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October 2018 E-Newsletter

Razors, Makeup, Hot Sauce — You Can Subscribe to Almost Anything. But Should You?

Remember when getting a hot pizza delivered to your door felt special? (OK, it still does.) Now you can spice up that pie with regular deliveries of hot sauce, or subscribe to nonfood items like neckties, razors, underwear, makeup, dog toys, mystery books — even slime.
These subscription-box services can allow you to try out new types of goods and bypass shopping errands. They can also wind up costing you a lot of money. Here’s how to keep spending on subscription boxes in check.
Before you buy a subscription
Identify your motive. Consider whether aggressive marketing has swayed you toward a subscription you wouldn’t have otherwise bought. Ads for trendy services may show up repeatedly in social media and targeted emails, and constant exposure can be persuasive.
“We only have so much resolve,” says Kit Yarrow, consumer psychologist and author of “Decoding the New Consumer Mind: How and Why We Shop and Buy.” “When we say ‘no’ to ourselves five times, we feel better about saying ‘yes’ the sixth time.” The idea of getting packages in the mail has quite a pull, too.
Before you sign up, “identify a reason [for subscribing] beyond the allure of having something delivered to your door,” says Nicole Leinbach Reyhle, founder of Retail Minded, an industry blog and publication, and an author of “Retail 101: The Guide to Managing and Marketing Your Retail Business.”
For example, the subscription may save you money or time, like diaper deliveries for busy parents. Or maybe a service exposes you to products that are unavailable in your area, like designer clothes, Reyhle says. If you feel good about your reasoning, then it’s time to do some homework.
Scrutinize the service. Research as much as possible about a subscription before committing. This homework can come in handy when choosing between multiple subscription services that deliver similar products.
Examine the terms to see if you can cancel at any time or if signing up means you’re on the hook for a year, Reyhle says. Services that offer a free trial get bonus points.
Read reviews. Look for customer reviews on the service’s website, Facebook page and Yelp, Reyhle says. For Yelp, you may have better luck searching “razor subscription Yelp” or “Dollar Shave Club Yelp” on Google rather than searching within the Yelp website. Try the same for reviews on Reddit by Google-searching the product or subscription name, along with “Reddit.”
Once you’ve subscribed
Evaluate the value of each delivery. When you subscribe to a service, you typically agree to have your credit or debit card charged automatically for each new delivery. As Yarrow puts it, you don’t feel the “pain of payment” for each box, like you would if you had to locate your wallet, pull out your card or cash and agree to its cost. “[Subscribers] logically know they’re paying for this product,” she says. “But, emotionally, it feels like they’re getting free goodies in the mail.”
Then “inertia sets in,” Yarrow says. You continue the subscription because, well, you’ve already subscribed.
To fight this mindless spending, set a reminder for a few months into the service “to reevaluate the benefit of the subscription,” Yarrow says. Or try treating each new box as a “fresh spending experience,” she says, and ask yourself if its contents were worth the monthly cost. “The minute you have doubt,” she says, “take action.”
Prepare to cancel. Even if you have doubts about the value of your subscription box, canceling is just no fun. “We don’t like spending time doing things that don’t give us immediate rewards,” Yarrow says.
So if it helps, bring on the rewards. For example, promise yourself ice cream or a bubble bath if you unsubscribe. You deserve a treat for making a smart money decision.
After all, you probably only need so many makeup samples, hot sauces or pairs of underwear. Whatever product you’ve subscribed for, “in most situations, eventually you have enough,” Yarrow says. “Sooner than [consumers] think, they’re going to have to pull the plug.”
More From NerdWallet Laura McMullen is a writer at NerdWallet. Email: Twitter: @lauraemcmullen.

The article Razors, Makeup, Hot Sauce — You Can Subscribe to Almost Anything. But Should You? originally appeared on NerdWallet.

Budgets 101: How to Make Your Spending Money Last in College

“Why am I running out of money?”
That’s the question students ask most when they visit the student money management center at University of North Georgia in Dahlonega, Georgia.
“When I ask them about a spending plan or a budget, they’ll typically say, ‘Yeah, I know what I spend my money on,’” says the center’s coordinator, Jean Cyprien. “But when I show them a spreadsheet with different categories for spending, they’ll say, ‘Wow, I didn’t realize I was spending that on eating out’ or ‘I forgot about that music app that I’m paying for.’”
You may have income from a part-time job, or you may start the semester with a lump sum. No matter your source, you have to make your spending money last all semester.
Here’s how to do it.
Set expectations with your parents
Before school starts, have a conversation with your parents about who’s paying for what.
“You don’t want to be in a situation where it’s kind of up in the air,” says Philip Schuman, senior director of financial literacy at Indiana University in Bloomington, Indiana. “Having that first initial conversation will help go a long way toward having students become more financially independent from their parents.”
For example, your parents may agree to cover tuition and supplies, but you’ll have to pay for living expenses.
Separate needs and wants
Paying for your wants shouldn’t come at the expense of your needs. To prioritize spending, start with a list of expenses you are certain of during the semester, such as a trip home at Thanksgiving or filling your car with gas every two weeks.
Subtract those expenses from the amount of money you have for the semester. What’s left is your discretionary spending money.
Now divide that remaining amount by the number of weeks you need to cover. For example, if you have $800 available over a 15-week semester, that’s a little over $50 a week you could spend.
Use leftover financial aid wisely
If you borrow student loans to pay for college, there may be remaining funds you can use for personal expenses after covering tuition and fees, as well as room and board.
But avoid spending loan money on nonessentials, like streaming services, vacations or delivered food. Paying for those expenses with financial aid can be costly, since you’ll have to pay back the money you borrow, with interest.
Find a tracking tool you’ll use
There are endless ways to track spending, including phone apps, online budgeting worksheets, an Excel spreadsheet or a paper and pen.
It doesn’t matter what tool you use, so long as you find something that works for you, college budgeting experts say. If maintaining an Excel spreadsheet isn’t your thing, try an app that links to your bank account.
Tracking your money can help you make smarter spending choices.
“You’ve got to take responsibility to say, ‘I can’t go out and spend money to go to the bar or pizza place, because I’m not going to have enough money for the books that I need,’” says Katie Ross, education and development manager for American Consumer Credit Counseling, a nonprofit credit counseling organization.
What to do if you slip up
Overspending is probably going to happen. You might budget $50 a week, but one weekend you end up spending double or triple that amount.
You don’t necessarily need to work more hours at a part-time job or send an SOS to your parents to get back on track. Instead, adjust your budget. There are two effective ways to do it:
  • Stop spending. Plan to skip a few weeks of spending to stick with your current budget. If you spent three weeks of your allotment in one weekend, for example, then curtail spending for two weeks.
  • Start over. Add up all of the money you have left for the semester and divide by the number of weeks left. This is the new amount available to spend each week.
More From NerdWallet Anna Helhoski is a writer at NerdWallet. Email: Twitter: @AnnaHelhoski.
The article Budgets 101: How to Make Your Spending Money Last in College originally appeared on NerdWallet.

Business Corner: Not Just For Small Businesses: How the SBA Helped Grow 3 Major Companies

It’s the 65th anniversary year of the Small Business Administration (SBA) and the perfect time to take a look back at SBA success stories. While the SBA is synonymous with small business, some of today’s biggest companies started out as small businesses.
As financing continues to be the biggest challenge for small businesses, the support of the SBA, and its diverse loan programs, is particularly relevant for the growth of businesses. The SBA mission is that “Small business is critical to our economic strength, to building America's future, and to helping the United States compete in today's global marketplace.” It’s interesting to reflect upon those small businesses, which once they received funding from SBA loan programs, ultimately grew to become major disruptors within their industries.
Let’s revisit the organization throughout the decades. After several war-related recovery efforts by governmental organizations supporting new and struggling small businesses, in 1953, Congress created the Small Business Administration. The function of which was to "aid, counsel, assist and protect, insofar as is possible, the interests of small business concerns." The SBA charter stipulated it would ensure small businesses a "fair proportion" of government contracts and sales of surplus property. Five years later, the Investment Company Act of 1958 established the Small Business Investment Company (SBIC) Program, under which the SBA licensed, regulated and helped provide funds for privately owned and operated venture capital investment firms, which in turn, invested in small businesses.
It is under these programs that quite a few, very notable, businesses got their start.
Under Armour
Famous for manufacturing athletic apparel and footwear, Under Armour was created just over 22 years ago. Kevin Plank, Founder of Under Armour, started the business out of his grandmother’s basement. Plank was an athlete that struggled with constantly changing out of sweat-soaked T-shirts during two-a-days and knew there had to be a better way to get dressed. He conducted research on synthetic fabrics and their athletic benefits, designing the first Under Armour HeatGear T-shirt. This revolutionary product is engineered with moisture-wicking performance fibers, allowing athletes to stay dry and cool no matter how sweaty the situation.
By the end of 1996, Plank made his first team sale, and Under Armour had generated $17,000 in sales. The company received support in its infancy from the U.S. Small Business Administration. In 2016, Under Armour received the first ever inaugural Hall of Champions award. Thanks to the startup funding from the SBA, Under Armour has transformed itself into a global multi-billion-dollar company.
In 1993, Steve Ells, a former chef, launched Chipotle Mexican Grill in Denver, Colorado. Funded by Ells’ father ($85,000), the first Chipotle storefront was established with the goal of funding a fine dining restaurant. One small business to fund another. The second store was opened with funds from the first. The third store leveraged SBA funds. In 1998, McDonald’s became an investor in Chipotle and in 2006, Chipotle went public. This is an example of where the SBA loans can fill a gap in combination with other loan sources, such as financial support from friends, family and large investors.
In 1978, the SBIC program, which is a venture-capital branch of the SBA, was formed to support further investment in start-ups. The SBA’s Small Business Investment Company (SBIC) provides for privately-owned venture capital funds licensed by the SBA to invest in the long-term debt and equity securities of small businesses. Continental Illinois Bank, owned by John Hines, was the SBIC-funded bank that awarded $500,000 in start-up capital to a fledgling computer startup called Apple Computer. While success stories such as Apple are rare, the funding of Apple by an SBIC whose owner had strong foresight was a significant and notable success story of the SBA’s programs. There may be no greater success story than Apple, funded by SBA programs at its infancy, on the verge of becoming the first US company valued at $1 trillion.
While the SBA is perhaps best known for small business loans, many different SBA programs, such as the SBIC program, have helped build worldwide brands. At the 65th year of the SBA, it’s a great time to look at the broader services and mission of the U.S. Small Business Administration — to aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of our nation. Although the SBA has grown and evolved in the years since it was established in 1953, the bottom line mission remains the same. The SBA helps Americans start, build and grow businesses – not just small ones, but, ultimately, big businesses, too.
The article Not Just For Small Businesses: How the SBA Helped Grow 3 Major Companies originally appeared on

Coulee Bank Q-Tip: Safe Browsing Tips for Chrome

In an internet full of malicious actors and exploits around every corner, it is a good idea to protect yourself while browsing by using a few of Google Chrome’s plugins.  These certain plugins will protect you from exploit kits, drive-by downloads, and malvertising to name a few.  It is even possible to stop being tracked by websites to preserve your anonymity.  There are numerous plugins for Chrome, but safe browsing should be the main priority.
Here are the top 4 security plugins for Chrome:
1.         uBlock Origin – Adblocker for blocking ads of all kinds
2.         HTTPS Everywhere – Forces all sites to use HTTPS instead of HTTP, a much safer alternative
3.         Privacy Badger – Detects and blocks trackers from spying on you
4.         Flashcontrol – Disables Flash content, which is highly susceptible to exploitation
With these plugins combined, it can create a more seamless internet browsing experience as well.  Blocking ads, trackers, and Flash will have the benefit of a page loading faster and with less clutter.  Ultimately, the crux of safe browsing comes down to not clicking on suspicious links or going to unknown websites.  However, if you succumb to clicking on something dubious, these plugins should most help ease your mind knowing the attempt has been blocked. And don’t forget, never tread the wilds of the internet unprotected.
Q-Tips are provided by Coulee Bank's IT Network Risk Manager, Quentin Fisher. He is always on the lookout for ways to keep our customers' information safe, here at the bank, at work and home.

Coulee Investment Corner: Five Strategies for Tax-Efficient Investing

As just about every investor knows, it's not what your investments earn, but what they earn after taxes that counts. After factoring in federal income and capital gains taxes, the alternative minimum tax, and any applicable state and local taxes, your investments' returns in any given year may be reduced by 40% or more.

For example, if you earned an average 8% rate of return annually on an investment taxed at 28%, your after-tax rate of return would be 5.76%. A $50,000 investment earning 8% annually would be worth $107,946 after 10 years; at 5.76%, it would be worth only $87,536. Reducing your tax liability is key to building the value of your assets, especially if you are in one of the higher income tax brackets. Here are five ways to potentially help lower your tax bill.1
Invest in Tax-Deferred and Tax-Free Accounts
Tax-deferred accounts include company-sponsored retirement savings accounts such as traditional 401(k) and 403(b) plans, traditional individual retirement accounts (IRAs), and annuities. Contributions to these accounts may be made on a pretax basis (i.e., the contributions may be tax deductible) or on an after-tax basis (i.e., the contributions are not tax deductible). More important, investment earnings compound tax deferred until withdrawal, typically in retirement, when you may be in a lower tax bracket. Contributions to nonqualified annuities, Roth IRAs, and Roth-style employer-sponsored savings plans are not tax deductible. Earnings that accumulate in Roth accounts can be withdrawn tax free if you have held the account for at least five years and meet the requirements for a qualified distribution.
Pitfalls to avoid: Withdrawals prior to age 59½ from a qualified retirement plan, IRA, Roth IRA, or annuity may be subject not only to ordinary income tax, but also to an additional 10% federal tax. In addition, early withdrawals from annuities may be subject to additional penalties charged by the issuing insurance company. Also, if you have significant investments, in addition to money you contribute to your retirement plans, consider your overall portfolio when deciding which investments to select for your tax-deferred accounts. If your effective tax rate -- that is, the average percentage of income taxes you pay for the year -- is higher than 15%, you'll want to evaluate whether investments that earn most of their returns in the form of long-term capital gains might be better held outside of a tax-deferred account. That's because withdrawals from tax-deferred accounts generally will be taxed at your ordinary income tax rate, which may be higher than your long-term capital gains tax rate (see "Income vs. Capital Gains").
Income vs. Capital Gains
Generally, interest income is taxed as ordinary income in the year received and qualified dividends are taxed at a top rate of 20%. (Note that an additional 3.8% tax on investment income also may apply to both interest income and qualified (or nonqualified) dividends.) A capital gain (or loss) -- the difference between the cost basis of a security and its current price -- is not taxed until the gain or loss is realized. For individual stocks and bonds, you realize the gain or loss when the security is sold. However, with mutual funds you may have received taxable capital gains distributions on shares you own. Investments you (or the fund manager) have held 12 months or less are considered short term, and those capital gains are taxed at the same rates as ordinary income. For investments held more than 12 months (considered long term), those capital gains are taxed at no more than 20%, although an additional 3.8% tax on investment income may apply. The actual rate will depend on your tax bracket and how long you have owned the investment.
Consider Government and Municipal Bonds
Interest on U.S. government issues is subject to federal taxes but is exempt from state taxes. Municipal bond income is generally exempt from federal taxes, and municipal bonds issued in-state may be free of state and local taxes as well. An investor in the 33% federal income-tax bracket would have to earn 7.46% on a taxable bond, before state taxes, to equal the tax-exempt return of 5% offered by a municipal bond. Sold prior to maturity or bought through a bond fund, government and municipal bonds are subject to market fluctuations and may be worth less than the original cost upon redemption.
Pitfalls to avoid: If you live in a state with high state income tax rates, be sure to compare the true taxable-equivalent yield of government issues, corporate bonds, and in-state municipal issues. Many calculations of taxable-equivalent yield do not take into account the state tax exemption on government issues. Because interest income (but not capital gains) on municipal bonds is already exempt from federal taxes, there's generally no need to keep them in tax-deferred accounts. Finally, income derived from certain types of municipal bond issues, known as private activity bonds, may be a tax-preference item subject to the federal alternative minimum tax.
Look for Tax-Efficient Investments
Tax-managed or tax-efficient investment accounts and mutual funds are managed in ways that may help reduce their taxable distributions. Investment managers may employ a combination of tactics, such as minimizing portfolio turnover, investing in stocks that do not pay dividends, and selectively selling stocks that have become less attractive at a loss to counterbalance taxable gains elsewhere in the portfolio. In years when returns on the broader market are flat or negative, investors tend to become more aware of capital gains generated by portfolio turnover, since the resulting tax liability can offset any gain or exacerbate a negative return on the investment.
Pitfalls to avoid: Taxes are an important consideration in selecting investments but should not be the primary concern. A portfolio manager must balance the tax consequences of selling a position that will generate a capital gain versus the relative market opportunity lost by holding a less-than-attractive investment. Some mutual funds that have low turnover also inherently carry an above-average level of undistributed capital gains. When you buy these shares, you effectively buy this undistributed tax liability.
Put Losses to Work
At times, you may be able to use losses in your investment portfolio to help offset realized gains. It's a good idea to evaluate your holdings periodically to assess whether an investment still offers the long-term potential you anticipated when you purchased it. Your realized capital losses in a given tax year must first be used to offset realized capital gains. If you have "leftover" capital losses, you can offset up to $3,000 against ordinary income. Any remainder can be carried forward to offset gains or income in future years, subject to certain limitations.
Pitfalls to avoid: A few down periods don't necessarily mean you should sell simply to realize a loss. Stocks in particular are long-term investments subject to ups and downs. However, if your outlook on an investment has changed, you may be able to use a loss to your advantage.
Keep Good Records
Keep records of purchases, sales, distributions, and dividend reinvestments so that you can properly calculate the basis of shares you own and choose the shares you sell in order to minimize your taxable gain or maximize your deductible loss.
Pitfalls to avoid: If you overlook mutual fund dividends and capital gains distributions that you have reinvested, you may accidentally pay the tax twice -- once on the distribution and again on any capital gains (or underreported loss) -- when you eventually sell the shares.
Keeping an eye on how taxes can affect your investments is one of the easiest ways you can enhance your returns over time. For more information about the tax aspects of investing, consult a qualified tax advisor.
1Example does not include taxes or fees. This information is general in nature and is not meant as tax advice. Always consult a qualified tax advisor for information as to how taxes may affect your particular situation.

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