EPEFCU

Buying Life Insurance 101

So you’ve graduated from college, landed your first grown-up job and married the love of your life. Life couldn’t be better, so why ruin it with morbid thoughts about mortality?

As unpleasant as the idea of planning for your own death might seem, there are plenty of reasons to look into buying life insurance. If you (or your spouse) are the main source of income for your family, have or are planning to have children and currently share a substantial amount of debt and/or a mortgage payment, life insurance will be a good cushion to put into place sooner rather than later.

As you grow older and your life continues to change, you’ll want to start thinking about purchasing a life insurance policy. But all these changes can be a little (or a lot) overwhelming, so we’ve done some research for you and put together a short list of basic do’s and don’ts  when purchasing life insurance.

There are two types of policies, term and permanent. Term insurance provides death protection for a stated time period, or term. It provides a death benefit if you die within a set number of years and typically nothing if you live beyond that term. Permanent insurance, otherwise known as whole life insurance, provides life insurance coverage for as long as you live.

According to consumer reports, permanent policies can cost at least 10 times more than term policies. A $1 million policy for a middle age male for instance might cost an average of $160 a month for a term policy. If however you’re looking into the same amount of coverage on a whole life policy, you’re looking at a monthly premium of approximately $750 a month. Keep in mind however that the premium is fixed on a whole life policy and you’ll be able to borrow against it should the need arise.

According to Forbes, some insurance agents recommend coverage that will replace the equivalent of 15 times your annual income.

In order to help you decide which type of insurance you should opt for, take advantage of online calculators. The goal is to figure out how much money will be needed to cover your spouse’s expenses until retirement as well as support your children through adulthood.

After you’ve decided how much insurance you’ll need and which policy best fits those needs, it’s time to get yourself into shape. There are several life improvement changes you can make today in order to reduce the cost of your monthly premium. For example, kick the smoking habit once and for all, work towards loosing weight and lowering your cholesterol and blood pressure.

Lastly, do your homework! Whichever type of policy you decide to purchase, it should be done through an insurance company with an “A” rating or higher from an independent rating agency. Also, make sure to compare quotes from different companies.

But don’t just take our word for it. Remember to consult a professional before making your purchase if you’re still unsure about your choices. Setting a plan into place for your loved ones will give you peace of mind knowing that they will be taken care of once you’ve passed away.

 

 

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Investing for Beginners

Many investor newbies hear the phrase “stock market” and shudder, but the truth is investing isn’t nearly as scary as you might think it is. The stock market isn’t just for bigwigs. You too could start investing, and you should. Here are a few tips to keep in mind when starting out.

1. Examine your budget closely.

Do you have money to spare? Money invested into any account should be money you can afford to lose. Keep in mind that money invested into stocks should never replace your 401(k) or IRA. If after close inspection you find that you do in fact have some wiggle room in your budget to invest, decide on how much money you can afford to put into the market.

2. Stick with what you know.

One of the biggest hurdles facing first time investors is knowing which stocks to put their money into, according to MSN, investors should stick with what they know. Let’s say you absolutely love dogs, and are constantly looking for the healthiest foods for Fido. Chances are you know more about dog food than the average person. Make money buying the brands you know best by using the knowledge you already have to make an intelligent investment.

3. Start by playing it safe.

Buy stock from large franchise companies that you know will do well, such as McDonalds or Apple. Companies with a strong global brand are harder to compete with, making them a safer choice for first time investors. When investing with safe firms such as these, you can feel pretty secure in your choices without being too risky.

4. Do your homework.

Doing some research before delving into the market will help prepare you for what’s ahead. Some websites, such as WeSeed.com, let you create a portfolio using fake money. You’ll be able to test your skills before investing with the real thing. Also, remember that everyone’s financial situation is different and you should always consult with a financial advisor first.

The Benefits of Using Direct Deposit

Many financial institutions, including El Paso Employees FCU offer direct deposit. Aside from saving time by not having to stop by your financial institution every time you receive a paycheck, direct deposit can actually save you money. Find out how you can benefit from this convenient feature and enroll in direct deposit today!

 

Funding Our Future

Learning how to live a healthy, financially sound life takes practice and like anything else, the earlier you start, the easier it will be. As the children of our community grow older, we realize that these young adults will soon be entering the workforce and becoming the future of our city. And so, in an effort to influence their perspective of the way our society spends money, EPEFCU has begun a variety of programs dedicated toward helping the young adults in our community learn to successfully manage their finances.

Our semi-annual writing contest is a recent addition to the long list of scholarships our credit union currently makes available to the students of our community. The contest is meant not only to provide financial aid to those in need, but also to promote literacy through the written word. Each semester, two students, a college student and high school senior, are chosen to receive $1,000 towards their college career. We understand that college can be an expensive endeavor, one many children cannot afford. According to a story published by US News and World Report, the average annual tuition (plus expenses) at a private nonprofit four year college is about $35,000.

These days it’s difficult to come across any entry level position that doesn’t require a bachelor's degree. As young adults enter today's workforce, they realize the importance of a college education. Yet for most, it is difficult to understand why the cost of higher education continues to soar. In the past 25 years, the average cost of tuition and fees has risen faster than personal income, consumer prices and even health insurance, according to the College Board.

El Paso is no different. The University of Texas System’s Board of Regents approved an approximately 3.95 percent increase to tuition rates beginning in the fall of 2010, at nine university of Texas Institutions, including UTEP. The increase adds to the approximately 70 percent increase that UTEP has seen since 2004.

While we may not be able to stop the continually soaring price of a degree, we can do our part to ease the cost of an education for students. The writing contest is meant to help not just current college students, but high school students as well. Unlike most scholarships however, our writing contest makes it easy to apply.

Students are asked to choose from three topics, each relating to their personal finances. They must then write a 1,000 word essay recounting their experience and email it back to our credit union. A board will then read the each of the essays and choose the top writer from both the college and high school category.

Last semester was the first launch of the writing contest, and we were pleased and excited to have received hundreds of entries. Being able to read about the struggles the students in our community have had with money has helped us to create programs centered around their needs. Along with our writing contests, we are excited to roll out our fist ever Teen Magazine that will feature stories and financial tips related to their experiences.

Nearly two-thirds of college graduates leave school with debt, up from less than half in 1993, according to the non-profit Project on Student Debt.  We want to change this statistic and so we’ve dedicated 2011 towards educating the future of our community.

Planning a Summer Vacation? Start Saving Now!

While your summer vacation may not rank high on your financial list of to-do’s, planning early can help you save a significant amount of money in the long run. We understand that it may be hard to think about your tropical island get-away in the middle of winter, but January is the perfect time to start budgeting for you summer vacation.

Decide where you want to go and how you plan to get there.  

•         Once you and your family decide on where you’ll spend those glorious vacation days this summer, it’s important to create a budget that will help you save money towards the cost of your trip. Remember that a vacation doesn’t have to equal debt! Start planning now and pay for your trip in cash rather than relying on high interest credit cards.

•         Before you can begin to save, you’ll want to open up a designated savings account that will separate your vacation fund from the rest of your finances, such as the Vacation Club Account offered at El Paso Employees FCU. Watching your vacation account grow will encourage you to stick to your goal and keep you from using the funds towards other splurges.

Do your homework. Once you’ve decided on where you want to go, begin looking into where you’ll stay during the duration of your trip. Check out online websites such as Expedia, Orbitz and Travelocity for deals on hotels. But don’t neglect to check out the hotel websites themselves as they can sometimes offer a better rate. Remember that the time of year you choose to take your vacation will affect the cost of your stay. Booking during the hotel’s off-peak season will help you score a lower rate. Get the most out of your money by asking for a discount if you’ll be staying for more than seven nights.

•         If you’re planning on taking a cruise, booking your reservations early will guarantee you a spot on the cruise ship. You might also be eligible for early booking discounts.

Decide how you’ll reach your destination. Will you be driving or flying to your destination? Just like you should consider booking your hotel early in advance, you might also want to consider buying plane tickets early as well. Doing so might let you avoid any spike in prices due to the increase in flying during the summer months.

•         Remember to consider how many people are flying or driving on this trip as well as if there will be pets accompanying you. For larger families toting their pets along, it may be cheaper to rent a van and plan a road trip rather than purchasing plane tickets for you, your children and Fido.

Don’t let your post-holiday-debt-blues keep you from planning your summer vacation early this year. Plan to pay for your next trip in cash and avoid the stress of the post-vacation debt! 

 

What tips would suggest when saving for your summer vacation? Share with us! We'd be honored to read your comments!



New Income Tax Rules

Find out about the latest income tax rules, what you need to know and how to prepare for this years tax season. Join Paul Berny and Barbra Waltmen on the Home and Family Finance Radio as they discuss the information you need to know.

Annoying Bills to Slash Today

Tired and irritated by those same bills that show up in your mailbox every month? While we can’t live without them (or at least most of them), they don’t have to cost you an arm and a leg. Read on to find out how you can slash those annoying bills you simply must pay every month.

  Stop paying more than you have to for your cell phone every month. Okay, so this isn’t actually a bill you absolutely cannot live without, but let’s face it, for many of us, feeling disconnected on the days we forget our phone feels like the end of the world. Still, your monthly plan doesn’t have to cost you a fortune.

•         Avoid unnecessary charges such as dialing 411 when you’re in need of a phone number. Text Google instead at 466453 to avoid the costly $1.99.

•         Sign up for a family plan with the ones you talk to the most. Being on the same plan will ensure that your conversations to those you chat with most often are free.

•         Check with your employer to see what discounts, if any, they offer.

•         Scan your monthly bill. Many times, we pay our bill each month without taking the time to see what it is we are actually being charged for. Not using up all those minutes or text messages? Consider signing up for a pre-paid plan to save some extra bucks.

During the colder months of the year it’s easy to rack up a large heating bill while trying to stay warm. Still, there are a few adjustments you can make to shave some dollars off the bill.

•         Block all drafts to keep heat from escaping and cold air from coming in.

•         Install a programmable thermostat so that you can control the temperature in your home.

•         While you’re away at work or sleeping at night, lower your thermostat a few degrees. Or, use a space heater to warm one area at a time.

Until your mortgage is paid off, you can count on that monthly mortgage payment. One of the smartest things you can do to save money on your mortgage bill is to make an extra payment a year. Now, we realize that this may sound counterintuitive, but in the long run, just one extra payment can save you thousands of dollars by reducing the amount of accrued interest you pay, and by shortening the amount of time it will take you to pay it off. 

Insurance is definitely a necessity, even the law in some states, (at least when it comes to automobile insurance), but there are a few ways you can lower the cost of your monthly premiums.

•         Taking a state-approved defensive driving course can significantly drive down (no pun intended) your auto insurance rates. Court-mandated classes however, may not qualify for a defensive driver discount; make sure to check with your insurance provider.  

•         Consider raising your deductibles, doing so will also lower your monthly payment. However, make sure that you set aside the needed deductible you’ll be responsible for in the event of an accident.

•         Ask about discounts for bundling your insurance plans. Many insurance companies will give you a discount if you have both your home and auto insurance with the same company.

Some bills are simply just unavoidable; the high cost however is not. Follow these easy tips to put some money back in your pocket.

 

Were these tips helpful? What have you done to save some money on the monthly bills you pay? Let us know! We would love to read your comments.  

 

Commonly Missed Taxed Deductions You Need to Know About

 The New Year means that the tax season will be upon us before we know it. Most of us will probably put off preparing our tax return until the very last minute because lets face it, preparing taxes can be tedious. When you finally do begin to prepare for this years dreadful tax day however, there are a few deductions you’ll need to keep in mind in order to ensure that you’re not paying more than your fair share to Uncle Sam.  

Did you spend some time looking for a job? If so, the expenses you incurred are deductible even if you didn’t land that job. Expenses such as fees paid to employment agencies or resume writing services are all included under expenses you can deduct.

If you’ve already paid off your mortgage, a new law that took into effect into 2008 will greatly benefit you. Now, you can write off your property tax, even if you don’t itemize deductions by increasing your standardized deduction by the amount of real property tax you could have claimed if you did itemize, up to $500 or $1000 on a joint return.

Most us know that charitable cash donations are deductible, but what about noncash contributions? You are permitted to deduct any charges you’ve made on your credit card for the purpose of charity in the year it was charged. Make certain however that you have proof of your purchase by asking the charity for any necessary receipts you’ll need to keep in the event of an audit. If you’ve donated clothing or any other items to organizations such as Goodwill, make sure you receive a written receipt for your records and remember that items must be considered in “good” condition or better. If you’ve volunteered for any charities, you are also permitted to deduct any mileage use while volunteering.

Still paying off those student loans? Any interest accrued on them is tax deductible as long as the loan is still currently owned by the lender.

Many insurance premiums, including long term care premiums based on age are potentially deductible. In order to qualify for this particular deduction, medical expenses must exceed 7.5% of your adjusted gross income (AIG).

Also, don’t forget to track any business expenses that you accrue throughout the year as these are also tax deductible. And whether you plan to prepare your taxes on your own or with the help of a professional, tax preparer costs are also deductible. Expenses such as tax preparation fees and even the portion of your legal and accounting fees related to tax planning are deductible if their total exceeds 2% of your adjusted gross income.

Tax preparation is never fun. Resolve to get a head start this year and keep these commonly forgotten deductions in mind so that come tax time, you can rest assured that you’ll be taking advantage of the deductions you’re entitled to. Remember,  as always each individual's circumstances can be different. Consult your tax advisor regarding questions and deductibility of interest.

Did you know that you can receive a discount on the Turbo Tax Federal Deluxe software just by being a member at El Paso Employees FCU? Visit our website and click on the Turbo Tax link to find out how!

A New Change in a New Year

We recently wrote a blog about the steps you can take to become financially sound in the New Year. We know that keeping a New Year’s resolution can sometimes be difficult because they involve change, and let’s face it…change is difficult. That’s why we are offering you a few more tips that will help you stay on track as you work your way towards decreasing your debt.

According to the National Foundation for Credit Counseling, decreasing debt was the no. 1 New Year’s resolution for 2011, with improving credit scores, allocating more funds towards savings, and reducing dependence on credit cards running a distant second, third, and fourth. But come February and March, many of our resolutions have been long forgotten. According to a study conducted in 2007 by Richard Wisemen from the University of Bristol, seventy eight percent of people who set New Year resolutions fail.

Being motivated is a great starting point, but in order to be successful, you’ll need to create a realistic plan that you’ll be able to follow throughout the year. Why not forego the traditional resolution and instead, create a financial to-do list you’ll work towards accomplishing. Consider some of your financial goals for the New Year, and then break them down into smaller, more tangible goals you’ll be able to cross off your list as they’re accomplished. When setting your goals, be specific. Setting unrealistic or broad goals will be difficult to fulfill and will only discourage you in the long run.

Seek resources that will help you accomplish your goals. There are many free webinars and websites such as our blog that offer free financial tips to help you get your finances into shape. Or, if you’re a reader, there are many books written on the subject by financial experts such as Dave Ramsey. In any case, seeking help will aid you in your journey towards financial success.

Make an effort to start saving. Or, if you are already saving, try boosting the amount you put aside each month. Use services such as automatic transfers to make the process less painful. If the money is pulled out before you see it, chances are you’ll miss it less. Creating a cushion for emergencies is an essential part of living a financially sound life.

Look at your credit report. Visit AnnualCreditReport.com to ensure that there are no errors on your report that might be affecting your credit score. Keep in mind that each of the three credit bureaus may provide you with a slightly different credit score. Make sure to check all three bureaus, although you may want to do this periodically throughout the year as you are only allowed one free credit report from each of the bureaus in the same year.

Know how much you owe. List all of your debts so that you know exactly how much you need to pay and when. It is imperative that you make all of your payments on time each month; late payments can drastically reduce your credit score. Keep in mind that your credit score can affect the interest rate creditors charge you. Also, try to pay more than just your minimum payment if possible. Due to the recent credit card laws, your credit card statement now shows you how long it will take to pay down your card should you choose to only make the minimum payment.

Life can sometimes get in the way and it’s easy to forget about a payment when we have so many to keep track of. Take advantage of tools offered by your credit union that will help you stay on top of your monthly payments. Sign up for alerts or and automatic payments when possible.

Remember that change is tough and it doesn’t happen overnight. Don’t get discouraged if you don’t see results right away or if you make a mistake, such as forgetting to make a payment. If you do make a mistake, pick yourself up and keep moving forward. Before you know it, you be living a financially sound life!

 

Do you have a financial success story you want to share? Or maybe you’re currently working your way towards financial success. What has your experience been like? Tell us! We’d be honored to read your stories!

Start Your New Years Resolution Today

The New Year is quickly approaching and soon many of us will begin once again to put into practice our new year’s resolutions. But you don’t have to wait until January 1st to begin implementing 2011’s resolution. With a few simple steps, you can begin creating a plan of action now and ensure that you’ll be financially sound and healthy come the new year.

Begin by evaluating your monthly expenses in order to determine what areas you might be able to cut out of your budget. If you’re trying to pay down your debt, you’ll need to make the decision to change the way you live your life. Spending five dollars a day on a cup of coffee or nine dollars for a movie ticket not to mention the cost of popcorn, soda, and candy every other weekend is not a necessary expense. While you may rationalize these seemingly small expenditures, you’ll need to keep in mind that every little bit of money saved could be used to pay down a credit card or other monthly bill. Sorting out necessary vs. unnecessary expenses may be difficult, but setting financial limits will help you become financially successful in the long run.

Create a budget and a plan and stick to it! For most of us, we don’t only have a balance on one card; we have high balances on multiple cards. There are many different ways to approach paying down debt. Yahoo.com for example recommends that you concentrate payments toward the debt with the highest associated annual percentage rate. Dave Ramsey, financial expert, suggest the “snowball effect” when paying down debt. His website suggests paying off the smallest debt first to create the greatest momentum in your debt snowball. According to Ramsey, personal finance is 20% head knowledge and 80% behavior. People, he says, need some quick wins in order to stay pumped enough to get out of debt completely. In any case, choose the strategy that works best for you.

Do not ignore your bills.  Successfully managing regular monthly payments is an essential part of staying debt free. If you are having difficulty paying any of your debts however, ignoring them will not make them go away. A large part of being financially successful is to have a healthy credit score, and ignoring payments will only affect you negatively. Call you lender to try to negotiate interest rates or even lower monthly minimum payments. You might be surprised that many lenders will be willing to work with you rather than not receive any payment at all. In any case, remember that it never hurts to try.

Lastly, and perhaps most importantly, make plans to set aside money into an emergency fund. You never know when you’ll need money for a large expense, and having to use your credit card to pay for an emergency will only catapult you into the debt cycle all over again.

Remember that your efforts won’t work unless you take the initiative to commit yourself wholeheartedly. And while the road to financial freedom may be difficult at first, the end result will be well worth the effort.

 

Were these tips helpfu? What steps have you taken to get out of debt? Share with us! We'd love to read your tips!