21 Oct

The Truth about Debt: It’s Not All Bad

Debt is a four-letter word – and it’s often used like one. We avoid it. We spurn it. We don’t mention it in polite company. But debt isn’t all bad. In fact, debt can actually help you build wealth – if you learn to use it wisely. Navigator Credit Union can help you sort out the good from the bad.

Good vs. Bad

Generally, debt is considered good if you use the money to buy something with the potential to grow in value. A college education stands to boost your earning power throughout life, so a student loan may be a good debt. Owning a home gives you a place to live and affords you tax advantages, plus the home’s value may appreciate over time, so a mortgage is often a good debt. But even good debt has a few warnings: Be sure to borrow only what you can afford to pay back, and shop around for the best credit union loan rate.

Using credit to buy disposable goods (like a T-shirt or a pizza) or anything that falls in value would result in bad debt, which can quickly stanch your cash flow. For example, if you charge a $500 high-definition TV to a credit card with a 17% interest rate, you could end up forking over $622 in total if you took just three years to repay the debt and paid only the minimum. And the higher the purchase price, the more interest you’ll pay.

But the line between good debt and bad debt isn’t always so stark. For instance, you may find it necessary to buy a car in order to hold down a job, but lack the funds to purchase it outright. While a car doesn’t have much potential to grow in value, it doesn’t have to be a bad debt. The trick is to be conservative and buy only what you can afford.

Where Do You Stand?

Most money savings experts recommend spending no more than 36% of your monthly income to pay off debt. Most lenders will consider this figure – called a debt-to-income ratio – when determining whether they will lend you money, and at what rate.

Do you know your debt-to-income ratio? A BALANCE? Financial Fitness counselor can help you assess your financial picture and suggest ways to improve it, all at no charge to you. Just contact BALANCE at 888-456-2227 to get started. Establishing a savings deposit program with Navigator can also help you avoid or reduce future debt. Call 228-475-7300, visit www.navigatorcu.org or stop by a branch today to learn more.

21 Oct

Hey, Generation X! Navigator Credit Union Is Here for You

At Navigator Credit Union, we provide value to all our members – no matter your age. From seniors and boomers to Gen Y and young children in generations yet to be named, we have the products and services that make your financial life easier. Generation X, everyone born from the mid 1960s to the late 1970s/early 1980s, have unique financial needs. And Navigator meets those needs in the following ways:

Account access wherever you go. Gen X members tend to move more than baby boomers, and are more likely to switch jobs. Even if you move out of state, you can conduct transactions at other credit unions through our shared branching network, and access your accounts using online banking or surcharge-free ATMs.

The latest technology. According to a 2009 MetLife survey, Generation X is extremely technologically savvy. Navigator is also on the cutting edge with our ‘N Touch online services including e-Bill Pay, e-Alerts, e-Statements and other e-Services. We know the importance of having account access right at your fingertips, and our convenient and secure online services deliver.

Affordable mortgage rates and experienced mortgage professionals. According to the MetLife survey, the majority of Gen Xers own homes, or would like to in the near future. Some worry about having enough money for a down payment. The mortgage professionals at Navigator can help take the guesswork out of applying for a mortgage. We will sit down and help you run the numbers based on the latest credit union loan rate. If you already own a home, we can also help you determine if refinancing is right for you.

BALANCE? and other financial education services.According to a Federal Reserve Survey of Consumer Finances, nine out of 10 people in their 30s are in debt, compared with 76% in their 20s. Generation X has incurred a great deal of student loan and consumer debt making it hard to save for retirement. As a member of Navigator Credit Union, you have access to BALANCE, a free financial counseling service. BALANCE counselors will look at what you owe and help you develop a plan to pay it off. We also offer free seminars on debt and other money management topics.

Working Hard for You

We know that when it comes to managing your money, you have different needs than your parents or your children. We have the products and services that are right for you. Find out more at www.navigatorcu.org.

21 Oct

Where to Safely Stash More Cash at Navigator Credit Union

Financial experts recommend having three to six months’ worth of living expenses in a regular savings account in case of emergency. If you’ve followed this advice and have reached your savings goal, don’t stop saving! Now’s a great time to consider other highest yield savings options that can help take your money to new heights.

The following savings vehicles from Navigator Credit Union can continue to help your money grow while still keeping it safe. Just like a regular savings account, they are NCUA insured.* Plus, you can keep tabs on these savings options just as easily as you can with your regular savings account. Here’s how they work.

Certificates of Deposit. One of the basic ingredients to a well-rounded savings plan is a certificate of deposit (or CD) that gives you a guaranteed rate of return – and that means peace of mind. CDs are high-yield deposit investments, with terms ranging from six months to five years. The interest rate for CDs tends to be higher than regular savings, which helps your money grow faster. If you are a new investor, take advantage of Navigator’s 1st Nvestor CD. For as little as $10/week, this CD gives you the opportunity to jump-start a savings plan at higher deposit rates without the requirement of a large opening balance.

Money Market Accounts. Add some muscle to your savings with a Money Market Account. This hard-working vehicle offers a higher rate than a Regular Savings Account and can be opened with an initial deposit of $2,500. Then, as your balance grows, your rate increases, too! It’s a smart way to save for a down payment on a home or to build an emergency fund as a financial cushion.

Individual Retirement Accounts (IRAs). Navigator offers traditional and Roth IRAs, two helpful ways to boost savings for your golden years. In addition to helping your funds grow safely, IRAs offer tax benefits.**

Find Your Highest Yield Savings Options

Opening other savings accounts with us combines safety with convenience. You can easily check your balance with online banking and make transfers between accounts. To learn more about our savings options and view our best savings account rates, visit www.navigatorcu.org, give us a call or stop by – we’ll be happy to talk with you.

*
NCUA insurance covers $250,000 per depositor, per legal account category.
**
This financial institution does not give tax advice. Consult your tax advisor for information specific to your situation.
21 Oct

Maximize Your Tax Savings before Year-End

If you find doing your taxes about as much fun as, say, flossing, then welcome to the club! It’s a club more than 182 million strong – the number of income tax returns filed in 2009, according to the Internal Revenue Service.

To make your “club membership” a bit more enjoyable, consider adopting any of the following tax tips before year-end.

Take advantage of the saver’s credit. If you’re a low- to moderate-income taxpayer, plan to take the saver’s credit (known formally as the Retirement Savings Contribution Credit). It’s based on your contributions to an employer-sponsored retirement plan, such as a 401(k), or an individual retirement account. The credit ranges up to $1,000 for single taxpayers and up to $2,000 for married couples. Eligibility is based on adjusted gross income: up to $28,250 in 2011 for taxpayers who are single or filing separately; $42,375 for those who file as head of household; and $56,500 for couples filing jointly.

Make a tax-free charitable contribution. If you’re age 70½ or older, you can make contributions to charitable organizations directly from your traditional individual retirement account (IRA) without paying any tax on your IRA withdrawal. In 2011, you may contribute up to $100,000 from your IRA to charities, tax-free. Note that qualified charitable contributions count toward your required minimum distribution for the year.

Beware of a major rule change in flexible spending accounts (FSAs). The greatest change in FSAs in 2011 is that you’ll now need a written order from your doctor to receive FSA reimbursement for over-the-counter medications, such as nonprescription cold tablets.

Buy a home. Despite distant Congressional rumblings about tweaking mortgage deductions, you may still be able to deduct your mortgage interest, property taxes and points paid to obtain a mortgage, as well as interest on home equity loans (up to $100,000). Plus, if you live in your home at least two of the five years before you sell, you won’t owe taxes on up to $250,000 in profit ($500,000 for a married couple filing jointly). With home prices and mortgage rates still relatively low, now may be a great time to buy!

Consider taking a deduction for state and local sales taxes. As of 2010, taxpayers can take an itemized deduction for state and local sales taxes instead of an itemized deduction for state and local income taxes. That’s potentially a big help if you live somewhere without an income tax, or if you make a major purchase this year, such as a motor vehicle or boat.

Get Expert Help

Have a question (or two or three) for a qualified tax professional? Call now! You’ll find tax pros much more available and amenable to your questions now than in mid-April. Plus, you’ll feel better prepared come filing time!

21 Oct

EASY BUTTERNUT SQUASH SOUP

This butternut squash soup is simple to prepare and chock-full of nutrients, such as beta-carotene, calcium, vitamin C and potassium.

INGREDIENTS
2 pounds butternut squash,
peeled and chopped
5 cups of low-sodium
chicken stock
1 teaspoon dried rosemary
1 teaspoon ground sage
¼ cup 1% or skim milk
Salt and pepper to taste

DIRECTIONS
Add butternut squash and chicken stock to a stock pot or sauce pan. Make sure the stock covers the squash. Add a pinch of salt.

Cook on high heat until it boils. Reduce heat to a simmer and cover.

Add herbs and pepper.

Simmer for 30 minutes, or until squash is tender.

Remove from heat and cool. Then mix soup in a blender until smooth, or use an immersion blender.

Stir in milk, and add salt and pepper to taste.

 
Per two-cup serving: 92 calories, 1g fat, 19g carbohydrates, 2g protein.
21 Oct

Harvesting Autumn’s Healthy Bounty

Seasons like winter and summer often inspire you to adopt healthy habits. With winter comes the New Year and resolutions to eat healthier and exercise more. In the summer, warmer weather encourages us to get outside and move and an abundance of healthy produce is available to make light, summery meals.

You may not think of autumn as a time to get healthy. But with kids going back to school, the leaves starting to change color and the air feeling cooler, autumn can be a time for new beginnings. Make a fresh start this fall by changing a few of your eating habits – the results can get you on the way to a healthy heart.

Making the Right Choices

While some fat is essential to your diet, most people get too much and the wrong kinds. Eating too much saturated fat and trans fat can contribute to high cholesterol and obesity, which can lead to heart disease, diabetes and stroke. Choose unsaturated fats instead, such as polyunsaturated and monounsaturated. Research has also shown that omega-3 fatty acids can be beneficial to health. Try upping your consumption of healthy fats by sautéing in olive oil as opposed to butter, and occasionally serving fish instead of beef or pork.

Grains are an integral part of a healthy diet, but some are better choices than others. Refined white flour has fewer nutrients and less fiber than whole-grain options, so choose wisely. Brown rice, whole-grain breads and pasta, and grains such as barley and quinoa are tasty and healthy alternatives.

Adding more fruits and vegetables to your diet is a great way to protect your heart. They are low in calories and full of antioxidants, essential vitamins and minerals, and fiber. Try adding a few of the tasty fall foods (above,right) to your diet.

Small Changes, Big Impact

By making a few small tweaks to your diet, you’ll reap big rewards. It’s not too hard to try a new vegetable, switch to a more heart-healthy fat and add whole-grains to your meals. The result will be tasty meals – and a healthy you!

nutritional benefits of some fall vegetables and fruits

21 Oct

Interest Rates and the Federal Reserve

The collapse of the world financial markets during late 2008 and into 2009 led many Americans to question the role, and ability, of the Federal Reserve to manage the monetary policy of our country. While the experts debated whether the Federal Reserve went too far or not far enough, the rest of us were asking more basic questions such as, “What does the Federal Reserve really do?”

The Federal Reserve: Then and Now

To truly understand the Federal Reserve’s role in our national economy today, it helps to look at how and when the Federal Reserve was created. During the Bank Panic of 1907, Wall Street turned to fellow banker and investor J.P. Morgan to steer the country through the crisis that threatened to push America into a depression. Morgan was able to convene a select group of principal financial players at his New York mansion and command that their individual and business capital flood the system and, therefore, float the banks. As a result, the banks then had the funds to support struggling businesses, providing them with enough capital to carry them through until the panic passed. These actions by Morgan saved the economy and forced the U.S. government into acting on its on-again, off-again plans to create a Central Bank. It was this near-miss that lead to the passing of the Federal Reserve Act in 1913.

The Role of the Federal Reserve

The Federal Reserve, commonly referred to as The Fed, doesn’t actually “set” the interest rates that prevail in the U.S. or world financial systems. Rather, the Fed’s mandate is “to promote sustainable growth, high levels of employment, stability of prices to help preserve the purchasing power of the dollar and moderate long-term interest rates.” In other words, the Fed’s job is to foster a sound banking system and a healthy economy by serving as the bankers’ bank, the government’s bank, the nation’s money manager and the regulator of financial institutions.

How the Federal Reserve’s Actions Can Influence Interest Rates:

Open-Market Operations

The Fed constantly buys and sells U.S. government securities in the financial markets, which in turn influences the level of interest rates in the banking system. This buying and selling also affects the volume and the price of credit. This is the most powerful tool at the Fed’s disposal.

Discount Rate

This is the interest rate that banks pay on short-term loans from the Federal Reserve. This can affect how much banks charge people that borrow money from the bank.

Reserve Requirements

This is the amount of physical funds a financial institution is required to hold in reserve against deposits in customer accounts. It determines how much money a bank can loan to its customers. For example, the more reserves the Fed requires, the less the bank can loan.

Influence, Not Control

It’s important to remember that the Fed does not dictate market interest rates. It merely tries to influence them. That said, the Fed’s actions can have a direct effect on the amount and cost of credit in the economy. This in turn can affect everything from interest rates on your mortgage or the return on certificates of
deposit to the level of growth in the U.S. economy.

Stay True to Your Goals and Your Plan

Regardless of the direction taken by the Fed, or resulting fluctuations in the market, the key for investors is to stay focused on the long term. Discuss your questions or concerns with an experienced financial advisor. Together you can map a strategy to reach your financial goals and not only understand, but weather,
various economic conditions.

Jeffrey C. Hamm is a Financial Advisor with Navigator Financial Planning Services located at Navigator Credit Union. If you have any questions, or would like to provide feedback regarding the information presented in this article, you may contact Jeff at 228-474-3427.

 
Representative is not a tax advisor or legal expert. For information regarding specific tax situations, please contact a tax professional. For legal advice, consult an attorney.
Representatives are registered, securities are sold, and investment advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free (866) 512-6109. Nondeposit investment and insurance products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the financial institution. CBSI is under contract with the financial institution, through the financial services program, to make securities available to members.
FR061007-CEAE
21 Oct

GAP Insurance Coverage for Auto Loans

Accidents happen. But what happens if your car is totaled, but its value is less than the amount you still owe on your auto loan? It’s called a coverage gap, and you may have to pay the difference out of pocket.

That’s where Guaranteed Asset Protection (GAP) can be a lifesaver. A GAP policy covers the difference between your loan balance and the amount your insurance policy would pay out if your vehicle were damaged beyond repair (totaled) or stolen and never recovered. It pays the “gap” so you aren’t burdened by the remaining balance of the loan.

GAP coverage is particularly important if you haven’t made a large down payment on a vehicle. The value of the car may drop as soon as you drive it home – so it’s common to owe more than the car is worth if you finance the purchase price. It also may be required if you lease rather than purchase a vehicle.

Coverage You Can Count On

GAP coverage is inexpensive and can be financed into the cost of your auto loan with Navigator. Contact us at 228-475-7300 or www.navigatorcu.org to get a quote for an auto loan or refinance, and don’t forget to ask about our GAP policy!

21 Oct

Enriching Your Life – Rather than Your Lifestyle

Being tight with one’s money used to carry negative connotations. Cheap Charlie. Frugal Fanny. Stingy Stu.

Now it’s much more mainstream to meet economic challenges head-on. Cost-conscious Cathy. Economical Ellie. Thrifty Ted.

Practical Living on Less

Taking control of your finances to improve your life is different than concentrating on lifestyle enhancements. It may even make your family happier in the long run. Research shows that spending time on experiences with loved ones rather than focusing on possessions often boosts positive feelings.

Here are some ideas for your family.

  • Start with time, not things. Spending time together doesn’t need to cost anything. Plan game or movie nights at home, organize family sporting activities in your yard or local park, attend your children’s school events. Children will remember the things you did together rather than the things you bought them.
  • Downsize your home. Can your family live without some rooms? Moving to a smaller home or renting an apartment can save significant dollars up front, plus lower monthly expenses on an ongoing basis. You may even make some money selling excess furniture and belongings you don’t need.
  • Change your spending priorities. Budget for the things your family needs first and consider shopping at consignment shops rather than buying new. Staying away from shopping malls will help avoid expensive spending patterns.
  • Focus on saving. Setting aside money for future needs, such as college tuition for your children and your own retirement, should remain a priority.

Let Us Help

At Navigator, we want to help you get the most value for your hard-earned money. We offer surcharge-free ATMs, low-interest credit cards and online banking to help you manage your money. We also offer a variety of savings products for your family’s future. Visit www.navigatorcu.org or call 228-475-7300 for more information.

21 Oct

Managing Your Checkbook in the Modern Age

Your checkbook is like an old familiar friend – one you’ve known and trusted for years. But just as your relationships have evolved in recent years (as you chat with your kids on Skype or connect with an old friend on Facebook), so should your relationship with your checkbook. Here are some reasons why you might want to turn to technology to manage your checking account.

  1. It’s greener. Receiving e-statements instead of paper statements is a great way to save a few trees. Plus, you will receive e-statements faster than their paper counterparts, and you don’t have to find the room to file them; they are already neatly organized and accessible via our online banking service.
  2. It’s more up-to-date. Ever balance your checkbook, then
    compare your ledger to your statement and find you made
    a mathematical error? Log on to your Navigator ’N Touch Web
    online bank account to double check your transactions. They
    usually appear within minutes, so you’ll always be able to quickly
    reconcile your account.
  3. You’ll be more organized. Take advantage of account
    e-Alerts, which can notify you when a transaction posts to
    your account, when your balance goes above or below a certain
    amount or when payments are due. Visit https://navigatorcu.org
    to sign up. You can also use online Bill Pay to stay on top of your
    finances, schedule payments in advance and keep everything
    organized in one spot.

Ready to modernize your checking account? Give us a call at 228-475-7300 or visit www.navigatorcu.org to learn more about ’N Touch Web services and get started!

the benefits of online banking