Money-saving secrets for surviving the holidays

The holiday season is upon us! It’s a time of year filled with friends, family, fun, festivities… and fear of the bills that follow. Don’t let this season kick off 2008 with debt. There are numerous ways to watch spending while still indulging and celebrating. Following are a few suggestions:

Holiday greetings: Cut your holiday card list in half. Send postcards or letters instead of cards, and remember that postcards require less postage. Go the way of the future – send a virtual greeting instead.

Wrapping paper: Use children’s artwork or create your own plain wrapping paper using ink stamps or paint. Save used wrapping paper and re-use it the following year. Skip expensive ribbons and bows – use leftover art supplies lying around the house instead. Make your own gift tags out of small pieces of matching wrapping paper or cut up old holiday cards.

Decorations: Use children’s handmade holiday crafts as decorations, year after year. Decorate old-fashioned, with popcorn strings, candles and items from nature rather than the latest and greatest light-up automated decorations… and save on electricity as well.

Entertainment: Read the grocery store sales ads listed in the newspapers when planning holiday feasts. Grocery stores offer great deals during the holidays. Check out all the holiday events offered in the community. Many are offered for free or a nominal price. Plan a night of watching holiday videos rather than going to the movie theater. Take a drive – or walk – through the neighborhood to view holiday lights.

At the end of the season, purchase holiday cards, wrapping supplies and decorations when they’re on sale. Many consumers cannot bear the thought of any more holiday purchases after the excitement has ended – but the smart shoppers will be happy they did next year.

Debt consolidation – good idea or bad idea?

Americans are the most in-debt people in the world. Getting into debt may happen gradually, with many small and medium purchases adding up over time, or it may happen quickly, due to life-changing circumstances. The credit card industry makes it easy to get into debt. Offers come in the mail almost weekly, and before long, naïve consumers can find themselves with balances on multiple cards, sometimes able to make minimum payment; sometimes having to borrow cash from one card to make payment on another. One solution consumers consider is debt consolidation. What are the advantages and disadvantages?

A debt consolidation loan can make handling payments more manageable because the consumer has just one loan to pay rather than juggling several payments, several due dates with stiff late payment fees and several different interest rates. It can also remove the temptation of borrowing from one credit card to pay for another, thus helping to develop a workable budget and gain control of finances. A debt consolidation loan oftentimes will significantly reduce some of the high interest rates that credit cards may carry, and it may allow the consumer to extend the term of the loan.

However, there are a few disadvantages to debt consolidation loans. Those consumers who think the debt problem is resolved with the consolidation loan may not actually adjust their spending habits. Instead of cutting up their credit cards, they may run up the balances again, finding themselves not only with the debt consolidation loan to pay but also, once again, with credit card balances. Extending the term of the loan when consolidating may actually increase the total debt. Making smaller payments over a longer time period may cost more in the long run. If the debt consolidation loan is secured by property, remember that any failure to repay the loan can jeopardize home ownership.

Consumers who choose debt consolidation as an option for getting control of their finances need to make a commitment to accrue no new debt. Make a budget and stick to it. Track spending and look for ways to minimize costs. Most important, learn from the experience. Once the debt consolidation loan has been paid off, make every effort to stay out of dangerous debt in the future.

The new $5… It’s safer, smarter and more secure

The U.S. government recently unveiled a new, more secure design for the $5 bill that will be issued and enter circulation in early 2008. A new $100 bill will follow. Similar to recently redesigned $10, $20 and $50 bills, the new $5 bill incorporates improved, easy-to-use security features, making it easier for businesses and consumers to check the new $5 bills they receive and more difficult for counterfeiters to fake.

The new $5 bill incorporates state-of-the-art security features that are easy to use by cash handlers and consumers alike. Hold the bills up to the light to check for these features:

• Watermarks: There are now two watermarks on the redesigned $5 bill. A large number "5" watermark is located to the right of the portrait replacing the previous watermark portrait of President Lincoln found on the older design $5 bills. A second watermark – a column of three smaller "5"s – has been added to the new $5 bill design and is positioned to the left of the portrait.

• Security thread: The embedded security thread runs vertically and is now located to the right of the portrait on the redesigned $5 bill. The letters "USA" followed by the number "5" in an alternating pattern are visible along the thread from both sides of the bill. The thread glows blue when held under ultraviolet light.

The redesign of the $5 bill will also help protect against a method of counterfeiting that bleaches, or removes the ink from, a $5 bill and prints over it to create a fake $100 bill. By eliminating as many similarities as possible between the $5 and $100 denominations, the new design foils counterfeiting and protects U.S. currency users.

As with the redesigned $10, $20 and $50 bills that preceded it, the new $5 bill features an American symbol of freedom printed in the background: The Great Seal of the United States, featuring an eagle and shield, is printed in purple on the front of the bill.
Additional design elements include:

• The large easy-to-read number "5" in the lower right corner on the back of the bill, which helps those with visual impairments to distinguish the denomination, has been enlarged in the new $5 bill design, and is printed in high-contrast purple ink.

• The oval borders around President Lincoln's portrait on the front, and the Lincoln Memorial vignette on the back have been removed. Both engravings have been enhanced.

• An arc of purple stars surrounds the portrait and The Great Seal on the front of the bill, and small yellow "05"s are printed on the front and back of the bill.

The new $5 bill's most noticeable design difference is the addition of light purple in the center of the bill, which blends into gray near the edges. Consumers and cash-handlers should use the key security features – watermarks and security thread – not color, to check the authenticity of paper money because color can be duplicated.

In the U.S. alone last year there were 3,945 arrests related to counterfeit bills passed to individuals and businesses, equaling a total loss of $62 million. Last year, the U.S. Secret Service and international authorities seized more than $53 million in counterfeit bills before they entered circulation. Nearly $65 million that had been passed into circulation was detected and removed worldwide. In these cases, innocent victims who accepted bogus bills suffered a financial loss.

What are you worth?

Ever wonder what your net worth is? It’s fairly easy to figure out. Net worth measures the difference between what you own and what you owe. Knowing your net worth is a great planning tool to help you realize your financial goals.

As long as your assets are more than your debts, you have a positive net worth. Your goal, from one year to the next, is to make that positive difference grow. Among other things, knowing your net worth helps you see if debts are in line with assets, if investments are growing, and even if you need more disability or life insurance to shield your assets. Use this guide to take your financial pulse.

First, add up your assets:
Cash – share savings
Cash – share draft/ checking
Cash on hand
Share certificates/ CDs
Money-market funds
U.S. savings bonds
Market value of house
Market value, other real estate
Life insurance, cash value
Annuities, surrender value
Pension plans, vested equity
Profit sharing, vested equity
401(k) or 403(b) plans
Individual retirement accounts
Keogh plans
Stocks (individually owned)
Bonds (individually owned)
Stock mutual funds
Bond mutual funds
Real estate investment funds
Other investments
Collectibles
Precious metals
Household furnishings
Vehicles
Boats, recreational vehicles
Furs, jewelry
Loans owed to you
Other assets

Next, add up your liabilities:
Mortgage balances
Vehicle loans
Student loans
Home equity credit lines
Other credit lines
Credit card bills
Other bills

Subtract your total liabilities from your total assets for your net worth. If your liabilities are larger than your assets, it’s time to take a hard look at your finances and work toward improving the bottom line.

To check out this net worth calculator online or for more tips, click on the Anytime Advisor button on HCFCU’s website, www.hicommfcu.com, and benefit from Credit Union National Association’s enormous database of sound financial advice.