Thank you for participating in the Grow Your Green Savings Challenge

Hi!

It’s Cash Cat here, and I want to thank you for participating in the Grow Your Green Savings Challenge of 2009. Your hard work in the savings challenge and your activity in the online community throughout the year have really made a difference and has served as an inspiration for other savers. I’m honored that Tech CU was able to be a part in helping you work toward your savings goal.

As you may already know, the Grow Your Green Savings Challenge ended at the end of December with the selection of our Super Saver of 2009. Ron Vogel was the lucky winner of our $1,000 grand prize. Not only did Ron save consistently all year to reach his financial goals, but he also shared his many wonderful money-saving tips with other Grow Your Green members. (You can read them here.)

But Ron wasn’t the only one who was rewarded for saving. From March to November, eight monthly winners received $100 to be added toward their Grow Your Green savings goal. We’re also proud that the campaign was effective in helping our members save more in 2009. Here’s what we were able to accomplish: 34 Grow Your Green Savings Challenge accounts for a total of $17,966 saved!

While this campaign was designed to last for one year, at Tech CU we know that saving money and smart money management should be lifetime efforts. That’s why we’re committed to helping you stay financially fit all year long. If you enjoyed all the useful tips and entertaining articles we had here at the Grow Your Green site, I’m confident you’ll love Tech CU’s main blog, Money Savvy.  With articles such as Haitian Relief: Be Generous but Be Careful and Banks Lure Customers with Cash: Deal or No Deal?, you’ll continue to find relevant, insightful and helpful articles at our blog to help you succeed in your financial goals.

Thanks again for participating in Grow Your Green. And remember, we still want to stay connected to you so join the Facebook Tech CU Fan Page or follow us at Twitter/TechCU. That way you’ll continue being the first to learn about Tech CU’s rate changes, promotions and specials.

Until we meet again!
-CashCat

ARM loans: Are they right for you?

If you’re waiting to buy the home of your dreams, don’t wait too long or you may miss your chance. Home prices and loan rates are at historic lows and a lot of buyers are taking note.

According to the Mortgage Bankers Association’s latest survey, applications for mortgages rebounded last week, rising a seasonally adjusted 8.2 percent as borrowers seek to take advantage of the combination of low home prices and attractive interest rates on home loans.

And, with an ARM loan, you could finally get into that dream home—the one that, just a few years ago, you thought you might never be able to afford.

What is an ARM loan?
An adjustable-rate mortgage (ARM) loan is a mortgage with an interest rate that is linked to an economic index. The interest rate and your monthly payments are periodically adjusted as the index changes. (An index is what lenders use to measure interest rate changes.)

The adjustment period is the time between potential interest rate adjustments. Here’s an example:

5/1 ARM

• The first number refers to the initial period of the loan
• The second number refers to how often adjustments can be made after the initial period has ended.
• So in our example of the “5/1 ARM,” the initial period of the loan is 5 years. After that, there could be an interest rate adjustment once a year.

You can learn all the important basic features of an ARM at:
http://en.wikipedia.org/wiki/Adjustable-rate_mortgage.

How can an ARM loan work for you?
The initial interest rate for an ARM is lower than that of a fixed-rate mortgage. Because a lower rate means a lower payment, it might help you get a larger loan.

“Finding a loan that’s right for you depends on your plans for the next 3 to 5, even 20 years,” says Steve Donahue, assistant vice president of Tech CU Mortgage Origination.

Donahue suggests you ask yourself these questions:

• How long do you plan to own the house?
• Do you expect your income to increase in the coming years?
• Will it be enough to cover your mortgage once the interest rate increases?

He says that if you only plan to stay in the home for 3-5 years, or you do expect an increase in income following the introductory period, you should strongly consider an ARM.

Getting a big loan can be tough
With this housing crisis and foreclosure rates through the roof, ARMs have gotten a bad rap. That doesn’t mean an ARM isn’t right for you.

According to a Boston Globe article titled “What So Bad About Adjustable-Rate Mortgages?”:

Indeed, today’s adjustable-rate mortgage is serving a far different market than it was a year or so ago. Gone are the days when lower-income buyers could reach for an ARM to make a home purchase affordable. These days, tighter underwriting standards often requiring a 20 percent down payment have transformed the adjustable loan into a high-end product best suited for people with sterling credit and significant resources. The people who are taking out ARMs today aren’t looking for affordability; they’re looking for ways to best manage their money…. the savings from a jumbo ARM can run into the tens of thousands of dollars in the five-year period before adjusting.

Unfortunately, in today’s tight credit market, getting ARM financing can be difficult–but it may boost your buying power because you get the loan you need for the home you want. Luckily, if you’re considering an ARM loan, Tech CU currently offers 3/1 and 5/1 ARM loans up to $1 million. Whether you choose Tech CU or another financial institution for your mortgage needs, you should speak with a loan specialist to learn more about how you can benefit from a jumbo loan.

“It’s a great time to take advantage of  this type of loan, if you can get it,” Donahue says. “When home prices and loan rates are at historic lows, you could end up getting a lot more home for your money, and keep a whole lot of money in your pocket too.”

Make your clothes last longer

If you’re trying to stretch your dollars further these days, it makes sense to take care of the things you already have, instead of always buying replacements. Having said that, here are some tips on how make your clothes last longer so you can always look like a total fashionista–even if you’re on a budget. Full story

Saving is so in style right now

It seems it’s not just us ‘Grow Your Green’ savers–many Americans are paying down their debt right now. The amount we owe on credit cards and other consumer loans plunged a record $21.6 billion in July!

According to the L.A. Times:

The drop in consumer debt for the month was the largest since the Federal Reserve began tracking the data in 1943 and the sixth straight monthly decline in outstanding consumer debt, the longest streak since 1991.

It’s apparently five times more than analysts had predicted. These experts speculate that a lot of folks are still worried about the economy, and so they’re reducing their debt in case they lose their jobs (if they haven’t already).

It’s mixed news. On the one hand, it’s great that we’re learning to save again and we’re not living above our means anymore. On the other hand, since we’re not spending, are we keeping the economy from recovering more quickly?

Some call this the Paradox of Thrift:

The paradox states that if everyone tries to save more money during times of recession, then aggregate demand will fall and will in turn lower total savings in the population because of the decrease in consumption and economic growth. The paradox is, narrowly speaking, that total savings may fall even when individual savings attempt to rise, and, broadly speaking, that increases in savings may be harmful to an economy.

Whatever it is, if you still have a revolving line of credit or you’re looking for a new card, here are some tips on finding the best credit card deal. We also have help for you if you want to improve your credit score to get those great rates.

What are your thoughts? Do you think this shift in the “saving psyche” is a good thing?

How to lose $3 million in six years

I came across this Yahoo! Buzz story about a girl who blew through $3 million dollars in six years.

Callie Rogers was just 16 when she won a whopping $3 million in the lottery. Six years later, she reports that she blew untold sums on drugs, partying, exotic cars, and breast implants. A staggering $730,000 went to designer clothes alone, Ms. Rogers explains in an article from AOL. Says Rogers: “I honestly wish I’d never won the lottery money — and knowing what I know now I should have just given it all back to them.” She’s currently left with around $32,000.
Full story

Can you believe that?! It’s a downright offensive story considering so many folks are struggling and losing their jobs and homes right now. And, what’s more, Rogers wasted an opportunity most of us only dream about.

Here’s how much Rogers could have made if she’d put the entire winning into an annual compounding interest account:

$3,000,000 + 2 percent + 6 years = $3,378,487.26
$3,000,000 + 5 percent + 6 years = $4,020,286.92
$3,000,000 + 10 percent + 6 years = $5,314,683.00

(Check out the Compound Interest Calculator to see how much you can make with your money.)

That’s not considering any savvy investments she could have made with the help of a financial advisor–that’s just for letting her money sit there and work for her. Instead, poor little Callie squandered it on clothes, cars and illegal substances. Such a shame.

Maybe she could start visiting ‘Grow Your Green’ to learn how to save and be smart with her money… I mean, what she has left, anyway.

Bernanke, wife hit by identity thieves

Federal Reserve Board chairman Ben Bernanke was one of hundreds of victims of an identity fraud ring that stole over $2.1 million from individuals and financial institutions, Newsweek magazine reported on Wednesday.

Apparently,  a thief stole his wife’s handbag, taking with it a family checkbook, credit cards and her identification, according to a police report and court documents. Read the full story here.

If even Bernanke and his family are vulnerable to ID theft, it’s safe to say regular folks like you and me are not immune.

But there are things you can do to protect yourself from ID theft. This what the Federal Trade Commission says:

FIGHTING BACK AGAINST IDENTITY THEFT

Identity theft is a serious crime. It occurs when your personal information is stolen and used without your knowledge to commit fraud or other crimes. Identity theft can cost you time and money. It can destroy your credit and ruin your good name.

Each year, millions of Americans have their identity stolen. The Federal Trade Commission, the nation’s consumer protection agency, wants you to have the information you need to protect yourself against identity theft. This information is summed up in the FTC’s clear and concise message on identity theft:

Deter, Detect, Defend.

DETER identity thieves by safeguarding your information

DETECT suspicious activity by routinely monitoring your financial accounts and billing statements

DEFEND against ID theft as soon as you suspect a problem

While there is no fool-proof way to avoid ID theft, there are steps you can take to minimize your chance of becoming a victim, and steps to take to minimize the damage should a theft occur.

Learn more at: http://www.ftc.gov/bcp/edu/microsites/idtheft/

While we’re on the topic, here are some related ‘Grow Your Green’ articles:
Improve your credit score
Find the best credit card deal
Tech CU Learning Center: ID theft

Tips to make your car last longer

Recently my car began making this weird, high-pitched screeching noise. It wasn’t just when I was braking–it happened a lot when I was on the highway, going over 65 miles an hour.

So what did I do? Turn up the radio. I figured, if I didn’t hear it, it didn’t exist. Problem solved.

I know you’re all thinking, “Uh… that’s not the right thing to do.” I know, I know.  My dad wasn’t very happy with my genius “solution” either.

“Don’t you know you’re making things worse?” he screamed one afternoon when I nonchalantly mentioned that my car was making weird noises at high speeds. “It’s only going to cost you more when you do decide to fix it. And it’s really dangerous!!”

It was the lecturing that got me into gear (pun intended), pushing me to finally visit my mechanic. Turns out my engine mount was broken and needed to be fixed PRONTO!

Anyway, I’m on ‘Grow Your Green,’ which means I’m trying to save money, which means buying a brand new car isn’t really an option right now so I’d better take care of the vehicle I do have.

Here are some things I’m doing to help make my car last longer, and you can do to keep your ride in tiptop condition too:

Clean it
Make sure you clean your car with sponges, towels and soaps designed for automobiles. Some cleaners can actually damage the paint finish. While you’re at it, it’s a good idea to put a coat of wax on it a couple of times a year. A coat of wax protects your car from things like tree sap and bird droppings, which can eat through the paint if it’s on there too long.

Now that your car is all shiny and sleek, it’s time do some interior cleaning. After all, isn’t it what’s inside that counts?

Empty out the clutter. (I know at any given time, I have several pairs of shoes, old InStyle magazines, and other stuff that shouldn’t be in there.) Do a deep cleaning–that means vacuuming the seats and floors and polishing hard surfaces like the dashboard, steering wheel, and car-door panels.

Check and rotate the tires
Inspect your tires for wear and tear and air pressure every couple of months. Here’s a neat trick I’ve learn from one of my buddies: Put a quarter upside down into the tread along the tire. If it doesn’t touch the top of George Washington’s head, your tires may need to be replaced.

You also need to rotate your tires every 5,000 miles or so. For example, the front driver-side tire will be moved to the rear passenger-side; the front passenger-side tire will be rotated to the rear driver side. We need to rotate tires every so often because each tire carries  a different load, depending on what kind of car you have. Rotating the tires evens out the wear and helps you get more life out of your wheels.

Inspect the breaks
You might have to get a professional for this, but if you’re brave enough to give it a whirl (I’m not!), here’s a helpful guide:

How to Inspect and Remove the Brake Pads on Your Car — eHow.com

Take stock of hoses, belts and fluids
It takes a lot of things to make your car run. Here’s a short list of some of the hoses, belts and fluids you need to check periodically:

• Motor oil
• Transmission fluid
• Coolant
• Power steering fluid
• Brake fluid
• Windshield washer
• Oil filter
• Cabin air filter
• Timing belt

You can read more detailed instructions for changing fluids, filters, belts and hoses.

I know it all seems daunting and expensive, but if you keep a car maintenance calendar, it won’t be so overwhelming because you can maintain and repair things along the way. Contact your dealer for a maintenance calendar for your car, or look one up at Edmunds.com.

Trust me, it’s worse to ignore that screeching sound for months, only to learn that the engine mount broke (which could have cost about $100 to fix) but because I didn’t tend to it right away, it caused a domino effect with other auto parts and now my tab is up to $500.

Fixing the problem early will not only help make your car last longer, you could save thousands of dollars in expensive repairs in the long run. I know this because I had to learn it the hard way.

As a result, I now have this nifty little reminder posted on my refrigerator.

Yeah, I hate to say it but my dad was right. Ugh.

Save money on health insurance

How you can save on health insurance
The annual premium that a health insurer charges an employer for a health plan covering a family of four averaged $12,700 in 2008, and workers are now paying $1,600 more in premiums annually for family coverage than they did in 1999, according to the National Coalition on Health Care.

But there are some things you can do to save money, while getting the most comprehensive coverage you need:

If your employer offers health insurance, take it.
Group coverage is often a better deal than private insurance. If you have access to employer-subsidized health insurance, it may be a good idea to take advantage of it. But before you do, read on.

Shop around before you sign anything.
While many group policies may offer better coverage and cost savings, it’s always wise to shop around, depending on your individual circumstances. For example, a healthy 30-year-old female could pay as little as $40 a month with a private policy. However, if you have a pre-existing condition, you may end up paying thousands more through a private policy than a group policy. Consider premium and deductible costs for your particular situation.

Assess family coverage options.
If you are married, take a look at the plans your employer offers as well as the plans your spouse’s employer offers. This is especially essential if you have children. Does it make more sense to have everyone covered under one insurance plan, or to split the coverage?

Review your coverage annually.
Health insurance rates change often. Review your coverage annually to ensure that it is the most competitive plan on the market, and that it sufficiently covers the needs of you and your family.

Get healthy.
Get on a fitness and prevention plan. If you’re overweight, get your weight down to reduce the risk of diabetes. Diet and exercise will go a long way to help you save on your medical and health care costs.

Things to consider & questions to ask when choosing a health plan
In a WellPoint Institute of Health Care Knowledge study, “Choosing a Health Plan: What Should Consumers Look For?,” more than 100,000 respondents were surveyed on the most important factors in choosing a health plan. Based on these factors, the institute recommends a series of questions to ask when choosing a health care plan, including:

• Am I satisfied with my current choice of networks and doctors?
• Are my current doctors covered by this health plan?
• What is my household’s current and anticipated health care service usage, what are the kinds of things we will need?
• What are my out-of-pocket expenses and monthly premium costs? Does it make sense for me to pay a higher premium for lower out-of-pocket costs?
• Prescriptions are one of the most utilized benefits. What coverage is provided by the plans I am evaluating? Are my current prescriptions covered, and at what level?
• How much will it cost me if an emergency situation occurs?

“It is so important to look at all the options available,” says Cheryl Leamon, director of corporate communications for WellPoint, Inc. “Today’s consumers are in a better position than ever before to make more informed choices about which health plan is best for them, based on their individual needs.”

What to do if you lose your job
In the event that you lose your job, state and federal laws protect you from losing your health coverage. COBRA provides certain former employees, retirees, spouses and dependent children temporary health coverage at group rates.

You may also be eligible for a premium reduction under the American Recovery and Reinvestment Act of 2009, which is part of the president’s stimulus package. If the involuntary termination occurred between Sept. 1, 2008 and Dec. 31, 2009, you could be eligible to pay a reduced premium amount that is 35 percent of the premium costs for your COBRA coverage for up to nine months.

Additionally, if you were offered COBRA continuation coverage as a result of an involuntary termination of employment during that time period and you either declined to take COBRA coverage at the time, or you elected COBRA and later discontinued it, you may have another opportunity to elect COBRA coverage at a reduced premium.*

The U.S. Department of Labor says you should seriously consider COBRA if any of the following apply to you:

• want continual, comprehensive and guaranteed coverage at a higher cost
• have a history of health problems
• need expensive medications
• have been declined for private insurance recently
• are pregnant or planning to conceive
• have a new job and your employer does not offer a health plan

For more information, call 1-866-444-3272 or visit www.dol.gov/COBRA.

Invest in yourself with a Health Savings Account
A Health Savings Account (HSA) is an alternative to traditional health insurance; it offers a different way for you to pay for your health care, which includes dental and vision care, as well as qualified medical expenses for your spouse and children. With an HSA, you can pay for current health care expenses and save for future qualified medical and retiree health expenses on a tax-free basis.

While HSAs are not for everyone, there are several advantages. With an HSA, you can:

• deduct 100 percent of your HSA contributions from your taxable income
• have the money in your HSA accrue interest and/or gains on a tax-free basis, in stocks, bonds, mutual funds, and certificates of deposit
• avoid penalties or taxes when you use your HSA to pay for qualified medical expenses
• have a high-deductible HSA-eligible health insurance plan that typically has a lower premium than a plan with a lower deductible

You must be covered by a High Deductible Health Plan (HDHP) in order to take advantage of HSAs. HDHPs generally cost less than traditional health coverage plans, so the money that you save on insurance can be therefore put into your HSA. Check with your health care administrator for further details.

Manage your health care, manage your future
“It is hard work researching health plans to find one that best fits your needs,” Leamon reminds us. “You have to consider a plethora of things: the choice of networks and doctors; the affordability plan values; the quality of service for each plan. But our health is the most important thing we have—we need to safeguard it. We should all spend some time to understand how prevent illness, and to protect ourselves with optimal health care.”

* Source: U.S. Department of Labor

Get hired fast: job search tips

With the unemployment rate at 9.7%, recruiters say they receive hundreds, even thousands of applicants for a single job posting. Yikes, that’s tough! Especially if you’re among those looking for work.

So how do you stand out in a crowd? Here are a few ways to get noticed.

Write a resume that gets interviews
This is the first step. A resume is a self-promotional ad that presents you in the best possible light–it highlights your skills, experience and achievements.

Start with an objective. What is it you’re looking for? What have you done professionally that would make you an ideal candidate for this job in which you’re applying? An objective is a brief summary of your skill set, your career goals and what you have to offer to a prospective employer.

Use “action” words. Back up your qualities (hardworking, closer, etc.) with actual achievements (“managed a $10M budget;” “increased sales by 40% in the second year”).

Consider search engine optimization, or SEO. Just like how search engines like Yahoo! or Google look for keywords that you type in, HR departments use similar tools. That’s why you have to tailor each resume to the job description, and then use those “action” words to beef it up. When a recruiter runs a search for a particular job, your resume will appear in the search results.

Make friends and expand your network
Even as the ranks of the unemployed continue to swell, according to a Washington Post article, Laying Low After a Layoff, “experts say a certain segment is determined to suffer in silence, keeping details of job losses and financial pressure secret.”

Not only is this counterproductive in helping you deal with the emotional trauma that is associated with a job or career loss, it also negatively affects your ability to network at a time when you most need help from others.

So let your family, friends, neighbors and former colleagues know you’re looking for work. Go to professional meetings and seminars. Use social media sites like LinkedIn and Facebook to expand your network even further. And think about being a “connector.” Instead of wondering about how someone can help you, think about how you can help them. For example, while you’re searching the job boards, if you see something that might be of interest to someone in your network, pass it along. People remember these kind gestures, and you’ll be rewarded in the long run.

After all, most hiring managers and recruiters ask for referrals from people they know before they even post a job online. If someone who knows someone who knows you brings up your name, you could get a leg up on the competition–you know, the hundreds of applicants who will be applying for the job once it hits the Internet.

Prepare for the interview
Woohoo! You’ve been called for an interview. Now it’s your time to shine!

Dress for the job. It may be unfair but first impressions are usually lasting. Even if you’re interviewing at a place where the CEO wears cargo shorts and flip-flops to work, you still want to be appear polished. While it may not be appropriate to wear a three-piece suit to an interview at a company like this, you should still be professional–try khakis and a dress shirt–it says you take this interview seriously. Once you get the job, feel free to wear those shorts and flip-flops too–but right now your main goal is to get an offer letter, so err on the side of caution.

Practice, practice, practice. Recruit a friend to help you rehearse the interview. Go through the most common interview questions and answers, and think about what you’d say. It’s also helpful to have some interesting stories and anecdotes that illustrate your answer.

Do your homework. Research the company, its management team and competitors. Take notes. Memorize important facts. Want to win some extra points? Find out how the company’s products and/or services are different from its competitors, and suggest ways to either improve them or market them to a new audience. A little preparation goes a long way.

I hope that some of these tips help you build the confidence you need as you search for the right fit. Remember, even if it takes longer than usual to land a great job, this is the worst recession since the Great Depression of the 1930s. If you’re having a hard time getting call backs, it has more to do with the economy than you and your skills. Just keep plugging away and stay upbeat. And if you want to contact me for a pep talk, I’m more than happy to help. Good luck!

Cost of living in America

I found this Cost of Living map at mint.com and thought it was interesting and worth sharing. The San Francisco Bay Area seems to be the only region where the CPI is going up. How does it affect your savings goals?

investing in real estate, budgeting

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