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E-newsletter December 2014

Holiday Spending Survival Guide


Are you crazy for the holidays, spending thousands of dollars on holiday gifts, lights, entertaining, food, and decorations each year? If so, you’re not alone. Many Americans feel the sting of holiday spending well into the New Year. If you love to celebrate the holidays but don’t love the financial pinch you experience afterward, there are several great tricks for giving and celebrating, without breaking the bank.

Know Your Limit
Sit down and plan out your holiday budget before you head to the malls this year. Gifts, large or small, can really add up, leaving you with a hefty bill at the end of the season. Estimate how much you plan to spend on presents, and keep track of your spending with each purchase.

Plan Ahead
You’ve done your budget and you’re ready to tackle the crowds. Here are a few ways to save on shopping, whether online or in the stores:

  • Look for special “savings days” at your favorite retail stores.

  • Use coupons from your newspaper, online or in-store.

  • Take advantage of free shipping with online purchases.

  • Buy gifts throughout the year, not just during the peak season.

Trim your List
Do you really need to exchange gifts with everyone in your family? Consider cutting your list back this year. Or suggest giving a group gift to certain members of your family rather than individual gifts. Just because you had a long gift list last year doesn’t mean you need to repeat it this year. You may find that other members of your family love the idea.

Reduce your Stress
The holiday season is stressful enough with demands from family and friends, not to mention social commitments for work or other groups. Try to plan ahead as much as possible; avoiding last-minute buys will impact your budget. Also remember to maintain your daily routines to keep stress levels low. If you usually take a walk or go to the gym every day, take the time to continue the habit during the hectic holiday months.

Enjoy the Season
In the end, the holidays are all about enjoying friends and family. Staying focused on time with loved ones and other joys of the season can help you to keep stress in perspective.


Avoid Gift Card Fraud This Holiday Season
Gift cards will be the most requested gift this holiday season for the eighth consecutive year, the National Retail Federation reports. Unfortunately, this also creates an opportunity for fraudsters who want a piece of an industry worth hundreds of billions of dollars per year.

Watch Out When Buying or Redeeming
Gift card fraud can happen when a gift card is purchased or redeemed, according to Pete Kledaras, Chief Risk Officer at CashStar. Thieves can purchase a physical or digital gift card using a stolen credit card or simply steal the gift card number and PIN and leave the physical gift card. In the latter case, thieves will typically use the balance themselves. "Once cards are stolen, there are any number of ways that thieves can turn that into money for themselves," Kledaras says. "They can resell them on the secondary market, or they can go into the store and purchase physical goods that they can sell."

Another example of gift card fraud is when a thief tries to return stolen merchandise, and the retailer issues a gift card as a refund. "The criminal is getting $75 cashback from an item that they never purchased in the first place," says National Retail Federation spokeswoman Kathy Grannis. Then the schemer might turn around and sell that gift card for cash on a secondary market such as eBay or a specialty gift card resale site.

To make sure you don't become a victim of gift card fraud this season, follow these tips.

For the Giver

  • Only buy from trusted sources. Gift card resale markets offer gift cards for less than the face value of the card, but not all of them guarantee the stated value. For example, if the original purchaser still has the gift card and PIN, he or she may be able to use the gift card online even after selling it. Or, if the retailer discovers the gift card was purchased using a stolen credit card, it can cancel the gift card. To avoid these potential issues, buy directly from the retailer issuing the gift card.

  • Watch for signs of tampering. In the past, thieves would walk into stores and write down the numbers of the gift cards on display. Since that was first discovered, large retailers have taken steps to remove any opportunity for criminals. Cards are now usually in plastic casing. If a card is not in plastic casing, make sure the PIN hasn't been scratched off. Digital gift cards are also becoming increasingly popular and don't have potential for physical tampering.

For the Recipient

  • Register your gift card. Some retailers, including Crate and Barrel and Starbucks, allow gift card holders to register their gift cards and protect the balance in case the card is ever lost or stolen. Not all merchants have this option, but if yours does, it's a good idea to register the card just in case.

  • Treat gift cards like cash. Many states prohibit gift cards with expiration dates, but it's still a good idea for the recipient to use the card sooner rather than later. This helps not only to prevent fraud, but also to avoid losing or forgetting the gift card.


How to Develop a Financial Plan 

The key to a good budget is including as much information as you can, so that you can adequately prepare and plan. It's important to keep accurate records of your spending so you'll spot places where you can save money and know how much you can reasonably spend. Here are some great tips and questions to consider for developing your financial plan.

What is your current income? 
The first step in creating a budget is to total all of your income. We recommend you do this on a monthly basis. Include only your take home pay (this is your salary minus taxes and deductions). Your income may also include tips, child support, investment income, etc.

What are your monthly expenses?  
Next, you'll need to track your expenses. Some of your bills will vary from month-to-month, so use a monthly average. For example, if your cell phone is $45 one month and $55 the next, estimate $50 per month. For annual bills, divide the yearly cost by 12 for a monthly figure. 

How much of your income should be spent?  
Rent or mortgage payments, plus your credit obligations, should not exceed 35 to 40 percent of your gross monthly income. The amount you owe on credit cards, monthly car payments, student loans, and other monthly payments should not exceed 10 to 15 percent of your take-home pay.

Put it in Writing and Do the Math
Write down everything you spend money on. Don't forget your daily coffee or snacks; those can add up quickly! The last step in creating your budget is to total all of your expenses and subtract them from your total income.

How'd You Do? 
Did you have money left over at the end of the month, or too much month left at the end of the money? If your income and expenses are equal:

  • You might be living paycheck to paycheck. Cut expenses and develop a savings plan in case of emergencies or unexpected expenses.

  • If your income and expenses equal each other, but only because you're using credit to survive and paying only minimums each month, you may need to talk to a debt counseling service to help you get back on the track to live within your means.

If you have money leftover at the end of the month, you're doing a good job of managing your expenses. Here are some suggestions for the leftover money:

  • Open a savings account. 

  • If you already have a savings account, consider setting up automatic transfers to your savings account or, if you have direct deposit, ask your employer to put a portion of your paycheck in your savings account automatically.

  • Investigate whether your employer offers a 401(k) or other employee matching savings plan. The contribution you make to this type of account is taken out of your paycheck before taxes.

If your total was negative and you don’t have enough money:

  • You need to make adjustments immediately. Keep in mind that it's usually easier to cut back on expenses than to increase your income. Analyze your budget to see where you can cut expenses.

  • Call your utility, phone, cable, and cell phone providers. There may be ways to cut those bills that just take a phone call.

  • Consider increasing your income by getting a second part-time job or by working overtime.

You can take charge of your finances and your life by setting financial goals, planning a budget, and sticking to it.​​


Security Q-Tip: Keep Your Money Safe This Holiday Shopping Season

With the holiday season in full force, it's time to gear up for holiday shopping. You've set your budget, made your list and checked it twice, so what are you forgetting? With more and more data breaches and fraud occurring in retail locations and online, make sure you know how to protect your money and identity during peak shopping season. Shoppers need to take steps to protect themselves from fraud and scams. Here's a quick refresher course for keeping your money safe this season.

Monitor Your Accounts
Proactively monitoring your financial accounts (such as bank and credit card statements) can help you catch errors and spot potential fraud at the first sign. To simplify this process, use a single credit card for all your holiday purchases. That way you will only have one statement to check instead of several. This practice has the added benefit of reminding you to stay on track with your budget, too.

Check Your Report for Free
Finally, be sure to check your credit report for errors. Look for new accounts that you didn't open and large purchases you didn't make, as these can be signs of fraud or identity theft (and they hurt your credit score too)! You're entitled to one free copy of each of your three credit bureau reports (Equifax, Experian and TransUnion) every 12 months through It's a good idea to stagger each of the three reports throughout the year. Requesting one every four months allows you to monitor your credit consistently all year at no cost.

Avoid using Public Wi-Fi
If you're doing some of your holiday shopping online to avoid the crowds, keep in mind that any purchases made online require transmitting your credit card and/or bank account information over the internet. Using a public Wi-Fi connection to do so puts that sensitive information at risk. Hackers can tap into unsecured Wi-Fi connections at hotspots like coffee shops and airport terminals to capture that information. If you're using a wireless connection to shop, be sure that it requires a password or WEP key.

Take Action
If you hear about a data breach or other fraud that might possibly affect your account, be proactive and change any related passwords. This is especially critical if you use the same password on multiple accounts. If you notice suspicious charges on your credit card or transfers from your banking account, contact your bank right away to notify them of the issue. They may put a freeze on the account to prevent further fraud, but this will keep the criminals from emptying your account.



Preparing Financially for a New Baby 
The U.S. Department of Agriculture estimates that the cost of raising a child until they're 18 is about $245,340 (more if you consider inflation). That's a nice chunk of change. Before the baby even arrives, you need to purchase a crib, a stroller, a car seat, and clothes. Then there's formula, healthcare co-pays, and the diapers to consider. On top of all of that, one parent may take unpaid time off work to take care of the child, which can mean a significant cut in family income. If that parent returns to work, the family has to somehow absorb the expense of child care, and that can cost the equivalent of a mortgage payment every month. So how can you prepare yourself for this financial onslaught so that you can enjoy those precious first months without worrying about money all the time?

1. Make a Baby's First-Year Budget
Sit down and figure out how much everything will cost. If you're first-time parents you might not know exactly what you'll need, but thankfully there are newborn checklists with estimated prices to help you figure it out. After that, you need to decide whether you will be moving to a bigger apartment or house, and how long you plan to be with only one income. Don't forget to factor in how much you might be able to expect your family and friends to help out via baby showers.

You might have to cut back in certain areas to make your budget work, or save up to cover the expenses when one of you might not be generating income. Some of these cuts will come naturally as your life changes to accommodate your new baby. For example, you probably won't be going out for dinner or to see movies as often as you were before. Practice living on your baby budget for a few months to make sure it's doable. A budget is meaningless unless you can stick to it.

2. Decide Who Will Stay Home & For How Long
While some families might be able to have one parent stay home until the kids go to school, not everyone has that luxury. Even if both mother and father are eligible for 12 weeks of unpaid leave, it's not always possible to take it since it would mean going without an income for three months which is impossible for most families. Some workplaces offer paid leave, so be sure to check to see what yours offers. Once you have all the facts, decide what makes the most sense for your family and your bank account.

3. Have an Emergency Fund
Anything can happen when you have children. It might take a while for the mother to recover, or there might be complications in delivery not covered or only partially covered by your insurance. Your child may have medical complications of his or her own. This could lead to missed work or expensive health insurance co-pays. Consider keeping some of your emergency money in a Health Spending Account for these types of emergencies.

Other emergencies unrelated to the health could crop up, like your car could need an expensive repair or one of you could be laid off. An emergency fund will help you handle anything that life might throw at you in that costly first year. Financial planners generally recommend having enough saved to cover the bills for three to six months. If that's impossible, save what you can and supplement it by establishing a line of credit at your bank.

4. Get Life Insurance
One of the most important things you can do for your kids is to get life insurance. It's not fun to think about, but you could die tomorrow. If you did, would your partner or spouse be able to support your family on their income alone? If the answer is no, then you need life insurance. Picking out the right life insurance is more important than picking out the right stroller.

Experts say that you need coverage worth five to 10 times your income. The good news is if you're young parents, term life insurance is relatively affordable since the likelihood of one of you dying is quite low. There are benefits from whole life insurance as an investment vehicle, so you should consider it if you have a little bit more money to put toward insurance. While you're at it, make a will. Knowing what will happen to your children if both you and your spouse die will give you peace of mind.

5. Include a 529 Plan in Your Budget
Getting post-high school education is expensive now, so imagine what it will cost when your baby goes to school. Start saving early with a 529 Plan and let the miracle of compound interest do its magic. Put money into it every month, even if all you can afford is a small amount. Encourage friends and family to make contributions instead of buying presents for your child's birthdays. Kids often get more toys than they need, and they will appreciate the gifts far more when they're older and have money for school. Be sure to research the best 529 plans before choosing one so that you pick one that will perform well and maximize your investment.

6. Factor in Tax Breaks
We’ve discussed the costs of parenting, but consider the tax measures in place to help parents. Factor those into your budget as well to get an accurate idea of the financial picture for baby's first year. The child tax credit provides a $3,500 exemption (though it phases out as income rises) for each dependent you have, and low-income families may qualify for more.

On top of this, you can create a flexible spending account (FSA) through your employer to cover child care costs, which will allow you to put your pre-tax earnings toward this major expense. If your child care costs exceed the amount you're allowed in your FSA, or it makes more sense for your family's situation, you can also claim the Child and Dependent Care Tax Credit which gives you a 20% to 35% tax credit for up to $3,000 in child care expenses if you have one child, and up to $6,000 in child care expenses if you have more.


Business Corner: 8 Tips to Boost Holiday Sales 
If national forecasts prove accurate, the holiday season holds a welcome gift for retailers: the biggest jump in November and December sales since 2011. With the holiday season expected to represent almost 20 percent of the U.S. retail industry’s total annual sales, small retailers need to get ready now, even if they have a bit more time this year. Here are eight tips for getting the most from the holidays:

Spruce up your Website
Nearly 60 percent of consumers plan to do at least some of their holiday shopping online this year, making online the leading channel for holiday shopping. Women are more likely than men to shop online (62 percent vs. 57 percent), as are those with children at home.

Stay True to your Values
Small retailers can’t beat big box stores on price, but they can strengthen their customer connections at the holidays, says Nicole DeBoom, chief executive of women’s activewear company Skirt Sports. “Ditch the sitewide or storewide 30-percent-off sale,” she says. Instead, try more focused promotions around core emblematic products. “Then package the promotion with the language that resonates with your community, giving your sale a theme that distinguishes you from the generic holiday sale,” she says.

Extend your Hours
Online shopping is expected to represent more than $100 billion in holiday sales this year, but consumers will spend at least $500 billion more at brick-and-mortar retailers. They won’t do it in your store if it’s not open when they’re shopping. Consider opening early and staying open late during December.

Spread the Cheer
People love freebies, so consider giving something away with certain purchases. Andrea Woroch, a consumer expert for website management company Kinoli, says holiday gifts can be alternatives to discounts. “Last year, Target did a great promotion that attracted lots of shoppers where they gave away a $5 gift card for select purchases,” she says. “This not only helped boost overall sales, but it helped boost sales of certain goods.”

Offer Free Shipping
Kinoli CEO Luke Knowles founded Free Shipping Day six years ago as a promotion for online retailers. Free shipping is the number one promotion that shoppers respond to, he says. “If possible, offer deals on expedited shipping as we get closer to the holidays, as shoppers want to know they have options for last-minute shopping.” Make sure your shipping deadlines and stock levels are communicated clearly so customers don’t miss out on ordering in time.

Hire Staff and Focus on Service
As a small business, personalized customer service is your best asset. “The holiday season is a stressful time, and having plenty of people responding to customer service inquiries and fulfillment requests is key to a positive customer experience and return business,” Knowles says.

Arrange Some Special Deals
No, you can’t compete on price, but cost-conscious consumers will be looking for unique products and good deals this holiday season. Michele Loeper, Marketing Manager at fair-trade retailer Ten Thousand Villages, likes doing one-day deep discount sales. “Also consider come-back offers. They can be especially enticing during those last-minute panic days leading up to the holiday,” she says. In the store, she makes sure to display some pre-wrapped grab-and-go items in categories like “foodie gifts” or “hostess gifts” that time-pressed shoppers can pick up on the way to a party.

Get Organized
Eileen Mockus, CEO of home furnishings company Coyuchi, builds a seasonal calendar with every activity mapped out to the end of the year. “The holiday season goes all the way through the New Year, so make every day count,” she says. “Put together events, promotions, product introductions, shipping offers, e-mails, and other marketing offers. Plan ahead so the details are figured out and at the busiest time of year all you are focused on is flawless execution.”



Coulee Investment Center: Making the Most of Open Enrollment

Shari-Hopkins.jpgIt's open enrollment time again, a time when employees across the country choose benefit options for the coming year, including those affecting their employer-sponsored retirement savings plan. Although most will just rubber stamp current plan settings, some of the savvier among us will take the opportunity to fully review plan options and ask some important questions.

Are you contributing enough?

The more you contribute today, the more you'll have for tomorrow. So consider upping your contribution rate -- even if it is just a percentage or two. Contributing more is less painful than you may think. Since contributions are pretax, you save on taxes, so your net take home pay won't shrink by as much as your contribution.

Most plans permit you to contribute a percentage of your salary either pretax or after tax (for Roth plans) to your plan. In 2015, Uncle Sam lets you contribute up to $18,000 to your plan, and if you're age 50 or older, you can contribute an additional $6,000. In addition to your elective salary deferrals, your employer may contribute up to $35,000 to a traditional 401(k) in 2015.

You should also make sure you contribute enough to earn the full employer-matching contribution, if offered by your plan. This match amounts to "free" money that goes directly toward your retirement, and can make a huge difference over time.

Does your investment mix suit your goals?

If you're like many people, you chose your plan's investment mix when you first enrolled and probably have not changed it since. While this may be appropriate for some, it's a good idea to review your investment mix at least once a year. Over time, the mix of investments in your portfolio -- your asset allocation -- can change due to one asset class outperforming or underperforming another. To make sure your asset allocation stays in sync with your risk level and goals, you may need to rebalance periodically. Similarly, you may need to adjust your allocation as a result of life events such as marriage or having a child. And as you near retirement, you'll want to reduce risk in your portfolio by allocating a greater share toward income-producing investments.

Keep in mind that most plans permit you to specify a different investment mix for existing plan balances and future contributions. So, if you do need to change your investment mix but are reluctant to rock the boat, consider changing investments just on new contributions.

Are you on track to meet your savings targets?

If you haven't already done so, it's helpful to calculate how much money you'll need at retirement. Online calculators are available at most financial and retirement planning websites that help you calculate how much you'll need to save now and how much you will need to have accumulated by the time you retire in order to provide for the retirement lifestyle you desire. Once you know your number, you'll be able to monitor on an ongoing basis how close you are to achieving your goals.

Remember that saving for retirement is not a set-it-and-forget-it deal. So take advantage of open enrollment time and put your retirement savings on track. If you have questions or would like to speak with me, please call 608-784-3904. You may also stop into the Coulee Investment Center, located inside Coulee Bank at 1516 Losey Boulevard S., La Crosse, WI 54601.

Because of the possibility of human or mechanical error by S&P Capital IQ Financial Communications or its sources, neither S&P Capital IQ Financial Communications nor its sources guarantees the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. In no event shall S&P Capital IQ Financial Communications be liable for any indirect, special or consequential damages in connection with subscriber's or others' use of the content. 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.

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