Personal Banking E-Newsletter - November 2010

Protecting Your Identity This Holiday Season

The holidays bring to mind wonderful scents and flavors, the company of family and friends and more. But what many people don't think about, is the increased risk of identity theft over the holidays. That's why we're bringing you tips on ways to help protect your identity this season. Just a few simple choices can help you prevent identity theft over the holidays, leaving you free to celebrate and be merry.

One of the biggest ways we prepare for the holidays is through shopping, so it's no coincidence that many identity theft tactics revolve around holiday consumers. By remaining aware of your surroundings and practicing a few simple tips, you can help keep your personal information out of the wrong hands.

When you're out doing holiday shopping, or even if you're just running to the grocery store, it's important to look after your belongings. Make sure purses and bags are kept close to your body and never left open or unattended. Men should also take care to avoid becoming victims of pick pocketing by keeping their wallets somewhere other than their back pockets. Additionally, try not to keep too many purchases in your car, and certainly keep them out of sight if possible. You might want to consider taking several smaller trips whenever possible rather than a large outing; being laden with bags may make you more of a target for thieves.

In addition to your possessions, it's also important to keep a close watch on your credit and debit cards. A number of thieves may try to steal your information through “skimming”: a process where your card is swiped and the information stored and later used fraudulently. Try not to let your card be scanned out of your view, and be sure to review the monthly charges on your credit card statements to make sure all of your purchases are accurate.

It's always a good idea to use safe ATM practices, but it's especially crucial during the holiday season. Whether you're getting cash or out shopping, be sure no one can see you enter your PIN. Even if you have to shield the keypad with your hand, it's better to be overly cautious than regretful. Also, when going to the ATM at night, be sure you go to one that is brightly lit, one with a security guard would be best. Finally, be aware of the machine itself. Thieves can place devices on ATMs that “skim” information from them. So if there's an odd-looking gadget attached to your ATM, you may want to consider using another machine.

On the Internet
As the popularity of Internet shopping increases, so do the online tactics used by identity thieves. Even if you clear your Web browser history, sensitive personal information can remain on your hard drive. Plus, thieves can use keystroke-logging programs on public computers to capture your payment and personal information. These are just a handful of suggestions to help protect you on the Internet:

  • Don't open suspicious-looking emails and certainly avoid clicking dubious links within them
  • Always use secure servers for online shopping. You can do this by looking for web addresses that start with https instead of simply http
  • If you're donating your computer, be sure to completely erase the hard drive first
  • Make sure your anti-virus software is up-to-date
  • Change your various passwords once a year, and avoid using similar login credentials for multiple accounts

The holidays are the perfect time to share with charitable institutions, but thieves may also use this tactic to try and steal your identity. Avoid this threat by never giving your personal information over the phone and by contacting a charity directly if you would like to make a donation. You can also verify a charity's reputation through a number of online sites.

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8 Ways to Lower Your Heating Costs

In some parts of the country there's a nip in the air that makes it actually feel like fall is here. It won't be long before temperatures dip even further, and you're hit with high heating bills. However, there are steps you can take now and throughout the cold months to keep costs under control.

Caulk and weather strip. Keep the warm air in your house and cold air out by caulking your windows and weather stripping your doors.

Insulate your attic. Yes, this will cost you now but it will help you save hundreds of dollars on your heating bill each year. Plus, you can claim a tax credit for 30% of the cost of the insulation, up to $1,500 through December 31, 2010.

Change your air filter. A dirty filter makes your heating and cooling system work harder. By keeping it clean, you can lower your energy bills by 5% or more, according to Atmos Energy.

Have your heating system inspected to make sure it's in good condition and running efficiently.

Install a programmable thermostat. Then in the cold months, program it so the temperature in your home will be 10% to 15% lower while you're at work, asleep or on vacation.

Set your thermostat at 70 degrees or lower. Your heating costs will rise 4% to 6% for every degree you set your thermostat above 70 in the winter, according to Atmos Energy. Rely on a pair of slippers and a sweater to keep you warm.

Let the sun heat your house. Keep curtains, shades and blinds open during the day so the sun can heat your rooms.

Sign up for budget billing. Some gas companies let you spread out your payments more evenly over the year. You'll pay more in the warmer months but you won't be hit with bills that bust your budget in the cold months.

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14 Worst Holiday Spending Blunders

How you can avoid overspending this year

The official Holiday Spending Season is upon us. Are you feeling the pressure?

Some of us felt the squeeze as early as the day after Christmas last year, when stores had their 75%-off sales and we felt compelled to buy gifts a year in advance. Not that we'd admit that in public. Yes, pressure makes you do strange things, and let's face it, we've all done very strange things under the influence of holiday gift-giving angst.

So think of this as the holiday equivalent of a tornado alert. No, you don't have to hide in the basement, just stay calm, cultivate a rational approach as the high-pressure front moves in, and keep reading.

Don't underestimate what you spend
Barbara Steinmetz, president of Steinmetz Financial Planning in Burlingame, Calif., is quite familiar with watching her Silicon Valley clientele get into hot water around the holidays. "The more money you have, the less you keep track of it," she notes.

While most of us don't have that problem, Steinmetz says many people seem to have temporary financial blindness when the time comes to purchase presents. She asks her clients to estimate what they spend every year on all their gifts, including weddings, anniversaries, birthdays, graduations, baby gifts and the like. "They usually say between $1,000 and $4,000 a year, which tells me they have no idea what they really spend," she says.

Steinmetz says that's why so many of us get into spending trouble over the holidays: "The biggest problem with holiday gift giving is a massive misconception of how much you're spending."

So it may seem too basic to bother with, but sit down now and draw up a holiday budget, yes, right now. This helps for two reasons:

  • It will give you some perspective on what you think you spend versus what you actually do.
  • You can panic now before you actually go out and spend the cash.

But even careful spenders can find themselves having post-holiday regret when the January credit-card bills roll in. The holidays are an emotional minefield, and one misstep can blow your budget. Below are the most insidious blunders so that you can venture forth into the malls forearmed.

Guilty Gaffes

Not surprisingly, guilt seems to be the biggest source of overspending.

Equalizing to excess: You get each of your kids (or parents or siblings) an equal distribution of presents. Except . . . maybe you should get Mom a couple of extra little things because Dad's cashmere sweater obviously cost a bundle. But now Mom has three presents and Dad has only one, so the least you can do is get him a book . . . repeat until broke.

Surprise-gift guilt: Your boss, friend, co-worker or neighbor gives you an unanticipated gift. You should have anticipated this! You dash out to the store and add yet another item to your overwhelmed holiday budget.

Reciprocal retaliation: This game is deadly and has a way of snowballing before you realize it. Three years ago, you and your mate gave a couple of your friends a dinky coupon for a free night of baby-sitting. They gave you pricey theatre tickets. The second year, you ramped up and took them out for an expensive dinner. They gave you a case of wine. This year, you just want to win, so you're planning to give them an all-expense paid trip to Guadalajara, just so they'll back down, and next year maybe you can get back to giving baby-sitting coupons. Won't happen.

Rejection rebound: In order to save money, you gave someone a gift that you got from someone else, forgetting it was the recipient who gave it to you last year. To make up for this offense, you overcompensate, now and possibly for years to come.

Clearly the issue here is that we think money speaks louder than our intentions. It doesn't. Really. So before you hit the store, delete the guilt files from your operating system.

Procrastination Problems

Putting off holiday shopping may cost you.

Last-minute largesse: It's the night before Christmas, Hanukkah or Kwanzaa and you are out shopping the stores that are open until midnight trying to get all your shopping done in one furious frenzy. But because you realize that this blows the whole "thought that counts" thing, the thoughtless gifts you buy are also wretchedly expensive.

FedEx folly: You bought your niece in Nebraska a great new CD but waited so late to mail it that you're spending more on shipping than the gift cost.

Holiday Spirit Overdrive

An insane impulse overcomes you: holiday joy? The spirit of Santa perhaps? Whatever the cause may be, you find yourself committing one (or all) of the following:

Debt of 1,000 gifts: Getting everyone, I mean everyone, a little gift: all of your co-workers, the woman who cleans your house, the neighbor who jump-started your car in 1986, your baby-sitter, your dentist, etc.

Parental panic: You lay out all the gifts you got for the kids, and suddenly it's just not enough. You love those kids so much. You can't let them limp into January so deprived. What were you thinking? Back to the mall!

Manic Martha-ism: For once, you're going to celebrate the holidays in style. You're going to throw that holiday party, take the kids to the "Nutcracker," the Ice Capades and the "Clifford the Big Red Dog Live!" show. You're going to cater a big holiday dinner and fly your parents in, and pay Martha Stewart to inject some holiday cheer into your décor.

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DIY: The More Expensive Option?

When it's cheaper to pay a professional

Doing things on our own always sounds like a good idea. We’ll save money, we tell ourselves, and get the satisfaction of accomplishment. But the truth is that we often end up spending more money and time.

The folks at CouponSherpa recently released a rundown of products and services they say are less expensive to buy than to do it yourself. Here are four times they say you are better off paying for a pro, unless, of course, you are one.

  1. Auto Oil Change
    For the inexperienced, changing your oil is not only physically difficult, especially without ramps and other equipment, but also environmentally unfriendly. (Do you know how to recycle your oil?) “That’s the biggest problem,” says Kate Forgach, an editor with CouponSherpa.  “Many cities and counties don’t allow consumers to dispose used oil down sewers or in the trash, as we did in the past. The oil now must be brought to recycling centers or city dumps, where consumers are often charged to leave it.” It’s a hidden cost many of us may not understand up front. There’s also the issue of time and possible frustration. “Most people also don’t want to hassle with accumulating enough oil to make the trip and expense worthwhile. Unless you have multiple vehicles and are a real do-it-yourselfer, it’s just easier to leave the entire mess to a quick-lube center,” says Forgach.

    The average price for a professional oil change runs from $25 to $45, depending on the type of oil used and additional services thrown in by the servicing company, according to CouponSherpa. DIY costs, including oil, air filter, etc., will average $20 to $30, depending on the same factors, plus the cost of getting rid of the oil.
  2. Formal Printing Jobs
    Another thing that sounds cheaper than it is: printing invitations, posters and other print jobs at home. What you’re not considering, though, is the cost of ink. “Major manufacturers often break even or lose money on printers, but they more than make up for it with ink cartridges priced more dearly than caviar,” says Forgach.

    A good exercise, if you’re not convinced, is to calculate the cost per page. “Consult the printer manual to determine a base rate of pages per cartridge, divide this rate by the cost of each cartridge and add in the cost of paper, test runs and errors,” says Forgach. Don’t forget time and frustration, either, she adds.
  3. Selling Valuable Personal Items
    If you’re trying to offload collectibles, vintage clothes or antique furniture, you may be better off with help from a professional seller, who can help you better appraise the item and match your product to the right buyer, all to earn the best and fastest return. Yes, you will pay a commission, but you may be able to pocket more money this way, says Forgach: “I just went through this process with several collectible pieces of movie memorabilia left me by my father, including an original Laurel and Hardy movie script. I had no idea how to price these items, much less find the appropriate target audience.”

    Find a professional reseller, consignment store, antiques dealer or estate sale company in your neighborhood to help you appraise and connect you with buyers. Ask friends and family for referrals.
  4. Taxes
    “The IRS commissioner doesn’t even do his own taxes,” says Forgach. While it’s not always best to hire a tax professional, sometimes, if your financials are relatively complex, it can be worth the investment. For example, if you own a business, are self-employed, own several properties or actively trade stocks.

Bonus Tip: Replace or Repair?
One more place where we’re often inclined to be penny-wise, pound foolish: repairs. For most small appliances, it’s cheaper to replace it than to buy the replacement part or get a repair cost estimate from the manufacturer, says Forgach. Parts are hard to find and costly. And even though some major manufacturers offer repairs, it’ll cost you: To replace a 50-cent gear on a coffeemaker, for instance, KitchenAid charges an average of $100 plus shipping (both ways), says Forgach. “If you’ve owned the appliance for several years, you have to consider whether that one repair will ensure many more years of service.”

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Five Steps to Simpler Financial Life

For many Americans, financial life seems to be getting more and more complicated. Perhaps that's because more workers bear responsibility for their own retirement savings thanks to the proliferation of 401(k) and other plans. Or maybe it's because there's so much information and so many investment choices to sort through. Whatever the case, here are some suggestions that may help to simplify your financial life.

  1. Start with a Plan
    A little time spent planning now can benefit you later. First, determine short-term financial goals. Do you want to purchase a home in five years? Are your kids heading off to college soon? Is buying a car a top priority next year? Next, think about long-term goals, such as saving for retirement and, if your children are young, college expenses. Estimate how much money you'll need to meet each of these goals.
  2. Build a Better Budget
    Next, look at your current monthly net income and then set up a budget. Creating a budget allows you to see exactly where all your money goes and to determine where you can scale back. After making cuts, invest that money to help pursue your financial goals.
  3. Invest Systematically
    You can take time and guesswork out of investing with a systematic investing program. With mutual funds, for example, you can make arrangements to automatically invest a specific amount of money on a regular (e.g., monthly) basis, a strategy also known as dollar cost averaging.* In addition to making investing easier, dollar cost averaging could potentially save you money. You'll buy more shares when prices are low and fewer shares when they're high. Over time, the average cost you pay for the shares may be less than the average price.
  4. Rely on an Investment Professional
    While the financial world is far more complex than it was just a few years ago, you don't have to go it alone. Think about tapping into your investment professional's expertise before making any major change in your investments. He or she can help you to evaluate how new tax rules and changing market conditions may affect your portfolio and, in turn, your financial goals.

*Dollar cost averaging involves regular, periodic investments in securities regardless of price levels. You should consider your financial ability to continue purchasing shares through periods of high and low prices. This plan does not assure a profit and does not protect against loss in declining markets.

© 2010 Standard & Poor's Financial Communications. All rights reserved.

For additional information, please contact Shari Hopkins, CFP®/Financial Consultant, at (608) 784-3904.

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