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What's New At Mid American

No more paper government checks

The U.S. government is retiring paper checks for those who receive Social Security or other government benefits.

 As of March 1, 2013, anyone receiving federal benefits will need to have those funds deposited directly into an account. The retirement of paper government checks has been in the works for the past few years as a way to reduce federal spending. The U.S. Treasury Department says it will save taxpayers $1 billion over the next 10 years to move to direct deposit.

 There are still more than 5 million Americans who have not converted their government payments to direct deposit, according to federal officials. Those mailed checks represent an additional $4.6 million in monthly costs since each mailed check costs 92 cents more than a direct deposit transfer, Treasury officials have said.

 If you or someone you know hasn’t taken the step to have these payments directly deposited into an account, go to www.GoDirect.org, call the helpline at 800.333.1795, or contact one of Mid American’s financial service representatives at 316.722.3921, ext. 202 for help in setting up a direct deposit into your account.

Winter car maintenance tips

 

 

From Emily Rienhardt, blogger for Mid American's Money Matters finance blog 

 

Keeping your car in good shape in the brutal cold is an important step, not only for your safety but for your financial life as well. An annoying problem in the summer could become a dangerous hazard in the winter if you put it off for too long. And putting off regularly scheduled car maintenance can cause you to really have to pay for it in the end. 

Assuming you’re already aware of where your window ice scraper is, and you’re already on top of your routine oil changes and such. Here are a few more ways to keep your car in its best condition during these frigid winter months.

Check your tires. Don’t discover that your tires are worn out when it’s too late and you’ve caught yourself in the ditch. When driving in wintery conditions, adequate tire traction is extremely important for your safety, and if you wait until the dead of winter, you might end up paying more than you’d like to, since in the dead of winter they’ll be in higher demand. Depending on how much snow your area gets each winter, you might be fine with just a new set of all season tires. But if you live in a place with rougher winters, you might need to consider a set of snow tires instead.

Keep your battery in good condition. You car battery struggles to work at its full potential when the temperatures are down to 0 degrees, or colder in some areas. Do be sure to double check your owner’s manual, but you can check your battery’s fluid levels and determine if you need to add anything or even replace the battery all together. You might feel better about getting your battery checked by a professional, in which case you can head to your nearest service station or auto parts store. If your battery is showing signs that it is worn out, it’s best to replace it before it completely dies. You don’t want to be stranded in freezing temperatures on a dark abandoned road with a broken down car battery. (My nightmare I believe!)

Replace your windshield wiper blades. Even the best windshield wiper blades start to wear out after even just 6 months of use. So you might have to replace yours more often than you actually think you would need to. You can prolong the life of your blades by wiping the rubber with a paper towel and some glass cleaner, but that isn’t a permanent solution. New windshield wiper blades will improve your visibility when driving in the snow or whatever the winter weather conditions are at the time and they aren’t too expensive to replace entirely. They’re also easy to replace yourself, so you probably won’t have to pay a service center to do it for you! When you know that bad weather is coming, you can pop your windshield wipers in the upward position so that the freezing sleet or snow doesn’t build up around your wiper blades. This will make scraping your windshield easier and will keep your wiper blades from being frozen blocks of ice.

Check your tire pressure. For every drop in temperature, your tires loose some pressure. A tire with lower air pressure isn’t able to grip the ground or asphalt the way tires do that are properly inflated. It would feel like hydroplaning in the rain, and it’s really just as dangerous.

Clear the fallen leaves and foliage that sits at the bottom edge of your windshield. If leaves and debris build up in the spots where water is supposed to run out of your car’s windshield, it could cause corrosion or leaks. Check around the seams of your sunroof too. These are common areas for leaves and other organic stuff to collect and cause a mess.

Keep up with your regular oil changes and scheduled maintenance. Frigid temperatures can beat up your engine too. The oil in your car can gunk up and make it harder for your engine to keep up. You should definitely check your owner’s manual and the manufacturer’s recommendation for oil changes and the type of oil your car needs.

Keep an emergency kit in your car. If your car slides off of the road into an embankment of snow, it could be a long time until help arrives to dig you out. Be sure you have an emergency kit in your car, and keep some of the more important items in close reach of the driver, always. A spot in the door compartment or your glove compartment would both be a good place for a blanket or other important items. Because if you’re in a wreck and your car has totally flipped, an emergency bag won’t do much good in the trunk of your car. Keep it close so that you’re able to reach it on the off chance you’re in trouble.

 

For more articles on personal finance, visit Money Matters

 

Small resolutions to start your year off

 

 

From Emily Rienhardt, blogger for Mid American's Money Matters finance blog

 

Are you a big resolution maker each year?

I’ll be honest, I try to be. It doesn’t always work out each year though. Part of me thinks it’s because I set goals or resolutions that might be too lavish or big for me to accomplish right away in a new year. So, I thought about it, and decided maybe it’s better to set a few smaller, easily attainable goals for myself. My financial life is almost always my focus each year, so what better place to start?

Here are a few small ways you can consider to focus on your financial wellbeing in 2017…

  1. Be sure that you’re taking full advantage of your employer’s 401(k) retirement savings match.
    If you’re lucky enough to have an employer who offers a 401(k) retirement savings program, you absolutely should be taking advantage of any sort of matching they provide. Before I was self-employed, I thought that I would be good at contributing to my retirement savings on my own, and didn’t need to do an automated transfer right out of my paycheck. Turns out I was really bad about doing that on my own, and I definitely didn’t take advantage of contributing the full percentage to savings and benefitting from the match that my employer was offering. Why didn’t I do that? Because now, I am my employer, and I’m even worse at the contribution now. Make it automatic. Then you’ll be sure it’s happening, and if you can, get that full savings match your employer is offering.
  2. Meet with a financial advisor.
    Even if you can’t afford to meet with an advisor on a regular basis, you can meet with one just one time, and get a lot of useful advice for you and your financial life. And yours specifically. There is a lot of advice out there, and some of it will be great for you. Some of it won’t. A good financial advisor can monitor and help you adjust each category in your financial life – emergency savings, investments, retirement savings, home-buying help, debt management, starting a new business, college savings, beneficiaries, and so much more. Any time you have a major life change, a financial advisor can help you rearrange and adjust things where necessary. Sometimes it helps to just talk things out with a professional, and it gives you some peace of mind knowing that things are in shape the way they should be.
  3. Up your savings game by just $100 each month.
    If general savings is your area of weakness, try a year long challenge of increasing your savings every month by a set amount. Start small if you want, but really push yourself so that it’s a challenge. $100 – $200 extra each month will add up to a lot at the end of the year. Making the savings an automatic withdrawal with each paycheck is a smart way of making it happen before you even notice the money in your account. “Out of sight, out of mind” works for me…if I move that money to savings before I even see it in my checking account, I’m more likely to forget it was ever there, and I won’t feel the urge to spend it instead of saving it.
  4. Shop less. Buy better quality goods.
    I noticed that when I purchase things that are very cheap, I end up replacing that thing a lot sooner and a lot more frequently that I need to. Better quality goods will definitely cost more, but if it’s better quality, the idea is that it will last longer and stay in better shape longer. So you won’t have to buy the same thing multiple times because of the fact that you’re buying a lesser quality product. Cheap clothing is my easiest example of this. I’ve seen myself go for that $12 top at Target, only to have the top fall apart or shrink or become totally misshapen after the first wash or wear. I end up buying another $12 top a few months later, and then the same issue after that. It’s a cycle that repeats itself and in the end, you’ve spent way more money on multiple items that are of poor quality. Instead, save up for the better product, and save yourself the hassle, and the money, of buying that thing 4 times over. Before you buy things, do a little bit of research, and find what you can afford, but something that stands up to the test of time.
  5. Create a plan to pay off your credit card debt.
    Of course, your plan is going to depend on how much money you’re bringing in, and how much total debt you have. The step that’s really going to help you tackle all of this is to create an attainable timeline for paying all of this off. If you can pay off all of your credit card debt within a 6 month period, then that’s going to tell you how much you need to allocate towards your credit card debt each month. Take it all a month at a time, and keep your payoff goals realistic.
  6. Develop an organizational system for your finances. One you’ll actually keep in tact.
    If you’re used to just stuffing papers and receipts and banking documents in drawers and keeping it all out of sight, that system may not be helping you. (I know this because it’s the system I was using when I was younger, and it doesn’t work!) For the first month of the year, develop that organizational system. Let it take all month and put those good organizational habits to use. This allows you to have time to put it all in place so that the rest of the year becomes much smoother and better organized for you.

Big goals are wonderful, but they take a lot of time. Smaller goals are great too, and they’re something you can change much sooner and quicker if you really put your mind to it.

 

 

For more articles on personal finance, visit Money Matters

 

New year, new you: recovering from credit card debt

 

 

 

By Heartland Credit Union Association via Experian

 

 It’s all too easy to swipe that credit card during the holiday season and rack up fees and interest. Never fear—you can do something about that. Here’s an outline for recovering from holiday debt. 

1. Assess your overall financial situation. What are budget, upcoming expenses, and financial goals? After listing that out, you’ll have a better idea of how soon you can pay down the debt.

2. Strategize about your payments. Focus on paying down the credit cards with the highest interest rates first. Sound daunting? Pay down the smallest balance first. Regardless, it’s important to pay more than the minimum balance on time each month.

3. Stop overspending. Limit or cut spending on non-essential items, at least until you catch up on the extra debt from the holidays. A simple lifestyle change, like carpooling or brown bagging it to lunch, can help you save thousands over the course of the year.

4. Put tax returns and bonuses to work. Use extra income to pay down credit card debt or save for next year’s holiday expenses. It’s not FREE money!

5. Start saving for next year. Did you know Mid American has a Christmas Savings account? If you put $50 a month into this account, you’ll have $600 saved for  next year’s holiday expenses. 

 

 

 

Top 10 ways to prepare for retirement

 

By Employee Benefits Security Administration

 

Retirement may or may not seem like light years away, but it’s closer than you think. Fewer than half of Americans have calculated how much they will need for retirement. That’s a scary thought as the average American spends approximately 20 years in retirement. 

There are steps you can take now:

1.Start saving, keep saving and stick to your goals. Kudos if you’re already saving—keep at it! If you aren’t saving, get started now. Make it a priority, devise a plan and stick to it.

2.Know your retirement needs. Experts estimate you will need at least 70 percent of your preretirement income to maintain your standard of living.

3.Take advantage of your employer’s retirement savings plan. Sign up and contribute to your company’s 401(k). Your taxes will be lower, your company may kick in more, and automatic deductions make it easy. Over time, compound interest and tax deferrals make a big difference in the amount you accumulate.

4.Check out your employer’s pension plan. This may not be for everyone, but if your employer does offer a plan, you should learn more about its benefits and factor that into your plan.

5.Consider basic investment principles. Know how your savings or pension plan is invested. Learn about your plan’s investment options and ask questions. Diversify your investments to reduce risk and improve return—this may change depending on age, goals, and financial circumstances.

6.Leave your retirement savings alone! When you take money out of your retirement savings, you lose principal and interest, and you may lose tax benefits or pay penalties.

7.Ask your employer to start a plan. Some employers might not offer a retirement plan. If yours doesn’t, they might be able to set up a simplified plan that benefits you and your employer.

8.What about IRAs? Opening an Individual Retirement Account (IRA) is a great way to save for everyone. You have two options when opening an IRA—traditional IRA or Roth IRA. Contributions to a traditional IRA are tax deductible on both state and federal tax returns for the year you made the contributions, while withdrawals in retirement are taxed at ordinary income tax rates. Roth IRAs provide no tax break for contributions, but earnings and withdrawals are generally tax-free.

Find out more about Mid American IRAs here.

 

 

 

5 financial resolutions for 2017

 

 

By Heartland Credit Union Association

 

Chances are your 2017 resolutions probably contain words like money, saving or budget… and you’re not alone! After all that holiday spending, many are looking to improve their financial health.

Here are the top five financial resolutions for the New Year, and tips for how to successfully complete them.

1.Create a budget… and stick to it! Know exactly how much money comes in and goes out each month. While it sounds a bit basic, many people do not know how much they spend on a regular basis. Note your essential expenditures like bills and groceries, decide how much you want to save a month and then work out what’s left over for the nonessentials and entertainment. The hardest part will be sticking to it! 

2.Start or grow your emergency fund. Begin small. Set up a separate saving account and deposit $25-50 each week or pay period. Your goal is to have at least six months of living expenses in this fund. You can keep adding to it, but avoid taking money out, unless an emergency occurs.

3.Prioritize debt. List out your debts—credit cards, loans, etc.—and organize them by annual interest rate. Pay down the higher rates first. You’ll save in the long run.

4.Talk to a financial advisor. There are tons of ways to save money AND make it grow. Ask your friends, family and even your workplace for recommendations.

5.Check in on your finances. With online banking, it’s easy to monitor your finances. Set up a time each week to review your spending habits, account balances and upcoming bills. 

 

Understanding debt

 

 

From Emily Rienhardt, blogger for Mid American's Money Matters finance blog

 

Many Americans are very used to their debt, often times with thousands of dollars owed to creditors. Between mortgages, student loans, and credit card debt, it’s become very common for people to be in debt. Sometimes the debt problems are bigger than just a couple of thousand dollars, and suddenly you start to wonder, how much do I really know about debt and credit?

There are so many common misunderstandings when it comes to debt, and we should dive into a couple of them and see what we know. It’s quite normal to have the personal finance waters get a little murky at times. We just have to take the time to better understand it.

If I’ve co-signed a loan for a friend and they’ve suddenly stopped paying, it’s their problem, right?

Only partially right, because it’s actually your problem now too. Co-signing a loan is essentially the same thing as taking out the loan yourself. You’re signing your name, saying you’ll be a responsible party as well. If the person you co-signed with stops paying, it could do real damage to your credit score, and creditors won’t care if the loan wasn’t exactly yours, or if your friend let you down. This will look like your problem, and creditors could potentially come after you for collections, fines and penalties.

It’s incredibly important to either NEVER co-sign a loan with another person, or to really know you trust that other person (like maybe with your life, or your CREDIT SCORE). My father had to co-sign on my car loan, and I’ve never taken a bill more seriously in my life. There’s a lot of pressure not to default in any way on that loan. Not only for my own credit score, but for his too. You need to make sure that the person you’re helping takes this responsibility as seriously as you do.

Debt affects my credit score, right?

Yes, it sure does. It’s smart to keep your debt low or nonexistent for your own bottom line, because holding on to high balances will have a negative impact on your score. For credit cards especially, your account balance should remain under 35 percent of your available credit limit. This is important for keeping a high credit score. Beyond the practice of not maxing out your credit cards, it’s essential for you to pay back your repayments on time and to be making payments above the minimum requirement.

If you aren’t paying careful attention to your credit card usage and the spending you’re doing, you could suddenly notice that you’ve gone overboard. If you ever catch yourself asking, “What did I buy? Why did I do that?”  you’ve probably gone a little too far, and you might need to take a closer look at your habits. A lot of people will gradually start to overspend with their credit cards. Their limit starts out relatively low, and as time passes, the spending limit is increased and slowly, their spending habits could increase too. As the balance climbs, the interest compounds and the payment amount grows.

Is there any kind of debt that’s considered “good” debt?

Good debt is considered an investment that will grow in value or will generate long-term income. Student loans are often considered a good example of this – you’re taking out money to grow your education and in the end, hopefully will result in better jobs for you, and better income. The phrase gotta spend money to make money kinda fits right here. Real estate, small business ownership, student loans, and wise investments are some great examples of this.

A few years ago when I was just starting out as an adult on my own, I had no credit at all. I signed up for my first credit card, got my first $1,000 loan from my bank, and bought a car (with the help of a co-signer, as mentioned above). It was a lot of firsts and I handled all of them responsibly. They aren’t necessarily the best example of good debt, but I needed to take them on in order to start building a credit history for myself. Depending on your own circumstances, taking on small, new lines of credit can be a good thing for you and will help you grow your credit profile. Starting small, and taking it slow is a good way of doing this.

My spouse has terrible credit. Does their credit score affect my credit score?

You are not responsible for your spouse’s bad credit or their debt. Unless you’ve applied for a loan or a line of credit together. Even if your score is spotless, you could be turned down for credit you apply for as a couple, depending on the seriousness of their credit problems. Applying for loans together will mean that a creditor will take both of your financial histories and your income into consideration.

Finding out how and why your spouse got into the credit problems is a good exercise. It helps you determine how the two of you will handle the loan or line of credit together, from here on out. You are also free to consider keeping your loans and lines of credit totally separate. Some couples never merge their financial lives when they get married, and you definitely do not have to. Take time to work through the credit issues together, and don’t be afraid to find advice and assistance where you need it. Financial advisors can help the two of you create a plan for working through some of your credit issues as a couple.

 

For more articles on personal finance, visit Money Matters

 

 

Living beyond your means

 

 

From Emily Rienhardt, blogger for Mid American's Money Matters finance blog

 

 

Are you certain that you can afford your lifestyle? Living beyond our means is easy to do these days. We’re surrounded by temptations to spend and opportunities to break your budget. If you’re too focused on spending, and you’re suddenly concerned that your financial future may be in danger, you probably are caught up in a lifestyle that you can’t actually afford. If you’re feeling this way, you probably know that your finances need some help. Here are some major warning signs that you need to recognize…

Your credit score is low. Credit cards are everywhere, and our world has adopted plastic as a major way of spending money. If you’ve gotten caught up in the habit of using credit cards too much, you might have noticed some damage to your credit score. Credit bureaus are keeping close track of your spending history, your payment records, and all outstanding loan balances. All of this information makes up your credit score and you could suddenly discover that your score isn’t very strong. If you’re wanting to improve your credit score, focus on paying down your debt, discontinuing the use of cards and stop applying for new ones too. A lot of handwork and dedication will go into improving your credit score, so get ready.

You are highly motivated to spend by your “fear of missing out." None of us want to miss out on the great parts of life due to our financial circumstances. If you catch yourself breaking your budget to take part in excess social activities or to maintain a certain lifestyle that your social circle holds, you’re being motivated by the wrong things. Getting caught up in a few moments of overspending is one thing, but constantly doing so, and constantly making excuses for it too, is a bigger problem. You can find inexpensive ways to hang out with your friends, and maybe you’ll inspire your social circle to start finding ways to spend quality time together without spending too much money. Also, be sure that you don’t feel the need to purchase excess “stuff” just to feel you’re caught up with your friends or your social media following or your coworkers and the people in your life. The feeling that you need to be “on trend” or own the latest gadget isn’t as important as the need to build your own personal wealth.

Your credit card balances continue to rise. It’s normal to use a credit card as a regular form of payment, but maxing them out or carrying your balance over month to month is a problem. It’s also a sign that you’re unable to support your lifestyle. You’re relying on borrowing more money than you actually have, and you’re digging yourself a big hole full of debt, deeper and deeper, with every swipe of the card. Carrying a balance from month to month is a sign that you’re spending more than you can afford to spend. Get a grip on your spending problems – identify what it is that makes you overspend, figure out how to get back on a tighter budget, and set aside more money for your savings instead of unnecessary spending. Ideally, you should only be using a credit card if you can pay the balance off in full each month. If spending with plastic continues to be a problem, you might want to switch over to a cash-only spending system for yourself. Sometimes the act of paying with credit cards doesn’t really feel like spending money. But if you’ve over spent with your cash, you notice when some of it isn’t there.

You’re not saving enough money. Creating a savings system for yourself is so important. And if you haven’t done it before, now is as good a time as ever to start. Paying off your debt should always be a high priority, but paying yourself first is equally important. You may not be able to save the full recommended 10-15% of your income right now, but you could always adjust while you’re working on getting rid of your debt and reorganizing your monthly budget system. If you’re overspending on credit cards and living beyond your means, chances are you are not saving any money for yourself. Build your emergency savings or even your retirement savings now, and you won’t be disappointed. Your savings shouldn’t be dipped into, so if you breaking your budget means that you’re dipping into savings, chances are you’re doing something in your life that you don’t need to be doing. If you can’t save any money at the end of the month, chances are you’re buying more than you need and living a lifestyle you can’t support. Pay yourself first!

You don’t have any money left at the end of each month. This is a huge red flag, and perhaps the most obvious. You’ve overspent. Even if you’re living paycheck to paycheck, chances are there’s a small way or two that you can cut back each month. Even a Hulu account or a magazine subscription  would count as an extra, unnecessary expense if you’ve run out of money each month. A great way to jump start a savings plan is to take a month and have absolutely no extra spending. A spending fast will stop the bleeding so to speak, and you’ll be able to set that money aside for savings instead. Cutting all spending means dining out, entertainment and extra activities, trips to the coffee shop, no clothes shopping, no cable – cutting back will be hard, and if you can make an effort to do it over an extended period of time, you can use the money you would have spent on other things to build your emergency fund, or to tear down your debt.

If you aren’t willing to cut back in the short term, chances are you won’t make it in the long term. Stability won’t build itself, it’s your job to make sure you’re able to create a life that you can afford to keep up and that can withstand the long haul.

 

 

For more articles on personal finance, visit Money Matters

 

 

 

Convenience can be costly

 

 

 

From Emily Rienhardt, blogger for Mid American's Money Matters finance blog

 

Our lives are continually speeding up and becoming busier and busier, making all things that are convenient more and more appealing. These days, we can order just about anything from any room in our home, we can pay for things with the click of a button, and we can have just about any purchase delivered to our front door. Convenience is no longer just an appreciated thing among people, it’s become something we all expect and sometimes demand.

Convenience plays a factor in all things from our health, to our food, to our savings, to our payments, to our travel, to our time. But at what expense is convenience coming to us?

Our health: In some ways, convenience has drastically altered our health. Think about how often we opt for the drive-thru at a fast food place, or pre-packaged foods at the grocery store. These are often times unhealthy options compared to fresh, seasonal food that we must prepare and cook ourselves. Grocery stores seem to have more packaged food products than non-packaged food options and these things are marketed to us and shoved in our faces so that we’ll feel the pull to choose the easy option over anything else.  These foods contain preservatives and unnatural ingredients that over time can have huge impacts on our weight and our overall health. Not only that, they’re often over-priced food options.

Quality: Sometimes, the more expensive and convenient items are higher quality purchases, and “totally worth it”. But how many times have you gone out to eat or grabbed that cup of coffee and thought to yourself, “I could have done this at home for much cheaper, and I probably could have made it better”. We’re often made to think that these fast, easy, mindless, convenient options are the better way to go, but sometimes we’re fooled by the choices available to us. Sometimes the quality is much lower, and we’ve just spent money on that.

Our environment: The cost of convenience has had a huge toll on the environment. Think of all those prepackaged foods, home electronics, single-serve products, (among so many other things) and how many more resources they require. The rise in production of these convenient items requires more energy to produce, more materials to package, and more effort to transport. With all of this extra effort to make things more convenient for humans, we’ve created a lot of waste and a lot of additional changes to our planet. We should always keep this in mind when we’re faced with choosing the convenient option.

Overconsumption: By having so many easy options out there, we’re often picking out more than we need. A lot of goods and foods are becoming easier to produce and manufacture, giving a change in prices, and encouraging us to buy more. But just because these things are cheaper to produce and purchase, doesn’t mean we need more of them. Not only that, but these things are readily available all over the place for us. Online, and on every corner, we’re forced to see and notice these things all the time and it makes us buy more than we need, and more often than we really need it. We know what overconsumption can do to our budgets too. Too many convenient options can make consumption way too convenient also.

Convenience comes with many hidden costs when you look at the whole picture. It’s easy to make the choice when the convenience is too good to pass up. But when we factor in all of these other ways that convenience eats away at us, how can we turn “inconvenient” into smarter habits and more rewarding work? Cooking a quality meal leaves you feeling great, even if it took four times as long and made such a big mess. Trying to switch the way we feel about convenient vs. inconvenient is the key. Convenience can quickly turn into what we’d consider a bad habit too. When I catch myself ordering food for delivery out of convenience, I get into a spiral of more decisions that cost more and leave me doing less work. I get into the habit of it, and then it’s harder to break.

Every spending decision should be a conscious one, not one we make out of habit or laziness or lack of motivation. It can get easy to justify spending more money on convenience, and it’s pretty amazing what we rationalize to ourselves as we do this. Being careful to plan ahead on a regular basis will help us with making a smarter decision when faced with choices to be made out of convenience.

Are you in a place where you need to reevaluate the choices you’re making based on convenience? 

 

For more articles on personal finance, visit Money Matters

 

 

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