250 Words or Less

Tax Change Due to New Health Care Law

2010-05-06T11:17:00.002-05:00

For all businesses, including ALS' member libraries - there is a provision in the new Health Care Law that has nothing to do with health care - a requirement that companies issue 1099 forms at year end to ANY individual or corporation from which they purchase more than $600 worth of goods or services. Typically these 1099 forms were only required to be issued to individuals for costs other than wages or salaries. For many libraries, this would apply to independent contractors.

This would mean that your library would be required to issue a 1099 for anyone you paid $600 or more - for utilities, books, furniture, etc.

The rationale for this is explained in a CNNMoney.com article that can be found here, which states "the final impact of the law won't be known until the IRS issues its regulations on the new law, which aren't expected to arrive until sometime next year. The IRS has not yet commented on when it will release regulations or schedule public hearings, and an agency spokesman was unsure when it will do so. The new requirements kick in January 1, 2012."

So - we have some time to get prepared - or get your bookkeepers, board treasurers, or accountants ready.

Money Smart Week - Illinois

2010-04-15T09:13:00.003-05:00

April 17-24 has been designated as "Money Smart Week - Illinois"

In the Peoria area, there are events going on through out that time period at various locations, including events hosted at the Alpha Park Library (Bartonville), Morton Public Library, Peoria Public Library - Lakeview Branch, and the Pekin Public Library.

In the Bloomington-Normal area, there are events being hosted by the Bloomington Public Library and the Normal Public Library.

If your library is hosting an event, please post a comment here so everyone can see it, too!

For more information about topics, dates and times, click here, then select your region and hit "search".

Credit Reports Revisited

2010-03-23T09:28:00.003-05:00

Back in 2008, I entered a two-post series on credit & credit reports. As a refresher, here is a link to an article on "How to Read Your Credit Report" that discusses and the four main parts of a credit report.

Remember, each of the three major credit reporting agencies: Equifax, Experian and TransUnion are required to provide one free copy of your credit report to you - EVERY YEAR. But, you must request it from them - they are not required to send it to you automatically.

Tax Breaks for Parents

2010-03-10T09:47:00.002-06:00

If you're a parent, check out this blog posting from a New York Times writer - it is a good summary of many different provisions in the tax law that provide tax credits, exemptions or deductions for activities related to children.

See the blog here.

Individual Income Tax Return Deadlines

2010-03-03T09:59:00.003-06:00

The federal income tax filing deadline for individuals is April 15, 2010.

According to the Internal Revenue Service, for the tax year 2006, there were 1.4 million people who did not file tax returns for the year 2006, the estimate is that this number represents $1.3 billion in refunds.

See this article for more details.

"In cases where a return was not filed, the law provides most taxpayers with a three-year window of opportunity for claiming a refund. If no return is filed to claim the refund within three years, the money becomes the property of the U. S. Treasury."

The three year deadline for unfiled 2006 returns is April 15 2010.

So, if you didn't file a return for 2006 and might be due a refund, time is running out.

America Saves Week

2010-02-23T13:14:00.005-06:00

Did you know it's America Saves Week? Visit http://www.americasaves.org/ All over America, people just like you are proving that you don't have to be rich to build wealth. People are paying off their debts, and saving to reach their financial goals. America Saves can help with tips and tools to help you set goals, develop strategies to reach those goals, and to start saving.

How Healthy Are Your Finances?

2010-01-29T11:21:00.003-06:00

Have you ever wondered if what you're spending and saving is in the proposed range? I ran across this neat little calculator/tool at CNNMoney.com.

You simply step through and answer the various questions on different topics, including:

Housing payment
Debt
Emergency Savings
Diversification
Company Stock
Life Insurance
Retirement Savings

As you answer each question, the site will tell you whether you're doing well or need improvement, and if you need improvement, there are tips on what the suggested levels of spending or saving should be for that topic. In addition to learning how well (or not) you are doing, this is also a good exercise to learn more about overall savings and investments.

Charitable Giving Through Texting

2010-01-22T11:48:00.002-06:00

With the recent earthquakes in Haiti, a new form of making donations has come to the forefront - donations via cell-phone texting.

For those of you that itemize your deductions and claim charitable giving as one of your deductions, be aware that the IRS still requires you to keep documentation of your contributions.

Here is a link to an article titled "The Trouble With Texting Donations" from Smart Money that looks at this issue.

Simplify & Make Money

2010-01-13T11:55:00.002-06:00

Do you have things (books, DVD's, appliances, etc.) lying around the house that you don't want/use/need anymore? Want to get rid of that stuff and get some extra money?

Here's a link to an article that talks about combining two typical new year's resolutions into one!

Credit Unions vs. Banks

2009-12-30T10:34:00.001-06:00

It has been quite a while since my last post. A lot of things have been going on both at the Alliance Library System and at home.

Now that both areas are settling down again, I am going to try posting new content again!

Here is a link to an article discussing the pros and cons of using a credit union vs. using a bank.

Campaign to Save Illinois Libraries

2009-09-17T15:23:00.001-05:00

Join the Campaign to Save Illinois Libraries

In response to the recent cuts to system funding and library grants, the Illinois library community is launching a campaign to secure the future of Illinois libraries. You can keep up with the campaign and find out what you can do to help by visiting us on Facebook or Twitter, or by going toSaveIllinoisLibraries.com. The campaign is just beginning: be sure to check back regularly for updates!

Incentives to Save for Retirement

2009-09-15T09:17:00.004-05:00

IRS announces increased tax incentives for retirement savings
The Internal Revenue Service has issued guidance as part of an initiative to increase taxpayers' retirement savings. The changes include making it easier for 401(k) plans to allow automatic enrollment, giving taxpayers a box to check on Form 1040 to buy savings bonds with their tax refunds, and permitting workers to contribute cash payments for unused vacation time to their 401(k) plans.

See the full article here: JournalofAccountancy.com(9/8)

Budget Cutting - Follow Up

2009-08-25T14:30:00.002-05:00

On July 24, I posted about a survey that my boss, Kitty Pope - the Executive Director here at the Alliance Library System, was running, looking at the various ways that libraries were looking to cut budgets to meet funding shortfalls.

The results are in - here's a link to the article that Kitty wrote summarizing the survey answers.

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You may have noticed that I haven't posted for a couple of weeks, with my last post being August 11. Well, August 12 was the day that the Illinois State Library notified us of our funding level for the current year. Needless to say, I've been busy working with the other department directors here at ALS in going through our previously approved budget with a fine tooth comb.

Since our board has not yet met to discuss the recommended cuts, I'm not going to share those here. What I can share, however, are some general thoughts as you go through a budget process - whether you're crafting an annual budget or you're digging around trying to revise a budget due to funding cutbacks:

Understand your funding sources. The more diverse they are, the less chance there is that any one cut or reduction will have a major impact.
Understand the requirements, if any, that your funding sources place on you. If you're restricted by a donor or grantor to using their money to purchase books, then make sure that's how you budget and spend those dollars.
Understand your mission and your "customer" - often times, budgets or programs carry on year after year with no realization that the budget item or program no longer meets the organization's mission or meets your customers' needs.

In other words, make sure your budget covers all of the "have to do" items before you start considering the "want to do" items!

For example, when going through our budget the past couple of weeks, we had three criteria from the Illinois State Library (for specific programs) and placed an additional criteria on ourselves (to try and make sure any cuts we made had little or no direct impact on our members).

Budgeting is not a science, it is not an art. It is a combination of the two. With good planning, documentation and good understanding by your boards, you should be able to come up with a budget that meets the needs of your customers while remaining within the guidelines of your funding sources and your organization's mission.

Property Tax Cycle for Public Libraries in Illinois

2009-08-11T12:41:00.002-05:00

The Consulting & Continuing Education Group here at the Alliance Library System has developed different tables and charts to help explain the various tax funds and the budget and property tax cycles that public libraries in Illinois face.

All of the downloadble tools created by the C&CE group can be found here.

For a list of ten different funds, the expenses you're allowed to spend from each, and the legal citation allowing these funds, click here.

For a list of seven property taxes which can be used to support the regular and ongoing financial needs of a public library, click here.

For a chart showing the steps in a public library's budget cycle, click here.

From personal experience, the budget cycle, funds and property taxes have been the most challenging and complex ideas to grasp as a trustee of a public library. At our last meeting, our library director handed out copies of the budget cycle chart and walked us through the process.

If you have questions on these processes, please contact a Library Development Consultant here at ALS. Contact information can be found here.

Being Prepared

2009-07-31T11:02:00.004-05:00

Apologies in advance for the long post!

A few days ago, I was doing the dishes after dinner. Outside, there was a heavy downpour, but according to the weather radar, nothing bad was around - a little bit of lightning and thunder off in the distance. Then, bright lightning and the thunder at the same time - it hit near the house. I stood there and waited for the inevitable power failure, but the power stayed on. I thought, "Wow, that's a relief." Then I realized...

The phones were dead and the ADSL that we get through the phone lines was down. We lost the telephone, the ADSL modem and the wireless network router, all through a surge that came in through the phone line. Amazingly everything else electrical in the house survived. I thought I was prepared - everything was plugged into surge protectors. I guess I wasn't prepared for the surge to come through the phone lines. Well, now I am - prepared with a surge protector that also has an input and output for the phone and ADSL lines.

Today, our well pump started dying. Apparently the well pump motor got a surge as well - it just took a few days to show up. It won't be until Monday when I find out the damage (physical and financial). If the cost is large enough, I'll turn it into insurance for reimbursement.

The lesson... you need to be prepared for emergencies. Aside from having homeowners (or renter's) insurance, you should set aside money for these types of issues. This can be called different things....reserves, a rainy day fund, an emergency fund. Financial planners all agree that you should set money aside ahead of time, but opinions differ as to how much. I've heard anywhere from three to twelve months of living expenses should be in this emergency fund.

Having an emergency fund can help you cope with unexpected situations without using credit cards or going into debt. Having an emergency fund can help you cope for a while if you lose your job. Having an emergency fund can help you pay the deductible on the insurance for major repairs or replacements. Having the insurance in place will limit your losses to whatever deductible you have.

We all know that we should have insurance and have funds set aside for emergencies - now is a good time to check to see that you have the right amounts! Be prepared.

Budget Cutting

2009-07-24T10:15:00.001-05:00

My boss here at the Alliance Library System, Kitty Pope, is doing some research on whether libraries are adjusting their budgets or cutting spending in these difficult economic times. If your library has cut, is considering cutting, or will be cutting or adjusting its budget, please help out in this research.

She has set up a short, ten question survey to help her gather data. The survey can be found here.

I'll post more when we have the results tabulated.

Thanks!

The Risk Spectrum

2009-07-21T09:43:00.002-05:00

Back to risk. For previous posts on risk, click here.

As I mentioned in previous posts, you can take on lower risk, but also at mainly lower rewards or returns. An newsletter from the Lord Abbett mutual funds broke risk down into various categories. Low risk/reward investments are considered "crawling", investments with a little more risk are considered "walking", and investments with even more risk are considered "running".

Here are some examples:

Crawling

Tax exempt bond funds that invest in short-to-mid-range maturity municipal debt.
Short-term corporate bonds.

Walking

Intermediate-range corporate bonds.
High-yield corporate debt.
Convertible securities.

Running

Equities (stocks).

Within this last category, the risk spectrum can be defined further from lower to higher by looking at large and well-established stocks, then mid cap value stocks, then small cap stocks.

As always, each person's definition of risk will differ, as well as how much risk each person is willing to endure will differ. Seek the help of a financial advisor or professional to learn more.

Setting Your IMRF Employer Rate for FY2010

2009-07-16T07:14:00.002-05:00

In General Memo 587, IMRF announced the optional phase-in rate program for the 2010 employer rates. Each employer also received a preliminary rate notice via the Employer Access Document archive.

It is very important that every employer review this preliminary rate notice and share this information with the appropriate staff.

Employers have until August 31, 2009, to select their 2010 contribution rate. If IMRF does not hear from an employer by August 31, 2009, we will assume the employer has chosen the optional phase-in rate.

For all previous posts discussing the different rates that are available to you, click here.

Coping With Budget Shortfalls

2009-07-10T07:46:00.003-05:00

This information comes from a LibraryJournal.com article by Susan Carol Curzon from last April, titled "Survivor: The Library Edition - Director-to-director guidance on how to cope with more budget shortfalls"

Tips to remember in these tough times:

Never stop outreaching
Talk to the users
Scan the environment
Counter the myths
Watch out for space hunters
Recognize the different emotions
Answer the question
Run a tight ship
Focus on planning
Keep looking at the dollars
Level the playing field
Ask the tough questions
Keep your spirits up

There's no way I could give adequate explanation for each of these in this post, so here's a link to the full article.

Mutual Funds

2009-07-07T09:17:00.003-05:00

My last two posts covered the concept of risk and the concept of diversification to mitigate risk while investing. If you are not (or don't want to be) an active investor that needs to watch many different investments in a diversified portfolio, one way you can still achieve some diversification is through investing in mutual funds.

The U.S. Securities and Exchange Commission (SEC) defines a mutual fund as "a company that brings together money from many people and invests it in stocks, bonds or other assets. The combined holdings of stocks, bonds or other assets the fund owns are known as its portfolio. Each investor in the fund owns shares, which represent a part of these holding."

Mutual funds will each have an investment philosophy, such as large cap stocks, corporate bonds, etc. Beyond that, however, it will diversify within that investment class. So, buying into a mutual fund should get you diversification within that mutual fund's investment class(es). Buying into mutual funds that have different investment philosophies will get you even greater diversification.

However, there are many mutual funds and a lot of different terms and ideas to understand before you invest. Here are two resources to help do the research:

The SEC's introduction to mutual funds can be found here.
Motley Fool has a glossary which they tout as "mutual fundese translated for the masses" which can be found here.

Managing Risk

2009-06-30T07:27:00.002-05:00

My last post introduced some of the different types of risk you face while investing. A question to ask is, "Why take the risk?" The answer is Reward. In general, the more risk you're willing to take on, the higher your potential returns (but also the bigger your potential losses). For example, a savings account at an FDIC insured bank has low risk, but also low rewards (in the form of low interest rates).

In investing, the goal is to maximize your returns without taking on more risk than you can bear. The best way to reduce risk is to follow the old adage, "Don't put all your eggs in one basket!" The key to reducing risk in investing is diversification.

You can diversify mainly in two ways:

Diversify Investment Types: Spread your investments out among different asset classes, such as stocks, bonds, real estate, commodities, etc.
Diversify Within Asset Classes: Diversify stocks by holding different sectors, such as technologies, consumer goods, transportation, etc. Diversify bonds by holding corporate bonds, US government bonds, municipal bonds, high yield bonds, junk bonds. Diversify in real estate by holding residential, commercial or industrial investments, etc.

The best way to come up with a plan to have a diverse portfolio that meets your risk tolerance is to work with an investing professional.

What is Risk?

2009-06-26T12:00:00.004-05:00

The Random House dictionary defines risk as "exposure to the chance of injury or loss."

When considering investments, risk is the chance that your investment will provide lower returns than expected. Here are some of the different types of risk to consider when choosing investments:

Market Risk: when an investment loses because of overall declines in the market - for example, your house may be well kept and even improved, but its market value may have declined during the recent recession
Inflation Risk: when prices in the economy rise as a whole, decreasing the worth of investment income
Default Risk: when an entity issuing a debt investment (i.e. a bond) is unable to pay as promised
Liquidity Risk: what value could you lose during the time you try to sell an investment? Common stock of a Fortune 500 company has low liquidity risk, since a sale order could typically be executed instantaneously. A 17th century vase may take longer to sell, and if you need the proceeds immediately, you might need to settle for a lower offer.
Political Risk: when changes in governments or politics adversely affect markets or investments you hold
Exchange Risk: when you hold foreign investments, changes in foreign currency valuations can adversely affect your investments.

One of the keys to successful investing is to understand the various risks you face, and to take steps or choose investments that help mitigate those risks.

Tax Credits for Making Your Home Energy Efficient

2009-06-17T09:06:00.005-05:00

Courtesy of 360 Degrees of Financial Literacy from the American Institute of Certified Public Accountants.

The American Recovery and Reinvestment Act of 2009, better known as the Stimulus Bill, has provisions that provide tax credits for making your homes more energy efficient.

For 2009 and 2010, you can receive a tax credit of 30% of the cost of the following items in your principal residence:

New windows
New doors
Insulation
Roofing
HVAC
Non-solar water heaters
Biomass stoves

There are also provisions for tax credits on installation of larger items, such as geothermal heat pumps, solar panels, etc. For a more detailed explanation and to see the full article from 360 Degrees of Financial Literacy, click here.

Credit Card Reform

2009-06-15T09:24:00.003-05:00

Compliments of smartmoney.com.

Last month, the Credit Card Accountability, Responsibility and Disclosure (CARD) ACT was signed into law. According to administration officials, CARD will "give consumers greater protections and a fairer deal when they choose to use credit cards."

The CARD Act:

Restricts retroactive rate increases
Provides more advance notice of rate hikes
Increases time to pay bills
Applies payments to highest rate balances first
Eliminates universal default
Requires an opt-in for over-limit fees
Restricts college credit

For more details on each of these provisions and to see the full article on smartmoney.com, click here.

Five Everyday Items You Don't Need

2009-06-11T10:17:00.004-05:00

Courtesy of Yahoo! Personal Finance and TheStreet.com, here are five things you can cut back on or possibly eliminate from your daily life to save money.

Bottled beverages
Food
Diet products
Vitamins
Cosmetics and toiletries

Here's a link to the article for their reasons and explanations.

Payroll Income Tax Withholdings

2009-06-04T11:25:00.004-05:00

This topic courtesy of a question asked by an ALS member library...

As employers, there are many different federal, state, and sometimes local laws, rules, and procedures that we must follow when we hire and pay employees.

One of the requirements, withholding of federal income taxes, was recently changed under the American Recovery and Reinvestment Act of 2009, commonly known as the Economic Stimulus Bill. The change, known as the "Making Work Pay" provision, adjusted withholding tables so that the effect was that workers would have an average of $10 per week less of federal income tax withholding which, in theory, would lead to higher take home pay and hopefully more spending - thus stimulating the economy.

For my earlier post on the Economic Stimulus Bill, click here.

If you use a third-party service to process your payroll, they should already have made the changes for the "Making Work Pay" provision effective with payrolls in May 2009.

If you use software to process your payroll, you want to make sure your software vendor has provided you with the most up-to-date tables to ensure the "Making Work Pay" provision goes into effect.

If you calculate payroll manually, you can find the updated instructions and withholding tables in Publication 15-T at the IRS website.

Remember, if you have a specific topic you want addressed - just send me a note!

Important Upcoming Dates for Public Library Districts

2009-05-20T05:30:00.007-05:00

Apologies in advance - I'm breaking the 250 word limit for this important topic.

Over the next few months, from a financial standpoint, there are quite a few important dates and deadlines for public library districts to consider:

June 30: Last day to adopt the Prevailing Wage Ordinance, a certified copy of which must be filed with the Office of the Secretary of State and Department of Labor and published in the local newspaper. (820 ILCS 130/9)

July 1: Schedule of regular Library Board of Trustees' meeting dates including the time and location, must be prepared and made available to the public. This information, however, may be presented at the beginning of the calendar year instead of the beginning of the fiscal year. (At least 5 meetings must be held.) (5 ILCS 120/2.03 and 75 ILCS 16/30-50)

August 23: Last day (30 days before adoption of ordinance and hearing thereon) to make the tentative budget and appropriation ordinance available for public inspection and publish notice for hearing thereon. (50 ILCS 330/3 and 75 ILCS 16/30-85)

August 30: Last day (within 60 days from July 1) for treasurers to file a sworn, detailed and itemized statement of all receipts and expenditures of any character for the preceding six months and showing the names, addresses, positions and salaries of every employee. [The statement shall be furnished for reference on request to all daily newspapers, the library, the Circuit Court Clerk and City, Village or Town Clerk.] (50 ILCS 305/1) AND Last day for library to authorize payment of obligation incurred in prior fiscal year with funds from that year in amounts up to 20 percent of those appropriations. (75 ILCS 16/30-90).

September 1: Last day to prepare and file written report including Secretary's audit, boundary changes, outstanding liabilities and bonds, etc. to State Librarian. (75 ILCS 16/30-65)

September 22: Last day (no later than the fourth Tuesday of September) for board to enact a budget and appropriation ordinance which shall be published once thereafter. (75 ILCS 16/30-85)

September 28: Last day (90 days after end of fiscal year) for audit of the records kept by Board's secretary to be filed. (75 ILCS 16/30-65)

September 30: Last day to pay obligation incurred in prior fiscal year with funds from that year in amounts up to 20 percent of those appropriations. (75 ILCS 16/30-90) AND Last day to transfer unexpended funds from prior fiscal year to Special Reserve Fund. (75 ILCS 16/30-90 and 16/40-50)

There are similar categories, but many different dates for Municipal and Township Libraries. These can be found in the Library Days and Dates to Remember Calendar at the Alliance Library System website.

Make sure that you have your ordinances reviewed by your library's attorney prior to finalization and publication.

Eating Better For Less

2009-05-18T14:07:00.005-05:00

This comes courtesy of Feedthepig.org - a personal finance/savings website created by the American institute of Certified Public Accountants.

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With food prices still on the rise, it's not only important to be frugal when you shop, but also to consider the types of foods you buy. With the right ingredients, affordable and healthy meals are just around the corner. Here are some tips:

Eggs and beans are inexpensive and versatile ingredients. Look for recipes in your cookbooks or on the internet.
When food runs out, it’s tempting to order out or reach for ready-made meals. Planning your grocery list ahead of time makes it easier to buy in bulk and repurpose ingredients. The more you can cook from scratch, the further your dollar can stretch.
Consumers often pay an additional “convenience expense” when purchasing certain foods. Grate your own cheese, make pizza dough from scratch or buy a fresh head of lettuce instead of bagged lettuce. Be creative with these ideas and you’ll reap the rewards in savings.
Make use of the leftovers in your fridge. Web sites like Allrecipes.com let you search for dishes based on ingredients you have at home. Also, certain dishes, such as lasagna, chili and soups, are easily made in large quantities that can be frozen or eaten throughout the week.

Visit www.FeedthePig.org for more money-saving tips.

Link: The Simple Dollar

2009-05-14T14:35:00.005-05:00

I ran across another blog that contains a lot of great ideas in personal finance. The blog is known as "The Simple Dollar" and according to its author, "is a blog for those of us who need both cents and sense: people fighting debt and bad spending habits while building a financially secure future and still affording a latte or two." The blog can be found here.

One of the things that attracted me to this site was a post titled, "Everything You Ever Really Needed to Know About Personal Finance on the back of Five Business Cards." This post contains a lot of simple, straightforward, common sense ideas, quite a few of which I've blogged about already or covered in my Retirement Seminars series that we presented last year.

There's even a free e-book that explains the "Five Business Cards" theme in greater detail.

Personal Finance Information

2009-05-12T08:41:00.003-05:00

I ran across a website called carnivalofpersonalfinance.com.

This site is a "is a weblog post that brings attention to some of the week’s most interesting and informative blogger-written articles within the broad spectrum of personal finance. It is a showcase of weblog posts, submitted by their authors or by casual readers for consideration.

Some of the topics considered for inclusion are budgeting, saving money, earning money, managing debt, living below your means, and any other topic somewhat related to personal finance."

Since they're on to weekly issue #202 - this site/blog seems to have staying power. A quick look reveals links to a variety of blog posts on many personal finance issues.

Tax Hit For Cracking Nest Egg Early

2009-05-07T16:48:00.004-05:00

In these difficult economic times, people are taking different actions to make ends meet. One avenue that some may be tempted to follow is taking money from their pre-tax retirement accounts such as IRA or 401k accounts.

Here is a link to a Wall Street Journal article which shows the pros and (mostly) cons for taking this action.

Here is the link to list all previous posts in this blog with the label "IRA"

Funding for Libraries in Illinois from the Illinois State Library

2009-05-02T00:51:00.007-05:00

In March, Governor Quinn presented a budget to the Illinois legislature. This budget made some small cuts, but the Governor is relying on an income tax increase to make up most of the budget shortfall.

The Illinois State Library, which is a department of the Illinois Secretary of State's Office, is a funding source for Library Systems, Public Libraries, and School Libraries through per capita grants as well as to all types of libraries through various other special grants.

An analysis of the budget for the Secretary of State's Office shows that the majority of submitted budget line items for the grants to libraries are either flat requests (the same amount as last year) or show slight increases. While this is, in a sense, good news that there appear to be no cuts to library funding through the Illinois State Library, the budget that the Governor submitted was only a first step.

Rumblings are that the submitted budget does not do enough cutting while asking for too much of an increase to the income tax. The Illinois House of Representatives and the Illinois Senate both have to pass and reconcile a budget that then must be sent to the Governor to be signed. Current estimates are that the legislature will complete their process by the end of May. So, stay tuned!

Creating A Budget

2009-05-01T09:20:00.004-05:00

Over the past few months, I've worked with employees and vendors of the Alliance Library System to create a budget for our next fiscal year. Last week, I presented it to the board of directors at ALS and it was approved.

As libraries, we tend to know in advance roughly how much money will be coming in...whether it comes from grants, property tax revenues, our parent organization, etc. The challenge, then, comes in fulfilling the mission and goals of our libraries within these incoming dollars.

There are two main types of budgeting:
(1) Zero-based budgeting, where you start from scratch every year and justify every expense that ends up in your budget.
(2) Incremental budgeting, where you start with either last year's results or last year's budget and add a certain amount or percent to each line item.

Here at ALS, we completed our budget using a combination of the two methods. We used incremental budgeting to determine our personnel expenses and we used zero-based budgeting to determine the non-personnel expenses.

If you're a member library of ALS and would like tips, pointers or help during your budgeting process, contact me or one of our Library Development Consultants. You can find our contact information here.

Should I Charge It?

2009-04-24T14:20:00.002-05:00

I havent' had much time lately to research or write articles for the blog, but now that the ALS budget is complete and the presentation to the board of directors was made last night, I can get back into the swing of things here.

One question that often comes up in life - should I charge it? Or more specifically, should I charge it and pay it off over time?

I ran across an interesting article on Kiplinger.com on this topic, so I'll post the link here.

There was a saying in a book I read, that "Credit cards are like nitroglycerin, handle with care!" The use of credit cards is not necessarily bad, but it is an expensive way to finance your purchases. In other words, if you use a credit card, pay off the balance each month - that way it becomes a convenience to use a card. However, if you charge things but keep a balance, be prepared to pay a steep interest rate. The above referenced article gives an example of the detrimental effect of carrying credit card balances.

Income Tax Withholdings

2009-04-17T11:12:00.002-05:00

The filing deadline for federal tax returns was two days ago, April 15. If you received a large refund or owed a lot, you might want to consider adjusting your withholding levels by filing a new IRS Form W-4 with your employer.

If you got a big refund, don’t think of it as a gift from the government – because it isn’t. What has really happened is that you had your employer withhold too much from each paycheck, essentially giving the federal government a free loan for the year. Decreasing your withholdings, in this case, would put more money in each paycheck, rather than getting it all back in one large lump sum at tax time.

If you owed money, don’t think the government is out to get you – because it isn’t. What has really happened is that you had your employer withhold too little from each paycheck, creating a tax liability for you at the end of the year. If you do this too often or end the year with a larger than normal liability, the IRS might start taking a closer look at your tax return and may even charge penalties.

To make an adjustment to your withholding levels, simply complete a new IRS Form W-4 and submit it to your employer’s payroll department. A useful tool provided by the IRS to help determine how much to withhold can be found here.

Should You Refinance Your Mortgage?

2009-04-07T09:29:00.000-05:00

For most people, their home will be the biggest investment they make, and the associated mortgage will be the biggest debt they will have. Here's some tips on refinancing (or not) from the American Institute of Certified Public Accountants:

Refinancing Your Mortgage

With interest rates dropping as a result of the Federal Reserve's new program to purchase Treasury bonds and mortgage-backed securities, now may be a great time to refinance your home. Refinancing often benefits the homeowner by providing access to equity and a lower interest rate — which might mean lower monthly payments on your mortgage and more savings in your pocket. Before refinancing, consider the following:

Reducing the life of your loan may cause your monthly payments to rise, but you will save on interest payments in the long-run.

Extending the life of your loan can potentially lower your monthly payments, but make sure that your interest rate is simultaneously reduced.

Refinancing may not be for you if a majority of your loan has already been paid off or your property has decreased in value.

Consult with a CPA or a financial advisor before making financial decisions such as these.

IMRF Employer Rates

2009-03-31T07:36:00.007-05:00

For IMRF employers, the IMRF released to each of you a Preliminary Phase-In Notice. The letter that is addressed to the Alliance Library System is dated March 3, 2009. If you did not receive the notice, you can access it via the IMRF Webpage. This is a preliminary estimate.

According to the IMRF, "In mid-April you will be provided the preliminary rate notice, showing the actuarially calculated rate (ARC), and a confirmation of the phase-in contribution rate. At that time, employers will be given the option to contribute the phase-in rate, the higher ARC rate, or some rate between the two. Employers who choose a rate less than the ARC rate will be required by generally accepted accounting principles to record a net pension obligation on its books in 2010."

For information on why the IMRF is using a lower phase-in rate, see my earlier post here.

The choice is to pay now by using the ARC, or pay more over the long term by using the phase-in rate. Each library will need to make that decision based on its funding and levy situation.

Are You Wasting Money?

2009-03-24T09:22:00.005-05:00

I ran across an article on the Yahoo! Personal Finance Section titled "7 Things You're Wasting Money On"

The introduction says that if you cut back or make changes on these seven things, you could save up to $1,000 per year. Here they are:

Bottled Water
Extended Warranties
Gym Memberships
Overdraft Fees
Organic Produce
Auto Insurance
Music Downloads

Here's a link to the full article.

The Economic Stimulus Bill

2009-03-20T08:58:00.003-05:00

The American Recovery and Reinvestment Act of 2009, commonly known as the Economic Stimulus Bill, was passed into law on February 19, 2009. This bill is a combination of additional Federal government spending and tax benefits.

So, “What’s in it for me?”

One provision of the bill, called the “Making Work Pay” provision, creates a tax credit for workers of approximately $400. While previous efforts last year put lump sums directly in consumers’ hands, this provision will be enacted by adjusting the paychecks of eligible individuals through lower Federal income tax withholdings, to the tune of about $10 per week.

There is also a first-time homebuyer credit, which is an $8,000 tax credit if you buy a principal residence by December 1. The credit is available to home buyers who haven’t owned their primary residence for the past three years. The income limitations for this credit are $75,000 for individuals and $150,000 for married couples.

Another credit to help stimulate the economy – an auto sales tax credit, where you can deduct the portion of state and local sales and excise taxes on the first $49,500 of a new car or light truck’s purchase price.

There are also other provisions dealing with college costs, the Earned Income Tax Credit, unemployment benefits, using public transportation, the alternative minimum tax, and energy incentives.

For a summary, which provides an overview as well as summaries for both individuals and businesses, click here.

Budget Artists

2009-03-16T14:09:00.003-05:00

I didn't post anything last week because I was busy. I'm still busy, but I'm posting a link to a new site called Budget Artists. From my quick read, it looks like it contains (or will eventually contain) a lot of useful information for surviving in this difficult economy.

Their website, found at budgetartists.com, "exists to help individuals and families live well through hard economic times."

An introduction to the site continues, "in hard times, we all have to cut our budgets, but being thrifty doesn't mean lowering your standard of living - just changing your priorities and working smarter with what you have... This site will guide you through the process of evaluating your lifestyle and financial priorities and making informed choices about what items you can replace with lower cost alternatives."

Every Library in ILLINET

2009-03-06T08:29:00.001-06:00

The Illinois Library & Information Network (ILLINET) is a cooperative network of libraries in Illinois administered by the Illinois State Library (ISL). From the ISL website, “More than 5000 academic, public, school and special libraries belong to ILLINET and work together to meet the diverse information needs of Illinois citizens. A library becomes an ILLINET member when it is accepted for membership in one of the ten state-funded regional library systems.”

A useful tool is the website for Every Library in ILLINET, found at www.eliillinois.org. Here, you can find directory and statistical information on all ILLINET member libraries, including:

• Library Name, Type & Library System membership
• Address
• Phone & Fax Numbers
• ILDS Route
• Cities Served
• Hours
• Electronic Resources
• Staff Information
• Interlibrary Loan Policies
• Foreign Language Resources
• Previous State Grants
• Legislative Districts and Legislators (State & Federal)
• Library Trustees

For public libraries, a useful reference found on this site is a compilation of information from the Illinois Public Library Annual Report that each public library submits to the ISL each year. While the information is a bit dated (FY05-06 is the latest data that is posted), it can be useful. You can look at information by library size, location, library system, etc. The IPLAR statistics can be found at www.eliillinois.org/iplar/

Library Systems

2009-03-03T11:08:00.000-06:00

On December 23, 2008, I posted an entry titled "Resources for Libraries: Your Library System" where I gave a very brief overview of the Alliance Library System & the services it provides for its members. In that entry, I mentioned that ALS was one of nine multitype library systems in Illinois.

The systems work together on various efforts, and the directors of the systems meet periodically to reach concensus and provide a common direction for the nine systems.

A useful website that they created can be found at www.ilsdo.org. Some items that I find of interest include:

- The 2009-2011 strategic plan laid out by the directors: www.ilsdo.org/downloads/ILSDOStrategicPlan2008.pdf
- A two year calendar of important legal dates and deadlines of interest to Illlinois libraries: www.ilsdo.org/se_daystoremember.html
- Information on the Fund for Illinois Libraries - allowing libraries to receive contributions from donors that contribute solely to non-profit organization holding IRS 501(c)(3) status: www.ilsdo.org/se_fund.html
- A list of Library Related Acronyms for those of us who are not librarians: www.ilsdo.org/se_acronyms.html

Individual Retirement Accounts - Part 2

2009-02-26T10:27:00.001-06:00

The US government provides incentive for individuals to save for retirement by providing tax advantages when you invest in IRAs. However, the IRS strongly discourages withdrawal of IRA funds prior to retirement by providing tax penalties if you take the money out too soon.

Normally, withdrawals from an IRA (either a Traditional or Roth) are allowed without penalty once you reach 59-1/2. Also, Traditional IRA holders must start taking distributions of minimum amounts by April 1 of the year after they reach 70-1/2. Because of the tax nature of the Roth IRA, you are allowed to withdraw your contributions at any time, but will pay penalties if you withdraw any of the earnings. Penalties vary, depending on the situation.

There are a number of “exceptions” to the above rules where withdrawals will be exempt from penalties, including:

- Withdrawals to cover medical expenses that exceed certain limits or for medical insurance while unemployed.
- Withdrawals after you become disabled
- Amounts distributed to beneficiaries if you die
- Distributions that are an annuity or the form of an annuity
- For certain qualified higher education expenses of children or grandchildren
- Distributions to help you purchase, build or rebuild a first home
- Distributions made to the IRS in the case of a levy

The recent economic downturn has led Congress to revise some of the above rules for withdrawals from IRAs. Here is a link to a summary of the revised rules: http://finance.yahoo.com/retirement/article/106391/Congress-Revises-Retirement-Fund-Rules

Minimum Wage Increase in Illinois

2009-02-19T09:11:00.003-06:00

A quick post - the minimum wage in Illinois is scheduled to increase to $8.00 per hour beginning July 1, 2009.

Here is a link to the Illinois Department of Labor website containing more information: http://www.state.il.us/Agency/idol/Facts/mw.htm

Every Little Bit Helps - Part II

2009-02-17T10:50:00.001-06:00

On January 9, I had a post here about different ways to save a little bit… each day or each week. While these amounts don’t seem like much when looked at individually, you’d be surprised at how quickly the little things add up over a year’s time!

I ran across an article from Kiplinger’s titled, “Save $50 a Day (and Feel No Pain)”. The article starts off with, “See how much money you can put back in your pocket” and goes on to cover savings ideas in different topics:

- Banking & Loans
- Health & Insurance Costs
- Utilities
- Food
- Transportation
- Investing
- Leisure
- Must-Have Trends

There are some good ideas here – some relevant to you, others that are not. Looking through the ideas, the Santos household has tried at least ten of these over the past couple of years. I can attest that yes, if you stick to it, the savings are real! One caveat: the $50 per day savings in the title is a bit misleading, as you’d need to do everything suggested in the article to achieve those savings.

Here’s a link to the article: http://www.kiplinger.com/magazine/archives/2009/02/save-fifty-a-day-and-feel-no-pain.html

Individual Retirement Accounts - Part 1

2009-02-13T07:45:00.001-06:00

The acronym IRA stands for an Individual Retirement Account. On dictionary.com, an IRA is, “an investment account in which a person can set aside up to a specified amount each year and usually deduct the contributions from taxable income, with the contributions and interest being tax-deferred until retirement.” This definition is for a Traditional IRA.

Alternatively, a recent development has been the Roth IRA. This type of IRA functions similarly to a Traditional IRA – with one main exception. Instead of contributions being tax deferred, you contribute to a Roth IRA with after-tax dollars. Again, according to dictionary.com, a Roth IRA is where you make contributions for retirement but “earnings on the account are tax-free, and tax-free withdrawals may be made after age 59-1/2.”

So, which type of IRA is better? To know for sure, you’d need a crystal ball – you know your income tax rates now, but can you project what they will be in the future at the time of withdrawal? In general, if you believe your income tax rate now is higher than it will be at retirement, than a Traditional IRA is probably best for you. Alternatively, if you believe your income tax rate now is lower than it will be at retirement, a Roth IRA is probably best. Tax treatment and eligibility for either type of IRA phase out at certain levels of income. So, as always, when making these types of decisions, seek the advice of an investment professional.

Saving for Retirement

2009-02-10T08:17:00.003-06:00

When we retire, we really don’t want to work. So, what do we need to know in order to prepare for that blissful day? There are many factors that go into determining your retirement savings:

- Your age: Now, when you retire, and when you expire (how long will you live during retirement?). The earlier you start and the later you retire will produce the best result here.
- Your income: Now, and how much you’ll want during retirement. Of course, the higher it is now and the lower it is during retirement will produce the best result.
- How much you have saved for retirement already. The more the better.
- How much will your current salary grow between now and retirement? The higher the better.
- What return will you get on your investments? The higher the better.

You want to take the amount you have saved already, add to it annually and watch it grow until the day you retire. Then, that “pool” of money will continue to grow during your retirement, albeit more slowly since you will also now be withdrawing funds for your retirement.

A handy calculator that covers these (and some other) factors can be found in Yahoo! Personal Finance at: – this can be either an exciting or depressing exercise, depending on the assumptions you make.

As always, this is rough planning. If you feel like you need more detail, seek the help of a professional.

Shifting Gears

2009-02-06T08:22:00.000-06:00

Since I’ve been busy with budgets, E-Rate filings, and year-end payroll tax filings, among other things, I haven’t had much time to devote to this blog. So, to keep information flowing to you, here is a plug for my co-workers here at ALS!

The Consulting & Continuing Education Department here at ALS has come up with a new downloadable. It is titled, “Shifting Gears: rethinking resources in tough times” and contains many ideas in the following topics:

- Budget rules of thumb

- Ways to save money

- How to make cuts

- Reality checks

- Surviving & thriving in tough times

This downloadable, along with many other useful resources, can be found at the C&CE Departments webpage here: http://www.alliancelibrarysystem.com/CEdownloadables.cfm

IMRF Employer Rates Likely to Increase Dramatically

2009-01-27T14:09:00.002-06:00

As you get into your budgets, appropriations and levy ordinance cycle for the upcoming fiscal years, please be aware that if you participate in IMRF and your employer rates are increasing, make sure that you increase your budgets and corresponding appropriations and levies accordingly.

IMRF rates for calendar year 2009 were finalized and announced in November 2008. However, due to the severe market declines during 2008, IMRF investments lost close to 25% of value. Since the IMRF is a defined benefit pension plan, there are three sources of funding: members (your employees), employers (your library) and investment income/returns. Member contributions are capped, by law, at 4.5%. Investment income in 2008 was negative. To keep the plan funded properly, then, the only other funding source becomes the employer.

For calendar year 2010, under current IMRF employer rate setting guidelines, the average increase in rates would be 79%. So, if your current IMRF employer rate is 10%, that average increase would raise your rate to 17.9%. However, each employer’s account is different, so your rate increase could be different as well.

The IMRF, at its February 27, 2009 board meeting, hopes to adopt some changes that would help alleviate the impact of the rate increases on the employers.

Important communications from IMRF to look for in the next few months:

February 2009 – employer reserve statements for the year ending December 2008

March 2009 – preliminary phase-in rate notices

April 2009 – preliminary rate notices

April 2009 – GASB disclosures (save this for your auditors!)

Compounded Earnings

2009-01-22T10:59:00.003-06:00

The best way to provide for your retirement is to save regularly. In addition, the earlier you start (read as NOW!) the better of you’ll be.

Let’s look at an example of two different savers – both are going to invest $250 per month, and both will average 5% annual returns on these investments.

Saver # 1 starts saving $250 per month, starting at age 20 and stops saving at age 30. Over this span, this saver invests $30,000 of their own money. If they leave the investment alone, it will be worth $224,000 when they turn 65.

Saver # 2 starts saving $250 per month, starting at age 40 and continues until they reach age 65. Over this span, this saver invests $75,000 of their own money. If they leave the investment alone, it will be worth $150,000 when they turn 65.

Saver # 1 clearly has an advantage – saving LESS of their own money yet ending up with a larger overall investment. This is due to compounding, or letting your investments work for you over time. Saver # 1’s money was invested longer, and the earnings on those investments also had earnings (this is compounding).

So, if you can, work your way to saving regularly – it will go a long way towards helping fund your retirement.

Public Library Tax Funds

2009-01-15T10:05:00.001-06:00

There are many different expenses for running a public library. A majority of funding used to pay for these expenses comes from property tax revenues. Did you know, however, that in Illinois there are various special funds you can create for certain expenses?

Here are some of the special funds you can create:

Audit fund – this fund pays only for the library’s annual audit expenses.
IMRF (Illinois Municipal Retirement Fund) fund – this fund pays only for the library’s IMRF expenses. With recent news about IMRF employer rates increasing in calendar year 2010, this would be a good fund to start if you don’t already use it.
Medicare/Social Security fund – this fund pays only for the library’s payroll taxes related to Medicare & Social Security.
Building/Maintenance fund – this fund is only for the library’s building(s) and upkeep, and can be used for (1) purchase of sites & buildings, (2) construction and equipment of buildings, (3) rental of buildings for library purposes, and (4) maintenance, repair and alterations of buildings and equipment.
Insurance fund – this fund pays only for the building, liability and errors & omission insurance. It does not pay for health insurance costs. It can also cover risk management and self-insured expenses.

Levying for these funds is outside of your general fund, so if paying for any expenses listed above out of your general fund, you should consider creating and levying for the above special funds, freeing up dollars for general library purposes.

Every Little Bit Helps

2009-01-09T15:02:00.001-06:00

Today’s entry: some quick tips from a bunch of different articles all saying the same thing – every little bit helps! Little sacrifices can go a long way.

For example:

Hitting the drive through for a hot coffee or latte can cost $3 to $5. If you do this every day, it can add up. Spending five dollars a day multiplied by twenty working days a month leads to $100 for one month, $1200 for the year. Cutting back even one day per week can save you $240. Bringing your lunch to work rather than hitting the drive-thru every day can yield similar results.

Movie tickets and snacks & drinks for two can cost $20 or more. Go to the movies once a week, and you’re spending over $1000 per year. Suggestions include renting a movie – its much cheaper. Alternatively, check movies out from the library – that’s free!

Sometimes when we’re facing tough financial times, we need to discern between our wants and our needs. I need food – but do I need to eat out? I want (for some, need) caffeine – but do I need the fancy $5 latte or can I settle for the cup of coffee that costs a dime in the break room? I need a car to get to work – but do I need the latest model with heated leather seats and a GPS? It’s OK to indulge, but in moderation and only when you can afford it.

WebJunction Discussion Group: Tough Times

2009-01-06T14:17:00.000-06:00

Because I am getting busy with some year-end financial items for ALS, I’m going to “punt” today and share a link to a group in WebJunction called “Tough Times”.

The group can be found here: http://www.webjunction.org/toughtimes/articles/content/30406184

This piece of WebJunction offers courses, webinars, webinar archives, and documents and discussions on various topics to help you get your library through tough economic times. Topics include:

· Funding and Tight Budgets
· Demonstrating Impact
· Meeting Patron Needs
· Planning & Partnerships for Change
· Staff Training & Development

This is a great resource and one that I can’t give much justice to in 250 words or less – so go to the site and explore!

Surviving Uncertain Economic Times

2009-01-02T10:39:00.001-06:00

Here are some suggestions from an article titled “Surviving Uncertain Economic Times” in the January 2009 issue of Columbia magazine, by John Ingrisano.

Reduce Your Expenses – suggestions include reexamining your budget, cutting back on unnecessary expenses, and revising your attitude toward spending. Ask yourself when making a purchase – Do I want this or need this? Examine your needs to truly see if they are needs.

Reduce Your Debt – if you carry credit card balances, try to reduce the balances on these each month. If you are in a bind –at least make the minimum payments, and make them on time! Late or missed payments will adversely affect your credit history and credit score.

Secure Your Job – you don’t have much control over whether your employer keeps you, but one way you to tip the scales in your favor is to make yourself indispensible. Look for ways to emphasize your unique skills and your value in the eyes of your employer.

Preserve Your Future (Retirement) Assets – in difficult financial times, it is tempting to cash out an IRA or 401(k), but you avoid making withdrawals from these long-term assets unless absolutely necessary. If you don’t meet certain conditions, you could also pay early withdrawal penalties and income taxes on these withdrawals.

In summary, protect what you have worked to achieve while reducing your expenses. The economy goes in cycles – maintaining financial self discipline during these tough times will help you get ahead when the economy rebounds.

What is the FDIC?

2008-12-30T09:12:00.001-06:00

I was recently asked, “What is the FDIC?”

FDIC stands for Federal Deposit Insurance Corporation. According to the FDIC website (www.fdic.gov), it “is an independent agency created by the Congress that maintains the public confidence in the nation’s financial system by insuring deposits, examining and supervising financial institutions, and managing receiverships.”

One way it maintains confidence is by insuring deposits in banks and thrift institutions. Currently, the limit is $250,000, so if you have $250,000 in a FDIC insured institution, the FDIC guarantees you’ll receive that money should that institution fail. The limit of $250,000 is a temporary limit that was set in response to the current financial crisis. Unless extended or made permanent by Congress, this limit will revert back to $100,000 after December 31, 2009.

To determine whether you institution is covered by FDIC insurance, see - www2.fdic.gov/idasp/main_bankfind.asp.

However, not all money you have with a FDIC covered institution may be covered by FDIC insurance. To help figure out whether your deposits are covered, see the “Are My Deposits Insured?” page at the FDIC site - www.fdic.gov/deposit/deposits/index.html.

There is also a government program that covers credit unions. The entity that provides the guidance and insurance is the National Credit Union Administration (NCUA). The NCUA operates a fund to insure “the savings of 80 million account holders in all federal credit unions and many state-chartered credit unions.”

So, check to see if your bank is FDIC insured or if your credit union is NCUA insured!

Useful Links: Personal Finances

2008-12-26T14:13:00.002-06:00

Here are some useful links to look at for personal finances:

For a website created by the Alliance Library System through a grant from the American Library Association that was funded by the FINRA (Financial Industry Regulatory Authority) Investor Education Foundation – see www.smartinvestingatyourlibrary.info. This site is dedicated to providing useful information about different types of investments and links to presentations created during the grant as well as links to resources from FINRA.

For a website created by the American Institute of Certified Public Accountants – see www.feedthepig.org. This site is aimed at 25-34 year olds and is dedicated to helping you “think through your spending and saving habits, identify ways you can start saving and commit to making changes that will reduce your debt and grow your savings.”

For another website created by the American Institute of Certified Public Accountants – see http://www.360financialliteracy.org/. This site “offers information to help consumers make sound financial decisions at every stage of their lives, from childhood to retirement.”

All of the bigger “home” pages, like Yahoo, MSNBC and Google all have finance pages/links that can provide useful information:
· http://finance.yahoo.com
· http://www.msnbc.msn.com/id/3032258/
· http://finance.google.com/finance

These sites can help you with things like mortgage payment calculators, dealing with identity theft, saving money, retirement planning, etc.

Resources for Libraries: Your Library System

2008-12-23T09:33:00.000-06:00

The Alliance Library System is one of nine Multitype library systems cooperating to provide vital library services to the citizens of Illinois. Our membership includes school, academic, public and special libraries. Our service to our membership includes consulting, continuing education, resource sharing and delivery of library materials.

What this means for the libraries:
· Free consulting: We have a staff of consultants with a variety of library experience. This group has created some tremendous resources to help you run your libraries more efficiently. Visit our consulting & continuing education group online at http://www.alliancelibrarysystem.com/indexCE.cfm.
· Free or low cost continuing education: Our consulting & continuing education group maintains a calendar of continuing education and other networking events at http://www.librarylearning.info/?LibSys=ALS. These opportunities occur at our headquarters in East Peoria, Illinois, at various other locations throughout the Alliance Library System, and even on-line.
· Group Purchases: The Alliance Library System also strives to stretch its member libraries funding by maximizing our purchasing power; by joining together we have been able to offer a variety of discount prices with several library vendors and suppliers. Our group purchases information can be found at http://www.alliancelibrarysystem.com/indexGroupPurchases.cfm.
· Grants: The Innovation Department at the Alliance Library System is always on the lookout for grants that help our libraries in various ways – expanding collections, providing programs and providing other resources are just some of the opportunities that we have provided for our members. Visit the ALS Innovation Department at http://www.alliancelibrarysystem.com/indexInnovation.cfm.

Have a safe and happy holiday season!

Credit & Credit Reports - Part 2

2008-12-18T08:33:00.002-06:00

Now that you know how to get a free copy of your credit report, what’s in the report and what do you do with it once you get it?

There are three main areas of a credit report:
1. Your personal information: name, address, Social Security number, telephone number, employer, past addresses, past employers, etc.
2. Account information: for each creditor, there will be the creditor/lender’s name, address, account number, type of account, opening date, terms, etc. as well as a payment history, high balance, and present balance.
3. The last section will list who’s been asking for your credit report in the last 24 months.

It may be lengthy, but you need to check all information in for accuracy. If any information is wrong or you wish to dispute an entry, you need to correct it with the credit bureau that issued the report. Under the Fair Credit Reporting Act, you have the right to have any correct or misleading information removed from your credit report. The credit bureaus have 45 days to investigate after your report an error. If, after the investigation, the credit bureau feels their information is correct, you have the right to add a short statement to your file to explain your side of the story.

Keep in mind, the better your credit history looks, the better your credit score. The better your credit score, the easier it will be for you to get credit – or get credit on better terms.

Credit & Credit Reports

2008-12-15T08:32:00.001-06:00

Dictionary.com defines credit as “confidence in a purchaser’s ability and intention to pay, displayed by entrusting the buyer with goods or services without immediate payment.”

We use credit in many different ways:
· We purchase or upgrade a house with a mortgage or home equity loan.
· We purchase a car with a loan.
· We buy furniture on installment.
· We purchase groceries and other items with a credit card.

Our ability to obtain credit (or get better credit on better terms) is impacted by our credit history and, by extension, our credit score. You can see your credit history by getting a copy of your credit report – which contains information about your past and present credit transactions. Potential lenders use your credit report to evaluate your creditworthiness.

By law, every consumer is entitled to a free copy of their credit report every 12 months from each of the three major credit bureaus: Experian, TransUnion and Equifax. For information on how to order your free copy, visit the Federal Trade Commission’s website at http://www.ftc.gov/freereports.

Each of these credit reports contains essentially the same information, so one bit of advice is to order one credit report every four months – that way you can see your credit history three times per year. For example, get your Experian report on January 1, your TransUnion report on May 1, and your Equifax report on September 1.

Next: Understanding your credit report and what to do if you find errors.

E-Rate Discounts on Telecommunications & Internet Expenses

2008-12-12T07:56:00.001-06:00

Take a look at your phone bill. In the “Surcharges” or the “Government Fees & Taxes” section, you should see an item titled “Federal Universal Service Fee” or something similarly titled. I typically glance right past this section right to the bottom line, but the Universal Service Fund that is fed by your payment of this fee can be a source of funds for your school or library.

One of the programs in the Universal Service Fund is the “Schools and Libraries Program,” better known as E-Rate. Under E-Rate, your library may be eligible for discounts in four different categories: telecommunications services, Internet access, internal connections, and basic maintenance of internal connections. Discounts range from 20% to 90% of the costs of eligible services, depending on the level of poverty and the urban/rural status of the population you serve.

So, you’re already paying for phone service or Internet service, why not take advantage of E-Rate and get some of that money back if you are eligible?

If you are not currently participating, check out the website of the Universal Service Administrative Company (USAC), the administrator of the E-Rate program at www.universalservice.org/sl - where you’ll find overviews of the programs and the process.

It is a lengthy process, with the funding year running from July 1 to June 30. But you need to act now –first steps need to be complete by early January 2009 to be eligible for the next funding year!

250 Words or Less

2008-12-10T08:37:00.003-06:00

On Monday 12.08.08, Kitty Pope asked me to answer a simple question. “What’s the difference between a recession and a depression?” But, before I could provide the simple answer, she kept going. I now have a new assignment – to provide information and ideas to help our members in these difficult economic times – both at the library level and also on a personal level. To keep it manageable, I’ve decided that I will attempt to accomplish these postings in 250 words or less.

So, once? Twice? Three times a week (or whenever I can find time) I’ll post something that will hopefully be of use! Now, back to Kitty’s question.

Recession vs. Depression

According to Investopedia.com, a recession is defined as “A significant decline in activity across the economy, lasting longer than a few months. It is visible in industrial production, employment, real income and wholesale-retail trade. The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country's gross domestic product (GDP).”

From the same source, a depression is defined as “A severe and prolonged recession characterized by inefficient economic productivity, high unemployment and falling price levels.”

The recession is a returned book with a few creased pages; the depression is the same book with the cover torn off with half the pages stuck together with jelly.

So, is the US in a recession? In March 2008, Warren Buffett, told CNBC, “I would say, by any commonsense definition, we are in a recession." When the richest guy in America speaks about anything financial, I tend to listen.

What does this mean for us in library world, both for our libraries and personally?
· As discretionary income decreases, more people may tend to use the library – why buy the book when I can read it for free?
· Patrons may come to the library to learn more about budgeting, finances, and saving for retirement.
· There may be a lag, but property tax revenues to local governments may not grow as quickly.
· Will I get a raise this year?

Keep watch for answers and tips on surviving these difficult financial times.