Using Your Tax Refund to Pay Down Credit Card Debt
From GreenPath Debt Solutions

Will you receive a tax refund this year? If so, would you consider putting the money in a savings account that guaranteed earnings of about 50 percent over two to three years?

Those are exactly the kinds of returns you could potentially enjoy by using your tax refund to make additional payments on your credit cards. Even if you are on a debt management program (DMP), the savings can be significant. The exact figures vary based on debt amount, interest rate and time on the program.

For example, let’s say you have three years of DMP payments remaining on a credit card with a $5,000 balance and a 15 percent interest rate. If you make a one-time payment of $1,000 and then continue to make your regular DMP payment, the impact may surprise you. The account would be paid off about eight months sooner than expected, and you would avoid paying about $493 in interest. In this example, you would have turned your $1,000 into nearly $1,500 in 28 months!

“Don’t underestimate the power of compound interest,” said Rus Halsey, GreenPath’s director of counseling operations. “People like to buy things with tax refunds, but it’s smart to pay down your debt as quickly as possible. The sooner you pay off the debt, the sooner you stop paying interest.”

When the debt is finally paid off, you will not be paying any interest and will have more money to spend each month on whatever you want. At that point, the additional disposable income will be like getting a pay raise.

If you have some extra cash for your credit cards, you’ll need to decide which account should receive the funds. In general, consider the accounts with the highest interest rates or the smallest balances. Depending on your specific circumstances, it may make more sense for you to use the refund for other purposes such as building emergency savings or paying another bill that is not on the DMP.

If you are on a debt management plan, consult your GreenPath counselor or account maintenance coordinator. They can review your situation and help you decide the best way to use the extra cash.

Settling Your Credit Card Debts
From GreenPath Debt Solutions

You may have heard advertisements from debt settlement companies who promise to reduce — or even erase — your debt for pennies on the dollar. If you find yourself sinking deeper in debt, this may sound like the answer to your problem. But before you decide, there are many things to consider on ways you can get out of the red, without spending a whole lot of green.

Debt Settlement Companies

Debt settlement companies claim to help people with debt problems. They say they’ll negotiate with your creditors to reduce the amount you owe. Some claim that they can arrange for your debt to be paid off for less than the amount you owe – for anywhere from 30 to 70 percent of the balance. For example, if you owe $10,000 on a credit card, a debt settlement company may claim it can arrange for you to pay off the debt for less, say $4,000.

But there is no guarantee that debt settlement companies can persuade a credit card company to accept partial payment of a legitimate debt. Even if they can, you must put aside money for your creditors each month. Meanwhile, it may be months — or even years — before the debt settlement company negotiates with your credit card company to settle your debts. And, if you stop making your payments in the meantime, the credit card company usually adds late fees and interest to the debt each month. Such actions can cause your original debt to double or triple. Then, if any debt is actually settled, you will likely owe income taxes to the IRS on the forgiven amount.

Credit Counseling Agencies

Reputable, non-profit credit counseling companies will be affiliated with the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies.

The credit counseling process begins with a free financial assessment. Your counselor will gain an understanding of your situation and goals, and will then work with you to create a detailed budget of income and expenses. The counselor will review the various options that are available to you to address your debt and provide you with an action plan to move forward.

A non-profit credit counseling company may offer to enroll you in a debt management program (DMP). A DMP can lower your interest rates, eliminate late and over limit fees, and stop collection calls. With a DMP, you make payments to the counseling agency and the agency then pays your creditors on your behalf. A reputable credit counseling company should never try to push you immediately into a DMP.

Consider All Your Options

It’s critical that you consider all the options available to you. Debt settlement is best for a very small segment of people — potentially those who have charged off debt and/or those who have received or are expecting to receive a lump sum of money. A DMP is an appropriate option for a greater percentage of consumers. Others may be able to handle their debts on their own with some counseling and education. And, for some consumers, bankruptcy may be appropriate. Remember, a company with only one product or service usually has a vested interest to sell you that product or service without operating in your best interest. A better option might be to work with someone who will help you determine the best option for you.

Source: Federal Trade Commission

Lake Trust would like to thank SouthLansing.org (South Lansing Community Development Association) for this article in their winter newsletter:

LEED the Way

On December 6, Lake Trust Credit Union held a ribbon cutting for its new South Lansing branch at 6440 S. Pennsylvania. The official grand opening [took] place throughout the week of January 10.

With an expansive lobby, large-screen displays, and a five lane drive-through with ATMs and night drops, the new building is much larger and more user-friendly than the prior location. After receiving a coveted LEED certification, the building is also more environmentally-friendly.

LEED (Leadership in Energy and Environmental Design) certification recognizes that a building was designed and built using strategies aimed at improving energy use, water efficiency, CO2 emissions reduction, indoor environmental quality, stewardship of resources and sensitivity to their impacts.

Lake Trust took many steps to become LEED certified, including using steel from junked cars, carpet made from recycled plastic bottles, and regionally-produced tiles. Construction crews also used silt fences to retain run-off, keeping soil on-site and preventing it from washing into sewers or waterways.

“We try to be different. We work hard to be a part of the community.” said Terrie Allen, Marketing Field Analyst for Lake Trust. Receiving LEED certification is one of many steps Lake Trust has taken to care for their community.

Lake Trust plans special events and classes for community members. Together with Impression 5 Science Center, Lake Trust offers Money Super Saturday, a one-day educational event full of fun, money-themed activities. Lake Trust and Impression 5 members receive free admission and the general public is given half-priced admission. Lake Trust also works with local teachers to give special presentations on topics such as the history of money and financial literacy.

For more information on their programs, call (517) 267-7171 or visit www.laketrust.org.

IRS Announces 2011 Tax Changes

It’s time to start preparing to file your 2010 tax return and there are some important changes we thought you should know about.

• Tax payers will have until Monday, April 18, 2011 to file their 2010 tax return, due to Emancipation Day (a holiday recognized in Washington D.C.) which falls on April 15, the preceding Friday
• Although most can begin to file starting on January 1, some tax payers will need to wait until mid to late February in order to allow the IRS time to reprogram their processing statements. Those that must wait include:

                  - Taxpayers claiming itemized deductions on Schedule A

                  - Taxpayers claiming the higher education tuition and fees deduction

                  - Taxpayers claiming the educator expense deduction

For more information on these changes, seeking assistance and checking your refund, visit irs.gov

Discounted Tax Services

Lake Trust makes tax time a little easier with free or discounted tax preparation software.

“Just file it! We’ll help.”

This is the Michigan Credit Union League’s name for I-CAN! E-FILE created by Legal Aid Society of Orange County. Through “Just file it! We’ll help.”, free state and federal tax preparation for any credit union member is provided. Exceptions and details can be found on the “Just file it! We’ll help.” website.

TurboTax®

TurboTax® is quick, easy and 100% accurate. They guarantee your biggest refund, double check your returns and have 24/7 answers to your questions. Plus, our members get a 10% discount! Start today for FREE and don’t pay unless you’re satisfied with the results.

For fast, secure refunds use Direct Deposit. All you need is the Lake Trust routing number. It’s important that you use the correct routing number, which is listed below by the region of branch that you use:

• Southeast Michigan, Livingston & Washtenaw Area: 272078268
• West Michigan, Lansing Area & Mt. Pleasant: 272482265

More Tax Reminders and Information

Lake Trust Credit Union is committed to supporting financial education and college access efforts in Michigan schools.

The Lake Trust Credit Union Professional Development Award Program was established in 2010 to provide financial assistance resources to Michigan educators for out of classroom/school professional development opportunities such as workshops, association conferences, and training.

In recognition of and in appreciation for our MS/HS Business Teachers, K-12 School Counselors, and Family and Consumer Science Educators within Lake Trust’s 35-county membership areas, the Professional Development Award Program provides a resource for today’s educators to continue enhancing their teaching skills, while supporting their students’ financial and career goals to achieve a bright and exciting future in Michigan.

The Lake Trust Credit Union Professional Development Award Program kicks off funding for Michigan Teachers starting February 1 of this year.

Spread the word to all those K-12 school counselors, consumer science and business teachers you know that would like to attend a school related conference. 

Visit our Laketrust.org for details and an application or contact Nicole Piche at 517.267.7111.

Applicants need not be a member of Lake Trust Credit Union.

You’re invited to the Grand Opening of our new South Lansing Branch. Visit us today through the end of the week (Fri, 1/14) during business hours. Enjoy refreshments, enter a drawing to win a Vizio 32” LCD HDTV and take a tour of the LEED-Certified, state-of-the-art branch.

What is LEED?

LEED stands for Leadership in Energy and Environmental Design. LEED is an internationally recognized green building certification system, providing third-party verification that a building or community was designed and built using strategies aimed at improving performance across all the metrics that matter most: energy savings, water efficiency, CO2 emissions reduction, improved indoor environmental quality, and stewardship of resources and sensitivity to their impacts (from USGBC.org). The entire certification process takes up to a year and we fully expect to receive our Gold Certification later this year.

What are some of the “Green” features of the branch?

• The building’s steel is made from junked cars.

• Carpet is made from recycled plastic water bottles.

• Tiles mined and made from regional natural stone products.

• 75% of waste was sorted and taken to a recycling center.

• Branch landscaping consists of drought resistant native plants. They are self-supporting and require no irrigation.

• More windows allows natural light and less energy consumption.

• The marmoleum (lobby floor) has rapidly renewable material content such as  linseed oil, pine rosin and jutea. It also has recycled content.

• The glass counter on the check stand is made from concrete and recycled glass bottles.

• The black portion of the teller line, check stand and base board is compressed paper.

• The paint used is low or no Volatile Organic Compounds (VOC) which contributes to good air quality.

• The toilets are low water usage.

What do the FEV signs in the parking lot stand for?

FEV stands for Full Electric Vehicle. These spots serve as charging stations for Electric Vehicles.

Map & Location

New Year’s Day is the traditional time for setting resolutions. But make them too lofty or unreasonable and by Valentine’s Day, you will wonder what went wrong. GreenPath trainers Megan Bridgett and Aimee O’Brien, offer up some simple and attainable ways for you to get financial goals in line in the first sixty days of the New Year:

On January 1, when you are still excited about your New Year’s resolution, coordinate a family meeting. “It is important to keep all members of the family involved in the decision making process,” said Bridgett. For instance, children can help save the family money by simply turning off lights when they are not in use and monitoring cell phone usage and charges.

January 1 – 14: Brainstorm on both your short and long term goals. Short term goals could occur within the next three to six months, and long term could be within the next few years. Try to make sure to keep them SMART:

• Specific – Be specific. If your goal is to “save money,” say instead, “I want to save money in order to buy a new car.”
• Measurable – Make the goal measurable. If you are saving money for a car, identify the amount you plan to save.
• Attainable – Goals should be attainable. If not, you may get discouraged and give up.
• Realistic – Be realistic. If you had a goal to “Never eat lunch out while at work,” this might not be realistic or possible. But if you changed it to “Eat lunch out once per week while at work,” you are far more likely to stick with it.
• Timely – Set a deadline for the goal to be accomplished. This will help you to stay focused and motivated.

The month of January: On January 1, create a projected budget of your monthly expenses, breaking them into different categories: Groceries, Clothing, Entertainment, Dining Out, Utilities, Household Bills, Debts, etc. “For the month of January keep every receipt,” said O’Brien. Each week, place the receipts into the categories you’ve identified. At the end of the month, total each category comparing what you’ve spent to what you’ve projected. “People tend to spend ten to twenty percent over what they anticipated and projected spending,” said O’Brien. This will help you to identify areas to adjust or cut back.

The month of February: Start making some cutbacks. “Make sure to stay realistic and do not cut out everything,” said Bridgett. “Gradually make these changes to keep yourself motivated and excited.”

Keep tracking your expenses and compare at the end of the month. Think about putting any money you saved into a family bank account. At the end of the month, have another family meeting and celebrate your successes by doing something fun and inexpensive as a family.

Time out on Super Bowl Weekend: For those who are football enthusiasts, this idea is for you! “Financial Football,” sponsored by Visa and the National Football League, is an interactive game for kids and grown-ups alike. Go to www.practicalmoneyskills.com and click on “Games.” This fun tool helps educate kids on financial topics while keeping them entertained and engaged.

Get through the first 60 days of attaining your goals and tracking your progress and the next 300 days will find you saving, budgeting and tracking your way to financial success in 2011.

From GreenPath Debt Solutions

GreenPath has pooled the collective expertise of our counselors to bring you “The Best List” of money management advice to help you accomplish your financial goals in 2011.

1. Hold a financial conference with the family. Present a “state of the household” speech where you review your current budget and make any necessary adjustments. Hold people accountable for specific changes that are required to balance the budget or establish a savings goal.
2. Post your budget goals for the year. When establishing goals, it is important to make them SMART: Specific, Measurable, Attainable, Realistic and Timely. Include goals that will motivate you to achieve them – vacation, retirement, house, car, etc. Treat yourself to something small every month you reach your goal.
3. Pay yourself first! Set aside at least ten percent of your net income for savings. The easiest way to do this is to have it directly deposited from your paycheck into an emergency savings account. Make it your goal to save at least three (3) months worth of living expenses. You should have enough to cover all (housing, auto, groceries, clothes, etc.) of your monthly expenses in the event of a sudden job loss or illness.
4. Start paying off credit cards. Once you have established a balanced budget with a savings plan for emergencies, work on those credit cards. If you are already on a debt management plan with GreenPath, you are well on your way! If not, here are some helpful tips:

   a. If you have trouble with interest charges each month, call your creditors and request interest decreases. If they deny you, ask them what you need to do before you can get one. Document who you speak with along with the date and time.

   b. Pay it down! Review a list of all of your creditors to determine balances and interest rates. Determine a plan of attack. Some people start with smaller balances and eliminate cards; others send the most to the highest interest cards.

   c. Set the payments you determine for each card into a bill pay service through your bank. Some banks eliminate monthly banking fees if you choose direct deposit and/or use their Internet banking features.

   d. If you have trouble controlling spending, take all of the cards and lock them in a safe place. Out of sight means out of mind.

5. Determine a baseline in your checking account. This should be your zero point (e.g. account never goes below $200). You’ve just created your own overdraft account!
6. Many banks and/or credit cards offer cash back or miles programs. Using these cards within your budget, and paying them off immediately, can get you a good chunk of change by the end of the year. Consider using them to help you achieve a vacation goal.
7. Use your credit cards wisely. Don’t spend more than you can afford to pay on a monthly basis. Responsible use of your credit cards will help you establish a solid credit rating and avoid financial problems. However, using your credit cards regularly for items such as food, gasoline, and utilities —- without paying off the balance in full each month —- could be a sign that your monthly budget needs reviewing.
8. Visit or re-visit your retirement goals. Start saving now for retirement. If your employer offers sponsored programs that can match or have established savings vehicles, use them. Ask yourself how much it will take to retire and calculate this based on current savings and years left as a viable employee.
9. Find a way to track your expenses. Save receipts throughout your day (ask for these whenever you spend). Make this activity a part of something else you do daily already. For example, before or after writing in a journal or putting your kids to bed, review where your money went that day.
10. Review your credit report. Your credit worthiness will affect your ability to purchase goods and services on credit, to get a loan or to land that next job. If you have a good credit record, you are likely to receive lower interest rates which save you money. You can obtain a free copy of your credit report at www.annualcreditreport.com.  

From GreenPath Debt Solutions

The National Foundation for Credit Counseling (NFCC) is sponsoring the 2011 BE MONEY WI$E National Financial Literacy Poster Contest. This annual event is a great way to get young students thinking about the importance of saving money, while offering a creative outlet to demonstrate their knowledge. This year’s theme is “Be A $uperhero! $ave Money!”

As a member of the NFCC, GreenPath Debt Solutions is hosting the contest in your community.

Students in grades 3-12 are eligible to enter with local and national winners to be chosen from three grade categories (3-5, 6-8 and 9-12). Entries will be judged on expression of the theme, artistic style and content, and creativity. Posters must be submitted to GreenPath no later than February 11, 2011.

Winners in each grade category will receive a $100 savings bond and a $50 Barnes & Noble gift card. One runner-up in each grade category will receive a $25 Barnes & Noble gift card. Local winning grade category entries will be submitted to the NFCC as national finalists.

The national overall contest winner wins an all-expense paid trip to Washington, DC with a parent or guardian, in April, as part of National Financial Literacy Month.

For contest rules, entry forms and where to submit poster entries, visit , or you may contact Kristine Schultz at kschultz@greenpath.com.  www.MoneyWisePosterContest.org

Refer a new member and you’ll both be entered to win a $500 Visa^® Gift Card.

Here’s how it works…you refer a new member and when that person returns a Gift of Membership form to any Lake Trust branch and opens a membership by December 31, you’ll both be entered to win a $500 Visa^® Gift Card. There will be two drawings:

 ·    One for current referring members listed on the Gift of Membership form

·     One for all new members from November 29 to December 31 

New members that submit the Gift of Membership form and open a membership AND a SoSMART Checking will also receive a special gift in addition to the drawing!

Here are two easy ways to get your Gift of Membership forms: 

• Download your form today  
• Stop in at your local branch

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