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Getting Ahead
4th Quarter 2008

In this issue:

Direct Deposit

Tips to Improve Your Credit Score

Tips on Keeping Track of Your Checking

Calculating Your Net Worth

Special Offer to Members

Direct Deposit

Direct deposit is simple, safe and secure. Is it right for you? Since January 1999, most federal payments are being issued through direct deposit. Although you can still receive your federal payments by check, direct deposit offers many benefits.

What are the benefits of direct deposit?

Some choices for you to consider:
If you already have a checking or savings account, why not sign up for direct deposit? Ask your financial institution for details.

If you don't have an account, consider opening one and signing up for direct deposit. Most financial institutions offer a variety of accounts, some with little or no fees. Look for one that meets your needs.

If you don't want direct deposit, you can continue to receive your money by check. Whatever choice you make, your federal payments will continue to be made on time and without interruption. Please take the time to make the choice that is right for you.

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  • There are no checks to be lost or stolen.
  • You will get your payments quickly and on time, even if you are out of town, sick or unable to get to your financial institution.
  • Both you and your money will be safe.


Tips to Improve Your Credit Score
  The first step to acquiring a mortgage is ensuring that you have a good credit history, which helps secure a lower interest rate and lower monthly payments. A high credit score indicates strong creditworthiness, which qualifies you for better interest rates on mortgage, auto and other loans.

Here are a few tips to help improve your credit score:

Pay bills on time. Pay at least the minimum due, but paying more is even better. Payment history makes up 35 percent of your credit score, according to The longer you pay your bills on time the better your score.

Watch for warning signs of credit trouble. If you pay only the minimum balance, pay late or use cash-advances to pay daily living expenses, you might be in the credit “danger zone.” For more information on debt management, contact the
Consumer Credit Counseling Service in your area.

Evaluate your credit report annually. Your credit report illustrates your credit performance. Everyone is entitled to receive a free copy of their credit report each year. To obtain your free credit report, visit the Federal Trade Commission’s Web site at, or call (877) 322-8228.

Read the fine print. A loan or credit card application is a contract, so read it thoroughly before signing. Be aware of introductory rates that expire, as well as the length of monthly billing cycles.

Ask questions. Remember that you are the customer and your lender is providing a service. If you do not understand something, ask. It is equally important to ask questions if you are turned down for a loan. Find out why, and ask the lender how you can improve your chances for approval in the future.

Set a budget and stick to it.
Developing a financial plan will help you keep your finances in order. Do not spend more than you can afford, and don’t reach your credit limit or “max out” your cards.

Comparison shop. Don’t jump at the first appealing offer. Compare rates and fees offered through mail solicitation, on the Internet or at your local financial institution.

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Tips on Keeping Track of Your Checking

If you get stressed out keeping track of your checking account, you’re probably not alone. Many people do not enjoy balancing their checkbook, but it is an important task to do to know your checking account balance and any outstanding checks, ATM or debit card purchases.

Keeping track of your checking account helps remind you of all your transactions, allows you to know what your balance is, and helps you avoid bounced checks, overdrafts and fees. Having your checking account linked to a savings account is also helpful in avoiding overdraft fees.

Here are some tips to help you avoid bounced checks or overdraft fees:

  • Do not write a check if you don't have the funds.
  • Balance your checkbook and keep track of all transactions.
  • Be aware that not all transactions are processed right away and may show up or post to your account days later.
  • Keep in mind that ATM withdrawals are posted immediately with many financial institutions.
  • Do not rely on "float", the time it takes for a check to clear.
  • Remember that overdraft protection programs are for an emergency and should be used accordingly.

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Calculating Your Net Worth

One way to plan your financial future is to calculate your net worth once a year. Net worth statements measure your financial situation at a point in time. If calculated annually and compared with the previous year's calculation, a net worth statement can provide an accurate picture of your financial progress over time.

What is net worth?
Net worth is your overall financial position. A net worth statement calculates this by comparing assets (what you own) and liabilities (what you owe).

Assets are cash and items that have substantial value. Savings accounts, a house, retirement accounts, cars, cash value of life insurance, stocks and bonds, and other possessions that can be sold or converted to cash are examples.

Liabilities are money that you owe. These can include the unpaid balance of a mortgage, auto loan balances, taxes owed, outstanding charge accounts and unpaid bills.

Why make a net worth statement?
A net worth statement is an important financial tool because it helps in making decisions about savings, investment plans, retirement goals, amount of insurance needed and estate planning. It helps you identify excessive debt loads, estimate your retirement income potential, and determine whether your assets are growing sufficiently to meet your financial goals.

Calculate your net worth by subtracting the figure for total liabilities from the figure for total assets. Start with your assets. Add up all of your cash, including what you have on hand, what’s in your checking and savings accounts, and any share certificates of deposit. If you own U.S. savings bonds, check their current values by visiting the
Bureau of the Public Debt Web site.

For the current value of your pension and profit-sharing plans, include only the amount you could withdraw in cash if you quit your job today. Your human resources office should be able to provide that figure.

Because your house probably will be your biggest asset, it is important that the value you assign it be accurate. Check around to find out what similar homes in your area are selling for, or ask a real estate agent for an estimate of the current market value of your home.

Next, look at liabilities. Start with your current bills. List the balance due on every credit card and installment debt. Your mortgage probably is your biggest liability, and the year-end statement from your lender will show how much you owe. Also, account for any outstanding loans including student, vehicle and business loans. If you pay alimony or have medical debt, be sure to list it.

Once you have calculated your net worth, ask yourself these questions:
How liquid am I? Do I have assets that I can quickly convert to cash?

How is my debt load? Is my total debt - including housing, car, credit cards, student loans, alimony, child support and installment payments - less than 36% to 40% of monthly gross income?

Am I acquiring assets that add value or am I using my income for items that depreciate in value?

Calculate your net worth at least once per year to track your progress and ensure that you are on the right path to reach your financial goals.

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Special Offer to Members

The GettingAhead Association is presenting an exclusive Sam’s Club offer to all of its members. If you sign up for a new Sam’s Club membership or renew an existing membership before November 3, 2008, you will receive a free $10 gift card. All you have to do is click here to print out the certificate and bring it to the member services desk of your local Sam’s Club. It’s that easy!

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