7 Things to Do Before Asking for a Raise

You know you deserve a salary raise. Here’s how to get your boss to agree:

  1. Volunteer for tasks that fall beyond your actual job responsibilities.
  2. Make yourself indispensable to the team by becoming an expert in a specific area.
  3. Take the initiative to acquire new skills in your field.
  4. Set up a meeting beforehand, specifying what you’d like to discuss.
  5. Make your request during your company’s best season.
  6. Bring proof of how much value you bring to the team and how you help increase the company’s bottom line, citing recent projects you’ve excelled at and increased levels of responsibilities.
  7. Be courteous and respectful without resorting to threats and ultimatums.

Your Turn: Have you recently received a raise? Share any proactive steps you took to make it happen!

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Investing – Step #6: Determine Your Risk Tolerance

You know that deciding to invest some of your money in the market automatically means you’re setting yourself up for possible loss.

But how much losing can you take? Does the thought of your stocks plunging make you sick to your stomach? Or are you a genuine thrill-seeker who loves the rush of adrenaline you get when you think about putting your money somewhere shaky?

Determining your risk tolerance is an important step to take for ensuring you’re completely comfortable with your investments. You might also come across trade recommendations that are discussing options based on different risk tolerances.

While your risk tolerance will change according to your age, income requirements and financial goals, there is no fixed label for those who fit certain criteria. There are simply too many variables. For example, most people think that the younger you are, the more of a risk-taker you’ll be. They reason that the years ahead afford you the freedom to take more chances with your money. While this may be true in general, it is not a fixed rule, and determining your risk tolerance depends on several variables besides age.

So, how do you determine your risk tolerance? Consider the following before answering the question:

1.) Time frame

The first factor to determine is the actual length of the investment horizon. When will the funds be needed? Even a younger investor can have a short-term horizon if they’re trying to earn enough capital for a goal they hope to fulfill in the near future, such as buying a house. If the investment horizon is indeed short, the risk tolerance should shift toward being more conservative, regardless of the investor’s age. For long-term investments, there’s room for more aggressive investing.

If you’re an older investor, don’t fall into the trap of thinking that, just because you’re pushing 70, you need to move everything into conservative investments. This may be suitable advice for some, but it’s not recommended as a one-size-fits-all approach. For example, a retiree who has sufficient funds to live off the interest without touching the principal can safely invest in volatile stocks. Also, with today’s growing life expectancy, a 70-year-old investor may still have a 20-year investment horizon – or more! When determining your risk tolerance, be sure to consider your actual time horizon, irrespective of age.

2.) Risk capital

An obvious factor of your risk tolerance is going to be how much money you have available to put into the market. What is your net worth? To find this number, simply add all your assets and subtract your liabilities. Risk capital is defined as the amount of money you have available to invest or trade that will not affect your lifestyle if it is fully lost. It is also referred to as liquid capital, meaning assets that can easily be converted to cash.

Naturally, an investor with a higher net worth will be able to take more risk. The smaller the percentage of your overall net worth the investment represents, the more aggressive the risk tolerance can be.

Unfortunately, those with little or even no net worth are often attracted to riskier investments because of the lure of quick and large profits. Bear in mind, though, that when too much risk is taken with too little capital, a trader can be forced out of a position too early to make the investment worth it.

On the other hand, if an undercapitalized trader using limited risk instruments “goes bust,” it shouldn’t take that trader long to recoup the losses. Contrast this with a high-net-worth trader who throws caution to the wind and puts everything into one risky stock and loses – it will take this trader a lot longer to recover.

3.) Investment objectives

Your investment objectives are another important factor in determining your risk tolerance.

Are you saving toward a specific goal? Are you investing your child’s college fund with the hopes that it will grow? Are you trying to earn enough to support your retirement? If your goal is to raise enough capital for a pressing need, you will likely be more risk-averse. Or, you may be so desperate to raise those funds that you’ll make some hasty decisions.

On the other hand, if you’re simply trying to increase your net worth with extra capital, you’ll probably be more open to investing in riskier stocks.

Knowing your risk tolerance goes beyond being able to sleep at night without stressing over your investments. Ultimately, knowing your risk tolerance – and sticking to investments that fit within it – should keep you from complete financial ruin and allow you to invest with a clear head.

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11 Ways to Scale Back on Food Costs

Here are 11 easy tips to help you save on food costs:

  1. Never shop before making a detailed menu for the week.
  2. Use coupons whenever possible.
  3. Cook with seasonal produce.
  4. Use the generic brands for cleansers, shampoos and detergents instead of brand-name products.
  5. Never buy something just because it’s on sale unless you use that item regularly. You aren’t saving if you got a great deal on something that will just sit in your pantry.
  6. Whenever possible, make your own instead of buying convenience foods.
  7. Never shop for groceries without a list.
  8. Buy in bulk instead of making smaller, more frequent trips to the store.
  9. Consider having your groceries delivered instead of going to the store to avoid impulse purchases.
  10. Never shop before taking full inventory of your fridge, freezer and pantry.
  11. When possible, buy larger containers of food instead of individualized portions. This includes snack bags, yogurts, ice cream, cheeses and drinks.

How do you save on food? Share your best tips with us in the comments!

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Energy Saving Tips – What to Look For When Buying New Appliances

There’s no getting away from the fact that our dependence on energy increases daily. With energy-dependent technology driving our lives, ecologists continue to search for ways to save our environment. Focusing on energy-efficient appliances is one way to do that.

Your monthly electric bill may not itemize the specific usage of each appliance in your home. If you are interested in a breakdown, though, you can ask your local electric company for a listing. But about 30% of the charges on your statement stem from your electrical appliances. That’s why the government, as well as the majority of appliance manufacturers, encourage consumers to replace standard devices with new energy-saving ones.

So, if your dishes aren’t coming out clean after a run in the dishwasher, or if the ring around your shirt collar has not disappeared after a hot laundry wash, you may be in the market for a new appliance.

There could be some good years left in that 10-year-old refrigerator or oven. But, generally speaking, prices for electrical appliances have come down across the board over the years. And once you consider the cost of a new part for your old apparatus, plus the charge for the visit, it just might be worthwhile to chuck the old and buy new.

It’s also worth keeping in mind that the new energy-efficient appliances save you money on a monthly basis because they use far less electricity. They also help the environment by cutting down on greenhouse gases emitted into the air.

What is Energy-Efficient?

So what does it really mean if an appliance is energy-efficient? In simple terms, it means the process used to make the appliance function – spin, clean, cool, heat, etc. is using less energy. This can be achieved in a number of ways, and manufacturers are always adapting new techniques, such as using renewable sources of energy like water or sunlight.  

Now that you have decided that a modern and energy-efficient refrigerator is what you need, how can you be sure you’re choosing the best product at the most reasonable price?

Here are some tips to guide you in your search:

  1. Determine the total cost. Since the purpose of your new purchase is to save on monthly energy costs, the first thing to consider is the operating costs.  That, along with the actual purchase price, should give you the real cost of the appliance.
  1. Look for the energy rating. There are several reliable rating services that provide information about appliance energy consumption. The federal government uses the yellow and black Energy Star Standard sticker to inform consumers about operating costs and annual energy consumption. This helps buyers compare one clothes dryer to another. Energy Star tests each item independently.
  1. Select the right size appliance. Running a large machine – even the most energy-efficient one – uses more electricity than a compact one, so don’t buy something bigger than what you need.
  1. Look for economy choices. Many dishwashers and washing machines offer a variety of different cycles. If you find one with an economy cycle, that will save you money when you need to wash only a small load of clothes or dishes.
  1. Stay Simple. When it comes to choosing a refrigerator, go easy on the add-ons. According to one independent rating service, a water dispenser or ice maker uses a lot of extra electricity. Also, top-to-bottom fridge/freezer models are more energy-efficient than side by sides. The auto-defrost feature uses heat to speed up defrosting and makes running the refrigerator less efficient.

This holds true for self-cleaning ovens as well, so consider the value in this upgrade.

  1. Contact your utility supplier for the latest ways to save on utility charges. With today’s smart devices, appliances can be programed to use less energy at certain times of the day.
  1. Check out your home. If you have the time and the extra cash, it may be worthwhile to call in a home assessor to help identify ways you can save on your overall energy and water costs.  He or she may be able to tell you how to use your appliances at the most energy-efficient times of day.
  1. Comparison shop. Never buy the first model you see. Household appliances are not cheap, and to find the most energy efficient one at the best price, shop around. Well-known name brands are always more expensive than lesser-known companies. However, they don’t always offer a better product. If you check carefully, you may find that heating element in the name-brand laundry dryer is exactly the same as the one in a model selling for hundreds of dollars less. Compare the details. You might be surprised.




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Sleep Deprivation – And Its Effects

Obviously, the potential downside for severe sleep deprivation is disastrous. But sleep deprivation hurts us in a myriad of other ways too – some more subtle than others. Lack of sleep can lead to the following problems:

  •  Decreased productivity at work.
  •  Increase in workplace errors.
  •  Workplace accidents and injuries.
  •  Increased irritability.
  •  Decreased energy.
  •  Depression.
  •  Decreased sex drive.
  •  Memory problems.
  •  Concentration problems.
  •  Difficulty managing financial affairs.

The problem is widespread. Most of us need about eight hours of sleep per 24-hour period. But more than 35% reported getting less than seven hours per night. Nearly half of Americans reported snoring – a major indicator of sleep apnea, which can cause sleep deprivation.

Nearly 40% of Americans reported falling asleep unintentionally during the day, at least once during the previous month. About one in 20, or 4.7% report falling asleep while driving – a problem that the U.S. Department of Transportation estimates to have caused 40,000 injuries and 1,550 deaths in traffic accidents each year.

Tips for Managing Sleep Issues

There are some easy things you can do to help improve your sleep patterns. According to the National Sleep Foundation:

1. Go to bed at the same time each day.

2. Wake up at the same time each day.

3. Keep up the habit, even on weekends.

4. Establish a relaxing bed-time routine.

5. Invest in a good mattress and good pillows.

6. Get computers, TV sets, work materials and other distractions out of the bedroom, which should be used only for sleep and intimacy.

7. Don’t eat a big meal or heavy snack right before bedtime. (Your heart will thank you for this too!)

8. Exercise.

9. Avoid caffeine near bedtime.

Severe, chronic sleep difficulty is a medical issue. If you are routinely getting too little sleep, and it affects your personal and professional life, talk to your doctor about your options. He or she may refer you to a sleep specialist.

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Investing – Step #5: Learn The Costs Of Investing

The ultimate goal of investing is to let your money work for you and provide you with stable, passive income.

But it costs money to invest money.

This month, take the time to learn the dollars and cents of investing. Of course, you knew that investing was going to mean coming up with the actual money you’re putting into the market, which always holds the possibility of being lost forever. But did you know there are going to be various fees, commissions, and taxes you’ll have to pay, too?

Let’s take a peek at an actual investment to illustrate this. The company and amounts have been changed, but they’ve been accurately scaled down to size.

Suppose that, on Aug. 13, 2015, a share of stock in Apple closed at $43.26. During the next few months,
Apple issues four dividends of $0.55 per share. On Aug. 25. 2016, a share of stock in Apple closed at $51.23.

Let’s say you chose to invest $1,000 in Apple on Aug. 13, 2015 and you withdrew it on Aug. 25, 2016.

At the time of your investment, $1,000 would buy you 23.25 shares of Apple. Over the year, you would have received $51.16 in dividend payouts. When you withdrew from the company a bit over a year after your initial investment, you’d sell that stock for $1,191.09.

It seems like your gain from this stock is $242.25, broken down into $51.16 in dividends and another $191.09 from selling the stock. Simple, right?

The problem is, though, you haven’t exactly earned that much. Here’s where the costs of investments come into play.

First, the dividends would be subject to income tax. In this case, the dividends are considered qualified dividends, and would therefore be taxed at a rate of 15% by the federal government and possibly more by state and local sources. As a result, $7.67 of that dividend gain is eaten up by these taxes.

Second, you’re going to have to pay your broker for the cost of buying and selling the stock. Let’s say, hypothetically, you’ve used an online discount stock brokerage firm. The buy and the sell would each cost $9.99. That’s another $19.98 dropped from your gain – although this fee is tax deductible.

Third, the gain on the sale would be a long-term capital gain, so 15% of that gain goes to the federal government. Since your gain was $191.09, you’d be paying an additional $28.66 in taxes on the sale.

In total, your expenses for your gain add up to $56.31. Just like that, nearly 30% of your gain is gone!

Even if your investment is a loser, you’re still paying the brokerage fees and will earn less in dividends.

The moral of the story? Investing costs. You’re taxed if you gain, and you’ll get hit with brokerage fees whether you win or lose.

Some forms of investing have lower costs than others. If you invest directly with an investing house, you can bypass the investing fees and only pay the taxes on your gains. However, you’re limited to the offerings that the investing house has available, and you’ll be subject to their often inflexible minimums for investing.

You could also simply invest in a money market account or other savings option at UCCU. Your returns will come with fewer or no costs. Plus, your balance isn’t at risk. Yes, you might “lose” some gains by only having the cash in a savings account, but your money is earning a steady return. If you invest elsewhere, it’s possible that the costs, the fees and the taxes can easily eat up a substantial amount of whatever you gain or make an already painful loss even harder.

It’s important to note that the bigger your investment, the smaller the impact such costs have. At the $1,000 level, the investment fees in the above scenario typically eat up about 2% of your balance. If you’re investing $10,000, the fees will only eat up 0.2% of your balance, and if you invest $100,000, the fees eat up only 0.02% of your balance.

Thus, as a beginning investor, it’s crucial to know the total cost of ownership of an investment as you consider it. Even a small fee can significantly lower your total return when you’re starting out with small investments.

That’s why it’s best to take it slowly at first and continue learning about the market and stocks you’re interested in. Know exactly what you’re going to invest in – and what all of the costs of that investment are – before you put down any of your money. After working out the math, you may find you’d rather wait until you have a substantial amount saved up for investing, as these fees don’t make such a big dent when the gains are larger.

So, before you make that first investment, learn the costs and be sure it’s worth the price!

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6 Common Tax Mistakes To Avoid

It’s that time of year again! Get ready to break out the calculator and pencils; dig out the enormous pile of receipts, tax forms, and pay stubs, and get to work. Whether you choose to go it alone, use a tax-prep computer program or hand it all over to an accountant, start with checking out our handy list of common mistakes people make on their tax returns.

1.) Faulty math

One of the most common errors on filed taxes is math mistakes. A small miscalculation can throw off all your numbers and get you into trouble with the IRS. However you choose to prepare your taxes, be sure to triple-check the math before filing.

2.) Name changes and misspellings

When preparing your taxes, you’re thinking about numbers, but don’t forget to pay attention to everything else on your form! If you use a name that’s different than the one the IRS has on file for your Social Security number, or even if you spell it wrong, that can mean trouble for you and your taxes. If you’ve recently changed your legal name, be sure to let the Social Security Administration know.

3.) Omitting extra income

Many people neglect to include secondary sources of income on their tax forms. This may include freelance work and any other side work they may have done throughout the year. If you’ve taken any side jobs in 2017, fill out a 1099-MISC and file it along with your taxes.

4.) Deducting funds donated to charity

Charity laws are complicated! First, only donations given to an organization with a tax-exempt status can be deducted from your taxes. Second, if you’ve donated food items or used clothing, they had to have been in decent shape to be eligible for a write-off. Finally, calculate the value of your non-monetary donations according to what they would be worth if you’d sell them now. Don’t forget to include those charity tax receipts when you file!

5.) Using the most recent tax laws

The current administration has made some major changes to the tax code. While most of these changes won’t take effect until you file your first taxes for 2018, there are some changes that are effective for this year, including the following:

  • The standard deduction increased to $6,350 for single, $9,350 for head of household, and $12,700 for married filing jointly.
  • The maximum earned income tax credit increased to $6,318.
  • The maximum income limit for the EITC increased to $53,930.
  • The foreign earned income deduction increased to $102,100.
  • Annual deductible amounts for Health Savings Accounts increased for individuals only, to $3,400.

6.) Signing your forms

If you’re filing through the USPS, be sure to put your signature wherever necessary, and get a mailing receipt. If filing online, you can use a PIN instead. Most places that require a signature will need to be dated as well.

Check your forms for errors before submitting and file with confidence!





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Plan The Ultimate Family Vacation – Together!

Planning the ultimate family vacation is quite a challenge. This is especially true when you’re trying to fit in the best attractions and give your kids the vacation of a lifetime while staying within a budget.

How can you accomplish all that and still keep your kids happy?

The solution is simple, yet brilliant: Let your kids be a part of planning that vacation! This way, they’ll be the making many of the choices, thus eliminating the usual complaints and groans about your chosen attractions. Plus, your job will be that much easier. As an added bonus, your kids will learn invaluable lessons about budgeting and making choices.

Several weeks before your planned vacation, hold a family meeting. Then, let your kids know what your destination is before enlisting their help in planning the itinerary. Make sure they know what your exact budget is and fill them in on all the best attractions in the area.

Tell them they are going to have to make some very hard choices. They need to decide exactly what they want to do with the vacation budget.

Do they want to try out the famously fantastic Thai restaurant near the hotel and then spend a day at the beach? Or, would they rather pick up a budget meal and take in the huge amusement park in the area? Do they want to go horseback riding and skip the ATVing? Or, would they rather give both activities a miss and spend the money on water-skiing? Let them know that each option is going to make a dent in the budget, so they need to choose wisely!

To make it even more tangible for your kids, withdraw cash for the entire amount you plan to spend on your vacation and place it on the table. Then, when a choice is made, physically subtract the amount it would cost you from the stash of cash. This will allow your kids to actually see how much each attraction will “cost” them and force them to make better choices.

When your meeting is through, you will have your itinerary planned and your kids will have gained an invaluable life lesson in budgeting and decision-making.

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Exercises That Improve Your Focus

As a student, it’s important to find ways to enhance your focus. Perhaps you’ve already tried many methods. Whether it’s a magic supplement promising to turn you into the next Einstein or a veggie smoothie your roommate promises will help you ace every exam, there’s a lot of reason for skepticism. Are there methods that really work?

Just like any muscle in your body, your mind muscles need resistance so they can stretch and grow. Challenge your noodle with the exercises listed below, all of which have been proven to sharpen the brain.

1.) Practice mindfulness

In a super fast-paced world, doing one thing at a time is nearly passé. Multitasking is the wave of the future – or is it?

When your brain is constantly being pulled in multiple directions at the same time, it’s hard to focus on any single task.

Defeat this downside of 21st-century life by resolving to do one task a day with complete mindfulness. When walking to class, leave your phone in your bag and concentrate on the pull of your muscles, the wind whipping at your face, and on your surroundings. When tackling a homework assignment, power down your electronics and focus on nothing else. When having a conversation with a roommate or classmate, focus intently on what they’re saying instead of other thoughts or distractions that may be vying for your attention.

Practicing mindfulness on a daily basis will soon turn it into routine.

2.) Play memory

Remember that matching game you played as a child? It’s time to dig out the stack of cards again! Get a bunch of friends together for a trip back into childhood and play a round of memory. You’ll have loads of fun trying to outdo your friends’ powers of recall and you’ll be giving your brain a real workout at the same time!

If you want to give the game a grown-up spin, have a roommate gather a bunch of random items on a tray. Look at the tray for 30 seconds and then have your partner remove it. How many displayed items can you remember? Keep on playing until you can remember all of the objects easily.

3.) Meditate

Not only does meditation help keep you relaxed and calm, research has repeatedly proven that it significantly boosts your attention span.

You don’t need to run off to a mountaintop for three hours every afternoon. You likely don’t have time for that sort of commitment – not to mention your roommates will think you’ve fallen off the deep end. Try meditating for just 10 or 15 minutes a day. Even short bouts of meditation can improve your focus.

4.) Play brain games

You may be sick of Sudoku, but there are loads of other brain games that’ll keep your gray cells in top form. Search “brain training games” on Google for dozens of fun games that challenge your brain. You’ll find some that boost your memory, improve your attention span and increase your cognitive speed and mental flexibility. To up the fun factor, compete against a friend!

5.) Puzzles

Another childhood favorite, jigsaw puzzles are a great way to exercise the brain. If you’d rather not work with a physical puzzle, you can find lots of free puzzles online.

6.) Physical exercise

When your body starts moving, so does your mind. Physical exercise has lots of benefits for the body – and one of them is keeping your brain cells healthy! You’ll also improve your mental stamina, which is always a good thing.

Give your brain a real workout and give yourself the tools you need to ace every exam!





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Why do I need to get preapproved for a loan?

Q: I’m in the market for a new home, and everyone I talk to, from friends to financial advisors, suggests I get preapproved for a mortgage before I start house hunting. Why is this so important?

A: You’re actually on the receiving end of great advice! When looking to take out a large loan, whether it’s for purchasing a home or buying a car, having that preapproval in hand before you start your search is crucial.

Depending upon the type of loan, the process of getting preapproved for a loan can take time. The lender will begin by asking for your financial history and other personal information. If you have a co-borrower, the lender will need this information about them as well.

You’ll be asked to provide your Social Security Number (SSN) and for permission to allow the lender to access your credit report. If the information you provide is satisfactory, as is your credit report, the lender will begin constructing the details of your loan. When they have determined how large of a loan you will be eligible for, they will grant you a preapproval letter. The letter will also detail your estimated interest rate on the loan, though that will sometimes also depend upon the specifics of your purchase, such as the year and condition of a car or appraisal on a home.

Having your preapproval letter will shorten the loan process significantly when you’re actually ready to take out the loan. However, that is only a small benefit of getting preapproved before you start “shopping.”

Here are some other advantages of getting preapproved for a loan:

1.) You’ll know what you can afford

Your preapproval will tell you exactly what you can afford. This way, you’ll avoid being disappointed later when you have your heart set on a certain home only to be told you can’t swing it financially. Knowing how large a loan you’ll qualify for will simplify your search and get you into your new home or car sooner.

Be sure to calculate other monthly costs, such as property taxes, home insurance and increased auto insurance rates when determining the actual amount of money you’ll need to shell out each month.

2.) Don’t get taken for a ride

Picture this scene at a car dealership:

Salesperson: So, you’re here to buy a new car! What are you looking for?

You: Well, I want something with a smooth ride and –

Salesperson: Got it. And how much of a monthly payment can you afford?

You: Weeelll, I think I can swing up to $200 a month, but I’d rather something closer to $150 if you —

Salesperson: Step right this way please! Let me show our new line of Camrys at just $205 a month! They have the most luxurious feel and the ride is smooth as butter!

What happened here is, quite simply, a salesperson looking to make the most money out of a customer. When you’re unsure about how much you can spend, the dealer will capitalize on your uncertainty and try to sell you a car that just barely skims the maximum amount you’ve decided you can afford.

Also, when you name a monthly payment you can manage, the dealer will work with that number instead of talking about the price of the car. They may try to inflate the payment with charges and fees just because they fit within your named payment amount.

In contrast, when you show up at the dealer with a preapproval in hand, the salesman will have to show you cars with price tags that fit within your loan amount.

Don’t get taken for a ride; get your preapproval before you set foot in the dealer shop!

3.) Be taken seriously

A car dealer will take you a lot more seriously when you wave that preapproval in their face, since having that information in hand shows you’re ready to buy.

When purchasing a home, the same rule holds true. A realtor will be able to assist you more efficiently when you know exactly how much house you can afford. They may also give you better service since you’re showing that you’re serious about buying a home. In fact, many realtors refuse to show homes to buyers who don’t have a preapproval in hand.

4.) Know you have financing you can trust

When you show up at the car dealership with a preapproval from your credit union, you know the deal is in your best interest. Many auto shops have access to several financing options and they’re almost always going to put customers into financing options that are in their own wallet’s best interests.

5.) Purchase your dream home

A preapproval makes you a valuable customer. It also helps you stand out from the pack. If you’re looking to buy a home in a competitive market, you may be competing with several other buyers for the same house. Having your preapproval will give you a leg up on bidding wars. A seller will be more eager to work with someone who’s already started the mortgage process. You can end your search sooner with a preapproval!

In the market for a new home or car? Don’t forget to call, click, or stop by UCCU to hear about our fantastic rates on mortgage and auto loans!

Your Turn: Based on your own experience, why do you think it’s important to get preapproved for a loan? Share your thoughts with us in the comments!

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