Getting Children to Buy Into Savings

Getting your kids to save money can be a tough sell. But even though being a strong saver is not innate, there are ways of steering your child in that direction.

One way is by you, as their parent, acting as a financial role model in a subtle way. For instance, don't encourage your young ones to save every penny they get from Grandma and Grandpa. That's no fun. Instead, help them take a third of the money and put it aside. Encourage them to put it in a savings account you started for them at birth—the one that has slowly been building, and whose worth they are now getting old enough to recognize.

Another way to encourage early savings is by openly talking about money, its value and how to make the most of it. Take your kids with you when you visit Tower and encourage questions.

A more abstract approach is mentioning, for instance, that the family is having lamb instead of hamburger for dinner because the former was "on sale" and is a more frugal choice.

Involve kids in decisions
Everyday experiences are perfect learning opportunities. You can take the grocery store lesson one step further while shopping, by letting your kids have a say in which food items to buy. For extra emphasis, remind them their choices could impact whether or not you can afford to go out to eat at a nice restaurant later in the week. You're basically teaching them about making a good short-term decision that will have a long-term benefit.

A dash of game playing doesn't hurt either. For their weekly allowance, provide your children with three separate "accounts." Show them how to divvy up their bounty between "Savings," "Sharing (for charity)," and "Spending." It's a simple method for even the youngest children to learn self-discipline.

And, to demonstrate how much of an interest you have in what they are doing, offer to match deposits, to a reasonable degree.

Now that they are teens
While the above approach may work well on a youngster, reinforcing it to a teen—who is distracted by smartphones and a myriad of other "must-have" gadgets—takes disciplined savings to a whole new level.

Have your teens practice self-control to avoid making a quick decision to buy something just because they saw it featured on display or on sale. Have them research before they buy so they are sure they are getting a good value, especially with a big purchase.

Ask them to keep track of their spending, which helps them set and stick to limits. Discuss the importance of taking good care of what they buy; it's expensive to replace things.

Let them take charge
When your teenagers are shopping with you, ask them to be in charge of the money for that day. It will help them get a grip on the cost of items, and learn to make choices about what would be good for themselves and the whole family.

If your teen has a part-time job, getting them to put aside some of the money they earn to save for an item they want is a good way to learn the value of saving.

And even when they are in college, financial acumen can still be taught. Getting a credit card for college can help. However, be sure to discuss with them that if debts start to mount up quickly, it can take a very long time to pay them back. Not taking heed to this can be a hard, but perhaps necessary, lesson.

Resources: MonkeySee, The Federal Deposit Insurance Corporation, TradeKing Advisors, Inc.

Message from the Board Chair—Marie E. Rowland

Looking back over the past six decades, a lot has changed since Tower's founding in 1953, especially in the financial industry and the ever-expanding world of banking technology. But one thing that has not changed and never will is our commitment to service excellence. Our reason for being has never wavered: Tower exists to enhance the financial well-being of our members by creating and delivering value in terms of service, price, honesty, convenience, consistency, variety, safety, confidentiality and timeliness. We strive every day to deliver this promise to our over 159,000 members (and growing!) across the globe. And we take pride in providing safe, relevant products and services to meet their financial needs. Our members deserve nothing less.

We continually invest in new technologies and enhancements to make our existing services easily accessible and secure. Over 75,000 members—nearly half of our membership—are Home Banking users. Over 43,000 members enjoy the convenience of mobile banking, a 19% increase over 2015. Our Mobile App continues to be popular, with over 36,000 users managing their accounts on the go— a 15% increase over 2015. Our App has a member rating of 4.5 out of 5, and we continue to receive positive feedback in the App Stores: "Easy to use." "Convenient." "Safe." "Simple." "Keeps getting better and better!"

Just as technology is important to our members, so is saving money. Tower not only helps you save through our low-cost products and services, we offer programs where you can earn cash back. Gold Mastercard holders enjoy a 1% rebate on all purchases, unlimited! Since 2014, Tower members have earned over $33 million in cash-back rebates. (By the way, another way to save big this month is to take advantage of Tower's best balance transfer offer ever!). Our Debit Rewards program is another easy way to save. Simply click on reward offers in Home Banking and shop with your Tower debit card. Just last year alone, Tower members earned over $100,000 in cash-back rewards. If you're looking to buy or sell a home, Tower's popular HomeAdvantage™ program can save you thousands at settlement. In 2016, Tower members earned nearly $260,000 in HomeAdvantage rebates! Or, perhaps you're in the market for a new car. Tower members receive an exclusive discount when using Tower's Car Buying Service. Last year, over 1,700 members used the service to buy a new vehicle, with an average savings of $3,279 off MSRP. For the second year in a row, Tower was awarded "Credit Union Partner of the Year" by TRUECar®.

While Tower exists for the benefit of our members, we also have deep roots in the community we serve. And we are giving back in a big way through the newly founded TowerCares Foundation. The Foundation supports children in need as well as brave and heroic individuals and their families who sacrificed while protecting our freedom. TowerCares is supported by generous in-kind donations, our all-volunteer board, Tower employee volunteers, donations from the local business community, and thousands of individual TowerCares donors that include Tower members and employees. In 2016, TowerCares granted over $60,000 to local charities, including Sarah’s House, Maryland Therapeutic Riding, The Boys and Girls Club of Annapolis & Anne Arundel County, Hospice of the Chesapeake, and more. TowerCares' website shows you how you can get involved.

And the giving continues—stop in to any Tower branch this month and for a $1 donation to TowerCares, we'll display a colorful heart with your name or the name of a loved one. Donations will help support children receiving treatment at the Johns Hopkins Children's Center in Baltimore, Md. and their families.

On behalf of Tower's volunteer Board of Directors, we thank you for your generosity, your membership, and the confidence you have placed in Tower to provide for your financial needs. We look forward to offering continued excellence in 2017—both through our existing products, services, and benefits, and through new ones we will be introducing as the year unfolds.

If you know family members or co-workers that are not yet Tower members, I invite you to share your experience with Tower with them, and to encourage them to join so they too can reap the savings and benefits of lifetime Tower membership.

Home Repairs That Require Immediate Attention

Every home develops problems over time. Repairing things that break is not such a big deal when it's something simple you can fix on your own, like a broken hinge or a leaky toilet. However, when your furnace stops working, or you notice a leak in the kitchen ceiling, it can be a VERY big deal. This is especially true if you haven't prepared for the cost of repair or replacement.

For major problems, you'll need professional help. Experts suggest having an emergency fund stocked with at least three to six months of expenses. When you need the funds, you can pull money from this account without disrupting your regular budget or spending plans. Other funding options include a home warranty, a home equity loan or line of credit.

These are some of the most costly repairs you should budget for, and how much they typically cost:

HVAC stands for heating, ventilation and air conditioning. If you don't properly maintain your furnace and air conditioning units, they could require expensive repairs or give out altogether. A gas furnace alone costs between $1,000 and $2,700 at Home Depot; but, as Home Advisor notes, you'll pay between $4,000 and $8,000 for a professional furnace installation.

To improve the efficiency and longevity of your HVAC system— plus improve air quality in your home—replace the air filter at least once every 90 days. You'll need to replace it more frequently if you have allergies or pets.

When your home's hot water heater bursts or stops working, it's usually a result of deteriorating structure of an aging tank. And changes in seasons are of particular concern with older tanks.

At big box stores, you can usually pay somewhere between $300 and $900 for a water heater plus up to $250 for installation. Expect to pay in the higher end of the price range for a complex or rush project. Tankless models offer improved performance, but are much more expensive, as well. Whichever type of water heater you use, be proactive and replace your heater no later than at the age of ten years.

Foundation repairs run the gamut from simple DIY fixes to major reconstruction. Water is the enemy. It seeps through concrete, settles in basements, and puts pressure on your foundation walls—creating mayhem for the rest of the house. The cost of repairs can start at $10,000 and go as high as $40,000.

The best way to avoid woes is to keep water far away from the foundation. Check to make sure all gutters and downspouts are in good working order, and that the soil around your foundation is properly graded—it should slope at least six inches for every 10 horizontal feet.

Just like with foundations, water leaks and moisture can create havoc with your home's roof. In addition, improperly or damaged flashing, ponding water, damage from small animals and birds, and penetrations caused by wind or hail can cause damage.

Replacing the entire roof could run between $3,000 and $12,000, plus the cost of removing old roofing materials and fixing any damage to the interior of the home.

Maintenance includes careful review of your roof at least twice a year, perhaps while you're up there cleaning your gutters. Look for missing or buckling shingles, tears and indentations. Also pay close attention to the flashing around the chimney and exhaust vents. Small repairs will help your roof last—most experts agree that a typical roof will last between 20 and 25 years.

Siding is designed to be durable and last a long time; however, there are occasions where you will need to replace it. Damaged wood, aluminum or vinyl siding can lead to rot, insect invasions and interior problems. Spot repairs to individual panels of siding usually won't cost more than a couple of hundred dollars, but a full replacement can run on average $10,000.

Painting a home, on the other hand, is typically cheaper but needs to be done more often. To pay for exterior painting of a home, HomeAdvisor lists a national average of $2,644.

To protect yourself, do a thorough walk-around of your house every six months, looking for cracks or holes in the siding/and or significant peeling or flaking to the paint job, plus missing or damaged sealing around windows and doors. Perform touch up work by caulking the unsealed areas. For the siding, use color-matched vinyl siding caulk.

Resources: HomeAdvisor, Inc., HowStuffWorks, The

Mistakes to Avoid During IRA and 401(K) Rollovers

If you have a retirement plan from a previous job or an individual retirement account, there are ways to move the funds without getting penalized by the Internal Revenue Service. These transfers, or "rollovers," can be directed through a plan administrator or financial institution, but you can also make the switch too. If you do it yourself, be careful to avoid any of the following mistakes that can lead to tax penalties.

Missing the 60-day cutoff
If distributions from a retirement fund are paid directly to you, the Internal Revenue Service gives you 60 days to deposit the money from one plan or individual retirement account, or IRA, into a new retirement account. If administrator errors, emergencies or other qualified delays arise, you may be eligible to receive an extension from the IRS.

In the event that you miss the 60 days without an extension, any pretax money in your account now becomes part of your taxable income for that year. If you're under 59½ years old, you also might pay an early-withdrawal penalty of 10% on that money.

Not waiting a year to do another IRA rollover
In most cases, the IRS limits you to only one rollover involving the same IRA in a year. So if you have two traditional IRAs (or two Roth IRAs) and roll over money from one to another, you can't do another rollover using either IRA for a year, whether to or from either one. The consequences of doing a second IRA rollover too soon can include paying the early withdrawal penalty and adding the previously untaxed IRA funds onto your year's taxable income.

However, this one-year rule doesn't apply in the following cases:

  • A rollover from an employer-sponsored plan, such as a 401(k), to another, which a plan administrator can make on your behalf.
  • A rollover from such a plan to an IRA.
  • A rollover from a traditional IRA to a Roth IRA, which is also called a conversion.
  • A trustee, such as a financial institution, makes a transfer from one IRA to another on your behalf.
  • A trustee transfers money from your IRA to a plan.

For a display of the acceptable rollovers from various retirement accounts, check out the IRS' chart.

Trying to roll over required minimum distributions
You can be compelled to start taking out required minimum distributions, or RMDs, from a traditional IRA, 401(k) or other fund once you turn 70½. Make sure to avoid rolling any of these funds over into another IRA as this wouldn't be an approved transfer. However, once you take out the RMD for a year, you may be able to roll over that money into another account without penalty. The sole exception to this is Roth IRAs, which don't have a RMD requirement until the owner's death.

Not transferring the same distribution to a new account during rollovers
The IRS' "same property" rule mandates that the retirement money you receive from a 401(k) administrator or IRA holder is the same money you roll over to a new account. If you repurpose any of it for another use, that amount is susceptible to tax penalties.

Some funds can also be withheld for taxes by a plan administrator or account manager before distributing the money to you. This withholding acts as a kind of insurance policy for the IRS, in case an IRA or 401(k) participant spends all of a distribution and doesn't pay taxes on the money. The amount withheld is 10% of distributions from IRAs and 20% from retirement plans, according to current IRS rules. So as you execute the rollover, it's up to you to make up that 10% or 20% from other sources to avoid tax penalties.

For example, if your "eligible rollover distribution" is $10,000 and an employer withholds $2,000 for taxes, it's up to you to make up that $2,000 when you roll over to a new account. If you don't, you'll pay taxes on that $2,000 and an early-withdrawal penalty, if applicable. You'd still report the $2,000 as taxes paid in either case and may be refunded if you end up owing less on that distribution.

As you make plans to roll over retirement funds to other accounts, make sure that you stay within the IRS guidelines. You don't want to end up with any extra costs from early withdrawals and penalties for money that you've built up for years for retirement.

Starting an IRA is a smart way to build a secure future. You can open an IRA at Tower, or, if you already established an IRA at another institution, you can transfer those funds to a Tower IRA.

There is no limit to transfers. If you have a qualified retirement plan, such as a 401(K), it may be rolled over into an IRA at Tower.

Tower's IRAs earn daily dividends that are compounded and credited monthly. Contributions may be tax deductible; check with a tax advisor.

© Copyright 2017 NerdWallet, Inc. All Rights Reserved

Protect Your Wallet—and Your Heart—From Online Dating Scams

In my day, parents were the ones worried about their kids meeting unsavory and unscrupulous people at parties or bars. Now, it's often our kids who are worried about the same thing for us—but not at the bar, at online dating sites. Every year, millions of Americans visit dating websites hoping to find a connection...companionship...possibly even a soulmate. Because of Valentine's Day, February can be a particularly lonely month if you don't have a significant other.

Don't be a victim
While many people on these sites are normal folks looking for love or friendship (well, as "normal" as any of us are anyway!), cybercriminals lurk as well, trolling dating sites and looking to line their pockets with money bilked from the vulnerable. An elderly Canadian woman was recently scammed out of $100,000 by a man she met online following the death of her husband. The man claimed to be a civil engineer working in China, and wooed the woman—who had never actually met him face-to-face—into sending hundreds of thousands of dollars to support his various work "projects." She even sent money so he could fly back to the states and propose to her; of course, he took the money and never showed.

Stories like this are all too common. While the FBI reports the most common targets of dating scams are women over 40 who are divorced, widowed, and/or disabled, every age group, gender and demographic is at risk. Scammers usually claim to be Americans working abroad or serving overseas in the military.

How it works
You're contacted on the dating site by someone who shows interest in you, probably throwing a couple of "likes" or "winks" your way. For weeks, even months, you chat back and forth with one another, over time forming a seemingly romantic connection. You may even receive flowers or other gifts to gain your trust. And then it happens—your newfound "love interest" asks you for money, usually by wire transfer or access to a credit card. Once you send the money, either he or she keeps asking for more—for increasingly strange reasons such as being in jail or needing emergency surgery—or disappears altogether and moves on to their next victim.

Red flags to look out for
The FBI and Consumer Affairs warn to watch out for these dating site flags that are redder than the biggest Valentine heart.

Sending you pictures that look like a supermodel. Be wary of pictures that look like a glossy from a modeling agency or glamour magazine. Another sign of a scammer is profuse professions of instant feelings of love, despite only having just started communicating with each other.

Displaying wealth, like mansions and exotic cars. By creating an illusion of their own wealth, they can more easily convince you that you're simply "loaning" money to them that, for some bizarre reason, they can't immediately access. The photos are usually fake or stolen from someone else.

Poor grammar. Messages from scammers are often riddled with poor grammar, broken English, odd word choices and strange sentence structure.

Avoiding meeting in person. Many scammers are operating out of foreign countries, despite profiles saying they live nearby. Their photographs are also likely of someone else, and that would be a tough sell in person. When you propose a face-to-face meeting, he or she will come up with some excuse like they're traveling overseas or facing some long-distance emergency.

Asking to leave the site quickly. Moving offsite before launching a scam reduces the chance that the crook will be discovered or reported. He or she will quickly ask you to switch to communicate outside the dating site, either by text or e-mail. Maybe this should be last on the list?

Keep your wallet shut
Do not send money through any wire transfer service or give your credit card or bank account information to someone you met online, regardless of why they ask for it. Scammers come up with any number of bogus excuses for needing money, including medical emergencies, hospital bills for a sick child, passports or airplane tickets (to come see you of course!), losses from a financial setback, or bail money. Once you send the money, the chances of recovering it or ever meeting the person are slim.

What to do if you're a victim
If you believe you fell prey to an online dating scam, the FBI recommends that you report it to the dating site and also file a report to the FBI Internet Crime Complaint Center. While you will still be out the money, reporting the scam may help others from becoming the scammer's next hapless victim.

References: FBI, CBS News, Consumer Affairs

You Could Win $1,000 for College!

Need extra funds to help cover college tuition? Here's an opportunity to win a college scholarship from the Credit Union Foundation of Maryland and D.C. All college-bound Maryland and D.C. credit union members are eligible to apply.

The foundation will award $12,000 in scholarships—10 essay scholarships, one video-based scholarship and one photo-based scholarship. Increase your chance of being a winner by applying in all three categories. The deadline for entries is March 31, 2017.


College Board Find scholarships, other financial aid—also has test prep, articles and college search tools.

Peterson's Over 1.5 million scholarships, grants, fellowships, prizes and forgiveable loans. A powerful search engine for finding undergraduate scholarships along with career profiles for many fields of study.

Unigo Along with scholarships, the site lists jobs, internships, college profiles and rankings, articles and a textbook store. Contains an online database of scholarships, grants and fun contests for undergraduates.

ScholarshipAmerica Offers college guidance, tips, videos and a free, downloadable Scholarship Coach eBook.

Scholarship Search by Sallie Mae® Search more than five million college scholarships worth up to $24 billion on this site hosted by Sallie Mae, a leading provider of student loans.

Serve on Tower's Volunteer Board of Directors

Have you ever thought about serving on Tower's Volunteer Board of Directors? If so, here's what you need to do to have your name placed on the ballot.

Any member wishing to place his or her name on the ballot may do so by submitting a petition to the Secretary of the Board of Directors. Only members who hold a valid security clearance from Tower's original sponsoring organization at the time the petition is submitted are eligible to be placed on the ballot. A notarized letter signed by the petitioner, which includes a statement that he or she currently holds the required security clearance and the latest indoctrination date thereof, must accompany each petition.

The petition must be signed by at least 500 Tower members who are not prohibited by law from participating in the conduct of the affairs of Tower and must include all of the following information for each member signing the petition:

  • His or her printed name as shown in Tower's account records;
  • His or her address as shown in Tower's account records; and
  • His or her phone number as shown in Tower's account records.

A signature on the petition will be valid only if it matches the signature in Tower's possession for purposes of account transactions. A member may sign the petition once.

Petitions must be postmarked by March 1, 2017, and sent by certified mail to:

Tower Federal Credit Union
Secretary, Board of Directors
P.O. Box 123
Annapolis Junction, MD 20701-0123

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