Controlling Credit Card Debt

Credit card debt can become overwhelming for some families. Here are some ideas to help you get your credit card debt under control. Feel free to pass this along to others not enrolled in Wyoming Saves.

Never ever pay the minimum. If you can afford to pay more than the monthly minimum on your credit card, do it! With $3,000 on a credit card, a 2% minimum payment and 18% annual interest, it takes over 30 years to repay provided you don’t add any new charges. In the end, you pay a total of $10,013 including interest of $7,013. For this reason, federal regulators have encouraged credit card companies to increase the percentage owed for their minimum payments.

Some experts recommend paying off cards with the smallest debt owed first and ignoring interest rates on the other cards. This costs a tremendous amount in unnecessary interest payments. Debts with higher interest rates grow more quickly. By tackling them first, you will pay off debt faster!

Found Money

We drive miles out of our way to save a few pennies on gas, then go around the corner and use an ATM that charges $2.50 for every withdrawal. There’s no doubt that saving a dollar on a fill-up is gratifying. Imagine how many gallons of fuel we could save if we watched ATM fees, bills and and other parts of life. Here are some easy ways to save money around the house.

Household Bills

• Shop around. Compare service providers for things like phone and internet. When buying big ticket items compare the offers of at least three providers (make a sheet with the features and options of each so that you’re comparing apples to apples).
• Cancel unused services. If you’re not watching cable, for instance, as much as you thought, then cut your cable bill down to the basic package, or cut it out of your life entirely.
• Cut heating bills. Reduce energy costs by as much as 30% using Energy Star appliances and making sure your house is well insulated.

Food

• Put in some effort. Convenience can be expensive. You’ll spend about twice as much on items such as pre-washed mixed greens and a jar of pasta sauce versus a head of lettuce and the ingredients for marinara.
• Go generic. Buying the store brand can save up to 50% according to Consumer Reports. And today’s store brands are typically very good quality.
• Brown bag lunch. Take your lunch to work.

Gasoline/Diesel

1. Don’t pamper your car. Unless a high-octane gas is specifically recommended for your car, buy regular unleaded.
2. Go slow. Improve fuel efficiency by 10% by observing the speed limit and accelerating slowly.
3. Drive a smaller vehicle. Drive a sedan instead of an SUV or truck.

Credits At Tax Time

April 15th, tax day is just around the corner. For many this can be a very stressful time, especially this year. Following is some information that I hope you will find helpful in preparing your 2008 taxes and/or planning for your 2009 taxes.

Having Trouble Paying Your Taxes?

For those of you who might be having trouble paying your tax bill be sure to still submit your tax return and notify the IRS of your inability to pay. The IRS has a specific form for this purpose. If you have questions on how to obtain the form or what you should do, give the IRS a call at 1-800-tax-1040 or go to your local IRS office to speak with someone in person.

Credits and Deductions at Tax Time Explained

A tax credit lowers your tax bill dollar for dollar. A deduction reduces your taxable income, so the value depends on your tax bracket. If you're in the 25% bracket, a $1,000 deduction lowers your tax bill by $250. But a $1,000 credit lowers the bill by the full $1,000, no matter in which bracket you are.

Tax Credits You Should be Aware of

Home Energy Efficiency Tax Credits
The Energy Policy Act of 2005 established tax credits for energy efficiency retrofits and on-site renewable energy projects. Many of these incentives that were due to expire in 2007 or 2008 have been extended or expanded. Following are some of the energy efficiency and renewable energy project tax incentives that might be of most benefit to you.

Residential Efficiency Incentives
These incentives provide a tax credit of 30% of the cost of materials up to $1,500 for home envelope improvements. Home envelope improvements include improvements to windows, insulation, roofs, duct sealing, etc. This credit is also available for high efficiency heating, cooling and water heating equipment. When making improvements to your HVAC system, the tax credit also applies to the cost of the labor to install the equipment. In order to qualify for the tax credits the improvements must have been placed in service in 2009 or 2010 and installed in the taxpayer’s principal residence only.

On-Site Renewable Generation Incentives
These incentives provide a tax credit of 30% of the system cost for installing (materials and labor) solar energy systems, small wind systems and geothermal heat pumps. This tax credit can be used for systems put in service in 2008 through 2016. There is no cap on the tax credit for systems put in service starting in 2009. Those systems put in service in 2008 must comply with earlier caps. This tax credit is NOT limited to the taxpayer’s principal residence.

For the specifics of how to qualify and receive these incentives please visit the following web resources
www.aceee.org/energy/national/recovery
www.energytaxincentives.org
Dsireusa.org

Child Tax Credit
Many working families can qualify for the Child Tax Credit and get up to $1,000 for each child under 17— in addition to the EIC for which they may qualify. To be eligible for the CTC refund, a single or married worker must:

• have a qualifying child under age 17;
• have taxable earned income above $11,300; and
• have either a Social Security number (SSN) or an Individual Taxpayer Identification Number (ITIN). ITINs are issued by the IRS to individuals who are unable to obtain a Social Security number.

To get the Child Tax Credit you must file a federal income tax return — Form 1040 or 1040A, but not 1040EZ and file form 8812.

Earned Income Credit
If your family works but doesn’t earn much money, there’s a way to reduce taxes or get a refund, even if you don’t earn enough to pay federal taxes. It’s the Earned Income Tax Credit.

The EIC is a special tax benefit for working people who earn low or moderate incomes. Workers who qualify for the EIC and file a federal tax return can get back some or all of the federal income tax that was taken out of their pay during the year. They may also get extra cash back from the IRS. Even workers whose earnings are too small to owe income tax can get the EIC. What’s more, the EIC offsets any additional taxes workers may owe, such as payroll taxes.

Who can get the EIC and how much is it worth?
Single or married people who worked full-time or part-time at some point in 2006 can qualify for the EIC, depending on their income.

Workers who were raising one child in their home and had income of less than $32,001 (or $34,001 for married workers) in 2006 can get an EIC of up to $2,747.
Workers who were raising more than one child in their home and had income of less than $36,348 (or $38,348 for married workers) in 2006 can get an EIC of up to $4,536.
Workers who were not raising children in their home, were between ages 25 and 64 on December 31, 2006, and had income below $12,120 (or $14,120 for married workers) can get an EIC up to $412.

Workers with investment income exceeding $2,800 in 2006 may not claim the EIC.

Here’s an example of how it works. In this case eligible workers can pay less in taxes and get a check from the IRS.

Mr. and Mrs. Johnson have two children, ages 20 and 21, in college. They earned $29,000 in 2006 and owe the IRS $550 in income tax, none of which was withheld from their pay during the year. Their income makes them eligible for an EIC of $1,936. So, the EIC eliminates their $550 income tax — now they don’t owe IRS anything — and gives them a refund of $1,386.

Getting the Credit
If you have children in your home then to get the EIC you must file either Form 1040 or 1040A and must fill out and attach Schedule EIC. Workers with children cannot get the EIC if they file Form 1040EZ or do not attach Schedule EIC. The children must meet some qualifications.
Workers who were not raising a “qualifying child” in their home in 2006 can file any tax form — including the 1040EZ.These workers write “EIC” (or the dollar amount of their credit) on the Earned Income Credit line on the tax form. They do not file Schedule EIC.

Tax Preparation Assistance
Low-income workers can get free help with tax preparation through a program called VITA (Volunteer Income Tax Assistance). To locate the nearest VITA site, call 1-800-829-1040.

enroll now for a chance to win Suze Orman's 2009 Action Plan

It's not too late to enroll in Wyoming Saves and be eligible for the drawing for Suze Orman's 2009 Action Plan book. Wyoming Saves is part of a national effort called America Saves in which over 67,000 Americans have committed to achieving a savings goal. To help people save, Cole Ehmke, UW Extension specialist, collected several resources of interest. The information given herein is supplied with the understanding that no discrimination is intended and no endorsement by Cooperative Extension is implied.

In addition to managing the Wyoming Saves program I am also a participant. Today I transferred my first installment of my savings goal into my savings account.

If you have any questions or concerns about your participation in Wyoming Saves, please let me know. I am here to support you and be a resource for you to help you achieve your savings goal.

Following is the first article that was sent to Wyoming Saves Participants.

Two great ways to establish automatic savings

(1) Online Savings Accounts – provide high yields; all of the following currently pay 5%+, with no minimums to establish (or maintain) an account, no fees, and are FDIC insured.
a. Emigrant Direct
b. FNBO Direct
c. HSBC Direct

(2) Mutual Funds – while many mutual fund companies require a large initial investment to open a mutual fund account, some companies will waive the initial investment if you establish an automatic investment (typically $50/month). T.Rowe Price and TIAA-CREF are a couple of notable ‘no load’ fund companies; AIM Funds and American Funds are examples of load fund companies that allow for automatic investments to open accounts. The Mutual Fund Investor Center provides a search tool to find companies that accommodate people looking for automatic investment opportunities.

A recent Federal Reserve Board study identified successful saving strategies:

- Have a reason to save. Households with an identifiable goal for saving were more likely to have financial assets (and also have higher levels of assets). Setting a goal is an important part of any saving strategy.
- Think ahead, plan ahead. Looking into the future can be an important motivational tool to help people anticipate and be prepared for future expenses. The most prominent goal of the Savers in the program is to develop an emergency fund. Many experts recommend having a fund that could cover three or more months of living expenses.
- Develop a savings habit. It is no secret that getting started is the biggest challenge people face financially. Once the habit is developed, people comment on how “second nature” saving becomes.
- Make savings automatic. Automatic savings via payroll deductions or automatic transfers from a checking or savings account is one strategy found to be very effective in “creating” Savers.

Get Ready for Wyoming Saves Give-Aways

Start thinking of your money saving ideas now. Throughout the Wyoming Saves program you will have an opportunity to share your savings tips and vote on which savings tip you think is the "best". Prizes will be awarded to the savings tip that receives the most votes.

The April 1st Kick Off date for Wyoming Saves is fast approaching. Be sure to get your enrollment form to us right away. And don't forget to talk to your friends and neighbors and encourage them to sign up.

For those of you who are die hard procrastinators, no worries. Just get us your enrollment form as soon as you can.

Please be sure and give me a call if you have any questions about participating in this great program.

Julie

Wyoming Saves - Be a Part of Making a Positive Difference

Times are tough. While the federal government is doing everything it can to encourage more spending. I am here to encourage you to do more saving. In uncertain financial time like these, accumulating a healthy savings account is one of the best ways to take charge of your finances. According to Consumer Federation of American (CFA) research the typical family has under $10,000 of net financial assets and many families are losing wealth. Low to moderate income households have accumulated even less money and typically have less than $1,000 saved. Even more distressing than the lack of savings is the number of families living paycheck to paycheck.

Nobody wants to feel the stress of knowing that they are only a paycheck or two away from financial disaster because they lack money to fall back on when “stuff happens”. In today’s economy, news of job losses is a daily occurrence. Even if your job is secure other financial emergencies can and do occur, such as getting hurt and not being able to work, having a vehicle break down or needing to care for an elderly parent or a sick child.

Even amidst all of this financial turmoil you have the ability to make a positive difference in your life. Starting and/or expanding your family’s savings program is important not only for your financial peace of mind, but it also teaches your kids valuable lessons that they will help them for the rest of their lives. The University of Wyoming Cooperative Extension Service and your local federal credit unions are here to help. As part of the national “America Saves” campaign to build wealth, we are rolling out the “Wyoming Saves” campaign. The goal of “Wyoming Saves” is to enroll individuals, families and groups to either increase their savings or reduce debt during three months. By making savings a habit, we can make a difference not only in our own lives, but in our community.

How Can You Help

PARTICIPATE (do what works and share your ideas)

1. Individually—complete the enrollment form then track your progress.
2. Pairs—enlist a partner, perhaps someone not in the habit of saving money. Complete enrollment forms for both of you then track your progress on the individual progress reports.
3. Families—enroll as a family. Set a family financial goal or set individual goals for each family member. Complete a group enrollment form for the entire family then track your progress on the group progress report.
4. Groups—form a team at work, with friends or neighbors, with your 4-H club or another organization to which you belong. Become the team leader, sign everyone up on the group enrollment form, and be responsible for tracking progress on the group progress report. As the group leader your team will look to you for encouragement and for distributing the educational materials.

Commit to a Goal
It matters more about forming a habit than the amount saved. New savers can take baby steps—$1 a week or month, or just begin saving pocket change. As the campaign progresses savings ideas will be shared with you and you will have the opportunity to share your savings strategies and compete for prizes.

Publicity
Request copies of the “Wyoming Saves” flier or informational letter and distribute via:

• E-mail to your friends and co-workers.


• Posting it on bulletin boards throughout your community.


• Including it in your newsletters or other correspondence.


• Passing out fliers at your regular meetings.


• Mentioning it during phone calls or email-conversations and encouraging participation.

While it would be impressive to see a significant amount of dollars saved or debt reduced, remember what this is all about—FORMING A SAVINGS HABIT! Implementing and sticking to a savings plan will enable you to achieve long term financial success.

How To Participate

Download the enrollment and progress report forms as well as the promotional fliers and letter from the Wyoming Saves box on the right hand side of this page. Alternatively, you can request the forms and information from your local UW Cooperative Extension Service office or participating Credit Union or Bank . You can also request the documents via email at larcntex@uwyo.edu or by phone at 307-633-4383.

Participating Credit Unions & Banks

• First Education Federal Credit Union


• Meridian Trust Federal Credit Union


• Warren Federal Credit Union


• Western Vista Federal Credit Union


• Unified People’s Federal Credit Union


• WyHy Federal Credit Union


• First Cheyenne Federal Credit Union


• Cheyenne Laramie County Employees Federal Credit Union

In order to participate fully, enrollment forms must be received by April 1st, 2009!

Delinquent Mortgage Borrowers . . . what to do

Doing nothing is the worst thing a delinquent borrower can do. And the longer the delay, the worse it gets.

US Comptroller of the Currency John Dugan says, "The record shows that the early stages of mortgage delinquency are the most crucial. The sooner borrowers reach out for help, the more options they have, and the more likely foreclosure may be avoided."

In half of all foreclosures, lenders say borrowers do not make contact with them. Yet, more than a third of those who reach out for assistance are successful in finding alternatives to foreclosure.

Homeowners experiencing financial difficulties can call 1-888-995 HOPE, a toll-free hotline staffed around the clock, seven days a week, by 85 qualified housing counselors from agencies approved by the Department of Housing and Urban Affairs.