Personal Banking E-Newsletter - February 2014
Security Tip of the Month
When banking online, always verify your bank's insurance status by looking for the FDIC logo or the words "Member FDIC" or "FDIC Insured".
Five Steps to Take if Your Identity is Stolen
In 2012, 12.6 million consumers filed complaints with the Federal Trade Commission (FTC) regarding identity theft, and that number is likely to be even higher when data for 2013 becomes available. While prevention is the best solution, you need to know what to do if you become a victim of identity theft. Here are five steps to immediately take if you think your identity has been stolen:
Step 1: Freeze Your Credit Report
Request a copy of your credit report from each of the three agencies (Experian, Equifax and TransUnion). If you are viewing the report online, the simplest way to initiate a dispute is to click on the fraudulent item. The agency website will walk you through what steps to take in order to place a security freeze on your report. The freeze ensures that no one will be able to obtain new credit using your identity, protecting you from further fraud.
Step 2: Contact Your Bank
Contact your bank to let them know you've become a victim of fraud. If you think your credit card was stolen as well, and the bank is not the card issuer, contact the issuer in addition to your bank. This step is easier if you have prepared and made a list of institutions to contact and their phone numbers. Don't include account numbers on this list, as that would be one more way for a thief to steal your identity. Do keep a list of what's in your wallet, so if it's stolen you know exactly who to contact.
Step 3: Contact the FTC
File an Identity Theft Affidavit and create an Identity Theft Report with the FTC. You can file this report online at http://www.consumer.ftc.gov/articles/0277-create-identity-theft-report or by calling 877-438-4338. The FTC will provide you with information on what to do next, depending on what specific type of fraud occurred.
Step 4: File a Police Report
In order to complete the report in Step 3, you'll need to contact your local police office and report the theft. Obtain a copy of the police report or the report number for future reference. The completed FTC Identity Theft Report will help you when you work with the credit reporting agencies or other companies where the thief has used your identity to open accounts.
Step 5: Protect Your Social Security Number
If you suspect your social security number may have been compromised, contact the Social Security Administration (800-269-0271) and the IRS (800-829-0433). This step is important if you think your SSN has been stolen, even if you haven't seen any fraudulent activity yet. The thief may be planning to wait until April and then steal your tax refund, or may seek employment under your name.
Take these steps as soon as possible after you suspect your identity has been stolen and the clean-up afterward will be simpler.
Overdraft Protection: Is It For You?
According to a 2012 Pew survey, nearly one in five consumers had overdrawn their bank account that year, and nearly 75 percent of these consumers incurred an overdraft fee because of it. Since August 15, 2010, consumers have needed to opt-in in order to receive overdraft protection services from their financial institution. So, should you opt-in or opt-out of overdraft protection?
What is Overdraft Protection?
Overdraft protection is a service offered by most financial institutions to their customers who have a checking account. This service prevents your debit card from being declined due to a lack of funds by temporarily allowing your account to be overdrawn and charging a fee for that allowance. The fee can be calculated based off of the amount overdrawn or how many times the zero-balance account is charged. For example, if you have $25 in your checking account and make a $30 purchase using your debit card, the $30 charge will go through if you have overdraft protection, but you may see a fee of $20-30 on your next statement.
Why You Might Need It:
If you use your checking account and/or debit card for emergency purchases (such as unexpected car repairs or medical expenses) you should opt into your bank's overdraft protection so that you will be able to make those necessary purchases, no matter what your current balance is. Overdraft protection can also prevent the embarrassment of having your card declined if you attempt to make a purchase that would cause you to have a negative balance. Consumers who do not use credit cards may also wish to opt in to an overdraft protection service, simply for the peace of mind of being able to make emergency purchases even if their account has a low balance.
Why You Might Not:
If you monitor your accounts regularly and aren't often in danger of overdrawing, you may not need an overdraft protection service. Or, your bank may offer a different type of service; some banks offer a type of overdraft protection product where they will automatically transfer up to a certain amount from your savings account to your checking account to cover a negative balance. Other banks offer cash reserve accounts that function as a line of credit or short-term loan.
The best advice for managing your checking account is to monitor your spending. Keep meticulous track of every purchase made with a check or debit card, as well as any automatic transfers that are scheduled throughout the month. You should check your balance daily, especially if you typically carry a low balance in your main spending account. If you're unsure which overdraft protection service is right for you, ask your banker to go over the options available to you.
How to Pay Off Your Credit Card Debt in a Year
A recent survey by Credit.com found that half of the respondents who have credit card debt said it’s extremely important to have a plan in place this year to pay off what they owe. However, consumers often say they want to repay debt but don’t take the time to figure out how to make that happen, says Gerri Detweiler, Credit.com’s director of consumer education.
“Usually, after people commit to eliminating their credit card balance, they simply start paying a little more than the minimum due each month,” Detweiler says. “But for those serious about paying off their debt quickly, that approach won’t work.” If you want to wipe out your credit card debt in a year, you have to create a specific plan and stick to it. Here’s how:
Calculate your Monthly Payment
To pay off your debt in a year, you first need to figure out what your monthly payment should be to reach that goal. Credit.com has a Credit Card Payoff Calculator that lets you enter your balance, interest rate, and monthly payment, and it will show you how long it will take to pay off your debt at that rate. It also provides a table that shows you how much you should increase your payment to pay off your balance faster. For example, if you have a $5,000 balance on a card with an 11% interest rate (the average for low-rate cards), you would need to pay $450 a month to wipe out your debt in a year. If you just make the minimum payment (2% of the balance), it would take you more than 23 years to get rid of $5,000 in credit-card debt.
Find room in your budget to make that payment.
Chances are there are plenty of leaks in your budget you can plug to increase your monthly cash flow and monthly credit-card payments. Plus, there are ways you can increase your monthly earnings to boost your credit-card payment. For starters, you might be able to take home more every month by simply adjusting your tax withholding. If you typically receive a tax refund, you’re letting Uncle Sam hang on to too much of your money during the year. You can keep that money for yourself and boost your paychecks by filing a new W-4 with your employer to adjust your tax withholding.
Get your Interest Rate as Low as Possible
The lower your interest rate, the larger the portion of your monthly payment will go towards paying off your actual debt (rather than interest). Look for credit cards with 0% balance-transfer offers to dramatically reduce your finance costs. But watch out for transfer fees, which can be 2% to 4% of the transferred amount.
Can’t Pay Off All Your Debt in a Year?
If you’ve run the numbers and looked for ways to cut back (or earn more) but still can’t come up with the monthly payment needed to pay off your debt in a year, Detweiler suggests adjusting your goal. If you have several credit cards, choose one to pay off first – preferably the one with the highest rate to minimize the amount of interest you pay. You can consolidate accounts with smaller balances by taking advantage of a balance-transfer offer.
The key is to automate your payments. Set up recurring payments in the amount needed to pay off your balance as fast – yet affordable -- as possible. Your credit-card statement will list the monthly payment needed to pay down your debt in three years. So you can use that amount if a one-year time frame is unrealistic. Then, put your cards away so you can’t use them and rack up more debt.
To set up automatic payments, log in to your Home Branch account and request our free Online Bill Pay service through our secure messaging system by selecting “Contact Us”. If you have questions or need help, call our Operations Department at (608) 784-9550.
7 Financial Tasks You Should Tackle Right Now
We’re all busy with work, family obligations, social commitments, and more. That’s why it can be hard to find time to do everything that needs to get done; especially those things that we assume don’t need immediate attention.
But there are several tasks you should stop putting on the back burner because they could be affecting your financial well-being. More importantly, there are things you should tackle right away because, if something were to happen to you, the financial well-being of your loved ones could be affected.
Here are seven financial tasks you should start right now.
1. Make a list of your accounts and passwords.
If something were to happen to you, would your spouse, significant other, or family members know about all of your various accounts and how to access them? That’s why it’s important to make a list of all those accounts, the passwords to access them online, or the phone numbers for the financial institutions where the accounts are held. If you also pay the majority of your family’s bills, you should list each one and when it is due. Keep this list in a secure place and let your significant other know where it is, as well as a trusted friend or family member in case something happens to both of you, says Jeb Zoller, a certified financial planner and partner with DaVinci Financial Designs in Columbia, S.C. You should also draft a durable power of attorney, a legal document that designates someone (or several people) to manage all of your finances if you become incapacitated.
2. Set up alerts for debit and credit cards.
The recent security breach at Target, in which the personal information of tens of millions of the retailers' customers was stolen, makes it painfully clear that anyone can become a victim of fraud at any time. So it’s important to keep constant tabs on your bank or credit accounts to spot fraudulent activity and stop it quickly. Most debit- and credit-card issuers will let you sign up to receive alerts by e-mail or text message when transactions are made in your account. By setting up these alerts, you can quickly spot unauthorized transactions, says Gerri Detweiler, director of consumer education at Credit.com. Plus, you can be alerted when your account balance falls below a certain level, or when a payment is due, which will help you avoid overdrawing your account or getting hit with a late fee on a bill.
You can also take advantage of Identity Theft Protection Services, like Deluxe Provent, at Coulee Bank. For more information, visit our website or talk to a banker today.
3. Check your credit report and score.
A study by the Federal Trade Commission found that one in four consumers had errors on their credit reports that might affect their credit scores and, in turn, lead them to pay more for loans. The credit bureaus have no obligation to correct errors until consumers point them out and dispute them. So if you’re not checking your report regularly, you won’t catch mistakes that could be lowering your credit score and affecting your ability to get a loan or a good rate on a credit card, Detweiler says. Checking your report can also help you find out if you’ve become a victim of an identity thief who has opened accounts in your name.
4. Create a home inventory.
When disasters strike, it pays to be prepared. Zoller says that a client lost all of his belongings when the moving truck transporting them from Virginia to Texas caught fire. Fortunately, the client had an inventory of his possessions and was able to tell his insurer everything he had lost and its value so that he could be fully reimbursed. Without a home inventory, filing a claim can be difficult, and you might not get enough money from your insurance company's settlement to replace your belongings. Several insurance companies have apps that help you maintain your inventory and file claims online.
5. Write a will.
Zoller says that the majority of his clients come to him either without a will or with one that hasn’t been updated in years. This is one document you shouldn’t put off drafting, especially if you have children. If you die without a will, your state's laws dictate where your assets go and a judge will likely decide who will care for your children. If your finances and circumstances are uncomplicated, you can create a will with forms you find online. Nolo and LegalZoom sell forms for as little as $34.99. Alternatively, consult a lawyer.
6. Review the beneficiaries on your accounts.
If you opened a financial account years ago, and have since married or had children, you should update the beneficiaries on those accounts. Otherwise, the parent or sibling you listed years ago as a beneficiary could end up with your money, leaving your spouse and kids with nothing. “Don’t assume this is unnecessary if you have a will,” Zoller says, “because the money in certain accounts will go to the people you’ve designated as beneficiaries regardless of what your will states.”
7. Get disability insurance.
Hopefully, you already have life insurance to help support your family after you die. However, there’s a greater chance that you’ll have a disabling event than die before age 65. So how would you or your family get by if an accident left you unable to work for several months? You can apply for Social Security disability benefits, but the process can be long, difficult, and uncertain. You’ll be better off with a disability insurance policy. Even if you have disability coverage through work, you might need more because your work policy likely won’t replace all of your income and might only cover you for a short period of time. Plus, if you buy your own policy, you won’t lose it if you switch jobs.
5 Tips for Preparing Your 2014 Taxes
Tax planning very rarely makes it on people's New Year’s resolution lists. Perhaps 2014 will be the year you vow to achieve a greater level of understanding about your taxes, and how to properly organize and plan for your liability.
Not only would this pledge make your life easier come tax season, but it could also end up keeping more money in your bank account. Here are some tips to get rolling on fulfilling this resolution.
1. Set Up Your 2014 Tax File
This could be an electronic file in which you scan documents and transactions throughout the year that will affect your tax return, or a folder or bin that holds the information.
The beauty of an electronic file is that, at tax time, you can simply e-mail it to your tax professional, who will likely also maintain the file in the event of an audit. Just make sure you have adequate back up of your data in case something goes wrong. Adding notes on the tax documents to aid your tax pro in understanding the transaction can help the filing process.
Examples of documents to store for tax purposes include: W-2s, 1099s, K-1s, escrow papers for purchase, sale of refinance of properties, receipts for property tax and vehicle registration fees, receipts for other tax deductible items, and acknowledgement letters from donations made to qualified nonprofit organizations.
2. Schedule a Mid-Year Tax Planning Appointment
If you plan to get married or divorced, buy or sell a home, start a family, or experience any other financially-altering event in 2014, it's a good idea to meet with a professional to do some tax planning. However, it is best to avoid scheduling a planning session at the height of tax season when your tax pro is overwhelmed with work.
3. Make Plans to Fund your Retirement Plan
If you have a retirement plan at work, check to see if you qualify to contribute more to the plan and make sure you are taking advantage of an employer match.
If you have no retirement plan in place, open an IRA, Roth IRA, or other such plan.
Your bank or investment house will be able to help you decide between various instruments to find one that best fits your financial situation. A tax professional can also weigh in on which type of savings vehicle would work best for a particular situation. This will not only reduce your current year tax liability, but it will help provide for your future. With so much uncertainty surrounding the viability of Social Security and Medicare, it is important to look out for yourself.
4. Log Estimated Tax Payments, Dates, and Amounts into Your Calendar
The IRS penalizes those who do not prepay their income tax liabilities in a timely manner. The dates for the four installments of your 2014 estimates for individuals filing on a calendar year basis are: April 15, June 16, Sept. 15, and Jan. 15, 2015.
5. Follow Tax Legislation News
Tax law changes rapidly; what you may think is a valuable deduction or credit for your tax return may have been obliterated by a congressional whim. Before you count on a particular credit or deduction, make sure it still exists.
Best wishes to you all for a happy, healthy, prosperous, and tax-savvy new year!
LPL Article: Social Security Review and Education Day
Dear Valued Investor,
Social Security is an important part of retirement planning. A little guidance today can help you maximize your retirement income tomorrow. As an experienced financial consultant, I can help you make the best decisions for your future.
Choosing when and how to begin Social Security will have a significant impact on the amount you’ll collect over a lifetime. The filing options are complex and can be confusing. Making an informed choice is the key to receiving your full benefits.
On Friday, February 14th, 2014, I’ll be available for one-on-one consultations at a free Social Security Review & Education Day at Coulee Bank. Stop in to the La Crosse branch at 1516 Losey Boulevard South. There’s no appointment necessary; just stop in any time between 9am and 4pm.
Learn when you’ll be eligible for Social Security, how much you’ll receive, and the potential impact of delaying your benefits. Discover which benefits you’re eligible for (including spousal and dependent benefits), whether you can collect Social Security while employed, and many other common questions regarding Social Security.
Please feel free to bring your spouse or friend to the event, and enjoy complimentary coffee and cookies. I look forward to answering your questions and helping you maximize your Social Security benefits.
Can’t attend the event? Please call me at (608) 784-3904 to schedule an appointment. I’m always available to help you achieve your financial goals at the Coulee Investment Center inside Coulee Bank in La Crosse, WI.
Shari L Hopkins, CFP®
Coulee Investment Center
Located at Coulee Bank
P.S. If possible, please bring your Social Security statement with you so we can address specific issues and questions regarding your benefits.
Securities offered through LPL Financial, Member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates. Coulee Bank and Coulee Investment Center are not registered broker/dealers and are not affiliated with LPL Financial.