Why The Money Talk is Important

Despite financial education being one of the most important lessons to shape our adult lives, it is not something many people learn until much later in life. As a parent, you have many “talks” with your children, but too often the “Money Talk” isn’t one that happens until it is too late.  

Respondents in the Ohio Credit Union League’s 2018 consumer survey indicated they considered lessons from parents extremely important to a child’s financial literacy. However, research suggests that’s not happening.

In that same survey, 61 percent of respondents said they received most of their financial education through experience and life lessons. Only 23 percent felt they had received financial education from home and – surprisingly – only 3 percent of Ohioans received financial education in the classroom.

As a result, Ohio’s teens may not be graduating high school with financial know-how.

Each year, The National Financial Educators Council administers a 30-question financial literacy test to participants ages 10 and up in all 50 states. Teens in Ohio, ages 15 to 18, averaged 60.32 percent on the test. Nationally, students of the same age scored an average of 61.11 percent

Parents want their children to have a good handle on finances before they leave the house in their late teens or early 20s, but most aren’t sharing the necessary wisdom to make that happen.

In the 8th annual Parents, Kids and Money survey, conducted by T. Rowe Price, 69 percent of parents have some reluctance discussing financial matters with kids. And, 35 percent of parents rated talking to their children about family finances as either very or extremely uncomfortable – ranking it alongside talks about death and drugs. Partly, parents may feel too self-conscious about their financial situation to be comfortable sharing advice with their children. This survey also found parents who have declared bankruptcy are 24 percent more reluctant to discuss money with their kids. And, parents carrying more than $5,000 in credit card debt are 14 percent more likely to feel uneasy having those financial conversations. 

“Financial literacy” is an easy term to define, but a more difficult one to put into practice. Here are some tips to help you equip your children with a bright financial future:

  • Set an example. Children who consistently see their parents pay the bills on time and keep a budget are more likely to adopt those practices in their own lives. Parents who have made financial mistakes should also share the experience with their children. That knowledge can prepare kids to avoid the same mistakes with their money in the future.

  • Make savings a tangible concept. Encourage younger kids to collect spare change in a clear jar or container so they can see their savings grow. Each time the kids want a small treat, parents can offer to put the money they would have used to buy the treat into the “savings jar,” instead. Once the jar is full, children can count the money and use the funds to purchase an extra-special treat. That way, they’ll associate a sense of excitement with savings. They’ll learn that delaying gratification can lead to a greater payoff down the road. Also, be sure to stop by DoverPhila Federal Credit Union during Youth Week from April 16th through April 21st to earn extra saving bonuses on deposits made to their youth accounts.

  • Have kids learn with their own money. Kids will learn the value of a dollar better if it’s their own. Younger children who are paid a small allowance for chores they complete around the house will learn the concept of working for money. Kids can then begin to spend their own money on some of the things they want. They’ll begin to appreciate what these items actually cost and will be more open to lessons about price comparison.

  • Get kids familiar with banking. Parents can make a trip to their financial institution an exciting event for younger kids. Let them in on the process – maybe even let them press the buttons on the ATM or help to fill out a deposit slip. They’ll feel included in adult chores and won’t feel intimidated by banking later in life.

  • Get help. DoverPhila offers Banzai, an award-winning, web based financial literacy game, for free to its community. The credit union also offers other programs and events geared towards fostering financial literacy in kids, teens, and adults; as well as a financial counselor.

 For more information about financial literacy call the credit union at 330-364-8874.

New Year, New You, New Budget

Just like swearing off chocolate and carbs, sticking to a household budget is a New Year’s resolution easier made than accomplished. In fact, according to the National Foundation for Credit Counseling’s 2017 Consumer Financial Literacy Survey, last year only two in five U.S. adults said they had a budget and kept close track of their spending throughout the year.

Everybody knows it’s important to track personal finances and maintain your financial health. So, why do Americans have such a difficult time sustaining a budget?

It likely doesn’t have much to do with a lack of money. According to the U.S. Bureau of Labor Statistics, the average household in America makes $74,664, well above the $18,871 national poverty line for a family of three. It’s also unlikely that consumers are too busy to keep up with their budgets. Some budgeting apps like Wally and Mint, can track spending and income with minimal attention from the user.

Financial planning and psychology experts believe the real reason people struggle with budgeting is psychological. According to an article in the Journal of Consumer Psychology, humans only have a finite amount of willpower. We can only restrict ourselves so long before we indulge. Just like dieting, people tend to see budgeting as restrictive; therefore, struggle to preserve the motivation to stick with it.

As you ramp-up your drive for 2018, here are some tips to help you exercise good budgeting habits and overcome a craving to spend.

  • Don’t mindlessly spend: If you don’t feel you have enough money, you could be spending money unnecessarily. Search the corners of your budget for empty spending that isn’t serving you. Many financial blogs offer creative tips to help with this. Check out Lauren Greutman’s list of 13 Things You Should Never Pay For.
  • Make time: If you don’t feel you have enough time to track spending, try finding a simple solution – like an app. Phone apps such as Wally and Mint track spending and income for you. They require minimum attention and time.
  • Start small: It takes weeks to form a new habit, and the same thing applies to tracking your income and expenses. In the beginning, keep it simple. If your spending plan is too complicated or restrictive, you will not stick to it.
  • Budget with a friend: If you don’t feel confident, get some help! Apps, financial blogs, and spreadsheets might help if you’re a little stuck in your budgeting process. But if you don’t even know where to start, consider seeking help from a trusted family member or a financial expert. Your local credit union is dedicated to financial literacy and can offer help and advice for your unique budget.

To learn more about how a credit union can help you be financially fit, visit www.aSmarterChoice.org and find a credit union in your area.

Six Rules for Managing Credit Card Debt

If you want to be the master of your credit card debt load, follow these key rules: 

1. Take inventory. How many credit cards do you have? What's the balance and minimum monthly payment on each? What's the total balance? If it is more than you thought or can afford, then it is time to cut down.

2. Check out the cost of your credit cards. What is the interest rate on each card? What is the annual fee? Does your card offer a grace period? If the card does not have a grace period, or if you carry over a balance, or take a cash advance, then you are usually charged interest right away.

3. Get one low-fee or lower-interest card and use it wisely. Make DoverPhila Federal Credit Union your first stop when starting your search. Check to see if you can transfer existing debt from your various credit cards to your new lower-interest credit card.

4. Make the largest monthly payment you can afford. Even though you may not be able to pay your balance in full, paying the monthly minimum may do little more than cover the accrued interest.

5. Watch out for "teaser rates." Your mailbox may be brimming with unsolicited credit card offers that promise attractive low-interest rates. But if you read the fine print, you will see that after six months or so the issuer may double the low introductory rate. 

6. If you get in over your head, do not bury it in the sand. If you are having trouble making your monthly payments, then contact your creditors before they contact you. If you are already screening calls from bill collectors or refusing to open your mail, then you need help. 

Contact Fred Weingarth at DoverPhila Federal Credit Union. He can help you get your finances back on track.

Avoid the Payday Lending Trap

Here is the scenario: you are in a financial bind and need some quick cash. You saw payday loan stores all over town and think “maybe I should try that…” 

Do not fall into that trap! Getting a loan with a payday lender could send you down a deep hole that may take years to get out of.

Here is how payday lenders catch and hold consumers:
To receive cash, you write a check to them for the amount plus the finance charge – which the lender will cash the next time you get a paycheck. They will tell you finance charges range from $15 to $50 per $100, but they will not tell you exactly what the interest rate (or APR) is charged. Interest rates can run from 390 to 780%, and if your state does not cap the maximum cost then the rates can be even higher.

Here is the math to figure out what you end up paying by borrowing $400 from a payday lending store with a $50 finance charge and a 14-day term:

  • Divide the finance charge by the amount you are borrowing: $50/$400 = .125
  • Multiply the answer by the number of days in a year: .125 x 365 = 45.625
  • Divide the answer by the number of days in the term:  45.625/ 14 = 3.2589
  • Move the decimal point to the right two places. This is your APR: 325.89%

At the end of your 14-day term, you have to pay them $450. But if you cannot pay it off entirely then you will have to roll the balance over and pay another $50 fee, as well as interest charges. At the end of your second term, your balance is almost $600 and if you cannot pay that off entirely then you roll it over again. See how quickly your $400 loan can cost you thousands of dollars?

So what are some alternatives?

  • Ask your employer for an advance on your next paycheck.
  • Consider asking family members or friends for a short-term loan. 
  • If you were a military service member, then you may be eligible for short-term lending or emergency relief assistance. Contact Military OneSource at 800-342-9647, or visit www.militaryonesource.mil for information.
  • A personal loan through DoverPhila Federal Credit Union. We offer loans with low rates and flexible terms.
  • Open a low-cost, low-interest credit card through DoverPhila and use it only for emergencies.

No one wants to find themselves in a financial emergency, but there are much better options than turning to a payday lender. To find out more about payday lending and learn about safer ways to get quick cash, visit the Consumer Federation of America webpage www.paydayloaninfo.org/consumer-help.

If you want help getting control of your finances then visit DoverPhila Federal Credit Union. We are committed to helping our members gain financial well-being and offer one-on-one financial counseling as well as additional resources to help you take control of your finances. Contact Fred Weingarth at 330-364-8874 for more information.

Shop Smart and Save This Back-to-School Season

It is getting to be that time of year when most families are thinking about purchasing school supplies for the upcoming year. Back-to-school shopping is the second-largest consumer spending category after holiday shopping, according to statistics from the National Retail Federation and Research Now. An additional survey conducted by Deloitte found that 32 percent of families expected to spend more on school supplies this coming year because either their children needed more items, because materials were increasing in price, or because students needed more expensive supplies.

An increase in back-to-school expenses can be a strain on family budgets. In a 2016 survey conducted by the National Retail Federation, back-to-school spending climbed to 55 percent over the past 10 years with the average family spending $107.76. A family could end up spending an estimate of $674 on back-to-school shopping when including other expenses such as clothing, shoes, and electronics,

Despite rising costs, back-to-school shopping does not have to be a budget-buster. A little pre-planning and early shopping can help avoid extra spending. Nationally, 73 percent of back-to-school shoppers plan to shop a month to three weeks before the start of school.

Here are some ways to shop smart during the back-to-school season:

  • Timing Matters: Look for end-of-summer sales and tax-free holidays, especially on big ticket items. In Ohio, the tax-free holiday starts on Friday, August 4, 2017, at 12:00 a.m. and ends on Sunday, August 6, 2017, at 11:59 p.m. To learn more about this tax-free holiday weekend, visit the Ohio Department of Taxation website.
  • Plan Ahead: Before making new purchases, take an inventory of supplies already available around the house. From there, make a list of items still needed. Two-thirds of consumers are likely to buy more than what is on their list, so be sure to stick to a shopping plan.
  • Avoid Fancy Supplies: Instead of spending money on the brightest, shiniest, and glitteriest supplies with a licensed logo – which adds cost – create do-it-yourself art projects for kids to decorate their own supplies.
  • Use Technology to Find Deals: Let technology help save money by doing an online coupon search, monitor favorite stores’ website and social media accounts to get advance notice of sales, and sign up for coupon links.
  • Stock Up: If there are good deals for certain supplies that have an on-going need then stock up on those items in case something runs out, gets lost, or breaks.

To learn about credit unions and how they can help plan for the back-to-school season, visit www.aSmarterChoice.org.

DoverPhila to Host Annual Kids’ Club Day

Mark your calendars for DoverPhila Federal Credit Union’s annual DP’s Kids Club Day. The family-fun event is scheduled for Saturday, August 5th from 10:00 a.m. to 1:00 p.m. at the credit union’s main office on Fillmore Avenue in Dover.

This year, the credit union is partnering with area organizations such as 5th Day Aqua, Tuscarawas County YMCA, Tuscarawas County Public Library, and STEAM Centers to provide even more family fun. Area youth ages 12 and under will have the opportunity to interact with a 20-gallon marine touch tank that features aquatic life from American beaches; to stay active with agility ladders, hula hoops, and 9 Square in the Air; to read and check out books, sign up for programs, receive a library card, and play games with a mobile library; to tap into their creative juices with activities focused on science, technology, engineering, art, and math from a pop-up museum; to bounce their way through inflatables; and much, much more. This free event will also include take-home, goody bags and pizza along with half-hour drawings of prizes donated by local businesses and organizations.

Check out the DoverPhila Federal Credit Union Facebook page for more event information, updates, and sneak peeks of what else the credit union has planned.

The Best Time to Buy a Car

Did you know that shopping at the right time can boost your chances of getting a really good car deal? Dealerships and individual salespeople have quotas to meet, so purchasing a vehicle during the last few days of a month, in late summer and early fall, or even around a major holiday like Christmas can often be the best time to make deals. Potential buyers should even consider shopping after very bad weather—when the roads clear just after a snowstorm, for instance. Any time when few people are out and about is a good time to be shopping for a car.

As auto companies get ready for their annual new-model introduction, dealers are eager to get rid of the old models. Usually this type of model-year shopping works best in July, August, and early September ahead of the traditional Oct. 1 start of the model year. Also consider late December when almost everyone is at the mall rushing to finish holiday shopping.

Although picking the right time of year to go car shopping can potentially help you get the best deal, you should still be prepared with research and a pragmatic target price so you can make the most of your good timing.

Fortunately, the internet makes it easy to find once-elusive cost data that will tell you how ready a dealer is to deal on a given model. Websites like Kelley Blue Book (kbb.com), Edmunds.com, and MSN Autos (autos.msn.com) show the dealer cost or invoice price in addition to the list price or manufacturers’ suggested retail price (MSRP). Whenever you are shopping, always start negotiating from the invoice price, not the MSRP. Kelley Blue Book and Edmunds also show what typical consumers actually paid for a given model in your region based on your zip code. If you are shopping for a slow-selling model, you can aim for a deal near invoice price and sometimes even lower. Make sure you do not let the sales person bring the rebate into the negotiations. You are entitled to that from the manufacturer no matter what price you negotiate. 

Even if you get a great deal, do not forget the cardinal rule of car buying: Plan ahead for your financing. Get pre-approved auto financing from DoverPhila Federal Credit Union before you ever go car shopping.

Social Security in Your Lifetime – Maybe Not

By the year 2033, Social Security's reserve trust funds could be exhausted. Though people disagree about when the money will run dry and how to avoid it – it could happen in your lifetime. You can prepare for it by starting now.

IRAs (Individual Retirement Accounts) offer young workers the opportunity to potentially receive higher benefits than the current system can afford to pay. They also offer an opportunity to build a nest egg for retirement that the government cannot take away.

Invest regularly and you will be surprised at how the money grows due to compound interest. Consider contributing a portion of your paycheck in one kind of IRA called a Roth IRA.

For example, if you invest $25 a week in a Roth IRA until you retire (let's say in 50 years) and the money grows at 5%, when you retire you will have $290,644 in tax-free money. If it grows at 8%, you will have $869,583. You only contributed $65,000 to the total—the rest is due to compound interest.

Visit DoverPhila Federal Credit Union today to start planning and investing for your future.

Tax Identity Theft Awareness Week Aims to Educate Consumers about Scams

Identity theft is a serious crime. When a thief obtains your personal information such as your mother's maiden name, your date of birth, or your account number, they can open fraudulent credit cards, charge existing credit cards, write share drafts, open share accounts, or obtain new loans – but did you know they can also use your Social Security number to receive a tax refund or a job? It is called Tax Identity Theft and tax season is the most common time for this type of fraudulence to happen.

To educate members about this type of theft, the Federal Trade Commission (FTC) has announced that January 25 through January 29 is Tax Identity Theft Awareness Week for 2016. The National Credit Union Administration (NCUA) has updated its tax identity theft resources page on the MyCreditUnion.gov consumer website to provide information to help credit union members understand and prevent identity theft, to protect themselves from other frauds and scams, and the steps used to report all fraudulent activity.

The Federal Trade Commission is also hosting a series of educational events online to correspond with Tax Identity Theft Awareness Week:

  • January 26 at 2:00 p.m. (EST) – the FTC and AARP’s Fraud Watch Network and Tax Aide Program will co-host a webinar for consumers addressing how tax identity theft happens and what people should do if they become a victim.

  • January 27 at 11:00 a.m. (EST) – Twitter Chat with Information for Veterans about Tax IDT hosted by FTC and Department of Veterans Affairs

  • January 28 at 1:00 p.m. (EST) – Assisting Victims of Tax Identity Theft, a webinar hosted by FTC and IRS

  • January 29 at 2:00 p.m. (EST) – FTC and ITRC Twitter Chat #IDTheftChat

For more information on protecting yourself and others against identity theft, visit ftc.gov/idtheft.

What Happens When Your Debit Card Is Compromised

Finding out that your debit card information was compromised is unnerving. Unfortunately, this type of fraud is on the rise and there is no way to avoid it. Card compromises occur when unauthorized individuals gain access to debit card information through a merchant or card processor computer system. This is sometimes referred to as “hacking” into or installing “Malware” to capture data on a computer system. Even though a card is compromised, it does not mean there is fraudulent activity occurring within the member’s account. 

DoverPhila Federal Credit Union is notified by their card processor and/or MasterCard® when there is a compromise situation. To minimize your inconvenience with compromised cards, DoverPhila will send a notification letter to the affected member that a new card has been ordered.  Within two weeks of the date of this letter, your new card should arrive in a plain white envelope.  Your compromised debit card will automatically be cancelled two weeks after the date on the notification letter; if you would like this card closed immediately, please contact the debit card department.

Your new card will be assigned a PIN (personal identification number) which, for security reasons, will arrive in a separate mailing roughly three days after the arrival of your new debit card.

For questions or additional information, please contact a DoverPhila Federal Credit Union member service representative by calling 330-364-8874.