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January 2015 E-newsletter

Winterize Your Wallet: Money Savings Tips for Cold Weather

With the holidays now over and family budgets feeling the effects of the season, it can be challenging to find fun cold weather activities that are also budget-friendly. Here are a few ideas to keep busy and save your budget this winter: 

Creative Sledding
Many city sledding hills don't charge admission, and you can cut down the cost of buying a new sled by repurposing your summer water toys. Inner tubes and other inflatables make for great sleds. If they're getting worn, reinforce the weak spots with some duct tape. It's also a good idea to check your local thrift store, as plastic sleds and saucers are often donated after a child outgrows them.  

Grab a Book and Dine In
Take a field trip to the local library. Most have a kids' section where children of all ages can bring their selected books and read together. Check out any books that they don't finish and have the kids read them at home while you cook dinner. Leave the oven door open after you're done (make sure to turn the oven off first) to let that extra heat circulate and lower your heating costs.

Bundle Up
Every degree on the thermostat costs you money when it comes to heating your house. Instead of sitting around the house in a t-shirt, slip into a cozy sweater and invest in some comfy slippers. Turning down the heat just three degrees can cut up to 10 percent off your heating bill.

Reverse Ceiling Fans
A lesser-known heat-saving tip is to switch your ceiling fans to spin clockwise. In a still room, all the warm air rises and ends up collecting near the ceiling. Depending on how well your house or apartment is insulated, that can mean up to a seven degree difference in temperature from the floor to the ceiling. Reversing the ceiling fan will push all that warm air back down into the room, meaning you'll feel comfortable even with the thermostat set a little cooler.


Live Chat Now Available at Coulee Bank 

CHAT-NOW.pngIf you're trying to find something on the website, have a question about your account, or simply want to speak with a representative without picking up the phone, we have great news! We now offer Live Chat on our website at To connect with a friendly representative, simply click the “Chat Now” button at the top of the page. Our Live Chat feature is offered between 8:30am – 4:30pm on regular business days.  

8 Tips for People Who Will Retire in 2015
Retirement is a major life transition that requires changes to your income and lifestyle. Here are the final preparations you should be making if you plan to retire in 2015.

Decide When to Sign up for Social Security
When you sign up for Social Security drastically affects how much you will receive each month. Most baby boomers are eligible to receive full benefits at age 66. If you sign up before age 66, your monthly payments are reduced, and if you delay claiming up until age 70, your payments increase. “You want to consider the penalty for taking it early and the benefit of delaying it beyond full retirement age,” says Christopher Rhim, a certified financial planner for Green View Advisors in Norwich, Vermont. Members of married couples may also be able to claim spousal and survivor’s payments and strategize ways to maximize their benefit as a couple.

Take Care to Sign up for Medicare on Time
It’s important to sign up for Medicare as soon as you are eligible to do so. “You should start submitting the paperwork for Medicare up to three months before age 65,” Rhim says. “It’s not something you want to wait and delay on because there are some financial penalties if you sign up later.” Also, take a look at Medicare’s premiums, deductibles, copays and coinsurance so you can get an idea of how much you will need to pay out of pocket. If you retire before age 65, you will need to find another source of health insurance until you qualify for Medicare, perhaps through your state’s health insurance exchange or your former employer.

Assess your Workplace Retirement Benefits
Make an appointment with your human resources department to determine which workplace retirement benefits will carry over into retirement. Some fortunate employees get traditional pension payments and retiree health insurance after leaving their jobs. You should also check when you vest in your 401(k) plan and get to keep your employer’s contributions.

Consider Rolling Over your 401(k)
When you leave your job, you have the option to roll your 401(k) balance over to an individual retirement account. To decide if this is a good move, you need to compare the fees and investment options in the 401(k) plan with those in an IRA. “If they do roll it all over into an IRA, they get certain benefits from it,” says Laura Mattia, a certified financial planner for Baron Financial Group in Fair Lawn, New Jersey. “A lot of times when you consolidate, you can take advantage of price breaks and lower fees.”

However, if you leave your job at age 55 or older (or age 50 for public safety employees) and plan to dip into your 401(k) balance immediately, you may want to leave the money you will need in the 401(k) plan. You can take penalty-free 401(k) withdrawals from the 401(k) associated with the job you left at age 55 or later, but if you move the money to an IRA, you will have to wait until age 59½ to avoid the 10 percent early withdrawal penalty.

Make a Long-Term Investment Plan
Investors obviously want to keep their nest egg safe, but you also need to make sure that it lasts the rest of your life and keeps up with rising costs. “You really don’t want to get too conservative because your portfolio has to overcome inflation and management fees and trading costs,” Rhim says. “If you are looking at 20 to 25 years of retirement, that is a long-term planning horizon and you need a competitive return. That really is a call for stocks. You simply can’t get that type of return with bonds and cash.” You also need to develop a plan for how you will spend down your assets in a way that minimizes taxes and penalties. “You should list all your financial assets, where they are and identify what the strategy is behind them,” Mattia says. “You want to make sure you are reacting according to your strategy and not making decisions emotionally.”

Remember Required Minimum Distributions
Beginning after age 70½, you will typically be required to withdraw money from your traditional retirement accounts every year and pay income tax on each distribution. The penalty for failing to withdraw the correct amount is 50 percent of the amount that should have been withdrawn.

Develop a Plan for Emergencies
Covering your basic monthly costs in retirement isn’t enough. You'll continue to need an emergency fund in retirement to cover unexpected bills. “I always tell people to keep between six months to a year’s worth of expenses in a liquid interest-bearing account that you can get to whenever you want,” Mattia says. “Having some cash out at all times also gives you flexibility, so if investments are not going in the right direction, you can leave them alone for a while to get back on the right track.”

Decide How you will Spend your Time
What you decide to do in retirement will have a big impact on your costs and quality of life. “Certainly you will spend less on gas and don’t have to spend as much on work clothes, but some people are also going to spend more money now because they have the time and don’t just want to sit around the house,” says Craig Schmith, a certified financial planner in Durham, North Carolina. “If you’ve got pent-up demand to travel, especially internationally, and you haven’t had time to do that, you need to think about budgeting that in.”


Security Q-Tip: Is it Safe to Bank Online? 
The recent security breach at Citibank was yet another incident that rattled consumers: Sony, Lockheed Martin, and iTunes are also among recent high-profile targets. With such big names falling victim to hackers, is it still safe to bank online?

The answer, according to top security experts, is a qualified "yes." Using the Internet to bank, buy music, or shop is still as safe (or safer) than visiting brick-and-mortar locations, as long as consumers take precautions and know what to do if they notice any suspicious activity. Here are 10 steps consumers can take to make sure their information is safe:

1. Don't Talk to Cyber-Strangers or Click their Links
This is the easiest way to download malware to your computer. Even if an email looks like it's from a company you know, such as your bank, go directly to the bank's website and log in there instead of clicking on the embedded link, and never open attachments from strangers (or even suspicious-looking ones from friends, who may have been hacked themselves). Sometimes hackers will set up fake sites that look like real sites to capture victims' information, a method referred to as phishing. A financial institution will never contact you via email asking you to verify your funds, request your username or password, or any other sensitive information.

2. Treat Social Networks like Dark Street Corners
You never know who's lurking among your friends and acquaintances. Hackers have targeted Gmail, Facebook, and LinkedIn, and users of those sites should be especially wary of clicking on embedded links, even those recommended by friends. Hackers also send emails that appear to be from social networking sites but are, in fact, fake emails designed to capture personal information. Again, users should avoid clicking on links embedded in emails.

3. Use the Internet to your Own Advantage
If you bank online, you don't have to wait until the end of the month to check your statement. You can log in anytime and make sure nothing is amiss. An errant charge is often one of the first signs of identity theft, so check statements carefully and alert your bank immediately of any problems.

4. Get Free Help
Many credit card issuers offer free and automatic identify-theft protection to customers. If you see erroneous charges on your statement, call your credit card company so they can investigate on your behalf. The law requires credit card companies to dispute erroneous charges. For most people, paying a monthly fee for extra monitoring services is unnecessary.

5. Think of a New Word
Consumers are tasked with remembering dozens of passwords for various retailers, banks, and accounts, making it almost impossible to remember them all, especially since they often include mixes of numbers and letters. Keep careful track of your passwords in a secure document, rely on mnemonic devices to boost your memory, or come up with some other clever strategy. Don't just stick with simple passwords that are easy for strangers to guess. Also, change your passwords on a regular basis.

6. Never Give your Social Security Number to Anyone Online
If a site asks for it during the checkout process, it's probably a scam site.

7. Shred or Safely Store Financial Mail
Bank statements, investment documents, and other financial paperwork can give thieves clues about account numbers, Social Security numbers, and other personal information. Destroying documents with a cross-cut shredder works, but you can make it easier on yourself (and the environment) by limiting your paper trail wherever possible. Shifting to online banking and document storage can reduce your chances of falling victim to a dumpster diver.

8. Fight Back Quickly
If you are hacked, step one is calling your bank. Banks have sophisticated systems in place that can immediately begin closely monitoring your account for signs of identity theft. They can also shut down and replace any accounts if necessary. In fact, banks are often the first to notice something amiss, even before the victim. As long as consumers report fraud in a timely manner, the law limits their liability to between $50 and $500.

9. Trust your Gut
You often hear, after consumers used an ATM with a skimming device, they had a bad feeling about it. If you do have that feeling, listen to it and remove yourself from the situation.

10. Take Advantage of Identity Theft Protection Services
Get comprehensive coverage, and peace of mind, when you use Identity Theft Protection Services like Deluxe Provent (offered here at Coulee Bank). Enjoy ongoing internet, credit, public records, and name/address monitoring, plus Identity Restoration to protect yourself in the unfortunate event of identity theft. Learn more here:

Taking these simple steps is like remembering to lock your door at night, or turn on your alarm system. Bad guys go for the house that's unprotected. If you take these basic measures, then you generally have less risk for getting compromised.


Get Your Finances Ready for 2015
Now is the best time to prepare for your financial resolutions. One of the most common New Year's resolutions every year is to either save money or reduce debt. If you have financial resolutions for 2015, here are some tips to help you accomplish your goals.

Take Stock 
You can't get a handle on your finances until you know how much money you make, how much you spend, and what you spend it on. Take a month to chart your finances and get organized. Tally every expense and break them down into fixed and variable expenses. Fixed expenses occur every month (rent, loan payments, etc.) and variable expenses change each month (gas, groceries, etc.). Organize your financial documents by year and store them in a safe place. Documents to keep include bank statements, tax returns, insurance papers and receipts. Keeping these files organized will help you keep track of your current financial situation and monitor it in the future.

Create a Realistic Budget
Now that you know where your money has been going, decide where it should be going. Split your purchases into needs and wants. If things are really tight, consider filing monthly payments like cable TV and magazine subscriptions under the "wants" category. Look for unused purchases. For example, 60 percent of gym memberships go unused. So, while losing weight may also be on your New Year's resolutions list, don't buy a $30/month membership that you'll only use once or twice. Invest in some good fitness equipment like running shoes or resistance bands instead. Make sure you based your budget on the goals you have. So, if your goal is to pay down credit card debt, be sure to leave room for extra (or larger) payments in your expenses.

Commit to the Plan
After you've examined your finances and made a realistic budget, the hard part starts. Achieving your financial goals requires you to change you habits. Keeping it simple will help. If sticking with your financial fitness resolution requires a major money overhaul, it can feel overwhelming. Avoid making a financial resolution that requires drastic lifestyle changes. Cutting your budget in half or cutting up every credit card in your wallet may seem like a good idea at first, but this kind of jarring change is very difficult to maintain. Most likely, you'll slip back into old habits by February. Instead, plan to reach your goal in small increments. For example, if your goal is to save $1,000 per month, start with $100 and work your way up.

Finally, keep in mind the most basic fact about building wealth: save more than you spend. That's the baseline for every money-saving strategy. Here's to a happy and financially fit 2015!


Your Savings Plan: Balancing Long- and Short-Term Goals
How many savings goals does your family have? Many consumers have a long list of needs and wants. Retirement, college education, a new(er) car, and an emergency fund might top the list of needs. The list of wants is more varied: Charitable giving, a boat, a Harley, a snowmobile, an ATV, or maybe an Alaskan or Caribbean cruise. How can you ever fulfill these wants and get ahead?

Whatever your dreams, some goals require a longer period of savings (retirement, college), while others are short-term: Adding a deck to the house, taking a fishing trip on Lake Superior, or buying a camper.

Consider tackling them one at a time in 2015. Begin with an emergency fund. Financial experts suggest saving at least three months of expenses as a cushion in the event of a layoff, or to handle a major car or furnace repair. Determine how much you need to meet expenses if your major source of income suddenly ended.

Next, consider retirement, college education, or other long-term goals. Depending on your age, available employer programs, and the age of your children, this number will vary. Then decide how much to set aside for each goal monthly, beginning in January. If your emergency fund is nonexistent, you may need more than a year to build it up before tackling short-term goals.

Finally, prioritize your short-term goals. If everyone in the family would enjoy camping in state parks, maybe a camper is a higher priority than an item that only one family member will use. Once you know what you want, it’s easier to strategize how to fulfill your goals. Consider yourself lucky if an employer offers a retirement savings plan that can leverage the funds you set aside. To make things easier, call or stop in to Coulee Bank to set up a regular transfer of money into your emergency fund, so that savings happen automatically.

This planning exercise may reveal that your income is too low, or your monthly expenses too high, to meet your savings goals. If that's the case, revisit your budget to search for costs that might be cut or consider ways to increase your income.

When your emergency account reaches your goal, set up a separate account for your priority short-term goals and have your automatic deposit go to this new account. Whenever you withdraw funds to pay for something from your emergency account, you can return to making deposits to it until it again reaches the level you set. Eventually you will have both an emergency fund and an account to use for some of the items on your "most wanted" list.

Family financial management is an art as well as a science. Your financial plan impacts your daily life, reflects what's important to you, and shapes your legacy.


Business Corner: Reinvesting in Your Business Can Lead to Huge Growth
Warren Buffett’s investment career started early and in a somewhat unexpected manner. One of his early investments was in high school, when he and a friend bought a used pinball machine for $25 and installed it in a barbershop. The game proved to be popular with the barbershop’s clientele, so the entrepreneurial duo reinvested their profits to buy more pinball machines. In time, they had eight machines in several shops.

Eventually, they sold their venture, and Buffett used his portion of the proceeds to buy stock and launch another business. By the time he was 26, he’d accrued $174,000 (or $1.4 million dollars worth of value in today’s market). Undoubtedly the most successful investor of the 20th century, he recognized the value of reinvesting early on.

Reinvesting is the best way to build wealth. If you’re a business owner, reinvesting is crucial to your company’s continued growth and success. It’s worth keeping in mind that investing isn’t just about a sudden influx of cash; your time and experience are also extremely valuable. Obviously, Buffett didn’t get to where he is today because of a few lucky financial investments. His ability to choose wisely, and direct finances to the most profitable ventures, contributed significantly to his success. If you can apply your time, knowledge, and experience in a way that profits your company in the long term, you’ll be making a valuable investment.

For any business that’s looking to grow, some form of reinvestment is necessary. It doesn’t have to be all of your profits, but a significant amount of resources, when targeted effectively, can dramatically improve your bottom line. With this in mind, let’s look at a few ways that you can expand your business by reinvesting in your company.

How to Invest Financially
The first thing that comes to mind when you hear the word “reinvest” is likely a financial reinvestment. Redirecting a portion of profits back into the business can help the establishment to grow and position itself for long-term success.

Most startups need to reinvest heavily. This is because new businesses aren’t able to compete on the same level as the big guys. An aggressive expansion strategy is often in order to get the company up to speed and to the point where it’s able to enter the marketplace as a serious contender.

The exact amount that you should reinvest will vary. The key is to reinvest based on a strategy, rather than a set percentage. Be strategic, and apply funds in line with your specific development plan and your business needs, but don’t invest to the point of cutting other aspects of your company short. Make sure there’s enough to cover all of your other expenses.

One common reinvestment is making business improvements. If you’re a business owner, then you likely have a list of areas that could be enriched with additional capital. Improving infrastructure, streamlining manufacturing, strengthening customer support, or refining your marketing strategy can all directly benefit your business, increase your profits, decrease expenses, and give you more capital to work with.

An investment in marketing will often pay off. As the old adage goes, you have to spend money to make money. However, it’s important to be smart with your marketing, and continually track the progress of your promotional initiatives. When embarking on a marketing campaign, quantify the results that you can expect so you will be able to monitor the success of the campaign. Ask yourself how many new leads you expect it to generate, and in turn what increase do you expect to see in your sales.

External acquisitions are another route that some companies can benefit from. In Procter & Gamble’s acquisition of Gillette, the acquisition was a success because P&G had stronger sales in some emerging markets and Gillette in others. Together, the companies were stronger and were able to bring products to new markets faster.

It's vital to invest in staff and build a strong workforce. Take care of your employees and keep them happy. They’ll look forward to coming to work, and will be more loyal to your company.

For some situations, it may even be beneficial to take on debt to grow. When done carefully and in line with a strategic plan for expansion, a loan can be an excellent catalyst for development.

A financial reinvestment, applied strategically, can pay off tremendously in terms of long-term development.


Coulee Investment Center: Start Your New Year with a Financial Review
Shari-Hopkins.jpgAs you plan for the year ahead, is an investment checkup leading your list of resolutions? Taking time for a detailed financial review -- including retirement planning, college savings, and your tax situation -- may help you progress toward your long-term goals. Consider the following items as part of your checkup:

Capitalize on Tax Reductions
If you plan to adjust your investment allocations, make sure you understand the tax consequences of your actions. Taxes on both long-term capital gains -- profits earned on investments held for more than one year -- and equity dividends are generally lower than rates on ordinary income (15% for many taxpayers, 20% for those in the highest tax bracket). Because of these tax reductions, you may now have greater incentive to hold your mutual funds for the long term and include equity funds that pay dividends within your portfolio.

School Yourself in Education Incentives
Consider opening a 529 college savings plan account if education is part of your family's future. Contributions to a 529 plan compound tax-deferred, and withdrawals are tax free1 when the money is used for qualified higher-education expenses.

Remember Three Important Letters – IRA
You can boost your retirement planning efforts by making the maximum annual contribution of up to $5,500 to either a traditional or Roth IRA. Investors aged 50 and older get an added bonus: A $1,000 "catch up" contribution that can be made in addition to the annual maximum for a total investment of $6,500. Your money compounds tax-deferred until you begin withdrawals.

At that point, earnings withdrawn from a traditional IRA may be taxable, while those withdrawn from a Roth IRA may be tax free, subject to certain restrictions.There are other factors to consider -- such as your investment mix -- as you evaluate your progress toward your long-term goals. But this list can help you get started as you chart your financial course for the year ahead.

If you have questions or would like to speak with me about a financial review, please call me at 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.

1Withdrawals used for expenses other than qualified education expenses may be subject to a 10% additional tax on earnings, as well as federal and state income taxes. Prior to investing in a 529 plan investors should consider whether the investor's or designated beneficiary's home state offers any state tax or other benefits that are only available for investments in such state's qualified tuition program. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.

2Withdrawals before age 59½ may be subject to ordinary income taxes and 10% additional tax.

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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