Newsletter


 

Staying Vigilant

By Brad Herzet, President/CEO
 
With the new year comes a new session of the Kansas Legislature. As a credit union that plays a vital part in the economic lives of thousands of credit union members in Kansas and elsewhere, Mid American Credit Union is always vigilant in tracking legislation that could affect its members doing business with us. And it can happen at any time of the year, not just when the Legislature is in session.
 
For example, this past fall, a Kansas Senate committee crafted two bills that would have done the following: give banks a not-for-profit tax exemption without requiring them to follow the same rules as not-for-profit credit unions, such as giving their profits back to Kansas consumers; and raising taxes on credit union members by subjecting credit unions to for-profit taxations despite the fact that credit union operate wholly for not-for-profit purposes.
 
Fortunately, credit union members, advocates and representatives came out in force during a special hearing in late October and the bills failed to advance any further.
 
State and federal law-making bodies continue to try to either tax credit unions as they do other financial institutions or try to give banks the same kinds of exemptions that credit unions have but without making them play by the same rules. Banks and credit unions operate with different financial philosophies and structures — one is a for-profit model that gives select shareholders wealth while the other operates as a cooperative, providing benefits for all.
 
130 advocates from 23 Kansas credit unions, including Mid American, gathered at the
state capitol to show their concern for two bills introduced by bankers.
You likely made the deliberate decision to become a credit union member because you prefer being part of a financial institution that looks out for each person who is a member and you enjoy the benefits of lower fees and interest rates and better dividends.
 
While credit unions prevailed with the recent legislative attempts, we know it’s just a matter of time before we’ll once again need to educate lawmakers and advocate for our members about our unique model. When that happens, we’ll reach out to our members for their help on such matters.
 
More action we care about
Educating youth and adults about financial literacy is another effort we care about. Recently, we hired a full-time financial literacy coordinator to help us in those efforts that range from participating in budgeting simulations in local schools to teaching a summer
financial curriculum in camps run by the Wichita Police department and other city agencies to offering on-site seminars with employers about various financial topics.

Pay Your Rent and Build Your Credit

By Emily Reinhardt, blogger for Mid American’s www.moneymatters.coop
 
It’s important to not ignore your credit score and to live life like you’re relying on that score because in many ways you are. So many things are dependent on our credit history — our ability to get a loan, the purchases we make and so much more. For many, rent can be the most consistent bill they have. If you pay your rent on time, you might think about how that information could boost your credit score. A big portion of a credit score — 35% in fact — is based on payment history. You have some options to get your rent payments reported to credit bureaus. (Equifax, Experian, and TransUnion are the three major bureaus.)
 
Check with your landlord if they are reporting your information. If they are, ask if they are using a service or reporting it to the credit bureaus directly and which ones. Rent history reported to the service RentBureau, for example, will only impact your Experian score because the service is owned by Experian.

You can use a rent reporting service yourself, such as PayYourRent, Rental Karma, RentReporters, RentTrack or Rock the Score. Be aware that some
have an initial enrollment fee, and monthly service fees typically apply. Find out whether you pay rent directly to your landlord or the service provider. Your landlord may need to verify your rent payments for this to be included in your credit report.
 
Using your credit card to pay your rent — if your landlord accepts credit card payments — is an indirect strategy to help boost your credit score. Credit card payment history is reported to credit bureaus. If you use your credit card to pay your rent, be sure to pay off that charge each month just as you would pay your rent to avoid running up additional debt. (Another thing to keep in mind when using this strategy is that you may end up paying service and other fees.) Your rent payments won’t be listed as a separate line on your credit report, but you can still get a boost this way. If your credit card offers points or rewards, paying your rent with your credit card could offer you more rewards in the end as well.
 
Whether your rent is reported to a bureau or not, make sure to pay it on time every single month. Not paying your rent could lead to eviction and could land you in trouble with a collections agency, which will ultimately hurt your credit score.

Pay and Save


Saving doesn’t have to be hard. It can be as easy as using your debit card.
 
Give your savings a little something extra each time you use your debit card for a purchase through Mid American’s Boost Your Savings program. If you're enrolled in the program, every time you use your debit card, your purchase will be rounded up to the next dollar amount. The difference is then automatically deposited into your savings account. It makes saving so easy — and those small amounts of change will add up. How much you save depends on how often you use your debit card. Our average debit card user could save about $300 a year through the program.

If you want to participate in Boost Your Savings, sign up at any Mid American Credit Union branch or online.

Buying and Selling — At the Same Time

By Debbie Stang, Home Loan Officer
 
Buying a home at the same time you are selling a home can be a difficult situation, but it can be made easier with the right resources, some planning and a little luck.
 
It’s predicted that 2020 will remain a seller’s market, so there are some things to consider if you are entering the market as both buyer and seller.
 
Hire an experienced real estate agent who has a good record selling and buying to represent you in both efforts. An experienced agent will have a handle on the market and be able to give you realistic estimates on pricing and timing. An agent can also help negotiate contingency offers or delay closings, depending on your scenario.
 
The best-case scenario is that both the selling of your current home and the closing on your new home
happen fairly simultaneously. You can apply the equity of your sold home to the purchase of your new home, and you only have to move once. But what if that doesn’t happen?
 
What if the buyer of your home doesn’t come through? Will you be able to afford two mortgages as you wait for another seller? What if you’ve sold your existing home but you haven’t found the right home to move into?
 
You need to be financially prepared. As the buyer in a seller’s market,
it can be more difficult to get a seller to agree to wait to sell to you while you wait for a buyer for your house. (That’s called a contingency offer.) If you can afford two homes at the same time, go ahead and buy your next home and move in while your agent finds a buyer for your current home.
 
Selling first can be less stressful, but it will take some planning and coordination. If you’ve sold your home but can’t move into your next home right away, you may need to rent a unit to store many of your belongings and find other housing, like moving in with relatives or renting month-to-month.
 
Along with working with a real estate agent, work with your mortgage officer. At Mid American, we can help you assess your finances and help you strategize if you want to be both a buyer and a seller. Please call 316-722-3921 and ask for either me or LeeAnn Marker in mortgages, or email dstang@midamerican.coop or leeannm@midamerican.coop.  

What’s It Worth?


When was the last time you took an inventory of what you own? Compiling an inventory list of what you own is important for a couple of reasons. One, it helps track your possessions in case of a devastating event, like theft, fire or other disasters. Two, it helps determine if you have enough homeowner’s or renter’s insurance coverage.
 
You can go old-school with hard-copy lists and photos or high-tech by using digital apps or making videos of your possessions. Store your list and accompanying documentation in a safe place, like a safe deposit box available at select Mid American branches for annual rent, or scan and upload to a cloud service.
 
Your inventory should include item description; make, model or serial number; appraisals or purchase costs; and where and when the item was purchased. Take photos, as well.
 
If you create videos, it may be easier to do single ones for each room. Remember to open drawers, closets, jewelry boxes and other storage areas and get close-ups of your items. Record the make, model or serial numbers, too. Once you’ve made your list, check with your insurance company to
ensure you have enough coverage.

Could a Health Savings Account Help Strengthen Your Retirement Plan?
By Jessica Brokaw
 
By one estimate, a 65-year-old couple who retired in 2019 may need about $300,000 in savings to pay their health-care expenses in retirement.1

Health expenses are rising faster than inflation so it’s important to have a strategy. A health savings account (HSA) is a tax-advantaged account linked with a high-deductible health plan (HDHP); together they can work to help you cover your current health-care costs and save for your future needs. Tax benefits HSAs offer several tax benefits to help encourage diligent savings. HSA contributions reduce your adjusted gross income and federal income tax for the current year, and withdrawals are tax-free if the money is spent on qualified medical expenses. Interest or investment earnings compound on a tax-deferred basis inside the HSA. HSA contributions and earnings may or may not be subject to state taxes.
 
Contribution rules
To be eligible to establish or contribute to an HSA, you must be enrolled in a qualifying high-deductible health plan with a deductible of at least $1,400 for individuals, $2,800 for families in 2020. The maximum HSA contribution limit in 2020 is $3,550 for individual coverage or $7,100 for family coverage. You can contribute an additional $1,000 starting the year you turn 55. Once you sign up for Medicare, you can no longer contribute to an HSA. Funds roll over from year to year and are portable, which means they are yours to keep. When HSA balances reach a certain threshold, you can steer the funds into a paired account with investment options similar to those offered in a 401(k). You can make 2019 contributions up to April 15, 2020.

Retirement strategy
Another HSA benefit is that account funds not needed for health expenses are available for any other purpose after you reach age 65. Although HSA funds cannot be used to pay regular health plan premiums, they can be used for Medicare premiums and qualified long-term care insurance premiums and services that you may need later in life. If you can afford to fund your HSA generously while working, some money can be allowed to accumulate over the years. You could even pay current medical expenses out of pocket and preserve HSA assets to use during retirement. But save receipts in case you have an unexpected cash= crunch; you can reimburse yourself for eligible expenses at any time.
 
 
 
Jessica Brokaw is available for free consultations in-person at the west Wichita branch or by telephone during her office hours of 9 a.m. to 3 p.m. Monday through Thursday and by appointment. She can be reached at 316-722-3921, ext. 182 or Jessica.Brokaw@cusonet.com.
  
 
1. Employee Benefit Research Institute, 2019
*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of
principal. Investment Representatives are registered through CFS. Mid American Credit Union has contracted with CFS to make nondeposit investment products and services available to credit union members.