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MONEY SOLUTIONS $ ma r t H o lid a y $ pen d ing

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Gifting on a Budget AT M S a f e t y S a v i n g o n H o l i d a y Tr a v e l Christmas Clubs Shop smar t with Credit Cards


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Copyright November 2012

Money Solutions

Business Directory Bank Iowa . . . . . . . . . . . . . . .Pg 6 City National Bank . . . . . . . .Pg 2 Doug McGinnis Insurance Agency . . . . . . . . .Pg 5

Page County Federal Savings Assoc. . . . . . . . . . . . .Pg 4 Raymond James . . . . . . . . . . .Pg 5

Great Western Bank . . . . . . . .Pg 3

Rosemary Els, Certified Financial Planner . .Pg 4

Miller, Shearer, Lasier & Co. P.C. . . . . . . . . . . . . . . .Pg 2

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Tax planning strategies for 2012 and 2013 To say the tax landscape in America will likely transform in 2013 may be a bit of an understatement. There are numerous changes scheduled for yearend, including scheduled budget cuts resulting from last year’s debt ceiling negotiations, the expiration of the Bush-era tax cuts on Income and Investment gains, the reduction of the lifetime gift and estate tax exclusion limits, and the implementation of new taxes created by recent healthcare reform. Given that it’s a presidential election year – and a particularly heated one at that – there’s no way to predict what will happen with taxes in the future. There’s only one thing of which we can be fairly certain: The tax landscape will change to some degree starting in

2013. The timing of these changes makes today’s favorable tax environment potentially all the more advantageous for positioning your wealth for the future. The key is to assess your options as soon as possible so you can take advantage in case the lower rates expire. As it is highly unlikely that there will be any changes in tax legislation before this year’s elections, this is an important time to consult with your financial and tax advisors to help position your finances to keep more of your money and develop a plan to react to potential changes when they occur. Duane A. Sturm, Branch Manager, Raymond James Financial Services, Inc. Member FINRA/SIPC; 114 W. Main St., Clarinda, IA. 712-542-6334

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Miller, Shearer, Lashier & Co, P.C. Certified Public Accountants 513 W. Sheridan Ave., P.O. Box 307, Shenandoah, IA


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The Valley News/Herald-Journal

Money Solutions

November 2012 3

Practice ATM safety this season By TESS GRUBER-NELSON Staff Writer

While doing your holiday shopping this year, more than likely you’ll make at least one trip to the ATM in order to grab some cash to pay for a present or two. With large funds withdrawn around the holidays, thieves know ATM machines are prime targets for easy money. According to Chris McGoey, a security consultant, 60 percent of ATM crimes occur between 7 p.m. and 4 a.m., with the majority of those occurring before midnight. Most ATM robbers are under the age of 25 and male, working alone. They stand away from the ATM machine and often catch the person withdrawing money (typically a woman) off-guard. Many people who are the subject of theft never saw the robber coming. Fifty percent of thefts occur after the money has been withdrawn. Often times a weapon or threat of a concealed weapon is used. During the holiday season thieves may be more brash in their robbery attempts. Therefore, it isn't unlikely to think a robbery could take place in the daytime hours or in crowded malls. For the millions of shoppers who will be using ATMs this holiday season and throughout the new

year, it’s important to know your ATM safety. Susan Blane, customer service at Bank Iowa in Shenandoah recommends choosing an ATM in a welllit, public area. She added to be aware of your surroundings when using an ATM for people who look suspicious or those milling around; if so, cancel the transaction and find a different machine said Blane. “Do not let someone look over your shoulder- as they could see what you key in for our PIN,� said Blane. “Also, never count your cash at the ATM.� Blane also recommended to never write the ATM’s pin number on the back of the card, but rather memorize it. She added if the machine happens to eat your card, do not reenter your pin number, but rather contact the bank or establishment where the ATM is located. “If you use a drive up ATM- have your doors locked and leave your car running,� she said. “I also suggest you minimize time spent at the machine, which means preparing deposit slips or other transactions in advance.� Lastly, Blane said to be wary of anyone attempting to help you with your ATM transaction and if someone does approach you with a weapon and demands money, comply and alert the police. “Safety is more important than money,� Blane said.

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Money Solutions

4 November 2012

The Valley News/Herald-Journal

Save up all year to enjoy a debt-free holiday season By JASON GLENN Staff Writer

The holiday season is synonymous with many things, perhaps the least heartwarming of which are spending and running up credit card debt. According to a survey from the American Research Group, the average family spends between $700 and $900 on Christmas gifts in a given year. This doesn't factor in the additional expenses of food and entertaining, as well as travel and miscellaneous holiday necessities. The American Consumer Credit Council indicates that the average American carries credit card debt of roughly $8,562, and holiday spending can add to that already heavy burden. Opening a Christmas Club account is one way shoppers can exercise some financial savvy leading up to the holiday season. Setting aside funds for Christmas can help cut down on any additional debt from holiday giving. It helps to budget for the added gifts, decorations and food that make the holidays festive. Savings clubs have

been offered through banks and other organizations for decades and it’s never too early to open a Christmas Club account and get ahead of the holiday curve. “It is pretty popular. A lot of people come in after the holidays in January or February and get them all set up and they start saving throughout the year,” said Megan Cabbage, CSR and teller supervisor for Page County State Bank in Clarinda. “It’s something I think a lot of people appreciate and like.” Like most modern Christmas Club accounts, PCSB’s product is a distinct savings account linked to the customer’s checking account at the bank, Cabbage said. The customer determines how much to transfer each month and on what recurring date and can withdraw the funds at any time during the year or transfer them back to the checking account, if they choose. If not, Cabbage said, a check is sent out to the customer around the first week of November, right in time for Christmas shopping. Another nice feature of Christmas Club accounts is that they usually have a very

small minimum opening amount, if any. Page County State Bank, for instance, has none, Cabbage said, and the average monthly contribution is around $25-50, timed to transfer right after payroll or Social Security deposits. While that might not seem like a lot of money to stock away for holiday spending, getting a $300-$500 check in the mail six weeks before Christmas can certainly make the season quite a bit merrier. Although Christmas clubs have traditionally been offered through credit unions and savings banks, third-party organizations, including retailers, also offer these types of savings accounts. Such accounts may accrue a small amount of interest, and unlike accounts established with banks, the money saved must be spent with the particular retailer holding the account. Cabbage said PCSB continues to offer a Christmas Club savings account

because their customers have come to rely on it and wouldn’t have it any other way. “It’s a customer-demanded product. I think that’s why we still have it and maybe other banks don’t,” she said. “Our customers like to save for Christmas. I think it really adds up quickly without people noticing, so I would say it’s just a great product that customers like.” Other area banks that offer Christmas Club accounts are Arbor Bank in Sidney and First Heritage Bank in Shenandoah and Farragut.

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Money Solutions

The Valley News/Herald-Journal

November 2012 5

Creating a holiday budget is a good idea By KENT DINNEBIER Staff Writer

With the holiday season rapidly approaching it is easy for shoppers to get caught up in the spirit and overspend. A 2011 study from found that consumers accumulated $16.8 billion in credit card debt in the third quarter of the year alone. However, holiday debt is a condition that can easily be prevented with a little planning. The simplest way to avoid racking up excessive credit card debt during the holidays is to establish a shopping budget. This will allow shoppers to control their spending while still enjoying a festive holiday season. “Now is the time to create an overall holiday spending budget. What is the most you want to spend in aggregate for the holiday season? This should include gifts as well as food for holiday gatherings, greeting cards, school – church – club donations and holiday travel,” Mary Beth Kaufman, Family Finance Program Specialist with Iowa State University Extension and Outreach, said. Reviewing receipts from last year will give shoppers a sense of their spending habits. This will allow them to pinpoint areas where they could save money in their budget this year and be more responsible shoppers. Shoppers should also revise their holiday shopping budget each year based on their financial position. Factors such as purchasing a home, losing a job or taking a pay cut are reasons to reduce the budget, while a shopper that has had a financially successful year may be in a position to spend more

than last year. Kaufman said the easiest way to start developing a holiday spending budget is to make a list of all the people you need to buy gifts for. Include the gift you have in mind for each person or a specific dollar limit to spend for each person. “Without setting this in advance, it can be easy to say, ‘He would love this game or she would love this sweater’ only to see that you are spending much more than you wanted on that person. Check to be sure that the total you plan to spend when looking at each person is not exceeding the amount you wanted to spend for everything,” Kaufman said. “A sensible guideline for holiday spending is to spend no more than 1.5 percent of your annual income. For


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example, if you make $25,000 a year, your maximum holiday spending budget should not exceed $375.” Once a holiday budget has been established, shoppers should consider the various payment methods available. Paying with cash eliminates interest payments, while debit cards prevent shoppers from spending more money than they have. However, shoppers should be aware of transaction limits or the amount that can be charged to a debit card in one day. Meanwhile, lay-away allows shoppers to set aside purchases and pay for them over time with no interest. Store policies on layaway programs vary so carefully review the terms involved if using this option. “Credit cards also work well if you can


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pay your bill when it arrives. It is a good idea to deduct your credit card expenses from your checking account before the bill comes in, so you will be sure to have the money to pay the bill,” Kaufman said. “Unlike debit cards, most lost or stolen credit cards are also covered by consumer protection policies.” Next, shoppers should develop a basic strategy to follow when purchasing their holiday items. Prior to going to the store, shoppers should do their homework and review product information on the Internet or consumer reviews to determine the exact item they are looking for. This is especially important when shopping for high priced items like computers, cameras or other electronics. Once at the store, shoppers should have their gift or supply list in hand and use coupons wisely. “If you can buy an item with a 10 percent off coupon for less somewhere else, shop where you save the most. Read the conditions of coupons to make sure they don’t require you to buy something you don’t need in addition to the product you want,” Kaufman said. Finally, shoppers who prefer to do their holiday buying online should only use websites they trust and take care to protect their personal information. Shoppers should also review the shipping and return policies associated with online purchases and track their purchases to ensure they are staying within their budget. “Planning ahead is one of the most important parts of successful gift giving. It prevents last minute shopping that can lead to stress, fatigue, overspending and impulse buying,” Kaufman said.

Duane Sturm, Branch Manager 114 W Main Street, Clarinda, IA 51632 712-542-6334 or 888-554-9601

Money Solutions

6 November 2012

The Valley News/Herald-Journal

Help college students this holiday season College is a time when many students form friendships and make memories that last a lifetime. College is also a time when students learn to stretch a dollar, and the right gift come the holiday season can have a big impact on a college student's life. The following are a few gift ideas that may help make your favorite student's second semester a success. â– Books and supplies: Textbooks and supplies remain one of the biggest expenses for today's college students. According to the College Board, a not-for-profit organization aimed at helping college students be successful, the average cost for books and supplies during the 2011-2012 school year was roughly $1,200. Such an expense can be daunting for college students, and relatives can help them out come the holidays by paying for a portion or all of their second semester textbooks and supplies. Such a gesture might not make the most sentimental holiday gift, but it's a practical present that will go a long way toward helping a financially struggling student pay his or her bills.

â– Travel: College students who want to study abroad or travel for spring break must bankroll those travels themselves. In addition, some students struggle to pay for their travel back home during the holiday season or during other breaks from class. Adults who want to lend a college student a helping hand this holiday season can offer to help pay those travel costs. Men and women who travel a lot for work might be able to use their airline miles to secure a free or low-cost ticket for the college student in their life. â–  Computer accessories and programs: Of course, not all gifts need to be financially oriented. Practical gifts like computer accessories can also make a great gift for college students. Nowadays, many colleges and universities require incoming students to have their own desktop or laptop computers. Students with their own laptops might appreciate new laptop bags that make it easier to transport their computers to and from classes and the library. In addition, some majors, such as graphic design, require that students use


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ever-evolving and expensive computer software. These programs are often installed on computers in the university's labs, but students may perform better in school if they install such programs on their own computers. Upgrading students' computer software can save them money and help them do better in school. â– Gaming consoles: Another great gift for college students is the latest video

gaming console. Though such a gift might not be as virtuous as new textbooks or computer programs, a gaming console can help students unwind from the stresses of schoolwork. Today's college students grew up with gaming consoles and many are avid gamers, so a new gaming console can also be a great way for them to make new friends who share similar interests.

The Valley News/Herald-Journal

Money Solutions

Shop smart with credit cards By JOHN VANNOSTRAND Staff Writer

The holiday season is synonymous with many things. Among those things is holiday shopping. Some people revel in holiday shopping, while others would just as soon never see a mall again the rest of their lives. Regardless of where men and women stand on holiday shopping, an essential element to a successful shopping season is managing money wisely. For most consumers, that means using credit cards in a way that won't leave them with a mountain of bills come January. This holiday season, consider the following suggestions to ensure your holiday shopping doesn't come back to haunt you when all those bills are due after the New Year. Don't start spending until you have devised a repayment plan. Particularly during the holidays, consumers tend to spend first and worry about payments later. However, this is a dangerous approach. Before spending a dime, have a plan to pay bills already in place. This helps shoppers avoid going over budget and finding themselves in a nightmare come January when the bills are due. When devising a plan, be as specific as possible, such as setting a Feb. 1 deadline to pay off all credit cards. The more specific you can be, the more likely the plan is going to be successful. “Creating a budget and staying with it is important,” said Dale McAllister, president and CEO of Page County Federal Savings Association in Clarinda. “There is value in planning and starting your gift shopping well before December. You can avoid lastminute rushes, impulse buys and keep much better track of how much you spend.” Beware of retailer credit cards. Retailer credit cards entice customers during the holiday season, typically offering 10 percent back on the first purchase after applying and receiving the card. While this entices many consumers to sign on the dotted line, shoppers should know retail credit cards often come with high interest rates. For shoppers who plan to carry a balance, these interest rates can add up, negating the benefit of that 10 percent discount at the register. If a retail

credit card offers a reasonable interest rate or something like 18 months with no interest on more expensive purchases, then it might be worth considering. But for the most part consumers are better off simply paying full price and not signing up for a card they don't need just to save an extra 10 percent. Be careful when using multiple cards. Using several cards tends to give consumers a false sense of security. Consumers who use multiple credit cards during the holidays often feel this keeps them from piling up a massive balance on one card. However, the best strategy is to simply use the card that boasts the best interest rate. “Dedicating your gift shopping to one credit card makes it much easier to keep track of how much you spend,” McAllister said. “Just make sure you are using the best card.” Know your balance and where you stand. A holiday shopping spree can quickly grow out of control, but shoppers must know their balances at all times. Exceeding the balance typically results in hefty penalties, and those penalties are something most shoppers simply can't afford during the often costly holiday season. If one card is maxed out, shoppers might want to cease their holiday spending altogether. A financial situation in which a person is carrying a maxed-out credit card is never ideal, and shoppers should not dig themselves a deeper hole by spending more on top of that. Instead, they can work toward paying down the balance and spending less on holiday gifts. “Remember to stick to your budget and you will enjoy the season more,” McAllister said. Use credit cards when buying gifts online. One positive way to use credit cards when holiday shopping is to use them when buying gifts online. Credit cards offer consumers more protection against fraudulent purchases than debit cards, so consumers should always use credit cards when shopping online. The holiday season is a fun time of year, but consumers can quickly spoil their season if they aren't responsible when using credit cards to make their holiday purchases.

November 2012 7






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Money Solutions

8 November 2012

Great gifts Giving is synonymous with the holiday season. But in a holiday season where people are still dealing with a sagging and unpredictable economy, giving in a way that won't break the bank is imperative for many thoughtful holiday shoppers. In response to the economy, many families have set limits on how much family members can spend on holiday gifts. Such budgets are a great idea and can even make holiday shopping more fun as shoppers hunt down the perfect gift without having to worry about how they're going to pay for it. Low-cost holiday gifts come in many shapes and sizes, and the following are a few ideas to help you get started. Food & Beverage If you need to find an inexpensive gift for the family foodie, then you're in luck. Plenty of culinary gifts can be had for less than

The Valley News/Herald-Journal

that won’t break the bank

$25. Early risers might appreciate some gourmet coffee beans accompanied by a new coffee mug, while those who prefer tea instead of coffee would no doubt appreciate a variety pack of herbal teas and a new teacup or teapot. Men and women who embrace mealtime as an opportunity to experience various styles of cuisine would likely love a cookbook filled with recipes from all over the world or a particular country whose cuisine inspires them. Another great gift for foodies is a membership to a club such as "Pastry of the Month" or "Coffee of the Month." Such gifts cost a little more than thrifty shoppers would care to spend, but there are some deals to be had on such memberships come the holiday season.

Photography The dawn of the digital age has made photography more popular than ever before. Amateur photographers can now take photos with a digital camera or even their cellular phones and post their pictures to the Internet in a matter of seconds. Though online photo albums are popular, a traditional photo album is a thoughtful and inexpensive gift for a loved one who can't take enough pictures. New parents might also consider giving their youngster's grandparents a photo album filled with photos of the family's newest addition. Film Fans Movie buffs are passionate about their favorite films, and feeding that passion can be easy and inexpensive. Many film fans have a favorite director or actor, so why not gift a collection of that director or actor's work? Perhaps

thanks to the growing popularity of streaming movies online, DVDs are now more affordable than ever. Many film fanatics are also interested in the history of the film industry, so a book detailing that history might appeal to your loved ones. Of course, all film fans generally appreciate a gift certificate to their local multiplex. Pet Parents Pet parents are enamored with their furry friends, so a pet-oriented gift is sure to make their holiday season even more special. A new bowl, a flashy new collar or some additional attire aimed at helping their beloved pooch or cat stay warm through the winter months won't cost much, but it's certainly something most pet owners and their pets need. For the pet parent who seemingly has everything, remember that

pets can never have enough toys. Pets tend to play rough, so their toys aren't known for their longevity. Some new pet toys can be had on the cheap, and pet parents will appreciate the gesture. Rest & Relaxation Arguably one of the best holiday gifts is one that won't cost shoppers a penny. Offer to babysit a loved one's kids so the adults can enjoy a worry-free night on the town or simply relax at home without the kids. Another R&R gift is to book a spa trip for you and a loved one. While this won't necessarily qualify as an inexpensive holiday gift, you can often get great deals on spa treatments and other luxurious services when you book for two. And booking such a trip is also a way to reward yourself for surviving another holiday season.

Money Solutions, November 2012  

Money Solutions, November 2012