau of Investigation’s Internet Crime Complaint Center’s latest report also revealed that online crime hit a record high in 2008. As vulnerable consumers repeatedly fall victim, scam artists continue to find new, seemingly legitimate ways to take advantage. Despite the grim news, protect yourself by taking precautions:
* Thwart online thefts. The Internet is full of useful software. Try download.com for firewall, antivirus, antispam and antispyware protection--many downloads are free, but some come at a cost. * Use proper security settings on social networking sites. Don’t use birth dates, addresses, phone numbers and any other personal information that could make you vulnerable to identity theft. * Don’t click on links within messages. If you do, you could be phished. Beware of scams on social networking sites; you are more likely to be caught off guard by phishing messages from your networked friends. Don’t provide personal information or follow links in suspicious messages. * Shop cautiously online. Crooks can set up fake e-commerce sites in a few hours. However, even a legitimate site may not be secure because a criminal still can hack in to sensitive data. Always look for a closed padlock in your browser frame and “https” in the URL. Also, check the legitimacy of the business with the Better Business Bureau (bbb.org). * Back it up. Regularly back up important data to prevent a virus from wiping it out and leaving you in the lurch.
For more information, read “Crooks Use High-Tech Scams to Commit Fraud” in Home & Family Finance Resource Center.

Retire Get real

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WASHINGTON (5/11/09)--The majority of workers remain confident they will be able to live comfortably in retirement, despite abundant evidence to the contrary, says the latest research. Consider these numbers from the 2009 Retirement Confidence Survey released by the Employee Benefit Research Institute and Mathew Greenwald & Associates Inc. (April):
* Three of four workers report that they and/or their spouses have saved for retirement. About half (54%) of workers believe that they will have enough money for a comfortable retirement. A similar percentage (53%) reports retirement savings--not counting home values and defined benefit plans, if any--of less than $25,000. * About one of three workers (31%) who have not saved for retirement is confident about a comfortable retirement. * Three of four workers who have saved expect to need jobs in retirement to make ends meet.
Because so many pre-retirees seem to think they’ll have the same standard of living in retirement with savings of less than one year’s current income--or no savings at all--experts recommend that all workers make a realistic effort to become “retirement ready” by taking these first steps today:
* Track expenses, and evaluate whether those expenses will continue in retirement; * Create a budget for your current situation; * Determine current net worth; * Get an estimate of pension or 401(k) income possibilities, and determine when you are eligible for retirement; * Get an estimate of your Social Security benefits from ssa.gov or call 800-772-1213; * Determine whom you'll be providing for in retirement, and plan for long-term care for any dependents; * Calculate your life expectancy; and * Set a retirement savings goal and make a plan to reach it.

HandFF Radio ABCs of broadband

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WASHINGTON (5/8/09)--Sunday’s H&FF Radio show lineup includes an Internet researcher explaining the ABCs of broadband, as well as a Kiplinger editor discussing a new resource to help military families master their money skills. Home & Family Finance airs Sundays at 3 p.m. EDT 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:
* “Credit Unions: Alternatives to Banks,” with Eric Porter, executive vice president of business development and marketing, CO-OP Financial Services, Rancho Cucamonga. Calif.; * “Personal Finance for Military Families Booklet,” with Kim Lankford, author, contributing editor for Kiplinger’s Personal Finance Magazine and columnist for Kiplinger.com, Washington, D.C.; * “Tax Credits for Homeowners Making Energy-Efficient Home Improvements Extended Through 2010,” with Ronnie Kweller, deputy director, communications, Alliance to Save Energy, Washington, D.C.; * “Broadband: If You Build It, Will They Log On?” with John Horrigan, Ph.D., associate director for research, Pew Internet & American Life Project, Washington, D.C.; and * Your Questions Answered: Ways older workers can recoup significant investment losses; Truth-in-Lending statements; and universal design for homes.
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 (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 “What to Know Before Bundling TV, Phone, and Internet Services” in Home & Family Finance Resource Center.

Cost-consciousness is the new recession luxury

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DES PLAINES, Ill. (5/06/09)--The recession has many Americans re-evaluating the way they spend their hard-earned dollars. About half (53%) of respondents to a recent Gallup poll said they are spending less, and 32% predict this behavior will become the new normal pattern once the recession is over (creditfyi.com Apr. 28). The necessity vs. luxury perception battle had been moving in the luxury direction for decades, but the looming recession has reversed the trend. A report released April 23 from the Pew Research Center Social and Demographic Trends Project revealed that many items previously perceived as “necessities” are getting booted to the luxury list. The Pew survey showed the number of respondents who categorize common household items--microwave oven, TV, air conditioning, dishwasher, and clothes dryer--as a necessity has dropped sharply from 2006. Further, the percentage of Americans who consider a TV a necessity is the lowest it has been since the question was first asked more than 35 years ago. Four of five survey respondents have taken at least some belt-tightening measures during the current economic crisis. Here are a few examples of scaled-back spending:
* 58% switched to less expensive brands or to discount stores; * 28% reduced spending on alcohol or cigarettes—two goods often labeled recession- proof; * 24% cut back--or eliminated--their cable or satellite TV subscription; 22% followed suit with their cell phone plan; * 21% plan to try out their green thumbs and grow veggies; * 20% started performing home repairs or yard work they previously hired out; and * 16% got rid of unwanted items by holding a garage sale or listing them on the Internet.
For more information, read “Tough Times Series: Steps Before, During Layoff Make It Easier to Cope” in Home & Family Finance Resource Center.

Playing catch-up to make up for nest egg losses

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LAWRENCE, Kan. (5/4/09)--The combination of stock market losses and company cutbacks can derail your retirement savings unless you take immediate action to get back on track (ljworld.com April 29). Companies of all sizes are slashing expenses to try to keep from laying off workers during the recession. Job benefits increasingly are targeted as a way to cut costs, and the long-term implications on your nest egg could be significant. For example, if your employer discontinues the 50% match of your 401(k) contributions to up to 6% of your $75,000 salary, you’ll lose $2,250 in savings in one year. And assuming a 7.2% average annual rate of return, that $2,250 yearly contribution would have grown to $100,000 in 20 years from compounded growth (Bankrate.com March 16). If you experience a loss or reduction in workplace retirement benefits, consider a combination of moves to soften the blow:
* Beef up 401(k) savings. Don’t let the loss of a company match--on top of rising expenses--keep you from forging ahead. Research from Hewitt Associates revealed that the average employee could bridge the gap caused by a 401(k) match suspension by increasing contributions just three percentage points a year (U.S. News & World Report April 14). Also, consider switching to a lifecycle fund, which automatically adjusts to less risky investments as you approach retirement age. * Redirect spending leaks to personal savings. If you don’t have an emergency fund, start one now, particularly if your job is in jeopardy. Keep three to six months’ living expenses in a liquid, interest-bearing account in case you need the money quickly. Once you have a solid emergency fund as back-up and you’re contributing as much as you can to your 401(k), consider an IRA (individual retirement account). A traditional IRA gives you an immediate tax deduction if you meet income requirements; a Roth IRA is funded with after-tax contributions and allows you to take tax-free distributions in retirement. Know the income limits for both. * Resist the urge to cash out. Fidelity estimates that if you’re in the 25% federal tax bracket, a $50,000 withdrawal before age 59 ½ will cost you $12,500 in federal taxes, $3,500 in state taxes (assuming a 7% state tax rate), and $5,000 because of a 10% early withdrawal penalty. Your $50,000 withdrawal from retirement savings shrinks to $29,000. According to Hewitt Research, 45% of employees make the costly mistake of raiding their 401(k) when they leave their job. (If you are terminated, there’s an exception to the penalty if you are 55 or older in the year you’re terminated.) * Revisit your retirement goals. In light of lower balances and economic uncertainties, rerun the numbers. Use several retirement calculators to analyze your situation and determine how much more you need to save to meet your goals. Check out BallparkEstimate.org and Bankrate.com (click the Retirement tab then scroll to Calculators).
If your employer terminates your 401(k) plan due to bankruptcy, merger, or acquisition, remember that any pre-tax contributions you made--plus earnings--are yours to keep. Whether you’re entitled to the employer contribution portion, though, depends on the company’s vesting schedule. For more information, read “Lifecycle Investment Funds” in Plan It: Retire Ready Toolkit.