Do NOT Add Authorized Users to Improve Someone Else’s Credit Score

There is a lot of bad advice out there when it comes to money management and responsible credit. The information I read yesterday was a good reminder that you shouldn’t necessarily take credit advice from someone just because they have a website that can show you where to find a good sale.

I follow someone on Facebook who often finds outstanding deals on clothes, jewelry, household goods and more. She often has very good tips for saving money. Her credit advice, on the other hand, is questionable.

For the past few days, her focus has been on credit scores, and the advice she gives is, in my opinion, irresponsible. She posted yesterday that her father added her as an authorized user to a credit card he has had since the 1980s, and she was excited to see how much that would make her credit score go up. I’m not even sure it will make her credit score go up, but I do know this. You should never add an authorized user to your account just to help them improve their credit score.

Adding an authorized user to your credit card is like co-signing a loan so someone else can borrow money. It’s rarely, if ever a good idea. If that person does not pay on the loan, you have to. If an authorized user runs up your credit card bill and never pays you a dime, you have to make those payments. If you don’t, your credit is the one that suffers. Not theirs.

This person makes the argument that she’ll never have the card in her hand. She’s just an authorized user. However, authorized users do have the right to get a card and can most likely request one by calling the credit card company. That’s risky, especially if you’re trying to help someone with bad credit. Remember, there is a reason why they have bad credit.

If you feel compelled to help someone in a tough financial situation, pay the light bill. Buy their groceries. Bring them to the credit union to see how we can help. You might even give them some money if that’s what they need. Be careful about co-signing on a loan, though, and definitely don’t add them as an authorized user on a credit card just to help them increase their credit score. That’s just giving them a license to go further into debt.

Mother’s Day Gifts Worth A Millions Buck That Cost Very Little

Mother’s Day is about 10 days away. Do you know what you’re giving your mom this year? Do you know what you want from your kids?

I used to send flowers to my mother and mother-in-law every year. That can be costly, so I would start weeks ahead of time, scouring the Internet for the best deal possible. After I had my own child, I realized that Mother’s Day gifts didn’t have to be fancy or expensive. They just had to mean something. My mom and mother-in-law don’t get flowers anymore. They get gifts that cost a little bit of time and almost no money, yet mean the world to them. I hope you mother will enjoy one or more of these ideas this year, too.

Videos from Home

If your mother/mother-in-law or grandmother lives far away, making a video is priceless and easy. For my mother-in-law’s birthday in January, I recorded my son singing happy birthday to her with my Flip camera. I uploaded it to my computer and burned it to a DVD with some recent photos of him. You would have thought I sent her a box of gold. That gift cost me about 30 minutes of time and a few dollars for postage. You can also have your child read a poem or book, or just talk to Grandma on the video.

Mother’s Day Photo Shoot

Every year since my son was born, I have my husband take photos of me and my son together. I  pick my favorite photo, blow it up and frame it. Does your mom live close? Perhaps you can have someone take photos of you and her together. Maybe she would like a photo shoot with her grandchildren, too.

Draw a picture

One of the sweetest Mother’s Day gifts I’ve ever received is a picture my son drew of he and I playing the Wii together. He said playing the Wii with me was one of his favorite things to do.  At the top of the page he wrote, “Your Pretty Mom.” That’s a gift that comes from the heart, and nobody asked him to do it. He did it all by himself. I still have that picture hanging on the wall in my bedroom, and it warms my heart every time I look at it.

Photo Calendar or Book

I actually make photo calendars for my mom and mother-in-law every year for Christmas, but I got the idea from a friend who gets one from her kids for Mother’s Day every year. You can start the calendar with any month. Websites like Snapfish, Mixbook, Artscow, My Publisher and Shutterfly have online templates for calendars and photo books. Simply insert the photos and pay to have them printed. This week, you can get 20 percent off everything at Mixbook, a free mini photo book from My Publisher and photobooks starting at $3.99 with shipping at Artscow.

Have a Happy Mother’s Day!

Traditions You Can Afford

Holidays are a time for fun and family, but they can also be stressful when budgets are tight and the Easter Bunny or Santa Claus may be involved. Sometimes we get wrapped up in the “stuff”, when making memories is what we really hope to do. Here are some ideas for make those memories affordable.

Be the Easter Bunny for Someone Struggling. A lot of people still don’t have jobs. They are our neighbors, families at our kids’ schools, people we play sports with and people with whom we worship. Find a way to be the Easter Bunny to them this year, even if it’s anonymous. Buy a slightly larger ham and deliver a portion to them cooked and sliced. Bake an extra cake. Leave a basket of produce or canned goods at their front door. Invite another family to your table. Do what you can afford so someone else knows someone cares.

Read a Story together. If Easter is a religious holiday for you, find a version of the Easter story suitable for all ages in your family and make it a point to read it together every year. If Easter is a secular holiday for you, find a different story to read together – one that has meaning for your family.

Plant Something as a Family. Easter signifies the start of spring and a time of new beginnings. Perhaps there is a spot in your yard where you can plant an Easter lily or your favorite flowering bush every year.

Ask Everyone to Bring a Dish. Even kids can do this. If you cook for a large group, ask each person to bring their favorite side dish. You get a huge variety, there’s something for everyone and you spend less money and time on your holiday meal.

Have a Food Fight…Kind of. When I met my husband, he introduced my family to a tradition called egg pocking. You literally fight with your hard-boiled, dyed eggs. Wrap your hand around an egg, kind of like you would hold a water bottle, so only the tip of the egg is showing through the loop made by your thumb and forefinger. Have the other person tap the tip of his egg to the tip of yours. The winner is the person whose egg does not crack. Flip the eggs over and switch roles. Easter is not Easter without egg pocking in our family. We each dye 18 eggs for adequate ammunition. Every year, someone comes up with a new way to make their eggs stronger without cheating, and every year, there’s that one egg that prevails against everyone else’s. It’s a lot of fun and something the whole family can do. Plus, you can refrigerate the eggs and eat them after Easter.

Holidays don’t have to be about money. What are some traditions your family enjoys? Post a comment hear and continue the discussion.

A Tool to Teach Your Kids About Money

It’s National Credit Union Youth Week – a week set aside every year for credit unions to help youth understand how they can be savings rock stars. It’s also the perfect time to remind parents how important it is for you to teach your children healthy saving and spending habits. The lessons you teach them and the way you handle money yourself are the two factors that will help determine your children’s relationship with money when they grow up. That can be a lot of pressure on parents, so here’s a tool to help you get started.

My son came home from school a few weeks ago with a note in his folder about a new program his class would be starting. It’s called Behavior Bucks. The children earn fake money for good behavior, usually a dollar at a time. They can earn extra bucks by doing extra reading, reaching certain academic milestones or being caught doing something kind for another classmate. The teacher issued each child a wallet to store their money, and they have a menu of items on which they can spend that money. A few examples are: 

• Keep your shoes off in the classroom all day – $5
• Earn a trip to the treasure box even if you get your folder signed -- $10
• Sit at the teacher’s desk for a day -- $15
• Sit by a friend all day - $23

I love this program for many reasons. First, it rewards good behavior. Second, it teaches kids to prioritize their “wants” and save accordingly. Third, it teaches them the cost of debt. If they make a bad choice in class, they have to pay the teacher from their savings. If they don’t have money to pay the teacher, they have to sit out of recess for a defined amount of time (usually five minutes) and watch their friends play.

The children have really embraced this program. Today, my son is sitting at the teacher’s desk all day. It will cost him most of his savings, but he purposely waited until he had more than he needed to cash in on this prize. He said he wanted to be sure he had money left over in case he “got caught talking again.” When the program first started, he was fined $1 on two separate occasions for talking when he wasn’t supposed to. Luckily for him, he had the money both times. Some kids aren’t that lucky, but they are learning, and that’s the whole point.

It is our job as parents to teach our kids the healthy way to handle finances, and it is never too early to start. They can count coins or play with a toy cash register. As they get older, start putting a price on good behavior or give them a chance to earn a dollar here and a quarter there, so they can buy their own things. It won’t always be easy, but they’ll thank you when their friends are in debt and they are financially independent.

Is it More Affordable to Buy or Pack Your Child’s Lunch?

Have you heard about the school in Chicago that won’t allow students to bring a lunch from home? In a Chicago Tribune news report, the school’s principal said she made the policy six years ago because too many kids were bringing chips and soda for lunch. I have no idea why a policy that old is making headlines now, but let’s use this opportunity to see which option is cheaper: buying it or brown bagging.

Public school lunches are subsidized by the government. They are the same everywhere in the United States. Elementary school lunches are $2.25 a day or $11.25 a week. Lunches at secondary schools are $2.35 a day or $11.75 a week. If you compare that to eating fast food, it’s pretty affordable. How does it compare to home, though?

Let’s say a child eats a basic ham and cheese sandwich, a piece of fruit and a cup of yogurt for lunch every day. For elementary age kids, don’t forget the juice box. Two weeks of supplies costs roughly $18.50:

One pound of deli meat: $6

One package sliced cheese: $2

Bread: $2

Two packs of yogurt cups (6 count each): $5

Bag of apples (12 count) : $2.50

Juice boxes (10 count) (100 percent juice): $3

That comes to about $2.05 – a savings of $.20 cents a day or $1 a week for elementary kids. Of course, I don’t like to give my kid the same lunch every day. I like him to have a variety of healthy choices. Is that costing me more money?

On a typical week, he gets a homemade “lunchable” on two different days. That’s two pieces of ham, two pieces of turkey, one slice of cheese and whole grain crackers. One day a week (sometimes two), he gets a soft taco – beans, meat and cheese on a whole grain tortilla. Every once in a while, I throw nutrition out the window and give him boxed macaroni cheese. He always gets fruit, yogurt and either juice or water. If I were to buy all of these things every week, just for lunch, it would cost me about $2.50 a day. However, I’m smart with his lunches.

I don’t buy supplies just for lunch. I incorporate his lunch needs into our dinner menu. Most of the ingredients in the soft taco are left overs. In fact, a lot of his lunches are left over from dinner: spaghetti with sauce, stir-fry and even homemade potato soup make it to the lunchbox occasionally. I have a kid size thermos bowl that fits in his lunch box, and I feed him healthy, warm meals for less than I could buy them at school.

It requires more time than writing a checking, but I’m saving money and my child is eating healthy.

What are some ways you save money on lunches for your children?

Use Some Money to Pamper Yourself

Staying on a budget can be hard work. It requires discipline and often means sayig no to luxuries. I equate it to weight loss. You can only deprive yourself for so long before you get off track. Pampering yourself periodically is a way to reward yourself while avoiding derailment.

That doesn’t mean using credit cards when you’re still working your way out of debt. It doesn’t mean springing for a new car when you can’t afford the monthly payment. It means treating yourself to something within a reasonable price range, even if you have to take it out of savings once in a while.

Last week, I treated myself to a pedicure. I was just planning to get a regular spa pedicure and then I learned something wonderful. On Tuesdays and Thursdays between 10 a.m. and 4 p.m., the shop where I get my pedicures offers 15 percent off. That may not seem like much, but it was the difference between the normal treatment and the deluxe treatment. I basically got a free upgrade, which included more pampering. I lost myself in a book for an hour while someone else pampered me, and it cost me less than $35 with a tip. That was a reasonable price range for my budget, and it did wonders for my mood that day. It was worth every penny.

We all have our own idea of pampering. If you like clothes or shoes, you might reward yourself with something from your favorite store. If your idea of pampering is having someone else clean your house, you might call a cleaning service. If going out to eat no longer fits into your budget, you may want to treat yourself to lunch with a girlfriend. The best thing about pampering yourself is you can plan ahead and look for good deals.

I often find discounts to my favorite places online at adpages.com, groupon or moolala. I’ve purchased everything from gift cards to my son’s favorite entertainment places, to discounted cleaning services. Adpages frequently has dozens of coupons for restaurants. Another site to check out is dininghalfoff.com. My husband and I have a favorite restaurant, but it’s pricey and we can’t really justify the cost of eating there more than once a year. In the past two or three years, however, the restaurant has started sending gift cards to its VIP customers. We receive a $25 gift card usually twice year. The cards expire, so we can’t use more than one at a time. We know they come around birthdays and anniversaries, so we plan accordingly. This year, we bought a $50 Visa gift card when we had extra money, and we just received our $25 restaurant gift card in the mail. Half our meal is already paid for, and we haven’t even made our reservation yet.

Treat yourself to some guilt-free luxuries, maybe once a quarter or so. You’ve earned it!

Is Bottled Water Worth the Money?

There was a commercial on television last night that said Americans consumed enough bottled water last year for the bottles to be lined up and wrapped around the earth 190 times. The point of the commercial was to show the impact of bottled water on our landfills and our environment as a whole. I immediately thought of money.

Think about how much money it costs your family to drink bottled water ever year. If your family goes through a case or two of bottled water a week, you’re spending anywhere from $3 to $14 a week, or $156 to $728 a year on something you could get from the faucet in your home. Did you know that most bottled water comes from the same source as the water in your house? Some of it comes from springs thousands of feet below the ground, but the majority of it comes from municipal water sources, just like the water in your home. It’s just filtered. Read the label on your bottled water. It might surprise you.

There are several more economical ways to get equal or better quality water than what comes from the typical bottle. Try a filter that mounts on your faucet. They average $20 for the initial system and $10 to $15 for replacement filters. One filter lasts the equivalent of at least 300 bottles of water. The cost for filters in one year would run you $65 to $130, and you would keep thousands of bottles from ever reaching the landfill.

There are other more permanent options that require a larger investment upfront but last a lot longer. When my husband and I moved into our house 12 years ago, we had a water softener installed. It cost us $4,000, but we’ve never had to replace it, and it came with a reverse osmosis unit that goes under the kitchen sink. The filters last for years, and our water is 10 times better than bottled water. We use BPA free and aluminum water bottles when we’re not at home, and we use regular cups when we are at home. Our family drinks several gallons of water a day, which means the system paid for itself a long time ago.

If you live in a place where the drinking water just isn’t safe, you may be forced to use bottled water. Most of us have access to perfectly safe water, though. We could save ourselves a lot money and save our environment a lot of harm by being more sensible about how we consume our water.

How to Not Owe Money at Tax Time

There’s nothing like the feeling of thinking you’re done with your taxes, and then finding out you owe money. I equate it to the feeling you might have when you’re scuba diving and your tank runs out of air. It just sucks the life out of you.

Six years ago when I owed money unexpectedly (and it was a lot of money), I vowed that it would never happen again. I don’t even need a refund. I just want to break even. Why? Because a refund means you’ve paid the government too much money in taxes that year. I would rather pay myself and put that money in savings, where it will earn interest. That being said, I’d still take the refund over having to pay.

Here are some ways to help you avoid owing money at tax time. Remember, these are just ideas. Neighborhood Credit Union is not licensed to give tax advice. You’ll have to consult with a tax expert to see which ones apply to you.

Have More Tax Deducted From Your Paycheck

We all like to see more money coming home in our paycheck, but not if it’s going to cost you at tax time. Be sure your company is taking the right amount of tax from your check. Sometimes claiming dependents is not enough, especially if you get overtime pay. There is a free online calculator at paycheckcity.com that will help you figure out how much tax is enough. Even if you claim zero dependents, you can still have your employer take additional money out of your check and apply it to taxes.

Keep Your Receipts

A few years ago, the IRS added sales tax to the list of allowable deductions. You have the option to choose the standard deduction, or you can add up all the sales tax you paid over the year and use the actual amount. It’s easier to take the standard deduction, but if you buy a lot of stuff, particularly big ticket items, like appliances, furniture, automobiles, etc., it could be worth your while to hang on to those receipts. Keep them in a basket or file and add the sales tax every month so you don’t have to do it all at tax time.

Take All the Deductions Entitled to You

The IRS gives us deductions for a reason. They are legally ours to take. If you’ve been paying interest on a home equity loan, it may be deductible. If you own more than one home or property, property taxes on all them could be deductible. Do you have a child in daycare because you have to work? That makes daycare expenses a deduction. Are you caring for a parent and paying some of their expenses? Those expenses could be a deduction. Do you buy supplies for your job that don’t get reimbursed? Those are deductible. The list goes on and on.

If you pay someone to do your taxes, be sure they are asking you these questions. It could keep you from owing money to Uncle Sam.