The Boardcast

Holiday Shoppers Beware

You would have to be a hermit not to know that, in the US, Thanksgiving marks the start of the holiday shopping season. We're assaulted by ads in all forms. TV, radio, internet, print all send the message that showing love = giving gifts even if we can't afford them. This message came through loud and clear when my mail was delivered yesterday. The pile of ads I received included a glossy, four page flier for a store designed to make big ticket, holiday buying "affordable" for everyone. This store offers "No credit checks, no credit needed - everyone's approved" purchase power for many of this year's most popular items. Do  you want to get your sweetheart a digital camcorder, 57" HD TV or a laptop computer? No problem! A small down payment and equal monthly payments for 6, 12 or 24 months can make him/her gasp when they look under the tree.

This all sounds great until you start doing the math. You pay only $99.99 for a Garmin GPS and then continue to pay $99.99 each month for 6 months for a grand total of $599.94. The same model purchased at a local electronics store is $394.00. A brand name laptop computer with 1GB of ram and an 80GB hard drive is $159.99 with 12 more payments of $159.99 for a total $1919. The same computer purchased from the manufacturer is $749. Need I say more? This seems to me to be the retail version of the payday lender. They target those of us who just don't seem to get our paycheck to stretch far enough to satisfy what we want. I say "want" because I couldn't see one thing in this ad that would be able to be classified as a "need".

A marketing campaign like this is particularly frightening in the current economic climate. A recent article in USA today entitled "Housing Woes Have Domino Effect" warns that...

...tighter credit and falling home prices top the reasons why the economy could slip into a recession...

This same article included clips from an audio interview with Gary Schatsky, a New York based financial planner. Mr. Schatsky was asked how people could protect themselves from the impact of a credit crunch and a faltering economy. He suggests that it may be more important to manage debt rather than investments. Managing debt involves cutting down on expenses and that's not an easy feat when we're constantly being bombarded with the message to "buy, buy, buy". Perhaps a gift we can give ourselves is to develop a budget for our holiday gift-giving. This budget could include a holiday club or share account so that our holiday gift giving doesn't put us in the red for 2008.

An Online Education

Winter comes to the North Country and many of us are looking for solutions to the "winter doldrums". There are, of course, activities for the hardy such as snowboarding and ice skating. The question becomes how can winter days (and nights) be used to their best advantage. Trips to the library and the bookstore have been the solution for many who use the winter to catch up on reading that can be neglected during the active days of summer. For those with an internet connection, another option is available. Why not take an online course through MIT or the Open Learning Initiative at Carnegie Mellon. Most of us don't have the time or money to enroll in institutions of higher learning. Many of them, however, are providing a large sampling of their offerings online and free. I never had the opportunity to take a course in basic economics when I was in college so that's where I plan on starting. Economics forms the basis for understanding the world of finance and so I thought this might be a good beginning for a credit union board member. I can choose from courses offered through many of the most prestigious institutions. I may select The Open Learning Initiative through Carnegie Mellon which provides a systematic course (complete with exams) called Experiments with Economics. Another option is a course entitled Macroeconomics Analysis from the University of California at Berkely. This course includes both audio lectures and lecture notes in pdf format. Economics is just one of hundreds of courses some including video lectures for an almost complete classroom experience. Here are some sources to get you started on your search:

• MIT OpenCourseWare offers about 1,800 courses, some with audio and video.
• Carnegie Mellon University offers about 10 courses designed specifically to provide not only materials but also computerized instruction.
• The University of California at Berkeley has posted videos of lectures of eight courses and plans to add others to YouTube.
• For iTunes fans - iTunes U offers audio and video lectures from more than two dozen institutions at its iTunes store.

In addition, the Open Culture Blog has a link to 75 courses from a variety of prestigious colleges and universities.

Board of Directors Meeting - 11/20/2007

The UFirst Board of Directors met for their monthly meeting at the Rugar St. operations center on Tuesday, 11/20/2007. UFirst continues to attract new members. We had strong membership growth in October and the board approved a substantial list of new members.

CEO Bourgeois asked the board to approve a contribution to the New York Credit Union Foundation. UFirst will be a corporate sponsor of the Life Smarts Educators Club. Life Smarts...

...expands the consumer and marketplace knowledge and skills of high school students nationwide in an effort to better prepare them as responsible consumers in today’s economy.

UFirst has been at the forefront of programs designed to advance financial literacy in Clinton County schools. UFirst Director of Marketing, Jody Carpenter told the board that UFirst will be joining teachers at Saranac High School to implement the NEFE (High School Financial Planning Program) program in their school.

Members who would like to propose items for board discussion are welcome to contact Linda Bourgeois, a member of the Board of Directors or email The Boardcast.

The UFirst staff and board would like to wish our credit union members a Happy Thanksgiving. We are thankful for your interest, your business and the trust you place in UFirst FCU.

What's Wesabe? (Part Two)

(This post is designed to provide information. It neither advocates nor discourages membership in this online service)

The previous post explored what's accessible in Wesabe without a membership. Wesabe membership is free and it is easy to join. There are a number of advantages to membership. Wesabe's FAQ page explains that with membership...

you can see all your bank accounts and credit cards in one place, categorize your transactions how you want, see spending and earning summaries, discuss things with other interested people, and receive tips for saving money based on your spending.

Wesabe hosts a variety of member-focused groups which provide forums for discussing hundreds of topics related to budgeting, saving, spending and investing. Groups vary in topic and membership with discussions like "How to Retire", having a membership of 220, and "Pack a Lunch" (focused on saving money by packing lunches for work) having a membership of 49. Any member can join or begin a group in Wesabe.

The heart of Wesabe's value for members comes as a Personal Finance Management tool. Accessing this benefit requires that you upload your personal, financial account data to Wesabe. Now credit unions and credit union members tend to be conservative when it comes to using online financial tools. UFirst has been offering online banking (access to personal account information and transfer ability) for at least 3 years and a little over half of our membership takes advantage of this service. The big obstacle to participation in online banking services appears to be fear of "the bad guys" tampering with our accounts or, even worse, cleaning us out. Wesabe takes security very seriously and has a detailed Security and Privacy page which explains that...

Every aspect of Wesabe has been designed with the privacy and security of our members in mind. The very existence of this personal finance web site depends on us taking an extremely strong stand and over-delivering when it comes to these issues. Using Wesabe is as secure, or in some cases, more secure than using your bank or credit card web site.

Included in their policy is a Data Bill of Rights which promises that personal data belongs to members and that members control all levels of access. Account usernames and passwords are not entered on Wesabe. Wesabe offers...

a unique feature – a software program that runs on your computer and keeps your passwords safe, encrypted on your local drive. We never have access to your passwords in any form, and upload only the data we need to help you get more for your money. Throughout the upload process, we use industry-standard encryption, so none of the data is in a format that can be read by hackers. Your account at Wesabe is stripped of all personal identifiers, including your name and email address.

For members who want absolute control over access to their data, we provide a tool that allows them to extract data from their financial institutions and manually upload only the transactions they choose.

Account data can be uploaded from checking, cash, credit card, brokerage or money market accounts. Transactions within accounts can be tagged allowing members to have a clear picture of their spending categories and patterns. Wesabe collates the information from your accounts and provides overall spending and earning summaries as well as summaries for any tagged category. Members can formulate goals as well as give and receive tips unique to them.

In a nutshell, this personal finance management service allows members to monitor spending and saving; formulate individual budgets based on comprehensive information; set achievable financial goals and participate in communities formed to help with achieving these goals.

Wesabe isn't the only online personal finance management tool. Two other prominent players in forming fiscal online communities are Geezeo and Mint. Both of these companies attended the Finovate Conference which was held in NYC in early October. Finovate organizer, netbanker.com, has posted video highlights from these presentations which are available online at the Finovate 2007 site. These videos are short and worth taking a look at for a summary of what these two PFM services have to offer.

What's Wesabe? (Part One)

(This is the first of a 2 part post on Wesabe - "...a community site that makes managing your money easy.")

"Information only" websites seem to be a thing of the past. Social networking is the new, online wave linking communities of people in a virtual world. Don't be fooled though, virtual worlds can help us form communities, access information and solve problems in ways unimaginable in our "real" lives. Wesabe is an online community based on the idea that pooling information on how/where and why we spend money can be a valuable resource for community members.

Wesabe is free and there are three ways to participate. "Explorers" should go directly to the FAQ section on the home page and read the "About" section. This provides information on the history and purpose of the community as well as summarizing the background of the founders, Jason Knight and Marc Hedlund. Wesabe has an interesting trio of advisers who come from the teaching, technology and marketing fields. Wesabe "explorers" can also take a video tour of the site's main features. Membership is not required to "listen in" on the hot topics being discussed in the group section of Wesabe. Groups can be found related to any topic pertaining to earning, spending and saving. A current sampling of hot topics include:

• Can You Afford Your Pet?
• To Join a Gym or Not?
• Frugality and the Holidays??

Membership is required to ask questions and participate in the discussions but following the discussions does not require membership and is a good way to measure the value of Wesabe for you. A unique feature of Wesabe is an invitation to "Talk to Jason". The founder and CEO opens his phone line to receive calls from anyone who may have comments or questions about Wesabe. He gives an online number where he can be reached Monday - Friday from 12pm to 4pm PST. Just as an experiment, I called the number and Jason answered the phone. I told him that I was preparing a post on Wesabe and asked what he would like to communicate to UFirst members. Jason was pleased that I called and mentioned that he is a member of Navy Federal Credit Union. He values his credit union membership and believes that the mission and goals of Wesabe fit nicely with the credit union theme of "People Helping People". Jason's accessibility is impressive. I can't think of many online CEO's who value their customers so much that they are willing to set time aside to field questions and comments. Jason said that he believes getting customer feedback is a wonderful use of his time.

Begin exploring Wesabe and you might find that this personal financial site may provide some surprising benefits.

(The next Boardcast post will explore Wesabe's membership benefits)

The Boardcast Featured in Online Article

Ginny Brady was interviewed, recently, for the featured article in November's issue of Bank Systems & Technology. The article entitled "Banks Are Creating a New Kind of Customer Intimacy With Web 2.0 and Social Networking" was written by senior editor, Nancy Feig. Nancy defines Web 2.0 and explores how both large and small financial institutions are using social media to enhance services and interact with customers and members. 

Children's Development Bank - A Unique Cooperative

Recently The Boardcast reported on a financial education initiative that UFirst FCU has joined with Plattsburgh High School students and the Plattsburgh Teachers Federal Credit Union. The other day I read that some childrern are learning fiscal responsibility in the most unlikely places. We often see TV documentaries on street children in developing countries who band together and attempt to support themselves by rag picking, sorting through garbage, running errands. These menial jobs allow them to exist in very difficult circumstances. Recently I read about a unique financial cooperative, "owned" and "operated" by children, in countries like India, Bangladesh, Nepal and Afghanistan. The Children's Development Bank began under the auspices of Butterflies, an initiative to improve the lives of street and working children, in April 2001. Unique featues of the bank include:

• Providing, for the first time, a safe, controlled place for street children to deposit their earnings for the benefit of them all.
• Facilitating the running of a bank which invests in micro enterprises run by working children.
• Placing control of the day to day running of the bank and the decision making process in the hands of the street children with minimal intervention by adults except in an advisory capacity.
• Offering the opportunity for the banks to make loans and grants to support education, health and recreational facilities for street and working children.

It's amazing that children who live in such desperate circumstances are able to set aside small amounts of money to build a better future for themselves and their friends.

Scam-Smart

Most of us have seen stories about people who have lost money on scams. We all like to think of ourselves as being smart enough to spot scams and avoid them by discarding or not listening to those offers that sound "too good to be true". One type of scam with many variations is "The Fake Check Scam". Fake check scams result in the loss of thousands of dollars each year and we all like to think that we could never be fooled. The National Consumer League has developed a website designed to alert us to how fake check scams can vary and what makes some people at risk of being entrapped by them. The National Consumer League is a not for profit organization that has been in operation over 100 years. It's mission is...

...to protect and promote social and economic justice for consumers and workers in the United States and abroad. The National Consumers League is a private, nonprofit advocacy group representing consumers on marketplace and workplace issues. We are the nation's oldest consumer organization.

NCL provides government, businesses, and other organizations with the consumer's perspective on concerns including child labor, privacy, food safety, and medication information.

Their website FakeChecks.org provides an entertaining way to learn about fake check scams and how to avoid them. Videos on FakeChecks.org are used to illustrate how scammers operate in a variety of settings. In spite of the fact that these videos had the feeling of caricatures, they made valuable points. I found the most interesting link to be the Fraud Tests. These quizzes are designed to measure an individuals risk of being scammed. Many of us think, "That couldn't happen to me" and then, unknowingly, we find ourselves in circumstances that can lead to scams. Exploring FakeChecks.org only takes a few minutes and can help prevent us from being complacent about scams and our immunity to them.

(Please note - If you ever receive a communication online that appears to be from UFirst FCU and asks you to give personal information DO NOT RESPOND! Call the credit union as soon as possible)