Cooking on a Budget

Looking for a gift for both your wallet and your waistline? This weekend, instead of heading to the nearest restaurant, why not fire up the flavor in your own kitchen with friends and family?

“Inviting guests into my home is like sharing a piece of myself. It's a comfortable setting and it allows me to dip into my creative outlet,” says Kelsey Nixon, chef and former contestant on the “The Next Food Network Star” reality TV show. “There is a feeling in a home that you can't recreate in a restaurant.”

If the idea of an elaborate dinner party seems too time intensive and costly, here are a few simpler ways to entertain at home:
Drinks and desserts: Skip the cost of full entrées and limit the menu to all that is decadent. What’s your pleasure: champagne and cupcakes, cocktails and chocolate-dipped fruit? Offer a variety of drinks (be sure to include non-alcoholic options) and sweets for an event sure to delight every attendee.

Recipe exchange: Choose a theme and invite your guests to bring their best dish to share. For example, you could host an appetizer night or one featuring 30-minute meals. Ask each guest to bring enough copies of the recipe to give to everyone in the group.

Theme potluck: A variation on the recipe exchange, you can assign parts of the meal to various friends or family members, all based on a theme. The theme could be as broad as “Cuisines of the World,” for example, with guests bringing appetizers, salad, dessert, drinks and side dishes to represent different countries.

Ready to get started? Here’s a summery recipe that works as an appetizer for nearly any type of gathering.

Fresh Fruit Salsa with Cinnamon Chips

Yield: 10 servings

INGREDIENTS:
2 kiwis, peeled and diced
2 Granny Smith apples — peeled, cored and diced
1 pound strawberries, diced
8 ounces fresh raspberries
3 tablespoons brown sugar
10 (10-inch) flour tortillas
1/4 cup butter, softened
1 cup cinnamon sugar

DIRECTIONS:
In a large bowl, thoroughly mix kiwis, apples, strawberries, raspberries, brown sugar and fruit preserves. Cover and chill in the refrigerator at least 15 minutes. Preheat oven to 350 degrees.

Spread one side of each flour tortilla with butter. Cut into wedges and arrange in a single layer on a large baking sheet. Sprinkle wedges with desired amount of cinnamon sugar.

Bake in the preheated oven 8 to 10 minutes. Repeat with any remaining tortilla wedges. Allow to cool approximately 15 minutes. Serve with chilled fruit mixture.

—Recipe courtesy Kelsey Nixon

What Should You Say to Your Kids?

April was National Financial Literacy Month, and many parents took the opportunity to speak to their children about being financially savvy before heading to college in today’s economy.

Having those first conversations with children regarding spending on tuition and making out a budget can be challenging.

“Number one is, don’t keep your child in the dark about finances,” says Adam Carroll, chief education officer with National Financial Educators.

“Throw the whole money taboo out the window. It’s okay to discuss what insurance costs. What parents need to arm their children with are realistic costs that they will be faced with when they get out of the house and get out of school,” Carroll says.

Many 18-year-olds have left high school armed with a knowledge of U.S. history and calculus, but no experience with the realities of car loans and college tuition.

Julie Felshaw is the financial education specialist for the Utah State Office of Education. Utah is one of only three states that require a course on personal finance for graduation from high school. The program educates high schools students about financial basics such as checking accounts, investing and risk management.

“The key is making the topic relevant,” Felshaw says. Parents can peak their children’s interest by relating abstract principles to relatable topics, such as saving for a car, creating a budget for prom, or projecting the costs of their first year of college. Many teachers use online stock trading games and in-class investment simulations to let students learn the financial ropes with no risk.

“Kids love to talk about money,” she says, and the more times they discuss it, the better they’ll understand it.

This process can, and should, begin much earlier. Kara Lott, a parent of three young children, is uses trips to the grocery store to teach her three young children basic money principles. While her youngest, Lanie, 5, is eager to spend a dollar as soon as she gets it, 7-year-old Ethan will spend an hour in the toy aisle to make sure he gets the best value for his $5.

“My son will ask me, ‘If I only spend two, do I get to keep three?’” Lott’s oldest, Dane, 10, has started asking her how checks work, and how the ATM knows to whom to give the money. He realized after his last birthday party that if he returned a duplicate gift, he would then have enough cash to buy a video game he wanted.

She encourages her kids to donate a small percentage of their money to their charitable causes, and she plans to open savings accounts for them once they understand the basics of saving and spending.

With the right kind of financial education, both at home and at school, the next generation is bound to be smarter and more secure than its parents. Just think what the housing market might look like right now if we’d all learned the simple lesson Ethan learned with his video game: Don’t buy what you can’t afford.

The Pleasures of Saving

When the recession hit, Americans responded quickly by changing their habits. The savings rate grew steadily in 2008, rising to 2.9 percent in the final quarter, and economists are predicting it will continue to grow as much as 6 percent.

Kelly Walters of Gulf Breeze, Fla., is one individual newly converted to the pleasures of saving. “I used to be a real keep-up-with-the-Jones’ guy, especially when it came to electronics and cars,” he says. “But I’m amazed at what a great feeling it is to have some money stashed away. I find there’s even a magic number — as long as my wife and I have a certain amount saved in our saving account at the credit union, I feel a sense of well-being I never had when I was living paycheck-to-paycheck and juggling to make bill payments every month.”

Walters finds that watching his savings grow affects his other financial behaviors. “The more we save, the more cautious I am about big purchases that could erode our savings,” he explains. “Now I feel sorry for my friends when I see them making choices, such as upgrading a car, that are based on status, rather than on what’s best for their families.”

Saving goes hand-in-hand with knowing exactly where and how your money is being spent. So, to help beginning savers launch their savings plan, many financial advisors recommend creating a budget if you don’t already have one. For those who are having particular trouble putting a check on uncontrolled spending, advisors will often recommend a micro-budgeting exercise, where household members track every penny they spend for a week or more, to learn exactly how much every spending habit costs.

These exercises can prove very valuable. But to jump-start your savings plan, the best advice is to simply put some money into savings first before a single bill is paid. Make it the first priority, even if it’s only $5 per pay check. As your savings grow, you’ll find ways to cut spending even more and make the savings grow faster, because you’ll learn the pleasure of saving.

Basic Saving Tips

• Bring lunch to work. If buying lunch at work costs $5, but making lunch at home costs only $2.50, then in a year, you could afford to create a $500 emergency fund and still have money left over.
• Save your loose change. Putting aside fifty cents a day over the course of a year will allow you to save nearly 40 percent of a $500 emergency fund.
• Ask your physician to consider prescribing generic drugs. Generic drugs can cost several hundred dollars less to purchase annually than brand-name drugs. 
• Use only the ATMs of your credit union. Using the ATM of another financial institution once a week could well cost you $3 a withdrawal, or more than $150 over the course of a year. 
• Keep your car engine tuned and its tires inflated to their proper pressure. Doing both can save you up to $100 a year in gas.
• Borrow books rather than purchasing them. Borrowing books and reading magazines at your local library, rather than purchasing reading material, can save you hundreds of dollars a year.

Kids' View: Summer Lovin'

What do you love most about the summertime?

“I like to use the shovel in our garden. And I like picking the tomatoes off of the vine.” —Dillon, 5

“Playing power rangers on the trampoline.” —Nate, 3

“The warm, warm weather. I could stay outside all day.” —Jennifer, 14

“Disneyland, camping, and visiting grandma and grandpa.” —Anna, 6

“I like working out.” —Gentry, 12

“Playing football, definitely.” — Derek, 9

“My favorite thing about summer vacation is horseback riding.” —Kim, 7 

“Swimming and sleeping in and playing.” —Noelle, 5   

From the Grown Up

Tim Hollis, author of Dixie Before Disney, is an expert on old-time tourist attractions. 

Kids recently asked him, “How was vacation when you were a kid different from vacations today?”

“When I was a kid in the 1960s, people did not usually go to just one mega-resort like Disney World or Universal Studios. Instead, we had fun just driving from place to place and maybe seeing eight or ten tourist attractions before the trip was over,” Hollis says.

For a kid-friendly perspective on summer vacations, visit http://www.pbs.org/parents/summer/

Loan Modification Creates Opportunity

Nothing is more crucial to economic recovery than the easy flow of credit, and federal credit unions are doing their part.

“In 2008, our lending grew at 7.5 percent, the highest growth rate in three years,” says Patrick Keefe, vice president of communications for the Credit Union National Association (CUNA). The National Credit Union Association (NCUA) also reported positive numbers, stating that mortgage lending grew at 14.5 percent last year.

In an episode of “Meet the Press,” embattled Treasury Secretary Timothy Geithner bluntly said, “Credit is like the blood or oxygen of the economy, and for us to get the economy growing again we need to make sure there’s credit available to business and families so businesses can meet payroll so they can expand, so that people can put their kids through college, so they can purchase a car or a new house.”

In our financial system, typically less than half of lending to business and consumers comes from credit markets outside the banking system. Existing government programs have already had some effect in helping to unfreeze those markets.

Recently the Fed, in conjunction with the U.S. Treasury, announced a new and powerful program leading to the issuance of about $9 billion in loans — more than in the previous four months combined. New loan modification programs are making it easier for people to get access to credit by refinancing and renegotiating lower interest rates.

Credit union regulatory agencies encourage all federally regulated financial institutions that service or hold residential mortgage loans to participate in the “Making Home Affordable” loan modification program. The Treasury Department requires institutions receiving financial assistance under the Financial Stability Plan (established under the Troubled Assets Relief Program) implement loan modification programs in accordance with the Treasury Department’s guidelines.

Credit union regulatory agencies strongly support the program’s goal of promoting sustainable loan modifications for at-risk homeowners that appropriately balance the interests of homeowners, servicers, and investors. They also worked closely with the Treasury Department to develop guidelines. Credit Unions are more risk averse in nature than banks, and their security is especially attractive in this economic landscape. Given the doom and gloom espoused from the business press these days, it is especially advantageous for credit unions to make their position of fiscal strength and mission of helping highly publicized.

“Credit unions are safe, sound, strong and federally insured up to $250,000. They were not involved in the subprime lending debacle that ruined our economy, and they don’t take on high-risk investments because with credit unions, 70 percent of all mortgages are held in portfolio. There’s no incentive to take risk,” Keefe stated.

NCUA Vice Chairman, Rodney E. Hood, recognizes the challenges posed by our current economy. Hood was able to look beyond the bleak present and strike an optimistic tone for the future of the credit union industry. “There has never been a better opportunity for credit unions to demonstrate our mission of ‘People Helping People.’ This is your time to be bold, be heard and be there,” Hood says.

What is a loan modification? 

Loan modifications allow credit unions to make loan payments more affordable for borrowers. They may change interest rates, loan terms, loan balances, or other parts of the loan agreement.

How do I get a loan modification? 

To get a loan modification, just call your credit union and let them know about your financial situation. Explain whether or not you’ll be able to make your payments. If they agree, you may qualify for a loan modification.

Crossword Puzzle - The 41-Cent Vacation by Matt Gaffney

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ANSWERS:

Is Your Home Mortgage Worth Refinancing?

Given the recent downturn in interest rates, many homeowners are taking advantage of the opportunity to refinance and save, but how do you know when refinancing is worth it for you?

Many home mortgage holders have jumped on the opportunity to save some cash, but there are plenty of ways to invest that money back into your home. Partners Credit Union Member Dave Yoder used the low rates to cut his mortgage term in half by investing his monthly savings back into the term of the loan, cutting 15 years off his loan.

“We moved in to a new home a year and a half ago and put down a sizeable down payment — more than 20 percent,” Yoder says. “We put $100,000 down on a $300,000 home, so we had quite a bit of equity in the home. Our home mortgage with Chase had a 30-year term with a 6.25 percent interest rate.”

When the mortgage crisis happened, Yoder watched the mortgage rates closely, looking for an opportunity to refinance for a lower interest rate.

“When the mortgage rates dropped I went online and did some research on lendingtree.com and I started getting calls from lenders,” Yoder says. “They all claimed their rates were the best, but I told them I was just collecting information. The calls started pouring in and everyone wanted a deposit to get things started. I was telling my story to a colleague when he told me about Partners. I already had a home equity line of credit with Partners, so I thought I would give it a try.

I called Partners Home Mortgage and talked to Natasha. She explained the current rates and gave me some options from the start with no nonrefundable deposit attached to it. Plus, I felt comfortable having Partners on property where I work. In the end, I refinanced with Partners and dropped my interest rate from 6.25 to 4.25 percent, and reduced the term from 30 to 15 years. On top of shaving 15 years off my mortgage term, I was able to keep the home equity line of credit I had with Partners. With another lender, I would have been forced to pay off any lines of credit associated with the loan to refinance.”

Yoder was able to get a great rate and save years on his loan because of smart financial planning. Beginning with the large down payment on the initial loan, to using his savings from the refinance to invest back into the loan, Yoder continually looked for the next best option for his investment.

“I can’t say how it could have turned out any better,” Yoder said. “Having Natasha as my primary contact and her proximity to my work location here was a huge benefit. It was easy to drop off paperwork and Partners even sent someone to have us sign off on the loan at our house.”

This year, home mortgage rates hit the lowest percentile on record since Freddie Mac began tracking mortgage rates in 1971. Find out if it’s worth it for you. If you’re looking to refinance, relocate, buy or sell your home, stop by a branch, visit PartnersFCU.org or contact a Partners Home Mortgage Counselor at (800) 948-6677.

Back to Basics: Budgeting 101

BUDGET – It’s really not a bad word. Unfortunately though, these six little letters can make the toughest among us cower. Resist your instinct, grit your teeth and read on.

Budget is perceived to be a word of constraint, but it should rightly be considered a word of empowerment. A budget doesn’t limit the individual or the family, but rather the limitation comes from the amount of household income relative to objectives. A budget is a mechanism that helps you recognize this natural limitation and make better choices in light of it. Take some time this summer, find a quiet place to work and begin developing a budget. You’ll be surprised at just how liberating it can be.

Step 1: Develop a clear understanding of your needs, wants and priorities. Write a list of everything you need and want. Next, think about and prioritize your wants. There are no right answers here. While drinking a $5 latte on a per day basis is not more important than retirement to me, it does not make it wrong if this is a priority for you. Label each want with a number that corresponds to its level desirability. After you have prioritized your wants, calculate the cost of each want. Many of these costs are easy to calculate, but some require a greater level of expertise. Things like college and retirement costs often times require a more detailed calculation and professional help may be in order.

Step 2: Clearly understand your income. This is a fairly easy task. You should consider all sources of income, not just your employment income, but also any rental income, interest or dividend income, pensions, and social security. If you want to develop a monthly budget, make sure you list all income in terms of monthly income (There are 4.33 weeks in the average month).

Step 3: Assess and categorize your expenses. This is a little more difficult, but reviewing bank and credit card statements can make this process easier. For variable expenses, you may want to look back over a period of time to compute your average monthly expense. For annual or quarterly expenses, be sure to adjust them to reflect the monthly cost. You will then use the wants/needs list that you created in step one to categorize these expenses. Once this data is in front of you, take some time and review it. You might be surprised at the amount you are spending on groceries, eating out or filling up your tank. This is what we want to fix and where the fun begins.

Step 4: Create a budget. Obviously, you have to insert your needs first. You may want to take some time to consider each need and its associated cost to ensure that you are getting the best deal.

Step 5: Adhere to your budget. There are many systems out there and you have to find one that works for you. I would recommend taking a look at the envelope system of budgeting or some derivative. If you are more technology savvy, you may want to utilize mint.com or similar personal finance websites. The key is not how you stick to your plan, but that you do stick to your plan.

After assigning a price tag to each need item, subtract the total of those costs from your monthly income. This calculation will leave you with your discretionary income. You will want to parcel this money out to your wants based on your personal prioritization.

A good budget will help you understand where your money is going and help you make better decisions about how to manage your financial life.  Sites like mint.com help you quickly pinpoint weak spots in your spending and see how they add up.  For example ongoing debits like subscriptions and memberships can really start to add up, or extra curricular classes might start to resemble private education when totaled.  Creating, understanding and managing your budget will help you allocate your money towards things you really want and help you make decisions about cutting things that don't fit into your big picture plans.