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America Saves News 2c 605

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America Saves News 2c 605 Powered By Docstoc
					Fall 2006




American
   Support for Saves
                                         Saver        NORTHWOODS SAVER
                                                                                                   You Can Build Wealth

   Week Grows                                         Taking Charge of His Financial Life
  K
           ey national organizational networks,
           including United Way and Cooperative              bout six months ago, Troy            taught that in school.” Although he
           Extension, will be participating in the
   pilot of a Saves Week, scheduled for the
   week of February 25, 2007.
                                                      A      Fishler had recently emerged
                                                             from divorce with “terrible cred-
                                                      it” and his finances in tatters. Today,
                                                                                                  had participated in the company’s
                                                                                                  retirement plan in the past, he did so
                                                                                                  “blindly, kind of.” After hearing the
          The main purpose of this new America        he has cleaned up his credit record,        Northwood Saves presentation, he
   Saves initiative is to provide a focal point for   bought a house, started an emergency        upped his contribution to earn the full
   mobilizing the support of numerous employ-         fund, and reallocated his retirement        company match and made changes in
   ers, financial institutions, governments, and      savings. The change, he said, has           his fund allocation to a more aggressive
   non-profit organizations for new savings ini-      given him “a completely different out-      approach consistent with his age.
   tiatives. Participating institutions will be
                                                      look on life.”
                                                           That change started with an                             “I’m not going to let
   encouraged to set specific savings goals —
                                                      Internet search for credit counseling
   such as opening a number of lower-income           services in the Rhinelander, Wisconsin
                                                                                                                   my finances be in
   savings accounts or increasing 401k partici-       area that led him to Northwoods Saves.                       charge of me.”
   pation by a set amount — that can be               Impressed with what he read about the                        Troy Fishler
   announced during the week and pursued              nonprofit organization, he met with
   throughout the year.                               wealth coach Phil Schlachtenhaufen.
          The Saves Week pilot is being planned       “I told him my situation, and he gave             He’s also contributing to an emer-
   by national organizations and five local or        me hope,” he said.                          gency fund. “It’s not nearly close to
   state America Saves groups. United Way, for             Fishler's first goal when he signed    where I want it to be, but I’m building
   example, is organizing the growing number          up as a Saver was to clear up his credit    that up right now,” he said. His goal is
   of local United Ways that support asset-build-     record. “I didn’t know the first thing      to have three months worth of expenses
                                                      about credit,” he said. Schlachtenhaufen    saved in an emergency fund. “Having
   ing to participate in the Saves Week.
                                                      walked him through the process of           that emergency fund will give me a lot
   Cooperative Extension has trained 60 agent                                                     of peace of mind,” he said, “because
                                                      requesting and analyzing his credit
   educators for leading local efforts.               report and disputing information. “I        something always crops up.”
          Within the America Saves network,           can’t believe how easy it is for someone          In the meantime, he’s changed his
   Cleveland Saves, Philadelphia Saves,               to get bad credit on their record, and      approach to major purchases. “If
   Tennessee Saves, Texas Saves, and Utah             how tough it is to get it off,” he said.    there’s something I really want, I don’t
   Saves will be piloting local or state Saves             As a result of his efforts, however,   buy it right away. I let it go for about a
   Weeks. The Cleveland group, for example,           he estimates he increased his credit        month,” he said. That helps him dis-
   has already secured two key media sponsors         score by about 200 points. Now he’s         tinguish between “wants and needs,” he
   — the Cleveland Plain Dealer and the local         buying a house, and with his improved       explained. “I think by taking that time
   ABC affiliate.                                     credit, he was able to get “a decent        it’s easier to take that big picture look.”
          “We are excited about the growing           interest rate,” he said.                          “Before, I didn’t really take charge
                                                           Fishler, who is a scientist with       of our finances like I should have,”
   interest in a Saves Week,” said America
                                                      Frito-Lay, also enlisted Schlachtenhaufen   Fishler said. Now he’s promised him-
   Saves National Coordinator Nancy Register.                                                     self that, “I’m not going to let my
                                                      to present a workshop to Frito-Lay
   “But as with other Saves initiatives, we will      employees on retirement saving. “No         finances be in charge of me. I’m going
   be using the pilot to experiment and figure        one wants to own up to being illiterate     to be in charge of my finances. It just
   out what models work the best. Then in             about things like that,” he said. “But      gives you a completely different out-
   2008 we will greatly expand our efforts.”          many of us, you know, you aren’t            look on life.”



                 w w w . A m e r i c a S a v e s . o r g
                                        Savings Strategies
                                        Your Credit Score and Saving
                                                                                          How You Can Raise a Low Score

                                        C       redit scores are designed to predict
                                                whether you will make loan payments
                                                on time. But they also significantly
                                        affect your ability to save and build wealth.
                                             Many people understand that a low
                                                                                               Credit scores reflect your bill paying
                                                                                          practices over time, but with more weight
                                                                                          given to recently reported information. That
                                                                                          means that, for most people who want to
Financial Market                        credit score greatly increases your loan costs,   raise their score, there is no quick fix.


   facts
    September 2006
                                        making it more difficult to find money to
                                        save. But a low credit score can also
                                        increase your auto and homeowners insur-
                                        ance premiums. It can even make it more
                                                                                          However, there are things you can do, or
                                                                                          avoid doing, that will help you improve your
                                                                                          score over time.
                                                                                               The most important thing you can do to
                                        difficult to find a job with a salary that        improve your credit score is to pay your
    Money market
                                        allows you to save.                               bills on time every month. One late pay-
    account                  0.84%                                                        ment can lower your score by 30 points, and
    1-year CD                3.83%      What is a Good Credit Score?                      a 90-day delinquency can lower your score
    5-year CD                4.22%           When lenders talk about “your score,”        by as much as 100 points.
                                        they usually mean the FICO score, which is             Also, don’t max out your credit cards.
    U.S. Savings Bonds                  developed by Fair Isaac Corporation. These        If you use all or most of the credit lines on
    EE Bond                  3.70%      scores range between 300 and 850.                 your cards, your score will fall considerably.
    I Bond                   2.41%           FICO scores above 700 are good and           Paying down your debt, rather than just
                                        help you obtain relatively low-priced credit      moving it around, can help raise your score.
                                        and insurance. But scores below 600 are                Don’t open a lot of new credit card
    Mortgage Rates
                                        poor. Scores in this range will not only          accounts. When you apply for new credit,
    30-year fixed rate                  increase your loan and insurance costs, they      creditors submit inquiries for your credit
    mortgage           6.44%            may even make it difficult for you to obtain      information. Having a lot of inquiries on
    15-year fixed rate                  these financial services products.                your report can lower your credit score.
    mortgage           6.12%                 Although the FICO score is the one usu-           Sometimes incorrect information on
    5-year adjustable                   ally used by mortgage lenders, consumer           your credit record can lower your score. For
    mortgage           6.19%            lenders or other service providers may use        that reason, it is a good idea to check your
                                        other credit scores. For example, each of the     credit reports to make sure they don’t
    Sources: The New York Times,        three major credit reporting agencies —           contain errors. If they do, you can chal-
    “Data Bank,” pg. BU 12, September   Equifax, Experian, and TransUnion — cal-          lenge that information in order to get it
    24, 2006 and www.savingsbond.gov,                                                     removed.
                                        culates a separate score that reflects the
    September 25, 2006.
                                        information they have about your credit his-           Federal law now requires the three main
                                        tory.                                             credit bureaus to make an annual credit
                                             These individual scores are usually fairly   report available to consumers at no charge
Family Wealth                           similar. In some cases, however, they can         on request. You can order the reports online


   facts
    Credit Score
                                        differ by more than 100 points. So, you
                                        can’t assume that the score you have
                                        obtained from one credit reporting agency
                                        will be the same as either your FICO score
                                                                                          at www.annualcreditreport.com or by phone
                                                                                          at 1-877-322-8228.
                                                                                          How You Can Obtain Your Credit
                                        or your scores from the other credit report-      Score
    Problems
                                        ing agencies.                                          Getting your credit score is different
                                                                                          from getting your credit reports. When you
    Percentage with credit scores       How a Low Score Can Cost You                      apply for a mortgage, you can get your cred-
     Above 800                25%       Thousands of Dollars                              it score for free from the lender. Otherwise,
     600-800                  55%            A low credit score can significantly         you will probably have to pay to get your
     Below 600                20%       increase your loan costs. For example,            credit score.
                                        according to Fair Isaac, consumers with                You can get all three scores from the
                                        credit scores over 760 will be charged a 5.42     major credit reporting agencies by contacting
                                        percent interest rate on a 30-year, $150,000      Fair Isaac. The cost for the three scores is
    Percentage who have ever obtained   fixed-rate mortgage. The monthly payments         $47.85. In addition, you can get individual
    their score:                        on that loan will be $844. In contrast, those     scores from each of the credit reporting
     18-24 years of age       30%       with scores below 620 will be charged a 7.0       agencies for less than $20 apiece.
     35-44 years of age       71%       percent interest rate, with monthly payments
                                        of $998. That’s a difference of nearly            Contact information:
     Over 65 years of age     34%
                                        $2,000 a year.                                    I   Fair Isaac (www.myFICO.com,
                                             For credit card debt, Providian Finance          1-800-319-4433)
                                        has estimated that consumers with an aver-
    Source: The Brookings               age score could reduce card finance charges       I   TransUnion (www.transunion.com)
                                                                                          I
    Institution’s Survey Series, May
    2006; Consumer Federation of
                                        by $76 a year if they raised their score by           Equifax (www.equifax.com,
    America/Providian Financial         just 30 points. If all consumers raised their         1-800-685-1111)
                                                                                          I
    Survey, August 2005.                scores by 30 points, total consumer savings           Experian (www.experian.com,
                                        on credit card interest payments would be             1-888-397-3742)
                                        greater than $16 billion.
A Quarter Saved
    is a Quarter Earned
        o one knows better than                  I am a teacher and do not get

N       Savers how to find the extra
        dollar here and quarter
there that, over time, add up to
                                            my regular salary during the sum-
                                            mer months. To save on my grocery
                                            bill, I stock up on essentials, such as
                                            toilet paper, paper towels, and
                                                                                         Send your savings tips to:
                                                                                         American Saver, c/o Consumer
                                                                                         Federation of America, P.O. Box 65686,
                                                                                         Washington, D.C. 20035-5686.
substantial savings. Here are a
                                            detergents, during the months that I              If we select your tip for publication,
few of their savings tips.
                                            am working. I estimate how many              we will send you a $50 EE Series
                                            of each item I will need during June         Savings Bond (initial value $25). Please
    Something I have been doing to
                                            through August and purchase this             include your name, mailing address, and
save on the electric bill is using cold
                                            amount along with my other pur-              phone number so we can contact you to
water for everything except dishes
                                            chases using manufacturer and store          arrange for your savings bond.
and showering. I have noticed a dif-
ference of between $10 and $30 on           coupons. This has cut my grocery
my bill. Every little bit helps.            bill during the summer months by
                                            25 percent.                                     Buy yourself a piggy bank.
                      MARLENE RODRIGUEZ                               DAWN ENGLAND
                 EGLIN AIR FORCE BASE, FL                              BALTIMORE, MD
                                                                                        Instead of putting in coins, put fold-
                                                                                        ed money in. Save until the end of
    Don’t pay extra for an unlisted              My food budget has always been         the year, then break it open, and
phone number. If you prefer not to          difficult for me to keep to. To stay        there is your shopping money for
have your name published in the             within my budgeted amount, I pur-           the holidays or a lump sum for an
phone book, use a different name,           chase a re-loadable gift card at my         interest-bearing account.
like your middle name or a pet’s            favorite grocery store for my bud-                                    JORDAN M. RAGLAND
name, for the listing.                      geted two-week amount. Each pay-                                          INDIANAPOLIS, IN
                           KATHY ALBANY     day I reload the card with my food
                         JACKSONVILLE, AL   budget amount for that pay period.
                                                                   MARILYNN GARDNER
   Enroll in payroll deduction or                                        RIVERTON, UT
purchase a savings bond on payday.
                         SANDRA COATES           I save money on prescription
                         PHILADELPHIA, PA   drugs by asking my physician for a
                                            free sample of the medication. This
    Just for a month, stay out of the
malls and shopping centers. The
                                            is especially useful if it is a new pre-     American
only stores you are to go to are the
grocery store, the drug store, and
                                            scription I haven’t taken before. If I
                                            have an allergic reaction and can’t
                                            use all of the medication, I’m not
                                                                                                    Saver
the gas station. Other than that,           out any money.                               American Saver is the quarterly newsletter of
avoid the mall or places where you                                                       the America Saves campaign, a national pro-
                                                                       JULIE GOLDBECK
will be tempted to buy “a special                                    VANCOUVER, WA       gram to encourage and assist Americans to
something.” If you must go to a                                                          save and build wealth more effectively.
specific store for a specific item you           One way I save money and calo-          The campaign is coordinated by the non-
truly need, then go and just pur-           ries is I cook in bulk. It’s similar to      profit Consumer Federation of America
chase that one item ONLY. You’ll            buying in bulk. You cook several             (CFA), supported by national foundations,
be surprised at how much you save           healthy meals at one time and buy            and advised by dozens of non-profit, gov-
by not buying those things that you         some plastic containers with the             ernment, and business groups. A generous
want. Furthermore, if you don’t see         dividers and freeze your meals. If           grant from the New Century Financial
those items you want, you don’t             you freeze it right away, the fresh-         Corporation supports the publication and
know you want them.                         ness will remain. You are saving             distribution of the American Saver.
                              LISA IRWIN    money by not buying lunch every              Questions about how to start a local savings
                    NORTH ROYALTON, OH      day. You have a selection of food            campaign in your area should be directed to:
                                            you like. And, if you cut the fat in         Nancy Register, America Saves, c/o CFA,
    Always clean your lint filter on        the cooking process, you have also           P.O. Box 65868, Washington, D.C. 20035-
your dryer after every use. The             saved in calorie intake.                     5686; 202-387-6121 (phone); 202-265-7989
dryer will work more efficiently, and                                                    (fax); nregister@consumerfed.org.
                                                                       BRIDGET JONES
you will avoid the danger of fire.                                   MONTGOMERY, AL      American Saver Editor: Barbara Roper
                           ELLEN ASHWILL
                      PARMA HEIGHTS, OH


                                                                                                                                         3
   News                                     F R O M        L O C A L       C A M PA I G N S
   Note: This is not an exhaustive list of the activities of all America Saves sites, but rather a sampling of activities from several of the local
   campaigns. For a more complete list of America Saves campaigns, be certain to visit our website at www.americasaves.org.

         Arizona Saves is working with               participating locations in the                     organized and plans to hold its first
   the City of Phoenix to organize a                 Columbus area. In November, the                    meeting in October.
   Money Management Institute, which                 campaign in holding “Money, Money,                      Northwoods Saves is providing
   is to be offered in October to all city           Money,” the first annual meeting with              financial education workshops at
   residents. The event will include                 George Banany from America Saves,                  three additional area libraries. The
   Saves and financial education work-               which all Savers are being invited to              campaign is also expanding its rela-
   shops. The Mayor and City Council                 attend.                                            tionship with the area technical col-
   are expected to participate in the                     Gadsden Saves (FL) is holding                 lege in order to provide additional
   event kick-off.                                   its annual campaign event in                       financial literacy training to students
         Colorado Saves has received a               November at the Gadsden County                     at the college.
   significant grant from the Certified              Extension Office in Quincy, FL.                         Okaloosa Saves (FL) recently
   Financial Planner Board of Standards              Partners for the event include Havana              completed its third annual “Teach
   to produce an educational video that              Learning Center, Kia Auto Sports,                  Children to Save” project. Through
   promotes debt reduction, saving, and              Fringe Benefits Management Services                the project, 186 young people made
   financial planning. Funding is also               of Tallahassee, Gadsden Community                  231 deposits totaling $16,941.28. Six
   being provided to present the video               Health Council, Gadsden Health                     participating youths were selected
   during workshops held for employee,               Start, Capital City Bank, Premier                  through a random drawing to receive
   non-profit, and community groups.                 Bank, and Gadsden Senior Centers.                  $100 savings bonds. A new corporate
   The campaign plans to offer random-                    Langley Saves (VA), which                     donor, National Electronic Warranty,
   ly awarded coupons to Savers to allow             serves the membership of the Langley               Inc., provided funds for the savings
   them to work one-on-one with a certi-             Federal Credit Union in Newport                    bonds.
   fied financial planner for up to one              News, VA, recently enrolled its one                     Silicon Valley/South Bay Saves
   year. Approximately 1,000                         hundredth Saver.                                   is proud to report that Forbes
   Coloradans have already enrolled in                    Dr. David S. C. Chu,                          Magazine has listed San Jose, CA as
   Colorado Saves, which is planning a               Undersecretary of Defense for                      one of the nation’s top three cities for
   formal launch of the campaign this                Personnel and Readiness, has declared              saving.
   fall.                                             the week of February 25, 2007 to be                     Utah Saves is gearing up for its
         Columbus Saves (OH) is starting             Military Saves Week. The                           first annual “Save Your Change
   a new membership campaign, which                  Department of the Navy has formed a                Week” in November. The campaign is
   includes efforts to recruit new                   Military Saves working group with                  also starting up its ad campaign again
   Columbus Saves sponsors and organi-               regional groups in Jacksonville, FL                and is expanding that campaign into
   zations. “Roll Your Change” week                  and San Diego, CA. A Military Saves                Hispanic TV and radio markets this
   was held September 25, with four                  financial services committee is being              year.

                        w w w . A m e r i c a S a v e s . o r g




                                                                                                     Washington D.C. 20035-5686
                                                                                                     P.O. Box 65686
 PERMIT NO. 8772
WASHINGTON, D.C.                                                                                              You Can Build Wealth
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