The holidays are the time of giving and when many people choose to help those in need by making donations to favorite charities. Did you know that these contributions can actually reap benefits for you?
You’ve probably heard the phrase “write off” or “deductible expense” but many people don’t fully understand what that means. Simply put, the purpose of tax deductions is to decrease your taxable income, thus decreasing the amount of tax you owe to the federal government.
Any charitable contribution is tax deductible up to 50 percent of your income. And you can get tax savings with non-cash donations as well. Eligible deductions include the purchase of a new coat for a coat drive or food for a food drive, or making a donation to Goodwill, Salvation Army or other charities that accept gently used items. Follow these tips to make the most of your charitable deductions:
Source: Forbes.com and CNBC.com
To enhance the calculation of your Required Minimum Distribution (RMD) and to streamline our internal process to serve you better, the date of your RMD disbursement will change beginning in January, 2018.
Beginning in January 2018, you will notice these changes:
This change will allow us to use newly available software to calculate your RMD even more accurately and efficiently than in the past, so we can provide the best possible service to you!
Since new cars depreciate when you drive them off of the lot, many people find purchasing used cars to be an attractive option. However, finding a dependable used car can sometimes be a challenge. Follow these steps to find a used car that’s right for you and your budget.
Step 1: How Much Car Can You Afford?
A general guideline is that your monthly car payment should not be more than 20% of your take-home pay. Visit the LGWFCU.com resource page for an auto loan calculator to determine what you can afford.
Step 2: Check Prices and Reviews
Once you’ve determined your dream car, get online and learn about the car’s reliablity, gas mileage, features and more. User reviews can offer insight into unexpected expenses of which you might not be aware.
Step 3: Locate Used Cars in Your Area
Online classified ads such as Edmunds.com, AutoTrader.com, eBay Motors.com, CarGurus.com and Craigslist allow for photo tours and detailed information about the car. There are, of course, many places to shop for a used car, such as independent used car lots, the used car section of a new car dealership and, more recently, used car superstores like CarMax.
Step 4: Check the Vehicle History Report
You should get a vehicle history report for the car you’re interested in buying. This is an essential step. If the report is negative, you should not go any further with this car. You can access vehicle history reports by the vehicle identification number (VIN) and even by license plate. AutoCheck and Carfax are the two best-known sources for vehicle history reports.
Step 5: Test Drive
Test driving a used car not only tells you if this is the right car for you but also if this particular car is in good condition. On the test drive, simulate the conditions of your normal driving patterns. If you do a lot of highway driving, be sure to take the car up to at least 65 mph. If you regularly go into the mountains, test the car on a steep slope.
Step 6: Inspect the Vehicle
If you like the way the car drives, you should have it inspected by a trusted mechanic before you negotiate to buy it. A pre-purchase inspection can save you thousands of dollars.
Step 7: Negotiate Your Best Deal
Negotiating with a private-party seller can be a quick and fairly relaxed process. Negotiating with a used-car salesman will take longer and can be stressful. Keep these tips in mind.
- Make sure your opening offer that is low, but in the ballpark.
- Decide ahead of time how high you will go and leave when you reach your limit.
- Always be prepared to walk out: This is your strongest negotiating tool.
- Don’t be distracted by dealer pitches for items like extended warranties or anti-theft devices.
Step 8: Contact Your Credit Union for Financing
One of the benefits of your LG&W Federal Credit Union membership is the advantage of low interest car rates. Throughout the month of October 2017, we offer some of the lowest rates you can find at 1.99% APR for models from 2008 and up. Make sure you’re not overpaying every month by simply contact LG&W Federal Credit Union to learn which rate your qualify for.
If you’re planning to sell your home, you’ll want to make sure it’s in tip-top shape. But you don’t have to spend a bundle to make a great first impression on potential buyers. Consider these inexpensive tips from Home and Family Finance for putting your home’s best face forward.
"Wow" buyers immediately
Buyers make a judgment about your property the minute they pull into the driveway. To entice them to look inside make sure the exterior of your home is clean and attractive. Cut the lawn, trim the shrubs, and plant some colorful flowers. Wash down the siding and brick, and make sure your gutters are clean and free of debris. Refresh the look of old shutters and doors with a coat of paint. Hide garbage cans, yard rubbish, and old garden hoses. Removing detractors like these from your home will help pave the way to quick sale.
Make the place sparkle
A few hours spent cleaning and organizing will go a long way with potential buyers. Scrub the floors, wash the baseboards and clean the windows so they sparkle. Shampoo any dirty carpets, clean the bathtubs, replace unsightly caulking, and make sure to fix dripping faucets and oil squeaky doors. Is your oven clean? Some prospective buyers may judge the overall cleanliness of your home by how clean you keep your oven. Consider applying a fresh, neutral coat of paint to tired walls.
Create the illusion of space
If prospective buyers have to perform gymnastic moves to avoid running into extra furniture and boxes, you may have to wait a while before you sell your house. Consider storing items temporarily at a friend’s house, or rent a storage unit. Organize junk depositories like closets, basements, and attics. To create the illusion of space, don’t cram a lot of furniture into a small room, and de-clutter as much as possible.
Bric-a-brac and too many personal items are also detractors. From the minute prospective buyers walk into your home, you want them to be able to imagine themselves living comfortably in the house surrounded by their belongings and keepsakes.
Consider a pro
If you want top dollar for your dwelling you might consider hiring a redesign specialist, also known as a home stager, to maximize your property’s appeal. Home stagers’ services include everything from coming in and making over a home—putting in new countertops, applying fresh paint, replacing older furniture with modern new pieces—to walking through the home and making suggestions for improvements. Their costs can range from a few hundred dollars to a few thousand dollars depending on the level of change you’re looking to effect.
With Same Day ACH debits, members will now be able to authorize a payment due the same day it comes out of your credit union account. In the past, those payments may have taken a day or two to clear your account. The conversion will enable faster crediting when moving money among transactions at different financial institutions. Similarly, business to business payments will process more quickly – providing faster processing of invoices and payments.
Currently credit transactions are posted multiple times per day while debit transactions are posted to accounts only once per day. As of September 2017, debit transactions will also be processed multiple times per day.
To avoid any overdraft fees, ensure your account has sufficient funds to cover any Same Day Debits that you may have authorized to be posted to your account. You may want to review authorizations for current pre-authorized drafts to ensure the desired debit date is provided to the biller/retailer.
If you have any questions or need more information on Same Day ACH Debits, please talk to a Member Service Representative.
Frequently Asked Questions
All consumers, businesses, government entities and financial institutions that use the ACH Network to move money between bank accounts will benefit from the option to move ACH payments faster.
Currently credit transactions are posted multiple times per day while debit transactions are posted to accounts only once per day. As of September 2017, debit transactions will also be processed multiple times per day.
How does this affect me?
Previously, you may have seen debits posted to your LG&W Federal Credit Union checking/share draft or savings account once per day. Going forward, transactions such as check clearing (only checks to ACH), and bill payments will post multiple times throughout the business day.
What are the benefits of same day ACH debits?
The conversion to ‘same day ACH debits’ will enable you to make easier on-time bill payments as well as faster crediting when you are moving money among transactions that you own at different financial institutions. Similarly, business to business payments will process more quickly – providing faster processing of invoices and payments.
Will my direct deposit be affected?
No. Your direct deposit will continue to be credited to your account on the correct posting date.
Most people aspire to become financially independent, but few actually think about or take the actions necessary to reach independence. Financial independence means having sufficient financial resources to comfortably choose whether to work or not work, or perhaps work in a highly desirable job that otherwise couldn’t support your standard of living. It means being able to withstand the inevitable financial storms along the way. But what key steps does it take to achieve financial independence?
1. Set specific goals.
Goals define what financial independence will look like for each of us. Goals, particularly specific goals written out with timetables, can motivate us to initiate and stick with the other keys to financial independence.
2. Consistently spend less than you earn.
Yes, your mother probably taught you this when you were receiving an allowance as a youngster, but so many of us forget this basic principle. Unless you spend less than you earn, it’s impossible to become financially independent — short of winning the lottery. Consistent saving is even more important than the investment rate you might earn with that savings. Aim for saving at least ten percent of your pre-tax income. If you’re unable to save ten percent now, saving a smaller percentage will help you—especially if you start saving while you’re younger and can let the power of compounding work for you.
3. Create a spending plan.
The key to spending less than you earn is to create and follow a spending plan. In general, if you subtract your expenses from your earnings, the amount left should be your savings. Another way to view your savings, though, is to treat savings as an expense item and put it at the top of your budget. Simply have the money deducted from your paycheck and deposited into your savings account. You won’t miss it, and you won’t be tempted to spend it.
To build financial independence, you’ll need to earn a reasonable return on your savings. A savings account alone is not enough. Invest in stocks, bonds, and other assets that involve an acceptable level of risk. Yes, there’s the risk of some loss of principal, but understand that investing is for long-term goals that are at least five years away. When you are closer to reaching your goals, shift the invested funds into those lower-earning but less risky savings accounts and money markets.
5. Stay invested.
One of the big mistakes many investors make is waiting to invest until the market is really strong and then bailing out when it sinks. In short, they buy high and sell low. Get in and stay in—and make adjustments if necessary. Keep in mind that the bulk of the returns of a bull market tend to come early in the upswing, and people often miss out on them because they’re waiting for the market to turn “hot.”
It’s important to diversify your assets. Overloading on company stock, on stock in the industry in which you work, or on other higher-risk investments is an open invitation to trouble. By spreading your investment money among several asset categories, you minimize the impact of the downturns of a particular segment.
7. Use tax-favored accounts.
Retirement plans and individual retirement accounts are the most efficient way to build toward financial independence because you get more bang for each invested buck, especially if your employer matches your contributions.
8. Bulletproof your independence.
As you accumulate money for financial independence, you need to protect it. The primary way is insurance—not just life, health, auto and homeowner’s insurance—but disability and liability coverage. Disability insurance helps offset the loss of income if you can no longer work due to a disability, and liability coverage is a cushion against lawsuits. Another form of insurance is a cash-reserve emergency fund where dollars are kept in a savings or money market account to see you through emergencies or a stretch of unemployment, so you don’t have to dip into retirement accounts or other investments.
This article was submitted by the Financial Planning Association, the membership organization for the financial planning community. FPA members are dedicated to supporting the financial planning process in order to help people achieve their goals and dreams. Submission of this article does not imply an endorsement or recommendation of the Financial Resource Center site.
Dear Members of LG&W Federal Credit Union,
I am humbled, honored, and excited to have been selected as your new President & CEO of LG&W Federal Credit Union. Having been an employee at MLGW for 30 years and a member of the LG&W Federal Credit Union since 1977, working with members and staff feels like working with family.
As a long-time member of the LG&W Federal Credit Union, I’ve had the opportunity, like you, to evaluate the Credit Union and its services over the years. Since starting my position with the Credit Union, I have been on a listening and learning tour with our senior management team, our board of directors, staff, and members to better understand the collective needs and priorities of all members. Based on what we’ve learned so far, we have set our sights on four key elements: Stability, Security, Staff and Service.
STABILITY. Your Credit Union is financially sound, and the National Credit Union Association (NCUA) examiners continue to give us high marks for financial strength and stability.
SECURITY. The security of your personal information and transactions is a top priority, and we leave no detail unattended to ensure the privacy of member data and the security of all transactions.
STAFF. I am so proud of our dedicated, friendly staff and continue to learn from them every day. We are fostering their professional development to help them build their strengths so that they can continue to be motivated and engaged in providing excellent member service.
SERVICE. We have begun to work on several new projects to improve and modernize our services and update our image. For our growing base of members connecting with us online, we have launched an improved responsive website - our online branch - that offers secure access to online banking tools, financial and educational resources, ATM maps, new loan programs and benefits, and other valuable information for our members.
In addition, we are in the process of updating our Mobile Banking App that allows members to conveniently bank anywhere, anytime through their phones and other mobile devices with peace of mind.
You also may have noticed our new logo, which uses three attractive colors to reflect light, gas and water. Symbolically representing the welcoming and serving hands we offer to our current and potential members, we feel that this new logo reflects a fresh and inclusive image for the future!
A special thanks is owed to our committed board of directors who generously volunteer their time, energy and expertise to strategically guide our organization and ensure the financial health of our Credit Union. We will be working closely with the board to develop an enhanced and thoughtful strategic plan to serve as a framework for organizational growth.
Lastly, thank you to all of the members of LG&W Federal Credit Union! In the weeks ahead, we will be issuing a member survey to ask for your feedback on our benefits and services, communication outreach, and customer service to determine ways to improve your member experience. We will also seek input from MLGW employees and retirees who are not current LG&W Federal Credit Union members to help us in our member recruitment initiatives. Thank you for your partnership in providing the best possible financial services for the LG&W Federal Credit Union family!
Back to school clothes, computers, and other expenses can add up in a hurry. Results from a study conducted by the Rubicon Project’s Back-To-School Consumer Pulse Survey found that parents will spend an average of $917 per child gearing up for school this year. Use the following planning and budgeting tips to help stretch those back to school dollars:
Start with a list of needs. Make a list for each child that includes what they need, not want, for school, and add up those expenses to compare to your budget. Remember to include school fees, lunches, Comb through closets, drawers and last year’s backpack to inventory what you already have to avoid duplicate purchases. You may be surprised at the amount of school supplies left over from last year.
Get the kids involved in budgeting. Don’t shy away from including your children in your back to school budget process. Show them what the budget is versus what the expenses are so that they understand spending limitations. As an incentive, you may want to offer to split the savings with them if you come under budget.
Go coupon clipping online. Consolidation websites post downloadable coupons and sale codes for online retailers, including: CouponCabin.com, CouponCode.com, CouponCraze.com, Dailyedeals.com, DealCoupon.com, DealHunting.com, Dealnews.com and MyBargainBuddy.com.
Buy only the clothes you need for now. Kids grow and fashion changes quickly, so purchasing a lot of clothes at once may not be your best strategy. Spread out your clothing budget throughout the year and take advantage of sales that pop up each season.
Pool resources. Talk with other parents about buying supplies in bulk together and splitting costs, setting up carpools, and swapping gently used clothing, uniforms and unused supplies.
Rent versus buy. For musical instruments and sports equipment, renting is a much more affordable option than buying. As your child’s interest change, they may decide they don’t want to play trombone or lacrosse.
Should I purchase term insurance or permanent coverage? If you're in the market for life insurance, sooner or later, you'll need to make this decision. The Michigan Association of Certified Public Accountants outlines the characteristics of both term and permanent insurance—and its variations, including whole, universal and variable life—to help you decide which is best for you.
Term Insurance Provides the Largest Death Benefit for Your Premium Dollars
Term life insurance provides pure income protection at a low cost. As its name implies, you can buy it one year at a time or for a specific term, typically 5, 10, or 15 years. If you die within the term selected, a benefit is paid to your beneficiary. If you outlive the term, no death benefit is paid.
The cost of term insurance gradually rises as you age.
There are two basic types of term policies from which to choose. One type is an "annual renewable policy," in which the premiums increase each year. The other is a "level premium policy," which allows you to lock in a premium for a fixed number of years.
Permanent Insurance Combines a Death Benefit with an Investment
Permanent insurance policies such as whole life, universal life, or variable life, combine a death benefit with a savings feature. Premiums can be several times higher than you would pay initially for the same amount of term insurance because, in addition to a death benefit, part of your premiums are invested and build up a cash value. Any earnings are tax-deferred until you cash in the policy or it is distributed to your beneficiaries. If your beneficiary receives the earnings, they are exempt from federal income tax.
Whole Life Insurance
Whole life is the most common type of permanent insurance policy. Both the death benefit and your premium, which is based on your age and other factors, remain the same, year after year. You can borrow against the policy at a rate that is typically lower than the market rate. If the loan is not repaid, the outstanding balance is deducted from the benefit paid at your death. You can withdraw some of your cash value and still remain insured, or you can surrender the policy and retrieve its full cash value. Since commissions and higher initial premiums slow the cash value accumulation in the early years of the policy, whole life insurance is best used as part of a long-term plan.
Universal Life Insurance
Universal life insurance offers more flexibility than a standard whole life policy. With a universal life policy, you can vary the amount of the premiums you pay and choose the amount of death benefit you want. That means, with the same premium dollars, you can choose a lower death benefit and a larger cash buildup, or a smaller cash buildup and a higher death benefit. For this flexibility, expect to pay higher fees and administrative costs.
Variable Life Insurance
With variable life insurance, the policy holder controls the investment of the cash value portion of the policy, choosing from investment options with varying degrees of risks and rewards offered by the insurance company. Earnings generated by the policy are not taxed while the policy is in force.
Since the value of the death benefit and the cash buildup fluctuates depending on the performance of investments you choose, these policies come with a certain level of risk. Good investment performance will lead to higher cash values and death benefits. The reverse holds true, although most policies come with a minimum death benefit.
CPAs say that life insurance serves different purposes at different times in your life. But keep in mind that its most important function is income replacement, so make every effort to buy as much protection for your family as you need. Once you've determined your needs, shop around. Look for a company and an agent who can help you get the right type and amount of insurance at an affordable price.
You seek the expertise of CPAs at tax and audit time, of course. But CPAs also promote personal and professional financial security year round. Visit the CPA Referral Service on the MACPA website to search for a CPA in your geographical area or specific area of expertise.
This article was submitted by the Michigan Association of CPAs.
Have you ever heard the term “yield curve”? If you haven’t, you’re not alone. But you might be interested to know that the yield curve is an important tool for investors.
Why the Treasury Market
Although a yield curve can be determined for the spreads between maturities of bonds for any sector, the term “yield curve” is most often used to refer to the curve determined by the U.S. Treasury Bill market. Risk-free discount rates can be derived from Treasuries to match most maturities. This information can be used as a benchmark to determine the value of other investments, and whether or not their returns are worth their risks.
Treasury securities are debt instruments that have a face value, market price and maturity date. Upon maturity, the bond pays the holder the face value. Longer-term bonds also have a coupon value and pay interest over the life of the bond. To put it simply, the sum of the interest payments and the final face value payment, divided by the price, make up an investor’s return or yield.
Although Treasury securities have fixed face values, maturities and coupon rates, their prices may vary because they are actively traded. Price changes may occur for a number of reasons. As the price changes, so does the yield.
The Yield Curve
The U.S. Treasury offers bonds with many maturities, varying from one year (a T-Bill) to 30 years. The yield curve plots the maturities and yields for all of these securities. Generally, the longer the time until maturity, the more risk a security holder bears, and therefore, the higher a return they expect. However, as market forces adjust the price for various securities, this may not be the case.
What the Shapes Mean
The yield curve’s slope or “shape” always fits one of three descriptions:
As you plan your portfolio, remember to keep an eye on the yield curve and the spread between short- and long-term Treasury securities. If the spread has been flattening for months, it might be a good idea to shift your allocation to steadier investments. If it’s growing, that’s generally a sign that you can feel good about equity investments. Just remember, all indicators should be taken with a grain of salt!
Our BALANCE Financial Guide is dedicated to helping you balance life’s important decisions.