Tuesday, July 19, 2011

Edition #620

Today's Highlights:

Weekly Spotlight:

Real estate values are finally starting to stabilize. Use our free Home Value Estimator to learn the value of your property or any other in which you hold interest. Find a link on our home page.

Our Current Rates:

For a listing of our current deposit and loan rates, click here.

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1st Flash

Teens and Their Money

The old adage goes "A fool and his money are soon parted."

Teens are not fools. A good number of them simply haven't been taught basic money management skills, rendering them to that same fate.

Sharing your financial situation with the kids goes against the grain for most parents. Children grow up too quickly as it is, they should be permitted the innocence of fiscal ignorance as long as they can is common thinking.

Yet they do grow up quickly. And that's exactly why they need to understand financial management. It's already too late if you wait until they're leaving for college.

A recent survey found the largest concern students have is debt. Those that understood how to save, live within a budget, plan for the future and had a grasp of financial issues came out ahead. Those that stressed over student debt and didn't know financial basics found themselves buried under that debt.

It's never too early to teach your kids about money management. Even the youngest can learn to divide their money between saving, spending and charity. They quickly learn what can be gained by choosing their expenditures wisely. The GCKids section of our website offers valuable resources for your child's financial education.

If you've spared them from fiscal reality while they were young, their education should begin no later than their teen years. According to the U.S. Department of Agriculture, the care and feeding of the average 15-year-old runs $13,530 per year. There's no better time for them to learn how to budget.

Tell your kids to write down all of their expenses for a full week. Then sit down with them and tally it up. It may surprise them to realize how much they actually spend on snacks, music downloads or video games.

Make a list of which items you'll pay for and which will be their responsibility. Share your family budget with them. It will teach them how to plan for necessities and how little is really left for luxuries. They'll start thinking twice before downloading every new app someone else is running.

Whether or not you give your teen an allowance depends on your own budget. But if you can, it will give them the opportunity to make their own financial decisions. They can supplement their income with an after school or summer job.

Teach your teen to bargain hunt. Price comparison websites and online coupons will help them stretch their money further. Buy clothing when it's on sale. Join loyalty programs at Gap, Old Navy or other retailers that sell that latest must-have fad. They won't succumb to peer pressure as easily when it's their own money they're spending.

Using debit and credit cards wisely is an important part of your teen's financial education. Open a checking account funded for purchases you've agreed on, and let them use a debit card. Opt out of automatic overdraft protection so they can only spend what they have.

Once they prove responsible, make them an authorized user on your credit card. But make sure they understand the consequences of abuse. It's your credit rating and financial liability at risk.

Avoid prepaid cards with outrageous fees and rates. These cards aren't protected by the 2009 federal credit card act so they're fair game for predatory billing procedures.

It may seem challenging to instill these values into your children. Yet they're lessons that will last a lifetime. Nothing can be more fulfilling that watching your child mature into a responsible adult.

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2nd Flash

End of an Era

Space Shuttle Atlantis undocked from the International Space Station this morning, leaving a void that will not be filled.

As a kid, we raced home from school in time to watch the Mercury module return to Earth. There was much suspense with this new endeavor. Would the spacecraft survive re-entry into our planet's atmosphere? Would its trajectory splash it down near the area where rescue ships were waiting? How did the astronauts fare the journey and will they easily readjust to Earth's gravity?

The Mercury program gave way to Apollo missions. More suspense, more excitement. President Kennedy's dream was fulfilled. Humans actually set foot on an extra terrestrial orb. Man had reached the moon.

Exploration stirs the spirit, the senses and creativity. As each phase of manned spaceflight drew to its natural closure, the next chapter captured the imagination of the American people.

Until now.

There is no next chapter. There is nothing to inspire younger generations to reach for the stars.

Studies began to develop the space shuttle program, officially named the Space Transportation System (STS), back in 1969. The goal was to make space travel less expensive. By 1972, the program was officially launched.

The shuttle was the first space vehicle to both orbit and land, and the only one reusable to make multiple flights.

It was designed to carry large payloads into various orbits, eventually transporting the components to build the International Space Station (ISS) and performing service missions. ISS was scheduled for completion by 2011, at which time our aging STS fleet would be retired.

Columbia was the first fully functional orbiter, launched on April 12, 1981. Two astronauts, John Young and Robert Crippen, took this inaugural test flight to verify the craft's ability to launch, orbit and safely return the crew. The mission lasted two full days, returning to Earth on April 14th.

We were glued to the television in April 1970 as a ruptured oxygen tank forced Apollo 13 to abort its planned lunar landing. Astronauts James Lovell, Jack Swigert and Fred Haise raced against the clock for their very survival. The spacecraft's electrical system was severely damaged in the explosion, crippling the main service module. Through the ingenuity of the crew, the Lunar Module was converted to a lifeboat that safely delivered them back to Earth.

President George W. Bush had outlined plans for the post-shuttle era. The Orion spacecraft, developed by Lockheed Martin, was to be part of the Constellation Program. The goals were to gain experience operating away from Earth's environment, develop deep space technologies and conduct fundamental science. The craft was to be tested by 2014 and ready for orbit by 2016. Space on Russian vehicles to reach ISS would have been rented until that time.

But on February 1, 2010, President Barack Obama scrapped the program in favor of commercial companies developing low orbit space transport needs.

Where does that leave us? The U.S. is still dedicated to the ISS. It will remain fully staffed with a crew of six who will continue to conduct scientific research in the national laboratory. Refueling of spacecraft, advanced life support systems and human/robotic interfaces will be the focus of their efforts.

NASA is researching ways to design and build safer, more fuel-efficient and environmentally friendly aircraft. New technologies are in the works to develop the Next Generation Air Transportation System.

According to NASA Administrator Charles Bolden, new goals for the agency include putting a man on Mars, deploying a vehicle to an asteroid, returning to the moon and venturing deeper into space.

Our space program is looking ahead to new frontiers. But until there is something functional to inspire new generations and capture the public's imagination, we will mourn the end of this golden era.

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Financial News

Most states in our nation have a sales tax. In fact, there are only five states that don't have sales tax: Alaska, Delaware, New Hampshire, Montana, and Oregon. (Alaska and Montana have a surtax.) Sales tax is added to the purchase price paid by the consumer. Use tax is paid directly by the wholesaler (or consumer) to the state on merchandise purchased. In a revenue starved environment, these tax ranges from 1 percent to 10 percent.

Currently, Amazon.com is in a battle with several states about whether it has to collect sales taxes from customers. States have been fighting back. A Supreme Court decision in 1992 found that a retailer does not have to collect sales tax if they do not have a physical operation in the state. With the growth of Internet sales, states are losing a lot of potential sales tax. California, traditionally an aggressive tax collection state, is taking Amazon on with a new law requiring sales tax collection. The additional cost could impact the competiveness of Internet companies. Meanwhile, retailers with storefronts in the state hale this tax as only fair, leveling the competition.

This story hasn't played out yet. And expect that where one state wins, they will all follow! There may be an added cost to our online purchases where sales tax is not currently charged.

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