Green is the new black
Source: CNN Money
It seems the entire country is living by the ‘Grow Your Green’ mantra of saving. The Commerce Department reported last week that the personal savings rate hit a more than 15-year high of 6.9% in May.
And according to CNN Money, “even though the stock market has rallied since March on hopes that the worst is over, consumers have stepped up their penny-pinching ways. The savings rate was just 4.1% in February.” That’s a huge difference, compared to how we were stashing away (or not) from 2005-2008: most of us were just saving at a rate of between zero and 1%.
But are we saving enough?
Apparently, we still have a long way to go. Consumers were saving a lot more during recessions in the early 1990s, and savings rates grew to above 10% during tough economic times in the 1970s and 1980s.
While we may still have a ways to go, this new sense of “growing your green” is a good thing. Hopefully, it’ll keep us from overspending and going into debt–which is how we got into this mess in the first place, right?
How much are you saving compared to a few years ago?
Tell us about it and you could win money for that savings account!
The descent into credit card debt
Debt can have a snowball effect.
When used wisely, credit cards can be the cornerstone of a sound financial strategy. A solid credit history makes you a good credit risk and that in turn allows you to purchase the necessities of life. But credit cards can also be a slippery slope. One misstep and you’ll tumble into the abyss of credit card debt hell, a mounting spiral of missed payments, fees, high APRs, and rate increases that will take years to recover from. Only by remaining vigilant can you hope to avoid this fate. Here’s our guide to what you may experience on the way down.
Full story
Lessons from the King of Pop
One lesson we can learn from Michael Jackson's sudden death: create a living trust for our loved ones so they're taken care of.
Now that the world is getting over the initial shock of Michael Jackson’s sudden and unexpected death last Thursday at the age of 50, we’re getting a glimpse of the star’s mysterious life and lavish spending habits. While there are many questions left to be answered, at the top of the list: What will happen to his estate? Who will take care of his three children?
Jackson is believed to have left behind $400-$500 million in debts, and legal experts say mounting financial questions could take years to clear up–there will likely be major legal battles as creditors and family members stake their claim in the King of Pop’s legacy and estate, which some say could rival that of Elvis Presley and Graceland.
All this drama got me thinking, “Do I have a plan in place should something happen to me? How will my loved ones be cared for?”
It’s a good question we all should ask ourselves, and one way you can ensure that your family is taken care of is to establish a living trust.
What is a living trust?
A trust is an arrangement where one person, called a trustee, holds legal title to property for another person, the beneficiary. You can be the trustee of your own living trust and keep full control over all property held in trust. With a living trust, your assets (your home, bank accounts and stocks, etc.) are put into the trust, administered for your benefit during your lifetime, and then transferred to your beneficiaries when you die.
Why should I establish a living trust?
One of the biggest advantages of a living trust is that property left through the trust doesn’t have to go through probate court, which is the court-supervised process of paying your debts and distributing your property to the people who inherit it.
Probates can drag on for months before the inheritors get anything, and cost thousands of dollars in legal and attorney fees. (Read more on probate FAQ here.)
Does a living trust replace a will?
No. A will is an essential back-up device for property that you don’t transfer to yourself as trustee. For example, if you acquire property shortly before you die, you may not think to transfer ownership of it to your trust–which means that it won’t pass under the terms of the trust document. But in your will, you can include a clause that names someone to get all of the property that you haven’t left to a specific beneficiary.
If you don’t have a will, any property that isn’t transferred by your living trust or other probate-avoidance device (such as joint tenancy) will go to your closest relatives in an order determined by state law. These laws may not distribute property in the way you would have chosen.* Learn more about the difference at LivingTrustvsWill.com.
You can learn more about living trusts:
Nolo – Living Trusts
The State Bar of California
For more information on this important topic, you can also attend Tech CU’s seminar on living trusts next month at our San Jose location:
Wednesday, July 22
5:30 p.m. to 7:00 p.m.
Technology Credit Union
Corporate Office
4th Floor, Suite 450
2010 N. First Street
San Jose, CA 95131
Sign up here
Whether Jackson established a living trust remains to be seen, but we can all learn from his passing. Give your loved ones the power to control your estate through a living trust, instead of subjecting them to government regulations, court rulings, and lawyers’ fees during an already difficult time.
*Source: Nolo.com
Laziness could be costing you money
Forbes asked a slew of experts, in fields ranging from personal finance to health care, to estimate the not-so-hidden costs or our laziness, and to demonstrate what little you can do—because in many cases that’s all it takes—to turn things around. Full story
Find the best credit card deal
You could save thousands of dollars if you spend some time researching the best credit card for your needs.
A credit card, when used correctly, is a powerful financial tool.
But how do you know you’re getting the best credit card deal out there? I mean, really, it’s much more manageable paying 5.9% APR interest on a $2,000 credit card bill than paying 19.9%APR, right? Could you be getting more bang for your credit card buck?
There are a few online resources that can help you find out. Besides improving your credit score, shop around–credit card companies compete for you business and you could be at the winning end of these deals. In fact, you could save thousands of dollars if you spend some time researching and shopping for the right credit card for your needs.
First, the most important thing you can do is to pick up the phone and call as many credit card companies as you can. Ask them what type of credit cards they’re offering i.e. bonus points, airline miles, cash back offers, etc.
As you make these calls, keep a list. What type of card is this? What are the interest rates? Are there any special offers? Can you get a better deal if you transfer the balance of one of your existing credit cards to a new one? (Some banks give you a introductory 0%APR grace period.) Armed with this information, you’re in a better position to make an informed choice.
Check out these sites too. You can find detailed charts and side-by-side comparisons. Plus, they’re easy to use.
CreditCardGuide.com
From finding an instant approval card to a low-interest card for your small business, CreditCardGuide.com provides you with a free one-stop credit card resource center and links to instant online applications. You can find side-by-side comparison of the best credit cards on the Internet from the top banks and card companies. These cards have competitive rates and outstanding benefits and rewards.
You’ll also find consumer tips like these:
CreditCards.com
CreditCards.com lets you find the best credit card deal in three easy steps: search, compare and apply. You can do it all online! You can shop by category too. The site lets you choose from a variety of credit card types:
-
- Low interest
- Balance transfer
- Rewards
- Cash back
- Airline
- Prepaid
- Student
- Bank type
If you’re in the process of repairing your credit, there is also an entire section of credit cards for those with less-than-stellar credit.
(On a side note, if you’re struggling to pay your credit card balance, try calling the bank to work something out. And, while most institutions are willing to work with you to come up with a more manageable payment plan, there are some things you should consider before making a deal with a credit card company.)
CreditRatings.com
CreditRatings.com scours the Internet for the latest credit card promotions. You’ll also find thousands of consumer reviews of credit cards written by actual consumers throughout the country. (New reviews can be added daily).
According to the site, “disclosing such information often helps consumers find more attractive credit cards and, in turn, helps them lower their credit card debt. Another added benefit is that such disclosures encourage stronger competition among credit card issuers.”
Put savings (and yourself) first with a budget
Smart budgeting leads to less stress.
Personal savings have reached record lows, yet saving is essential to ensure a comfortable future. Learn how to track monthly expenses with a budget and potentially free up cash for saving. Full story
Get help paying for college
There is more than $143 billion in financial aid available so, despite all of these college price increases, a college education remains an affordable choice for most families.
As if keeping your grades up, studying for SAT’s, and taking part in all those extracurricular activities wasn’t enough (ai yi yi!), now that you’ve been accepted to college you have to start thinking about how you’re going to pay for it.
According to recently released reports from College Board:
“Most students and their families can expect to pay, on average, from $108 to $1,398 more than last year for this year’s tuition and fees, depending on the type of college.
“But there is good news. There is more than $143 billion in financial aid available. And, despite all of these college price increases, a college education remains an affordable choice for most families.”
To make it even more affordable, here are some tips and resources that can help you pay for that college education:
Get started early
The sooner you begin researching available resources, the better your chances to qualify for them. Talk with a campus guidance or career counselor and get in touch with the school’s financial aid office. These experts can help you navigate through all the paperwork, find the appropriate resources out there, and target the aid that you may qualify for.
There are also lots of online sites that can help you find the aid that’s right for you:
Consider all sources
There are many different types of funding such as scholarships, grants, loans, and work-study programs for undergraduate, graduate, doctoral and postdoctoral students. You should also look into federal, state and local grants.
You can find a scholarship for almost any category: athletics, academic merit, disability, race, nationality, major, etc. FastWeb’s free scholarship search makes finding the right scholarships for you easy.
Remember deadlines!
Get an early start, then keep a log of cutoff dates for all financial aid packages and set reminders for them. You don’t want to miss out on any opportunities because you missed a deadline. (Try sites like Google Calendar, which offers a free calender reminder service so you can get all that paperwork filled out and mailed out on time!)
Federal Pell Grant
The Pell Grant is a federal assistance grant that is awarded to low-income undergraduate and certain post-baccalaureate students to promote access to post-secondary education. Students may use their grants at any one of approximately 5,400 participating post-secondary institutions in the country.
To qualify for a Pell Grant, you must demonstrate financial need. Learn more here.
Stafford Loan Program
Stafford loans are federal student loans made available to college and university students to supplement personal and family resources, scholarships, grants, and work-study. Nearly all students are eligible to receive Stafford loans regardless of credit. Stafford loans may be subsidized by the U.S. government or unsubsidized depending on your needs.
Federal Parent Loan for Undergraduate Students (PLUS)
Your parents can borrow a PLUS loan to help pay for your college expenses if you are a dependent undergraduate student enrolled at least half time in an eligible program at an eligible school.
Apple scholarships
Love products like the iPhone? Then get Apple to pay for college! The Apple Scholars program recognizes the academic and creative abilities of outstanding high school seniors with $2,000, an Apple Nano iPod, plus a pricey laptop to take to college.
According to CollegeScholarhips.org, eligible applicants must be ready to go head to head with some pretty stiff competition. The idea is to prove, via a “senior project,” that you can synthesize your academics with the creativity inspired by your Apple experience and savvy.
(Side note: Besides the scholarships, Apple also provides education discounts for students, K-12 institutions, colleges and universities.)
Microsoft scholarships
Not to be outdone by Apple, software giant Microsoft also wants to help the country’s future engineers and scientists. Microsoft scholarships are awarded to students entering computer science and related technical disciplines: General Scholarships, Women’s Scholarships, Underrepresented Minority Scholarships, and Scholarships for Students with Disabilities.
Google scholarships
Of course, where there’s Apple and Microsoft, there’s Google. The Google Anita Borg Memorial Scholarship encourages girls to enter and succeed in the computing, engineering and technology fields.
Recipients will each receive a $10,000 award for the 2009-2010 academic year; finalists will each receive a $1,000 award.
Get mom and dad to help
Talk to your parents about some ways they can help you pay for your education. For example, if they own a home, a home equity line of credit could free up some funds to pay for tuition, books, room and board.
You can also ask your parents about a 529 College Savings Plan. A 529 Plan is an education savings plan operated by a state or educational institution designed to help families set aside funds for future college costs. Contributions grow tax-deferred and withdrawals are tax-free for 529 plans.
The more financially prepared you are for college, the more you’ll be able to focus on your studies. While college is expensive, many counselors say that most students don’t take advantage of all the financial resources available to them, so take time to do your (financial aid) homework and it could really pay off! (Hey, we even have tips on what you could do with that extra money!)
Q&A with Jayshree – GYG $100 winner, April
Jayshree Jain is GYG's $100 winner for April. She says direct deposit helps her reach her savings goal.
What are you saving for?
I am saving for my kids, my parents, and my family’s future (and of course, any emergencies we may have along the way).
I am a teacher so I’m also saving for classroom supplies. I want my students to get the most out of their projects without having to worry about whether they can afford school supplies. (In fact, I love the Save 4 Your School challenge! It could really help teachers like me!)
What steps are you taking to save each month?
I have automatic transfers set up for several of my Tech CU accounts. As soon as my paycheck is deposited, these funds are automatically transferred to my various accounts, such as ‘Grow Your Green,’ Insured Investment and other savings and checking accounts.
What’s great about this is that you have complete control with what you want deposited in each account. For example, you can have $50 of your paycheck directed to your ‘Grow Your Green’ savings account, and $100 directed to one of your other savings accounts. It’s all up to you.
What is your biggest obstacle when you’re trying to keep a consistent savings plan?
If an emergency or an unexpected expense comes up, that can really sidetrack me. But the good news is that’s what a savings account is for—so you have money for a rainy day or two, when you most need it (although I’d rather spend my savings on a vacation!).
Has the current economy affected your savings plan at all?
Fortunately, I have not been affected by the economy.
Do you have any savings tips for other ‘Grow Your Green’ savers?
If you set up automatic transfers through Online Banking so that your funds are automatically transferred from your checking account to your savings accounts, you will hardly notice that you’re putting away some money each month. Before you know it, you’ll have reached your savings goal! It’s a psychological thing—when you don’t see the money in your checking account, you’re less likely to spend it. I know this little trick has helped me. Try it to ‘grow your green!’
Want some free money?
What’s a better way to grow your savings account than winning some money?! We give away $100 to one lucky saver every month.
Here’s all you have to do to qualify for the cash prize:
1. Save at least $25 in your ‘Grow Your Green’ savings account every month.
2. Register your profile here at ‘Grow Your Green.’ This way we know you’re out there, and we can put your name in the drawing. (Register here, if you haven’t already done so–it’s really easy!)
Once you’re registered, you can tell us about your savings goal and how you plan to reach it. Send photos, videos or use Grow Your Green to write posts. You can also share tips and ask for advice from other community members.
Winners will be announced on our Money Savvy blog at www.techcublog.com and here on ‘Grow Your Green’ around the 15th of each month. We already have a few of winners, including Jayshree from Los Altos. Meet all our winners.
Be our 2009 Super Saver and win $1,000!
On Tuesday, Dec. 15, 2009, we will pick our 2009 Super Saver with the help of our ‘Grow Your Green’ community—someone who has been actively saving and participating in the community—and that person will win $1,000 toward their savings goal.
Sign up to join our ‘Grow Your Green’ saving community! Once you sign up, you can start posting your stories, photos or videos about saving… and you can win some money. It’s that easy!
7 common money wasters
It's easy to lose track of spending on the small things, and they can really add up.
Do you ever feel like you have a leak in your bank account? Like all the money you put in there mysteriously disappears? If you’re like me, chances are you’re spending money on a lot of little things that you don’t need–little things that add up to a whole lot of cash.
Here are a few of those “little things” that you can save money on today:
1. Eat out less
Do you go out for lunch every day? Even if it’s just a $5 fast food meal, that can quickly add up. You could save hundreds, even thousands, of dollars a year if you pack your own lunch. (Read our “Dining on a Dime” tips.)
2. Curb spending on unnecessary luxuries
Are you paying top dollar for all those cable channels that you don’t have time to watch? (Learn how to save money on cable costs.) Take a closer look at your phone bill. Do you really need extras like call waiting and call forwarding?
3. Cancel or defer unused memberships
When’s the last time you actually went to the gym (be honest now!)? Are you still paying membership dues even if you haven’t worked out there in a long time? Gym memberships can cost up to $100 a month. If you’re tight on cash, cancel your membership or put it on hold until you’re ready to make use of it.
If you need to work out, try some of these at-home exercises. You could also check out some local trails in your neighborhood. A jog or bike ride are some great, inexpensive ways to get that heart rate up.
4. Stop your magazine subscriptions
How many magazines and newspapers do you subscribe to? Many subscriptions are automatically renewed, so you eventually forget that you’re paying for them. Take a look at what you’re actually getting value from–could you get the same information online? Could you get these subscriptions at a discount?
5. Be selective with your music purchases
Have you ever spent $20 on a CD and found yourself only listening to a couple of songs on the album? You could save a lot of money if you just buy the individual songs at online stores such as iTunes, where songs typically cost under $1.
6. Pass up those hard-to-pass-up sales
Just because something is on sale doesn’t mean you should buy it. Even if that designer suit is 50% off, it’s probably still overpriced. One little trick I use is to leave my debit or credit card at home. If I really like something, I ask the sales associate to put it on hold so I can go home at get my card. This gives me extra time to think about whether I still want the item. Usually I go home and don’t return to the store.
As my friend, Albert, says, “It’s not how much you save, but how much you spend.”
7. Avoid bank fees and interest charges
You could be wasting a lot of money because you don’t have the right bank account. For example, if you rarely go into a branch, try switching to a checking account that’s free with direct deposit. (Here are 5 easy steps to avoid bank fees.)
If you have a credit card balance, try to pay down the debt as quickly as possible. It could help your credit as well.
