January 2005 Newsletter

What are you waiting for? It's January so it's time for some resolutions that you can keep. Resolve to attend FPW and bring a new friend or colleague each time. If you don't start caring about your money and your financial future, who will?
I am still seeking your input to determine the topics to be covered in FPW for 2005. PLEASE email a list of topics that would bring you out to the monthly meetings. FPW generally focuses on saving, investing, retirement and estate planning; let me know what would motivate you to come out and learn. Help with basic budgeting and debt reduction is available for free in individual sessions at the Family Life Center (see below).
Quote of the month: "Planning for retirement always outperforms worrying about it." (WSJ advertisement)
Upcoming program:
January 12, 2005: Asset Allocation
We will review the general principles of asset allocation that apply to ALL your investment decisions and then offer recommendation on how to allocate contributions to your retirement plan. These decisions are very important and will GREATLY affect how much money you have in retirement. If you err on the conservative side, fearing that you will lose money, you will not accumulate enough to live on. Investing too conservatively is VERY risky!
We will review the menu of both TIAA-CREF and Utah Retirement System (URS) options. Even if you do not participate in these two plans, you will learn about the general principles of asset allocation that you can apply to your investment decisions.
Have you even looked at the choices you made when you (or spouse) were first hired? Do you know where your retirement money is invested? Review your most recent statement. You can change future contributions as well as re-allocate your current accounts. Come and bring a friend.
February 9: ??? let me know what topics interest you!
March 9 ?
April 13 ?
Financial Planning for Women (FPW) is a monthly educational seminar that meets the second Wednesday of each month at two times: 12:30-1:30 p.m. in Family Life room 318 on the USU campus. Bring your lunch. The same program is repeated in the evening: 7-8:30 p.m. at the Family Life Center, 493 North 700 East, Logan (at bottom of Old Main Hill). The longer evening time slot allows for more discussion. Programs are free and registration is not required. For further information: (435) 797-1569; jean.lown@cc.usu.edu
NEW this year from FPW.
Would you like a speaker on a personal finance topic for a group? Would you like help organizing a personal finance club? This is different from an investment club that buys individual stocks. A PF club can be a group of friends that meets once a month to discuss a book on investing, to study a topic and share ideas. It's a way to get together with friends who share an interest (or want to develop expertise) in personal finance and investing. Contact Jean at: 797-1569 or jean.lown@cc.usu.edu
Credit Scores and Credit Card Debt
According to Experian, (http://www.nationalscoreindex.com/) the average credit score in the U.S. is 677; for Utah: 680 (the range is 330-830). Click on "area score" to find that the average consumer debt in U.S. is $11,224; for Utah: $11,308; for Logan: $11,430! This is the average amount of money owed per individual on credit cards and fixed payment account (i.e. auto loans); excludes real estate mortgages.
Resolve to pay off your credit card debt in 2005. The best financial move you can make is to pay off your credit card and then pay your card in full each month. The average American family has $8,000 in credit card debt at a typical rate of 14%; if you pay only the 2.2% minimum balance each month, it will take 30 years to pay off the debt (assuming you do not charge another penny) and cost about $10,000 in interest! Don't be late on your payments. About 85% of credit card issuers punish late payers with rates as high as 30%. Almost half of card issuers will raise your rate even if you pay on time IF you are late on a payment on another card! For most Americans the best way to find money to invest is to pay off those credit cards. Call the Family Life Center to make an appointment for a free PowerPay debt analysis: 797-7224
Reminder: Check your Credit Report.
Residents of the west can get free copies of their credit bureau reports from each of the three major credit bureaus . DO NOT use any web site other than: http://www.annualcreditreport.com/ You may be charged a fee at other sites. Call 1-877-322-8228 to request your credit report by phone. You can order all three at once or space your requests throughout the year (usually a better choice to monitor for ID theft).
Tips of the month:
Don't contribute to tsunami relief scams which are proliferating on the web. Stick to organizations that you know are legitimate.
Rising interest rates mean that rates charged on credit cards and adjustable rate loans rise rapidly while savings rates languish in the basement. One bright spot for savings: ING Direct is raising the rates it pays on FDIC insured, no minimum balance savings accounts. Current rate is 2.35% APY. Compare to the 0.45% national average on savings accounts and 1.01% on money market mutual funds. How do they do it? ING Direct is a an internet-only company so they don't pay for bricks and mortar. You may have noticed their bright orange print advertisements. Deposits and withdrawals are done electronically through your checking account. Check them out at www.ingdirect.com
The single best retirement strategy:
http://money.cnn.com/2004/12/17/retirement/retirement_best_0501/index.htm
Get healthy; get wealthy:
http://money.cnn.com/2004/12/06/pf/yir04_resolution_healthy/index.htm
Websites of the month:
TIAA-CREF.org and URS.org both offer lots of help in assessing your risk tolerance and allocating your retirement plan contributions.
Secret history of the credit card (PBS documentary)- a real treasure trove of information on credit cards and how to protect yourself. http://www.pbs.org/wgbh/pages/frontline/shows/credit/
The USU Family Life Center, 797-7224, 493 N 700 East (bottom of Old Main Hill), provides free financial counseling and occasional workshops. This is the best source for basic money management and getting out of debt. They offer the PowerPay computer debt analysis for free.