JANUARY SUCCESSFUL Ways to Reduce Your Debt In 2018

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1 JANUARY SUCCESSFUL Ways to Reduce Your Debt In 2018 Date/time to schedule: Monday, January 7:00 p.m. Preheader Text: Finally a resolution with long-term benefits. Facebook Share Text: Ready for a resolution with long-term benefits? Here are a few tips for getting out of debt this year, but if you need help, remember we re just a phone call away! Body Copy: It s that time of year again! Time to make those promises to ourselves centered around self-improvement in the New Year. Before you settle on all of your resolutions for 2018, consider the benefits of putting debt management and reduction at the top of your New Year s Resolution list. In a recent Nerdwallet article, contributing writer Anna Helhoski, shows us 5 ways to make debt control a successful resolution this year. 1) Figure out what you owe Compile a document or spreadsheet of the amounts you owe including payments, due dates and interest rates. For a complete picture, you ll want to pull a copy of your credit report watch for an from us next week that has all the information you need to pull and read your report, or call us if you want help before then. Lastly, add up the total amount you owe, as well as the total you need to spend each month on bills. Having this information is crucial to determining your next steps. 2) Seek guidance As your credit union, we re here to help. Contact us if your debt is more than half of your annual income or you re struggling to pay for living necessities. We want to give you the tools you need to help you thrive financially. A certified consumer credit counselor may also be an option to help advise you on how to tackle your debt. In your initial meeting or call, general advice on budgeting or creating financial goals will be free. For other services, such as those for debt management plans or bankruptcy counseling, expect to pay fees. If you decide to contact a consumer credit counselor, look for one affiliated with the Financial Counseling Association of America or the National Foundation for Credit Counseling, which has a search tool to find locations near you. 3) Decide if debt consolidation is the right move If you re making several monthly payments on multiple high-interest bills, consider debt consolidation. With this option all of your unsecured debts are combined into one single loan or credit card with a lower interest rate, which can make payments more manageable. Contact us to find out consolidating to a personal loan or our credit card would be a good fit for your situation.

2 4) Avoid debt settlement companies Debt settlement is risky and doesn t work for many people. It involves paying a lump sum to a debt settlement company that then negotiates on your behalf. Then, you pay the agency a percentage of the total debt or a percentage of the debt eliminated by the settlement. If you re in dire straights financially, you may want to consider filing for bankruptcy of your unsecured debt. It will damage your credit history, but you can begin rebuilding it almost immediately. However, be sure to contact us before you take this step we may be able to help you avoid filing bankruptcy. 5) Develop a realistic budget Debt repayment works only if you can plan how to avoid getting into debt again. While unexpected expenses happen, such as medical emergencies, you can take control of your finances by keeping a budget. Figure out your after-tax income and then choose a plan that covers your needs, wants and savings. Consider trying the 50/30/20 budget, which allocates 50% for cost-of-living necessities, 30% on wants and 20% on prioritizing emergency savings, retirement funds and repayment on toxic debts, such as payday loans. Once you have a budget, automate your payments when you can so you don t miss bills, and watch your spending by using a budgeting app or spreadsheet. Keep track of your credit and resolve any errors you find. Click here to read the full article.

3 January is a Great Time to Pull Your FREE Credit Report Date/time to schedule: Thursday, January 2:00 p.m. Preheader Text: The best way to protect your identity and your credit score! Facebook Share Text: One of the best ways to protect your identity and credit score is to pull a FREE copy of your credit report. Here s how to do it & what to look for absolutely no strings attached! Body Copy: Most of us spend more freely during the months of November and December, which may cause us to lose track of our finances just a bit. It happens. Unfortunately, scammers and thieves also know this to be true, so it s very important that you pull a copy of your free credit report in mid- to late-january and review it carefully to ensure it s accurate. By law you are entitled to receive one free copy of your credit report annually from each of the three credit reporting agencies (Experian, Equifax and TransUnion), so a total of three reports each year. You can pull a copy online at Rather than pulling all three reports at once, we recommend pulling one of the reports every four months - so January, April & September. This will help you keep a yearround eye on your credit report and catch potential fraudulent activity sooner. The difference between a credit report and credit score Your credit report is really a snapshot of your credit use history your personal information, what kinds of credit you use (credit cards, mortgages, loans), whether you have paid your bills on time, how much of the credit you have used and what is outstanding, banking information, public records, and more. Your credit score is a number assigned to you that is a mathematical calculation based on the information in your credit report (usually ranging from ). This number shows lenders how much of a risk you are in paying back debt. The free credit report you pull will not include your credit score. Locating your reports Simply visit scroll down and click on Request your free credit reports, and follow the instructions. Review these four key areas of your credit report for accuracy: 1) Personal information Your name, address history, social security number, date of birth and employment history. 2) Credit history

4 This is the largest section of your credit report, and will contain information on all the credit accounts you've either opened or co-signed for, including accounts you've closed. 3) Credit report inquiries Whenever someone inquires about your credit, such as a landlord, lender, or insurance company, this information is recorded and remains on your report for up to two years. 4) Public records Any public information, such as bankruptcy, late child support, or unpaid taxes, can stay on your credit report for up to 7 years. Comb through each of these sections and make sure that all the information is correct. If you need assistance, contact us. We can assist you in reading your credit report, disputing any items, and provide advice for building or raising your credit score.

5 6 Tax Credits & Deductions for College Tuition & Expenses Date/time to schedule: Sunday, January 7:00 p.m. Preheader Text: College is expensive. Deduct everything you can! Facebook Share Text: News flash college is expensive! Whether you re financing college for yourself, a spouse, a child, or someone else, here are some tax deductions you ll want to make sure to take advantage of! Body Copy: News flash: college is expensive! Many graduates leave with thousands of dollars in student loan debt, burdening them beginning just after graduation. However, if you re paying for school yourself (or for a dependent), there are a number of education deductions and credits that can help alleviate the monetary burden of a college education. Gary Tuttle, moneycrashers.com contributing writer, details 6 tax credits & deductions that can help you save money on college. 1) American Opportunity Credit The American Opportunity Tax Credit (AOTC) is one of the most valuable tax credits available. The credit is worth up to $2,500 for money you paid towards tuition, fees, and other eligible education expenses. It s partially refundable, meaning that if your tax liability is zero before the credit is applied, you can get up to $1,000 back in your bank account. To be eligible, the student needs to be enrolled at least half-time. You can only claim this credit for four years, per student. This means you can t claim it for graduate school or if the student took longer than four years to complete a Bachelor s degree. To claim the full amount, your income must be less than $80,000 if you file as an individual, or $160,000 if you are married and file jointly. However, you can receive a reduced amount of the credit if your income is between $80,000 and $90,000, or $160,000 and $180,000 if you are married filing jointly. 2) Lifetime Learning Credit The Lifetime Learning Credit allows you to get a tax credit for tuition, fees, and required books and supplies for classes taken at any qualified educational institution. This tax credit does not have a limit on the number of years that it can be taken. If you continue to have eligible expenses, you can take this credit each year indefinitely. Unlike the American Opportunity Credit, the student does not need to be enrolled in a degree-seeking program. Furthermore, he or she can be a graduate student, and you can get this credit for just a single class. You can deduct expenses paid for yourself, your spouse, or for any of your dependents as long as those expenses are required to be paid to the educational institution as a condition of enrollment or attendance.

6 3) Tuition & Fees Deduction The tuition and fees deduction is an adjustment to income, enabling you to reduce your taxable income by up to $4,000. You can deduct tuition, fees, and expenses required to be paid to qualified educational institutions as a condition of enrollment. You do not have to itemize your deductions to receive this benefit it is taken on Form 1040, line 34. The expenses must be paid for you, your spouse, or your dependents. Your income must be $80,000 or less if single or head of household, and $160,000 or less if married filing jointly. Additionally, you cannot take this deduction if you are filing as married filing separately or if you can be claimed as a dependent on someone else s return. 4) Student Loan Interest Deduction You can deduct your student loan interest up to $2,500. You can even claim the deduction if you do not itemize your deductions. Qualifying educational loans can be taken on behalf of yourself, your spouse, or your dependents. However, you must be legally obligated to repay the loan in order to take the deduction. Additionally, your student loan must come from a qualified lender, such as a private bank or the federal government. Loans from family members to pay for school are not eligible for this tax deduction. 5) Work Related Education Expenses You may be able to deduct work-related educational expenses as itemized deductions. To qualify, the education must: be to maintain or improve your job skills, or be a requirement of your employer or a law to keep your salary, status, or job, and not be to meet the minimum requirements of a new or first job. Expenses that you can deduct include: Tuition, books, supplies, lab fees, and similar items Certain transportation and travel costs Other educational expenses such as the cost of research and typing 6) Educator Expense Deduction If you are a K-12 teacher, instructor, counselor, principal or aide for at least 900 hours in a school year in a school that provides elementary or secondary education, you may qualify for an adjustment to income on Form 1040, line 23. Eligible educational expenses are unreimbursed expenses for: Professional development, books, supplies Computer equipment and related software or services Other equipment and supplemental materials for the classroom. Click here to read the full article.