Step 9: The Debt Test

It is already April 9th, which means we are on Step 9 of the "30 Steps to Financial Wellness". Step 9 is about examining your debt. Take the quick, 10-question Debt Test to see if you are in need of a better debt payoff plan. The Financial Literacy Month website has been set up to guide individuals towards financial independence through the month of April. Visit the website and see what financial areas you may need to revisit.

Financial Literacy Month!

April is the official National Financial Literacy Month! Checkout this helpful resource that gives "30 Steps to Financial Wellness", which is sponsored by Money Management International. Regardless of the day or month, you can always begin to improve your financial wellness. Remember to take your first step towards a better financial future today!

New Overdraft Rules for Debit & ATM Cards

Debit and ATM card holders have additional overdraft options under the new Federal Reserve rules. In the next few months, financial institutions must offer you the ability to make decisions about overdraft services for transactions made with your debit or ATM cards.

Generally, there are 2 types of overdraft services:

1. Standard overdraft services
2. Overdraft protection plans

The new rules allow you these new options:

1. You choose to "opt in" which grants your financial institution permission to apply standard overdraft services to debit and ATM card transactions before you can be charged overdraft fees.
2. If you have an existing account and you don't "opt in", then beginning August 15th, any previous overdraft fees won't apply. Transactions will simply be declined instead of charging overdraft fees.
3. If you open a new account after July 1st, you will not be charged overdraft fees by your financial institution unless you "opt in".
4. The new overdraft rules give you more flexibility. You can add and remove overdraft services at any time.
5. The new rules do not cover checks or automatic bill payments. Your bank will automatically enroll you in their standard overdraft services for transactions like these.

Visit the Federal Reserve website to learn more details about the new overdraft rules.

Investment Quotes

Come and learn more about investing basics at next month's FPW workshop! Afterall, "an investment in knowledge pays the best interest" (Benjamin Franklin). Please email Jean Lown at jean.lown@usu.edu if you are interested in learning about a specific topic on April 14th, at 12:00 pm (noon) or 7:00 pm. Here are a few quotes you can stock away.

"The four most expensive words in the English language are, 'This time it's different.' "
-- Sir John Templeton

"The stock market is filled with individuals who know the price of everything, but the value of nothing."
-- Philip Fisher

Earthquake Insurance!

Watching devastation after devastation of tremendous earthquakes around the world really makes you stop and think about home. Where will the next big earthquake hit?? Unfortunately, not even the experts can give us the answers. Earthquakes can cause enormous damage, endangering your safety, home, and other personal property and belongings. Although we may never feel completely prepared, one way to ease your mind and protect your home is through earthquake insurance. The Utah Insurance Department is a great resource to learn more about how to insure your home against earthquake damage. Visit Utah Insurance Department for more information.

Kool Kiplinger Klips

Here's a great resource for both both financial novices and gurus. Kiplinger has several mini videos that cover important financial topics for consumers. Topics include investing, insurance, family finance, taxes, retirement, and health. These short clips offer beneficial tips and review personal finance basics. Most of the videos are only 2 to 5 minutes long, so they are quick and easy to watch but don't impinge on your busy schedule. Check out the video clips on the Kiplinger website at: http://www.kiplinger.com/video/.

Do You Qualify for the Earned Income Tax Credit?

The following information is presented by the IRS Tax Tips. The Earned Income Tax Credit, commonly referred to as EITC, can be a financial boost for working people adversely impacted by hard economic times. However, one in four eligible taxpayers could miss out on the credit because they don’t check it out. Here are the top 10 things the Internal Revenue Service wants you to know about this valuable credit, which has been making the lives of working people a little easier for 35 years.

1. Just because you didn’t qualify last year, doesn’t mean you won’t this year. As your financial, marital or parental situations change from year-to-year, you should review the EITC eligibility rules to determine whether you qualify.
2. If you qualify, it could be worth up to $5,657 this year. EITC not only reduces the federal tax you owe, but could result in a refund. The amount of your EITC is based on the amount of your earned income and whether or not there are qualifying children in your household. New EITC provisions mean more money for larger families.
3. If you qualify, you must file a federal income tax return and specifically claim the credit in order to get it – even if you are not otherwise required to file.
4. Your filing status cannot be Married Filing Separately.
5. You must have a valid Social Security Number. You, your spouse – if filing a joint return – and any qualifying child listed on Schedule EIC must have a valid SSN issued by the Social Security Administration.
6. You must have earned income. You have earned income if you work for someone who pays you wages, you are self-employed, you have income from farming, or – in some cases – you receive disability income.
7. Married couples and single people without kids may qualify. If you do not have qualifying children, you must also meet the age and residency requirements as well as dependency rules.
8. Special rules apply to members of the U.S. Armed Forces in combat zones. Members of the military can elect to include their nontaxable combat pay in earned income for the EITC. If you make this election, the combat pay remains nontaxable.
9. It’s easy to determine whether you qualify. The EITC Assistant, an interactive tool available on IRS.gov, removes the guesswork from eligibility rules. Just answer a few simple questions to find out if you qualify and estimate the amount of your EITC.
10. Free help is available at volunteer assistance sites and IRS Taxpayer Assistance Centers to help you prepare and claim your EITC. If you are preparing your taxes electronically, the software program you use will figure the credit for you. If you qualify for the credit you may also be eligible for Free File. You can access Free File at IRS.gov.

Paying off Debt: A Utahn's Success Story

Bianca Young, a resident of Utah, did not learn about how to save and manage money at a young age. Rather, she had the opportunity to teach herself after divorce and other financial setbacks. As her need grew, she began making steps to improve her financial situation. She started to budget and save. She was able to start a savings account and set goals to pay off her debts. When describing her new financial habits, Bianca stated, "The roads have been tough all my life. If I’m given the opportunity to change that, then I’m going to change it." To read Bianca's full story, visit "Read Saver Stories" at americasavesweek.org. These stories serve as inspiration and are great examples of how we can make important changes in our own lives.

Learn How to Get Your Refund Faster

If you want to get your refund as quickly as possible, just tell the IRS to deposit your refund directly into your bank account. By choosing Direct Deposit, you can get your refund much sooner than if you chose to have a paper check mailed to you. Nearly 73 million taxpayers choose Direct Deposit because of security, ease, convenience, and options. Read IRS tax tips for more information.

Do You Know About the IRS Free File?

The IRS Free File service provides free federal income tax return preparation and electronic filing for all taxpayers. All you need is access to a computer and the Internet and you can prepare and e-file your federal tax return for free.

Free File offers two options. The first is Traditional Free File, which includes approximately 20 tax preparation software products from which to choose. Taxpayers with 2009 incomes of $57,000 or less are eligible for this service. The second option is Free File Fillable Forms, which is an electronic version of IRS paper forms. All taxpayers can use Free File Fillable Forms to prepare and file tax forms electronically. For more information visit the IRS.gov website.