It’s a rite of passage for every teen and young adult… the start of making their own buying decisions and purchases. This rite often is met with tricks and traps as it seems the real world doesn’t want to make it easy for our younger generation. What’s it called? Learning the hard way? Yep, I’ve done that!

So I’ve pondered ways to help my teens navigate through the manipulative real world of “Buy Now, Pay Later”, “We’ll Beat Any Competitors Price” and “Zero Interest Until 2014”. We all have numerous experiences can we share with our teens on the art of negotiation and importance of reading the fine print, (which goes along with the mind bending exercise in trying to understand it.)

That fine art of negotiation works best when confidence fuels it, (and confidence is fueled by knowledge). Negotiating will be important not only in purchases but also in the career world as they seek to move up the ladder.

Below are 10 valuable tips compiled from Entrepreneur, Psychology Today and Consumer Reports.

1. Be Informed. Want to buy a new car, TV or rent an apartment? Do your homework first and research on the internet. The virtual world is bursting with information that’ll allow you to compare prices and important product details. Often there are online calculators that will factor in the price and most fees for you. These calculators are not entirely accurate but will give you a foundation to start from.

2. Create A Budget. The amount you spend can be determined by either what you are “able” to afford or what you “should” spend based on market prices. Both should be considered when establishing a budget. But be prepared, in most cases there are additional hidden fees known as taxes, interest, processing charges, insurance, maintenance packages, etc.) To account for the hidden fees, seek a product that is 85-90% of your total budget to allow for the average fees of 10-15%, (however it varies for every industry).

3. Shop Around. Find local (or online) businesses that are willing to beat any competitors advertised price. For smaller purchases, you can simply scan the bar code with your smart phone to compare prices. For larger purchases, it’s time to step away from your computer and iPod because the best places to find businesses offering price-beating programs are in your local newspaper or on the radio.

4. Make A List. After doing your research, write down what you need and what features are important to you. Your list will keep you focused so the “shiny objects” don’t lure you into buying something you don’t need or can’t afford.

5. Watch, Read & Listen. Find out what others are saying about the product or business. Testimonials can be found throughout the internet on Yelp.com, all search engines (Google, Bing & Yahoo) and in social media you can search via SocialMention.com. Another great source is Consumer Reports, a magazine and an app on your smart phone that is considered the supreme source of product research and reviews.

6. Put Your Game Face On. Your research and list will give you the confidence you need to get in the game. There are many types of sales people out there. The helpful, informative type and the commission-minded type. Keep your enthusiasm to yourself, evaluate your sales person to see if they have your true interests in mind, (and don’t be afraid to request a different person if they are not helpful). Stick to your research, list and budget but consider any new information you may gleam from an informative type sales person.

7. You’re In Charge. Always keep in mind that you are the customer. Never allow manipulative tactics to pressure you into purchasing on the spot. In the midst of negotiating a price or payment plan, or evaluating which product is best for you, take notes and prepare do more research.

8. Don’t Buy Now. Try not to rush into anything. Take the time to evaluate your experience, any new information and compare it with your research and list. This will prove valuable.

9. Cash vs. Credit. If you have been diligent in saving your money, you are miles ahead of others. The money you save in paying for your purchases vs. using credit can equate to a 15-40% savings. Of course, there are times we must use credit. If the company offers a “no interest” time period, this is timeframe in which you must to pay as much as you’re able to avoid high interest which will save you a lot of money.

10. Enjoy. Life is sweet! You’ve made a smart purchase on your own. Whether for need or pure entertainment, you can be assured you’ve paid the best price for a great product without over extending yourself.

I strongly encourage that you share these 10 valuable tips and your own experiences with teens and young adults as an important step towards a solid financial future. As stated in Tip #9, encourage them to save some of the money. They can start by opening a U22 account. It’s perfectly designed for 12-22 year olds.

Today we discuss purchasing, next month we’ll discuss negotiating in the career world.

GTE Federal Credit Union Courtesy Pay

Know your options when it comes to overdrafts.

Big changes are happening in the financial world. You may have heard about the Consumer Protection Act and the changes the Federal Reserve is making in regards to overdrafts for example.

Why should you care? I’d like to start off with a story first…

Let’s say you are driving in Wimauma, Florida and happen to swerve your vehicle to avoid a tortoise in the road and you happen to hit a tree. Well, to have the tow truck come out and then get your car fixed so you can drive home, well that may be $400, money you may not have in your checking or savings account right then. Moreover, you left your credit cards at home! If you have not opted-in to your financial institutions program, you will no longer be able to take out more money than you have in your account, leaving you stranded in Wimauma. Your ATM and debit withdrawals will be denied.

It used to be that if you wanted to buy something that exceeded the available funds in your account, a financial institution could automatically allow a transaction to go through, to overdraft your account. So, if you wanted to buy a $5 coffee, but only had $2 in your account, the purchase would still clear, and you would be charged a fee. Fees, especially at some of the larger banks, have now been deemed excessive. Another complaint was that consumers were not adequately alerted when they overdrew their account and could incur numerous overdrafts that carried increasing fees.

As of August 1, 2010, all financial institutions are required by new Federal Regulation E to get approval, via opting-in, from their customers before an overdraft transaction can be processed. Unlike previous overdrafts, account-holders will only be charged a one-time fee upon overdrafting using an ATM or debit card. However, some banks, like Bank of America, are not giving their customers a chance to opt-in; they are denying any debit purchase or ATM withdrawal, regardless of whether or not the customer would like to be able to overdraw their account, for example in an emergency. They are however, letting patrons link an account such as a savings account, charging $10 for an automatic transfer.

GTE Federal Credit Union recognizes that being able to make a debit purchase or ATM withdrawal, even if funds are not available right then, for a one-time fee of $29, may be of value to some members. For purchases under $5, the $29 fee does not apply. The program is called Courtesy Pay, and it has been recently improved!

(Just as a little FYI, Wells Fargo, BB&T, Fifth Third Bank and Sun Trust offer an opt-in program, some of which, charge up to $36 per overdraft transaction.)

You may be thinking…well…I NEVER WANT TO BE ABLE TO OVERDRAFT! But, remember the Wimauma story.

At GTE Federal Credit Union, it costs nothing to opt-in for Courtesy Pay. It’s 100% free. So, even though ideally, you never want to overdraw your account…YOU CAN IF YOU NEED TO!

Before you decide, read GTE Federal Credit Union’s handy-dandy web site further describing Courtesy Pay. May not be the most exciting thing you’ve ever read, but it may help you avoid getting stranded in Wimauma – or at least, help you make an informed decision!!!

Courtesy Pay – https://www.gtefcu.org/CourtesyPay/CourtesyPay.aspx

Courtesy Pay FAQ – https://www.gtefcu.org/CourtesyPay/CourtesyPay.aspx

Opt-in Today – https://cuathome.gtefcu.org/default.aspx?ptp=odo

This is a great article we used for some inspiration!

Part 1: Young & In Debt.  Avoid The Real Life Drama of Financial Frustration.

(continue reading…)

Hello, Kathy Here!

The summer is here, finally! For weeks now, my teens were electric, anxiously readying for endless fun in the sun. Now that the final school bell has rung, my days are filled with trying to get ten minutes of quality time and a family dinner in here and there! One thing for certain, all this fun time gets expensive the older they get. So in my ten minutes of quality time, we discussed a balance of who will pay for the fun. The result? Half parents, half teens.

Now personally, I understand the need for kids to have a summer break before they head off for college or a career, (since there will be very few breaks in life until retirement). However, the reality is life costs money, its good to understand that now. So we’ve created a ‘pay for play’ model that helps them make money without having a full-time obligation.

Here are some great tips on small and part time jobs for teens and tweens:

• Pet sitting – this is vacation season, the need for pet sitters is at an all time high.
• Tutoring – summer is the time when tutoring is on the rise for math, science, writing and more.
• Lifeguard – requires certification but certainly puts teens at the top of the ‘cool’ scale!
• Camp counselors – camps come in all forms, your teen’s athletic, artistic or academic skills will be put to great use.
• Lawn care – a longtime tradition to make extra money.
• Arts & Crafts – handmade jewelry and accessories are very popular and it doesn’t even feel like work.
• Computer training – help seniors learn the ins and outs of the internet, E-mail and more.
• Web site & blog design – teens today are very computer savvy. They can put their technical and creative skills to great use for small businesses and individuals.
• Delivery – if they have a car, they can put it to good use for a few hours a week delivering pizza, flowers, newspapers and more.
• Caddy – the perfect time to learn or to perfect their game as you assist others.
• Music lessons – whether your teen plays an instrument or sings, they can put their skills to good use by sharing their knowledge and talent with others.
• Baby sitting – always a great way to make money as you help parents get a night out.
• Blogging – they can create and author their own blog to share unique knowledge, insights and skills with others, as they make money on advertising sold.

Believe it or not, there are many, many jobs you can find or create. Teens have more choices than just working at a fast food chain, especially if they want to explore their inner-entrepreneur side.

So the final question, what should they do with all that money? Skip the piggy bank, encourage them to save some of the money and open up a U22 account! It’s perfectly designed for 12-22 year olds.

I to I. Peer to Peer. Good Advice for College Freshman.
This week, I decided to sit back and let the college seniors do the talking!

There’s no doubt it’s tough for incoming college freshmen to avoid the temptations of campus life – new quarters, new rules and the new found freedom of being away from home! It’s an exciting time in their lives that requires some restraint to avoid getting off to a very bad start.

The first temptation is the evil credit card. Sure it looks cool with your own design and your name gleaming on it. But be wary. While new reform limits credit card companies’ from issuing credit to 18-20 year olds, many freshman still have access to credit cards. They want, they buy and they owe with a plan to pay off balances when they graduate. What they may not realize is that carrying balances and paying the minimum monthly throughout these four years is both costly and affects their credit score. Plus, if you don’t land that job with the dream income right away, how will you pay the bills?

The second temptation will be peers. College students come from all walks of life. There are ‘haves’ with seemingly limitless spending and ‘have-somes’ which makes up the majority. [There are also ‘hads’ which are those who caved into the pressure and are deeply in debt].

Life costs money, it’s a cruel reality so budgeting is key.

Some tips from college seniors to incoming freshmen, “Be smart and get creative.”
• Buy your clothes at home, not at college. The prices are typically higher in college towns.
• Get in the habit of setting money aside for savings and major purchases so you don’t rely on a credit card.
• Go with the school meal plans. There are lots of choices and the cafeterias have the best prices in town.
• Go in on purchases with friends. This is great for dining out or buying necessities in bulk.
• Check out the fees at the ATMs and keep your usage at a minimum.
• Utilize online banking to avoid overdrawing your account. That $35 average overdraft fee can add up and it will show up on your financial record.
• Don’t hang out with big spenders. The pressure to spend is too much for many.
• Plan for the unexpected, because something will happen that costs you money, [you know… like a speeding ticket or going over your cell phone minutes].

Fortunately GTE-FCU’s U22 account offers free online bill pay, email balance alerts, and mobile phone account access, plus once-a-month forgiveness for a debit card overdraft, their free personal financial management program AND you can earn points on your debit card to get cool stuff!

Hello,

I recently posted some of my top reasons for encouraging my kids to get a Summer job – Part 1.

I was talking to my girlfriend recently, and her daughter just applied to work at a clothing store in the mall. She was really surprised at the interview questions that she had and the number of applicants they were sifting through; competition even for part-time jobs in retail – there’s a lot of people ready to fill those positions! Employers like to see a work history, and there’s no “easier” time to get started then during the Summer in high school!

So, why should your Teen get a Summer job? Here’s my reasons 6 through 7.

6. They gain new skills that will benefit their future career. While in high school, on-the-job experience gives teens the insight they need to discover their true interests. Their experiences will provide invaluable guidance when it’s time to select a college.

7. They’ll have a better understanding of the business world. Surprise, surprise. Life is not how it’s depicted on television. The business world has challenges, rewards and pitfalls. Better for them to learn about it now than after you’ve invested thousands on their college education.

8. Working teens gain maturity at a faster pace. There’s no substitute for hands on experience. Teens like to be challenged and recognized for a job well done. Work teaches responsibility, resourcefulness and provides a sense of accomplishment.

9. It looks good on their resume to future employers after college. It takes more than just good grades to land the big job. College graduates who can demonstrate responsibility have a real advantage. Employers are impressed by a graduate’s contribution to their own education and real world experiences through work, volunteerism and internships.

10. They are more responsible during off-work hours. Perhaps they’re tired. More likely they have a greater appreciation for their personal time. Working teens dedicate their spare time on chores, catching up with friends, sharing their work experiences with others and just plain relaxing.

Summer is fast approaching! Thus . . . the teenager/parent Summer job debate is right around the corner.

My teens look forward to this time of year when they break away from the day-to-day routine of school, homework and rules just to sit back, relax, play video games and hang out with their friends.

While they look forward to this time of year, I am desperately seeking ways to occupy their time: summer jobs, chores, camps, responsible recreation. Let’s face it, teens are expensive and, at times, challenging. This year, I’ve decided it’s time for them to be responsible, contribute to their own wants and build their savings account. So I did some research and have compiled a list of the top 10 reasons for teens to work in the summer.

1. They gain a better understanding of what life costs. Parents have rules when it comes to opening their wallets. Therefore, when teens start to work for their money, a sense of controlled freedom sets in. The result? Teens place a higher value on ‘their’ money and become more selective ‘spenders.’

2. They can start learning how to budget and save their money. Teens love money just as much as they love to spend it. Create a ‘matching dollars’ reward system and your teens are on the road to understand saving vs. spending.

3. They’re more likely to keep out of trouble. They can’t loiter, text, IM, surf the web, etc. when they’re working. Bottom line.

4. Working teens save parents money. Teens that work become more independent by nature. Therefore, as your teens stop asking for movie money, you can consider depositing those dollars into their college or after-college savings accounts.

5. They’ll gain real life experiences in dealing with other adults. The boss, customers and co-workers are far less forgiving than parents. That’s life. Better that they learn it now rather than later when they’re on their own.

Check back in for the remaining Great Reasons for Teens to Get a Summer Job.

Free Often Comes with a Fee.
Teaching Teens How to Avoid Unnecessary Costs.

Let’s face it, life is not free. Banking and managing money is a service that consumers have to pay for. Take my teenagers for example. They hadn’t a clue of what life really costs until we opened their own saving and checking accounts, and they had to start paying for themselves.

What they’ve discovered is along with financial freedom comes the responsibility aspect, which in this case, I used fees to help demonstrate how better management, preparation and knowledge in regards to their accounts can pay off. For example, at my credit union, we are charged a small fee for debit card transactions. Every bank, credit union, and financial institution charges fees, either boldly in your face or in very small legal print. This fee really represented a great learning opportunity for my kids:

1. READ YOUR NOTICES! My credit union regularly sends out notices to their members regarding account updates. My kids receive these notices and often discard them or neglect to read them. If they had read them, they would realize that to avoid debit fees, all they would have to do is pay with credit and sign for their purchase versus typing in their PIN – a great option that they can use almost everywhere! And, they earn rewards points by signing.

2. PLAN AHEAD! Moreover, they can plan ahead and budget. My kids were tapping into their accounts sometimes 10 times per day! Minimizing their transactions by forecasting their week’s activities helped them spend less.

In the years to come, most money gurus have predicted that fees will only continue and perhaps even rise as banks and financial institutions try to compensate for the new credit card legislation. For the future, kids need to better understand fees, learn about them and even accept them. The whole idea of “Fees aren’t fair” – well my response . . . “Life’s not always fair.” You can either huff and puff or learn some stuff.

As was in my kids’ case, just by being more educated about their account, they avoided a fee completely!

Credit Card Reform is Here. What It Means For You.
Learn the Pros of Credit Union-Issued Credit Cards

It’s interesting that the word “credit” appears in both names. If we revert to the core of the word, credit is defined as:
Belief or confidence in the truth of something.
A reputation for sound character or quality; standing.

Call me cynical, but this definition seems to have been lost over the years by the credit card issuers. The mere act of issuing credit has as many definitions, rules and restrictions as there are credit card issuers; forcing major reform and changes to the law.

But just as there are many culprits on the issuer side, there are many that have abused credit making it a “War of the Withs” (meaning: those ‘with’ credit, those ‘with’ bad credit and those ‘with’ credit to issue).

So as the second phase of credit card reform kicks in this month and we stand on the precipice of “one small battle being won” prohibiting arbitrary rate increases, it causes me to reflect back to what I know about credit cards. I’ve since discovered the important differences between credit cards issued by banks and credit unions.

Fortunately my research was already done by professional analysts. A recent study conducted in October, 2009 by Pew Charitable Trusts reviewed terms for the 12 largest banks issuing credit cards and 12 largest credit union card issuers. The study found that credit unions offer more consumer-friendly terms. “In general, the largest credit unions offered lower rates than did the largest banks. In July 2009, median advertised purchase rates were between 9.90 and 13.75 percent on surveyed credit union cards, approximately 20 percent lower than comparable bank rates,” according to the study. It also pointed out that every one of the 12 largest banks’ cards would run into conflict with the restrictions outlined in new credit card reform law.” I also discovered the results of a 2007 Consumer Reports survey stating that credit unions offer cards with low annual percentage rates and “the fewest hassles.” (I don’t know about you, but to me, credit unions seem to operate within the original intention and definition of ‘credit’ in many aspects.)

So I encourage you to become informed on CARD Reform law, read your statements, (the big and the small print); and perhaps visit your local credit union to explore all your options. It may save you some headaches and money. See below to view a concise list of the latest changes to the law.

The law passed by Congress last year overhauling credit card rules takes effect in stages.
• Card-issuers must disclose any changes that take effect when the card is renewed and must inform customers how long it will take to pay off a card balance with only minimum payment.
• In billing statements, card issuers must disclose all due dates and penalties for late payments. Also, the use of the term “fixed rate,” is banned unless the APR or interest rate can’t be changed for any reason.
• Due dates must be the same each month and must be at the end of a designated business day.
• Payments at local branches must be credited on the same day.
• Payments in excess of the minimum are applied to the account with the highest rate of interest.
• Card issuers can’t charge fees to pay by mail, phone, and electronic transfer, except for expedited payments.
• Over-limit fees are banned unless the customer has opted in to such a program.
• APR or finance charge increases are banned during the first year of an account.
• Any promotional rate must last at least six months.
• Card issuers must post credit card agreements on their Web site.
• Issuing credit cards to those under 21, without the permission of a parent or guardian who will take responsibility for the debt is banned.
• Increasing credit limits on the accounts of those under 21 is banned unless both individuals agree.

Spring Break doesn’t have to mean Spring Broke

If your kids are in middle school, you have some time to relax before the real pressure about Spring Break kicks in. Enjoy this time while you can.

However if you have high school or college-aged kids, you’re likely challenged with the financial and social aspects of Spring Break. Fortunately there are many more options than just bikini clad beaches for young people and I, like all of you, am trying to steer my kids toward the milder excursions or even contributing to society in some way.

Why? First of all, beyond concerns about bikini contests and beer, Spring Break is expensive! It’s during this time that airfare and hotel rates are at their highest. The average student spends over $1,200 just to come back with zero in their bank account, a bad sunburn and credit card debt.
So I perused the internet searching for affordable alternatives to steer my teens in a direction I can support in heart and wallet. Together we agreed upon some great adventures that have both financial and personal rewards.

I was thrilled to discover that MTV and many others promote what’s called Alternative Spring Break, listing opportunities to help others in need and have the most rewarding time of your life. If MTV promotes something, it has to be cool!

Habitat for Humanity hosts what’s known as Spring Break Collegiate Challenges throughout the country including many great locales in Florida, the Gulf region and the southwest including California. These are regions that score high on any teen or young adult’s list.

Embrace the great outdoors and clean up the environment with the SCA (Student Conservation Association). Their excursions include working and exploring the magnificent Grand Canyon. Students enjoy hiking the Grand Canyon’s beautiful trails while also removing graffiti and accomplishing important vegetation projects.

If you seek a more international experience, Amizade is an organization you may want to consider. Amizade is the Portuguese word for friendship. They offer global service learning and volunteer programs throughout the world taking young people to the regions of Jamaica, Mexico, Ireland and beyond.

Alternative Spring Break excursions are not only affordable, but they contribute to our environment and society. My teens were far more accepting of these programs than I ever anticipated. This is real adventure for far less expense and the money they are saving, I’ve offered to match and deposit in their U22 savings account.

Visit www.U224U.com to learn more about GTE Federal Credit Union’s youth checking account and credit card. Because money is important no matter what your age.