Affinity by Shibu Lawrence

Affinity Business Solutions works for you

Affinity has a full range of services that you expect and need as a small business from insurance, to payroll services, loans, business checking and savings. As your business grows, Affinity can provide services to meet your expanding needs without having to shop around. And, you can let us manage the details while you manage your business.

Our Partners are here to help. Affinity partners with some of the leading providers of services such as Paychex and Travelers Insurance to provide your business with the right solutions. Affinity can act as your single source to these services saving you time and money.

We offer you lower fees and better rates. As a member of a credit union, your membership entitles you to extremely competitive rates and lower fees on the products and services your business needs. And, we have the flexibility to meet your needs no matter what the size of your business. In fact in 2007, Affinity extended loans ranging in size from 5 thousand dollars up to loans of 5 million dollars, for businesses just like yours.

We think small business. We’re so dedicated to small businesses like yours, that we have created a Business Advisory Council that will look to businesses like yours to provide us with feedback on the wants and needs of small businesses, to help us build an even better product offering.

Membership makes a difference. At Affinity Business Solutions you are a member, not a customer. We think you’ll find working with Affinity different than working with other banks and financial institutions with our commitment to you to provide ...

We’re bigger than a lot of banks. We just don’t act that way. Affinity Federal Credit Union manages assets of over 1.5 billion dollars. With over 125,000 members of over 1,700 businesses we are the largest credit union in New Jersey. And, even though we’re big enough to provide all the solutions you need, we’re small enough to provide you the kind of hands on service you expect, including access to the right people in our organization.

Affinity Value Proposition We promise that our knowledgeable, engaging and caring professionals will make our members feel great about the Affinity Experience, while offering the best and easiest to use financial products and services to meet our membersâ&#x20AC;&#x2122; needs.

One account, Four loans, Infinite possibilities A flexible line of credit that lets you take up to four separate loans when you need them! There’s never been an easier way to borrow the money you need for:

Announcing Affinity’s New EasyFLEX Home Equity Line of Credit

• • • •

Home Improvement Debt Consolidation College Expenses Unforeseen Expenses

Annual Percentage Rate (APR) is XX.XX% as of [date]. Rates are subject to change. The maximum APR that may be charged is 18.00%. Properties not located in New Jersey are subject to state mortgage tax fees, which typically range between $0 and $5,000. Consult your tax advisor regarding the deductibility of interest under this plan. Within the Easy Flex HELOC there is a fixed rate option which you may use for up to 3 advances at any one time. When you choose this option the interest rate you receive for that advance will be fixed until the balance is repaid. Your fixed interest rate will be determined by the Credit Union adding or subtracting, in its sole discretion, a margin of two and one-half per cent (2.5%) to the U.S. Prime Rate Published in the Wall Street Journal at the time you choose this option. We reserve the right to charge a lower margin. The APR includes a 0.25% reduction for automatic payment from your Affinity account. Home Equity Lines of Credit and Fixed Rate Equity Loans are not offered in Texas. South Carolina requires the borrower(s) to have a closing attorney; other states may have the same requirement for legal representation.

Announcing Affinityâ&#x20AC;&#x2122;s New Home Equity

EasyFlex Line of Credit A Flexible Line of Credit and Fixed Rate Loan in One Account!

Borrow What You Want —When You Want. • • • • •

One application, one approval, no closing costs Up to four active loans at any one time No fixed vs. variable rate choices to make. You can have both Flexible terms and repayment plans Interest may be tax-deductible

To learn more or apply today, visit any branch, call 800-325-0808 prompt 3, or visit www.affinityfcu.org/easyflex

EasyFlex can be applied to equity in primary homes or vacation homes. HELOC loans and FRED loans are not offered in Texas. South Carolina requires member to have a closing attorney

Announcing Affinityâ&#x20AC;&#x2122;s New

EasyFlex

Home Equity Line of Credit A Flexible Line of Credit and Fixed Rate Loan in One Account!

Borrow What You Want —When You Want. • • • • •

To learn more or apply today, visit any branch, call 800-325-0808 prompt 3, or visit www.affinityfcu.org/easyflex

EasyFlex can be applied to equity in primary homes or vacation homes. HELOC loans and FRED loans are not offered in Texas. South Carolina requires member to have a closing attorney

Announcing Affinityâ&#x20AC;&#x2122;s New

EasyFlex Home Equity Line of Credit

A Flexible Line of Credit and Fixed Rate Loan in One Account!

Borrow What You Want —When You Want. • One application, one approval, no closing costs • Up to four active loans at any one time • No fixed vs. variable rate choices to make. You can have both • Flexible terms and repayment plans • Interest may be tax-deductible To learn more or apply today, visit any branch, call 800-325-0808 prompt 3, or visit www.affinityfcu.org/easyflex

EasyFlex can be applied to equity in primary homes or vacation homes. HELOC loans and FRED loans are not offered in Texas. South Carolina requires member to have a closing attorney

Announcing Affinity’s New

EasyFLEX Line of Credit

Home Equity

4 loans • 1 account • Infinite possibilities The best features of variable rate home equity lines of credit and fixed rate home equity loans in one convenient account.

Home Improvement College Expenses

Debt Consolidation

Unforeseen Expenses

Announcing Affinity’s New

4 loans 1 account Infinite possibilities

EasyFLEX

Home Equity Line of Credit • • • •

Home Improvement College Expenses Debt Consolidation Unforeseen Expenses

4 loans, 1 account, Infinite possibilities The best features of variable rate home equity lines of credit and fixed rate home equity loans in one convenient account:

Announcing Affinity’s New EasyFLEX Home Equity Line of Credit

• • • •

Home Improvement Debt Consolidation College Expenses Unforeseen Expenses

Announcing Affinity’s New Home Equity

EasyFLEX Line of Credit 4 loans • 1 account • Infinite possibilities The best features of variable rate home equity lines of credit and fixed rate home equity loans in one convenient account.

Home Improvement College Expenses Debt Consolidation Unforeseen Expenses

Do the Math 1 account = up to 4 home equity loans Affinityâ&#x20AC;&#x2122;s new EasyFlex Home Equity Line of Credit provides 15 years worth of variable and fixed rate loans with one applicationâ&#x20AC;Ś and one approval

There’s never been an easier way to

borrow the money you need for: • Home improvements • College expenses • Debt consolidation • Unforeseen expenses

EasyFlex offers: • • • • •

It all adds up. To learn more or apply today, visit any branch, call 800-325-0808 prompt 3, or visit www.affinityfcu.org/easyflex

Affinityâ&#x20AC;&#x2122;s new EasyFlex Home Equity Line of Credit provides 15 years worth of variable and fixed rate loans with one applicationâ&#x20AC;Ś and one approval

EasyFlex offers: • One application, one approval, no closing costs • Up to four active loans at any one time • No fixed vs. variable rate choices to make. You can have both • Flexible terms and repayment plans • Interest may be tax-deductible It all adds up. To learn more or apply today, visit any branch, call 800-325-0808 prompt 3, or visit www.affinityfcu.org/easyflex

1 account = up to 4 home equity loans Affinityâ&#x20AC;&#x2122;s new EasyFlex Home Equity Line of Credit provides 15 years worth of variable and fixed rate loans with one applicationâ&#x20AC;Ś and one approval

Do the Math

There’s never been an easier way to

borrow the money you need for: • Home improvements • College expenses • Debt consolidation • Unforeseen expenses

EasyFlex offers: • • • • •

It all adds up. To learn more or apply today, visit any branch, call 800-325-0808 prompt 3, or visit www.affinityfcu.org/easyflex

Announcing Affinity’s New

EasyFLEX Line of

Home Equity Credit FLEXIBLE LINE OF CREDIT ONE ACCOUNT, FOUR LOANS ONE APPLICATION, ONE APPROVAL, INFINITE POSSIBILITIES

W I N T E R

2 0 0 9

Fresh Perspectives New Yearâ&#x20AC;&#x2122;s Resolutions for Your Business

IN THIS

ISSUE

Dear Fellow Affinity Member: The New Year is a time for resolutions and reflections. Resolutions that we will somehow do better in the future and reflections of what we could have done better in the past.

I want to take this opportunity to express a few reflections and resolutions of my own. First, I want to reflect on your loyalty and how appreciative I am for letting us be your financial advocate. Second, I want you to know that all of us at Affinity resolve to do whatever we can to deserve your continued support in 2009. In this issue of Connections, we provide a number of ideas to help you improve your financial outlook, whether you’re a business owner concerned about trimming expenses in 2009 or a consumer wondering how you’re going to pay off the debt you accumulated during 2008. An economy like this requires that you pay especially careful attention to such basic considerations as where to invest your cash reserves, whether you should borrow and if so, which of the many loans available in today’s marketplace are most appropriate for you. We’ve included back-to-basics information on savings and checking accounts, loans and lines of credit that can help you make the right decisions. And we’ve also drawn some distinctions between life and long-term care insurance to help you determine whether you need one or both types of coverage to truly protect your family. Thank you for your membership. I wish you the happiest of New Years and hope that 2009 will be a year of fulfillment and prosperity for you and your family. Sincerely,

Your Investment Portfolio......................................................... 2 – The Basic Tenets of Sound Investing

Cut the String on Yo-Yo Budgeting......................................... 3 – Getting Off the Debt Cycle

Learning to Love Red Ink.......................................................... 5 – Finding the Right Loan

Taking Care of Business............................................................. 7 – Setting SMART Goals

Rainy Day Reserves...................................................................10 – Planning for the Unexpected

Covering Your Bases..................................................................11 – Long Term Care and Life Insurance

John T. Fenton President and CEO

IN EVERY ISSUE AFFINITY N E W S .....................................................................13 WELCOME N E W S E G s ......................................................14 – Thank You for Choosing Affinity

1 Affinity Connections | WINTER 2009

What now for your Market conditions of the past several months have compelled many investors to liquidate their holdings and run for the safety of FDIC and NCUSIF-insured accounts – often after suffering substantial losses. Interestingly, however, several studies completed before last fall concluded that investors who try to time the markets by buying and selling mutual funds at what they perceive to be opportune times, underperform investors who simply employ a buy-and-hold strategy. In fact, many investors actually underperform the investments in their portfolio because they sell their holdings when prices are low and miss the opportunity to recoup their losses when markets turn around. It’s not easy to look at your account statements each month and see losses that may be more dramatic than any you've ever experienced before. But unless you truly believe that markets will never rebound, you might do well to remember these basic tenets of sound investing:

investment portfolio?

study in high school chemistry class, but a closer look reveals that it lists the top performers by investment category over the period from 1995-2007. As you can see, from 1995-1998, large cap growth stocks generated the highest returns. Over the past three years, international stocks were the winner. The point is that different investment categories fall in and out of favor in different market environments. That’s why diversification among several is so important. 3. Rebalancing Your asset allocation should remain constant since it is a reflection of your risk tolerance, objectives and time horizon. Rising or falling securities prices, however, can change your allocation without your realizing it. As a result, astute investors rebalance their portfolios periodically to

According to numerous financial studies, asset allocation accounts for 93.6% of a portfolio’s return, while securities selection accounts for only 4%. The right allocation for one person, however, may be totally wrong for another. Your allocation should be a reflection of your objectives, risk tolerance and other factors. To develop it, you should consult with your financial advisor or use the analytical tools available at such websites as www.mint.com or www.kiplinger.com. 2. Diversification Diversification within asset classes is critical. The chart on the right may look like the periodic table you were forced to

YOU’VE GOT TO BE IN IT TO WIN IT Recently, The New York Times cited a study that looked at equity markets in 15 nations, including the U.S.1 A portfolio belonging to an investor who missed the 10 best days over several decades across all of those markets ended up, on average, with about half the balance of someone who sat tight throughout. In short, it may be tempting to liquidate your stock positions now and take a known loss instead of incurring potentially bigger losses down the road. But what if the market turns around, if not now, then several months from now? How will you know when to get back in? Unless you time your move impeccably, you may never recoup your losses. Source: 1

New York Times, October 8, 2008.

The Callan Periodic Table of Investment Returns 1995

1. Asset Allocation

ensure they are not assuming more or less risk than they originally intended.

Annual Returns for Key Indices (1995-2007) Ranked in Order of Performance 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

S&P/Citi 500 Growth 38.13% S&P 500

S&P/Citi 500 Growth 23.97% S&P 500

S&P/Citi 500 Growth 36.52% S&P 500

38.13% S&P/Citi 500 Value 36.99% Russell 2000 Growth 31.04% Russell 2000

22.96% S&P/Citi 500 Value 22.00% Russell 2000 Value 21.37% Russell 2000

33.36% Russell 2000 Value 31.78% S&P/Citi 500 Value 29.98% Russell 2000

28.44% 16.53% 22.36% Russell Russell Russell 2000 2000 2000 Value Growth Growth 25.75% 11.32% 12.93% LB Agg MSCI LB Agg EAFE 18.46% 6.05% MSCI LB Agg EAFE

9.64% MSCI EAFE

11.21%

1.78%

3.64%

S&P/Citi Russell Russell Russell 500 2000 2000 2000 Growth Growth Value Value 42.16% 43.09% 22.83% 14.02% S&P 500 S&P/Citi LB Agg LB Agg 500 Growth 28.58% 28.25% 11.63% 8.43% MSCI MSCI S&P/Citi Russell EAFE EAFE 500 2000 Value 20.00% 26.96% 6.08% 2.49% S&P/Citi Russell Russell Russell 500 2000 2000 2000 Value Growth 14.69% 21.26% -3.02% -9.23% LB Agg S&P 500 S&P 500 S&P/Citi 500 Value 8.70% 21.04% -9.11% -11.71% Russell S&P/Citi MSCI S&P 500 2000 500 EAFE Growth Value 1.23% 12.73% -14.17% -11.89% Russell LB Agg S&P/Citi S&P/Citi 2000 500 500 Growth Growth -2.55% -0.82% -22.08% -12.73% Russell Russell Russell MSCI 2000 2000 2000 EAFE Value Value Growth -6.45% -1.49% -22.43% -21.44%

LB Agg

Russell Russell MSCI 2000 2000 EAFE Growth Value 10.26% 48.54% 22.25% 13.54% Russell Russell MSCI S&P/Citi 2000 2000 EAFE 500 Value Value -11.43% 47.25% 20.25% 5.82% MSCI Russell Russell S&P 500 EAFE 2000 2000 Value -15.94% 46.03% 18.33% 4.91% Russell MSCI S&P/Citi Russell 2000 EAFE 500 2000 Value Value -20.48% 38.59% 15.71% 4.71% S&P/Citi S&P/Citi Russell Russell 500 500 2000 2000 Value Value Growth -20.85% 31.79% 14.31% 4.55% S&P 500 S&P 500 S&P 500 Russell 2000 Growth -22.10% 28.68% 10.88% 4.15% S&P/Citi S&P/Citi S&P/Citi S&P/Citi 500 500 500 500 Growth Growth Growth Growth -23.59% 25.66% 6.13% 4.00% Russell LB Agg LB Agg LB Agg 2000 Growth -30.26% 4.10% 4.34% 2.43%

2007

MSCI EAFE

26.34% Russell 2000 Value 23.48% S&P/Citi 500 Value 20.81% Russell 2000

11.17% S&P/Citi 500 Growth 9.13% Russell 2000 Growth 7.05% LB Agg

18.37% 6.97% S&P 500 S&P 500 15.79% 5.49% Russell S&P/Citi 2000 500 Growth Value 13.35% 1.99% S&P/Citi Russell 500 2000 Growth 11.01% -1.57% LB Agg Russell 2000 Value 4.33% -9.78%

Securities offered by Affinity Investment Services, LLC, 73 Mountain View Boulevard, Basking Ridge, NJ 07920, member FINRA/SIPC. Investments offered by Affinity Investment Services are not deposits or obligations of Affinity Federal Credit Union. They are NOT NCUA INSURED and NOT GUARANTEED by Affinity Federal Credit Union or any governmental agency and are subject to INVESTMENT RISK, including LOSS of PRINCIPAL. Investments may lose value. Affinity Investment Services, LLC is a wholly owned subsidiary of Affinity Federal Credit Union.

This newsletter is distributed with the understanding that it does not constitute legal, accounting or other professional advice. Neither Affinity nor any other party will assume liability for loss or damage as a result of this material. Appropriate legal or accounting advice should be sought from a competent professional. Affinity is not responsible for typographic or inadvertent errors. Affinity Financial Services is a wholly owned subsidiary of Affinity Federal Credit Union. © 2008 Affinity Federal Credit Union.

2 Affinity Connections | WINTER 2009

Resolve to cut the string on

yo-yo budgeting this year The new year typically begins with too many Americans wondering how they’re going to pay off all the holiday debt they’ve accumulated. To be specific, Americans currently carry approximately $2.6 million in consumer debt—up 24% from 2003 levels.1 And the average amount of credit card debt per U.S. household is a whopping $9,840 — up 25% since 2000.2

This year, the situation may be even more dire. The combination of rising debt, rising prices, dimming job opportunities and declining home values has already resulted in the highest personal bankruptcy rates since the early 1990s.3 And if consumers don’t make a greater effort to incur less debt and pay off the debt they’ve already incurred, that rate could rise even higher. How can you get off the cycle of yo-yo budgeting—paying off debt only to incur it again—or avoid getting in the cycle in the first place? In our last issue of Connections, we discussed debt counseling and management programs, but typically as a last resort. Here are a few simple measures you can take before you get to that point:

3 Affinity Connections | WINTER 2009

1. Determine how much you owe Sounds fairly obvious, doesn’t it? Except so many Americans owe so much on so many different credit cards, not to mention other loans they may be carrying, that they don’t really know. Start by making a list of all your credit cards, your current balance on each and the interest rate that each charges. Some people begin their efforts by focusing on the cards that charge the highest rates. Others focus on the cards with the lowest balances so they can feel a sense of accomplishment as quickly as possible. Either way, develop a plan to pay off these debts by including payments as part of your monthly budget . . . which brings us to our next suggestion. 2. Develop a budget Most people don’t have one. They may know what they pay for such important fixed expenses as a mortgage payment, rent or car payment, but beyond that, they’d be hard pressed to provide an accurate figure. Compile all monthly statements and categorize expenses by such headings as food, utilities, clothes, gas, etc. Now divide categories into sub-categories — what you truly need and what you don’t. How do the results match up with your income? Do they match up better once you eliminate impulse buys and unnecessary expenses? Because “man doesn’t live by bread alone,” you might want to include a figure for “wants,” as opposed to “needs” in your budget, but make sure this figure doesn’t equal the amount of any surplus you may have.

Resolve to Manage Your Debt More Effectively This Year

Once you actually pay off debt, don’t stop making periodic payments. Just change the recipient of those payments from a lender or credit card company to yourself. Build up your savings or retirement account. Or determine a new objective like saving for a vacation, down payment on a new car or even a specific amount you can use next holiday season.

You still have to budget for the debt you already owe and hopefully, for savings as well. 3. Stop using your credit cards Yes, we know this seems like a drastic measure, but until you get out from under what you’ve already incurred, you might find that paying with cash will curb your expenses. 4. Consider debt consolidation Many banks and credit unions offer you the ability to consolidate all your credit card balances into one convenient loan account. Typically, this loan imposes a lower interest rate than the credit card companies you’re currently paying. Some consumers choose home equity loans for debt consolidation because they offer a lower rate than debt consolidation loans. Remember, however, that failure to pay off a home equity loan can place your home in jeopardy. And while a debt consolidation loan charges a higher interest rate, it may be a safer solution. Just make certain you read the fine print. Some debt consolidation loans only offer low rates for a specified period of time. And if your credit score is low, you may be required to pay a higher rate than that which is advertised.

MORE TIPS TO CUT THE YO-YO STRING • If you’re even moderately computersavvy, consider buying a software program like Quicken® or Microsoft® Money that enables you to track your monthly expenses and understand where your money is actually going. • If you’re a two-income family, make an effort to live on one of those incomes and invest the rest. Again, set specific goals for the assets you're investing. • Build charitable contributions into your budget. By giving money to an organization that’s important to you, you achieve a number of objectives— namely, supporting a cause you feel passionate about, receiving a tax deduction for the contributions you make and maybe decreasing the acquisitive impulse in yourself that caused you to get into debt in the first place.

5. Set specific goals Instead of just vowing to pay off all debt and save more for the future, you should consider formulating objectives that have numbers attached to them— I’m going to pay off 50% of my Visa® balance by April; I’m going to pay down my car loan by $7,000 this year, etc.

Managing your debt can mark the beginning of a new financial awareness that will guide your actions and keep you on a straighter path toward your most important objectives. Sources: 1

Choking on Credit Card Debt, Forbes.com, September 2008

Ibid

Bankruptcies Back on the Wrong Track, Center for American Progress, June 2008, www.americanprogress.com

Affinity’s free Budget and Credit Score Enhancement Service (BASES) can help you get out of the debt cycle. To learn more, visit www.affinityfcu.org or call 800-325-0808 ext. 3753.

4 Affinity Connections | WINTER 2009

Learning to love red ink: How the Right Loan Might Be Your Staunchest Financial Ally Some people view debt as a last resort, while others embrace it as an integral component of their financial plan. The fact is, the right financing arrangement can help you buy a home, send your children to college or acquire any number of goods and services without liquidating valuable assets. As a result, you avoid incurring income tax liability for any gains you might have earned and maintain the growth potential of your investment portfolio or real estate holdings. With all the innovative loans that have been introduced in recent years, however, many consumers are unsure which might be most suitable for them.

5 Affinity Connections | WINTER 2009

Here are a few basics to consider next time you go loan shopping: • Secured or unsecured Secured loans are based on collateral like your home or securities portfolio. Unsecured loans are based solely on your credit — whether or not, in the opinion of the lender, you have the ability to repay the loan on a timely basis. Secured loans, as you might expect, offer lower interest rates than unsecured loans. However, they involve greater risk — if you can't make payments, you may lose the assets securing the loan. • Fixed or variable Some loans offer a fixed interest rate that never changes. Others offer a rate

that changes periodically to keep pace with prevailing interest rate levels. Variable rate loans generally offer lower rates than their fixed rate counterparts— at least initially. Depending on interest rate fluctuations, however, variable rate loans may ultimately cost you more. • Loan or line of credit A loan is simply an agreement to borrow money and pay it back with interest over a specific time period. A line of credit is available over a specific time period to provide you with funds when you need them. You may access your line of credit by simply writing a check. Each check you write is in essence a loan that must be paid back within a specific timeframe.

WHAT ARE YOUR ALTERNATIVES? Credit Cards Credit cards are essentially loan agreements. The loan begins when you use your card to make a purchase. Repayment begins when you receive your next monthly statement. With credit cards, you can take as long as you wish to pay, provided you make a specified minimum payment each month. However, the interest rates charged by credit card providers are notoriously high — approximately 12-13% on average.1 As a result, you should confine use of your credit cards to short-term purchases and seek other financing arrangements for longer-term needs.

Home equity loans offer a fixed rate with terms that can range from 5-20 years. Home equity lines of credit typically offer a fixed rate for a specified number of years before changing to a variable rate for the remainder of the term. Unlike personal loans and lines of credit, the interest paid on home equity loans and lines of credit may be tax-deductible. Stock-Secured Loans and Stock-Secured Lines of Credit

Personal Loans These can be car loans, debt consolidation loans, home improvement loans or other loans that are typically unsecured (although in the case of some car loans, they may be secured by the vehicle you purchase). The term for these loans is typically less than five years and while the interest rate charged is lower than that imposed by credit cards, it’s considerably higher than secured alternatives like home equity loans and lines of credit. Home Equity Loans and Lines of Credit What if you could access the equity you’ve built up in your home to pay for virtually any expenses—remodeling, college tuition, medical expenses, or a new car? That’s the principle behind home equity loans and lines of credit, financing arrangements that have become increasingly popular over the past 20 years.

If You’re Contemplating a Loan…

In addition to providing a ready source of capital, home equity loans and lines of credit are usually available with no closing costs or application fees. In addition, the approval process is far less onerous and time consuming than that required for traditional mortgages.

These overlooked vehicles work similarly to home equity loans and lines of credit except instead of using the equity in your home as collateral, they use the value of securities in your investment portfolio. Generally, borrowers can access up to 50% of the market value of stocks, bonds, mutual funds and other eligible securities. Loans are often available with terms of up to five years and charge a fixed interest rate. Lines of credit offer the convenience of being able to access funds by writing a check, and charge a variable rate. Business owners often find stock-secured loans to be a valuable tool for managing unpredictable cash flow, and taking advantage of immediate opportunities until longer-term financing can be arranged. You should realize, however, that if the value of your securities declines in unfavorable markets, you may be required to deposit additional collateral.

WHICH LOAN SHOULD YOU CHOOSE? There are no right or wrong answers. What may seem to be the right loan choice at one time in your life may be the wrong choice at another. For example, if you’re looking to finance a new car, you may automatically apply for a car loan. But chances are, you could get a much lower interest rate by arranging for a home equity loan or line of credit. At the same time, you have to decide how long you want to pay for your purchase. Car loans are available with terms as low as two or three years. Home equity loans usually require a minimum term of five years. Your monthly payments will be lower with a home equity loan, but you could be paying more in interest charges over the duration of the loan. You should also determine whether a fixed-rate or variable-rate loan would make more sense for you. Variable-rate loans may offer lower rates initially, but ultimately they impose a rate that fluctuates with prevailing interest rates. What if rates go up over time? Fixed-rate loans allow you to lock in a rate over the long-term, but what if interest rates go down and you’re stuck paying a higher rate than you would have paid with a variable-rate line of credit? Of course, no one can predict the direction of interest rates, but you should consider the economic climate, as well as timeframe, interest payments and your own needs and objectives before you sign on the dotted line. Source: 1

www.indexcreditcards.com, September 2008

…understand the options available to you. Talk to an Affinity Loan Specialist who can help you develop a financing strategy that makes sense for you. Visit www.affinityfcu.org or call 800-325-0808.

6 Affinity Connections | WINTER 2009

Taking Care of Business New Year. New President. But unfortunately, not a new economy—at least not yet. The difficult conditions that have plagued American consumers and businesses since early 2008 have not yet changed for the better. But that doesn’t mean you have no choice but to grit your teeth and wait passively for better times. According to some experts, 5% of businesses actually thrive during recessionary environments.1 And, the vast majority of them do survive. What can you do to take advantage of any opportunities that might be hiding in the gloom and position yourself for what will hopefully be a not-toodistant turnaround?

7 Affinity Connections | WINTER 2009

IF YOU’RE GOING TO SET GOALS, MAKE SURE THEY’RE SMART SMART stands for specific, measurable, attainable, realistic and timely. It's a term used by business consultants to help clients separate actionable ideas from wishful thinking. “I’m going to get in shape this year,” might be an example of the latter. “I’m going to fit into those jeans I bought last year by September,” might be an example of something SMART-er,

especially if it's accompanied by, “I’m going to cut out desserts and join a gym.” Here are a few potentially SMART ideas to which you can add appropriate detail: • By all means, reduce expenses. But, be careful not to slash muscle while you’re trimming fat. Don’t automatically look to lay off valuable employees or cut your marketing budget. In fact, now may be the time to add a dynamic salesperson or increase your advertising presence. After all, the idea of owning your own business is to generate business, isn’t it? Before you start cutting, try to quantify how much you hope to save and carefully analyze every area of your operations to determine which are truly not contributing to your bottom line. • Don’t just monitor cash flow, forecast it. That means matching your fixed expenses and planned expenditures to accounts receivable and making

able to increase them again so easily when the economy turns around. Now is the time to focus on improving service by shortening production schedules or keeping more customerfriendly hours. And if you must focus on price, confine your efforts to rewarding important customers with pre-payment incentives or price breaks for entering long-term contracts. • Take stock of your inventory. It’s pointless to tie up cash in unproductive assets. By now, you should know how many times a year you typically turn your inventory or how long it takes you to sell it. If sales are slowing, order fewer products and continue to monitor your progress so you don’t overstock or get caught short in the event of an economic turnaround. • Be SMART about debt. Depending on prevailing interest rates, you may be able to refinance loans or negotiate lines

In this or any economy, it’s important to measure your progress. You don’t know where you are if you don’t know where you’ve been. Establish metrics for all your business processes — how long it takes to deposit customer payments and gain access to cash, how individual items in your inventory are selling and whether you’re tying up capital in slow moving goods. If you’re a service business,

in Today’s Sluggish Economy adjustments if they don't balance. What kind of adjustments? Avoid expenditures that aren’t completely necessary, of course, but pay closer attention to collections as well. Today’s lackluster economy is probably affecting your clients as negatively as it’s impacting you. Stay in close touch with them to determine how they’re faring and whether their creditworthiness has taken a hit. Don’t wait until payments are overdue before you begin collection efforts. And make sure you address all customer service issues promptly, so they can’t be used as an excuse for withholding remittance. • Add value, don’t cut prices. By conducting a fire sale, you commoditize the products and services you offer. And once you cut prices, you may not be

of credit at more favorable terms. If you’re crunched for cash, consider talking to creditors about extending payments before your bills are past due. Chances are they’ll be receptive if you have a solid credit history. • Involve your employees. They’re affected by adverse business conditions, too. Meet with them regularly and enlist their assistance in cutting costs and improving productivity. If layoffs seem unavoidable, ask them to develop alternative solutions—job sharing or shortened hours, perhaps. And, especially in difficult times, show employees how much you appreciate them. You may not be able to give them raises, but a simple compliment or public acknowledgement of their contributions can go a long way toward lifting morale and ensuring commitment.

determine how to maintain the quality of your service. Do you obtain feedback from customers, for example, or impose service standards on employees? The 5% of businesses that thrive in difficult economic environments don’t all do it by luck. Resolve to make 2009 your SMART-est year yet. You may find yourself flourishing even before the economy turns around. KEEPING MORE OF YOUR PROFITS THROUGH ASTUTE TAX PLANING Making money in this economy is difficult enough without contributing an unduly large portion of it to unnecessary taxes. As a business owner, you have numerous opportunities to reduce your tax bill through such allowable write-offs as up to

8 Affinity Connections | WINTER 2009

$250,000 for major equipment purchases like computers or office furniture and 100% of any health insurance premiums you pay. Beyond these incentives, however, Uncle Sam offers a number of other opportunities to reduce your business’ income tax, provided you know where to look for them. Here are just a few to think about: • Defer income…or not If you think that this year will be better than next, defer year-end billing to just before the new year or even 2010, so that the payments you receive won’t count toward this year’s income tax. Conversely, if you think that next year will be more profitable than 2009, speed up your billing process and try to book as much income as possible this year. Variations on this theme include prepaying estimated tax payments and perhaps even electing a new fiscal year. • Estimated tax payments are deductible for the year that they’re paid. If you foresee a large tax bill, make your January 2010 estimated payment in December 2009. That will reduce your taxable income for this year, instead of next. The same principle applies to local property taxes. Making any payments in December will enable you to take a deduction for this year. • You don’t have to adopt the calendar year as your fiscal year. If your business tends to be cyclical, with sales at their strongest around the holiday season, consider ending your fiscal year in June. This strategy will enable you to defer tax payments on year-end profits to the following year.

How Do You Make SMART–er Business Decisions This Year? 9 Affinity Connections | WINTER 2009

• Bite the bullet on bad debts and sluggish inventory Uncollectible debts are especially frustrating to business owners because even if they file a small claim against the debtor and receive a favorable judgment, they often fail to collect because the debtor goes bankrupt. As long as you keep records showing that you tried to collect payment, you can write-off debts for which you have no hope of ever getting paid. In addition, you might think about going through your inventory and destroying or donating

those dusty goods that were supposed to be hot sellers but never were. • Make the most of losses Individual tax payers who suffer investment losses often carry forward a portion of their losses for use in future years. The same principle applies in reverse for businesses. If you foresee major losses, you might be able to carry a portion of them back to the two previous tax years. That means you would actually qualify for a refund of taxes you have paid in those years. Source: 1 Reilly, Tom, Selling in Tough Times, www.tomreillytraining.com, 2008

Don’t Try This at Home Tax laws are complex and one wrong move can have a ripple effect on your business and personal finances. If you don’t currently work with a CPA, do so immediately. The right professional can not only prepare your taxes and help you identify write-offs you might miss on your own, but can provide you with ongoing advice that can result in tax savings far exceeding the fees you pay. To choose the right CPA for your business, ask colleagues and associates for referrals, but you might also consider the following: • Who does your bookkeeping? Some business owners want the control of keeping their own books through QuickBooks® or other recordkeeping systems. Others would just as soon relinquish this responsibility to an employee or outside professional. Some CPAs offer bookkeeping services, but others do not. • Do you need a specialist? Some industries are subject to unique tax laws and government regulations that require specialized expertise. If you’re a dry cleaner, you don’t need an accountant with expertise of this nature. If you’re in an energy-related business, however, you might benefit from a CPA who speaks your language. • Big firm or small? Big firms typically charge more but offer more services. Small firms provide more personalized attention and the benefits of working with the same professional on an ongoing basis. By hiring a sole proprietor or small partnership, you can develop a relationship with a CPA who understands your business. Once you choose a CPA, meet with him or her on a regular basis, not just at tax time. The right CPA can help you take advantage of favorable tax laws and avoid potentially harmful liabilities throughout the year.

Affinity Business Solutions offers customized advice that can lead to a healthier bottom line and greater employee satisfaction. For more information, visit www.affinityfcu.org or call 800-325-0808.

Reviewing Your Rainy Day Reserves How much should you keep in your checking account, money market account and certificates of deposit? And how much should you keep in one versus the others? According to most experts, the answer to the first question is 3-6 months of living expenses. By maintaining this reserve in accounts that are easily accessed, you protect yourself in the event of emergencies such as unforeseen expenses or losing your job. And you avoid having to sell less liquid investments like stocks, bonds or mutual funds under duress. As for the second question — how much should you keep in each — here’s a look at the alternatives available to you: • Checking Account Does it pay interest? Does it require you to keep a minimum balance and charge you a fee if you fail to do so? Does it offer free checks and online banking? These are just a few of the questions to ask about the account that you probably take for granted. Your checking account may not pay much interest, but it shouldn’t be costing you money. • Money Market Account You’ll earn high interest in a money market account, but you’ll be subject to more restrictions. Typically, these accounts only allow you to write a certain number of checks and make a certain number of withdrawals and transfers each month. In addition, money market accounts usually impose a minimum balance requirement.

• Certificates of Deposit These offer a higher interest rate than money market accounts. What’s more, the rate remains constant until the CD matures. However, CDs don’t offer the same liquidity as money market and checking accounts. You won’t be able to withdraw your assets before maturity without incurring a penalty. CDs are available in maturities that range from a few months to several years. The longer the maturity, the higher the interest rate. CHECKING ACCOUNTS VS. MONEY MARKET ACCOUNTS • You might consider using a money market account instead of a checking account if you don’t expect to write more than a few checks or make more than a few withdrawals or transfers each month. • You might consider a money market account, in addition to your traditional checking account, for the 3-6 month rainy day reserve discussed earlier. You can keep only enough in your checking account to meet day-to-day expenses. • You might also think of your money market account as a convenient place to keep assets that you plan to spend over the next few months. Money market accounts are a great place to save funds for quarterly estimated tax payments or major purchases such as home furnishings or a new car.

MONEY MARKET ACCOUNTS VS. CERTIFICATES OF DEPOSIT • You can earn higher interest on your reserves by allocating a portion of them to Certificates of Deposit with relatively short-term maturities (3-12 months), while keeping the remainder in a money market account. • Another way to participate in CDs without tying up all your reserves for a long period of time is to ladder maturities. To understand this concept, imagine that each CD is a rung on a ladder with the shortest maturity at the bottom, the next shortest directly above it and so on until you arrive at the longest maturity on the topmost rung. For example, let’s say your ladder contains five rungs with CDs maturing in 3 months, 6 months, 1 year, 18 months and 2 years. When the 3 month CD matures, you can use the proceeds to buy a 2 year maturity since that rung is now vacant. When the 6 month CD matures, you can do the same, thereby perpetuating the ladder. In this way, you will always have CDs maturing at regular intervals. This approach can also help you take advantage of rising interest rates by reinvesting proceeds in higher rate CDs. And if rates drop, you will still have a portion of your reserves in CDs with higher yields.

Checking? Money Manager? Certificate Accounts? Affinity’s checking and savings accounts are insured to at least $250,000 by the National Credit Union Administration (NCUA), a federal agency backed by the full faith and credit of the United States government. To learn more, Securities offered by Affinity Investment Services,visit LLC, 73www.affinityfcu.org Mountain View Boulevard, Basking NJ 07920, member FINRA/SIPC. Investments offered by Affinity or Ridge, call 800-325-0808.

Which FederallyInsured Account is Right for You?

Investment Services are not deposits or obligations of Affinity Federal Credit Union. They are NOT NCUA INSURED and NOT GUARANTEED by Affinity Federal Credit Union or any governmental agency and are subject to INVESTMENT RISK, including LOSS of PRINCIPAL. Investments may lose value. Affinity Investment Services, LLC is a wholly owned subsidiary of Affinity Federal Credit Union.

10 Affinity Connections | WINTER 2009

Covering All Your Bases with and

Long-term Care M Life Insurance

ost people understand the basics of life insurance. It provides them with the peace of mind that in the event of a breadwinner’s premature death, his or her family will be able to maintain their current lifestyle without compromise. But what if that breadwinner doesn’t die prematurely? What if he or she lives to a ripe old age — a distinct possibility, given today’s longer life expectancies. The aging process, unfortunately, is often accompanied by chronic conditions that may require ongoing medical attention or even long-term care at home or through an assisted living or other facility. In fact, some experts estimate that 70% of people who are age 65 and older will need nursing home care during their lifetimes.1

And with the cost of nursing home care averaging more than $76,000 a year,2 extended treatment can erode even the most carefully constructed retirement nestegg and leave loved ones with little more than their memories. That’s why long-term care insurance has become so popular with aging baby boomers in recent years. Like life insurance, long-term care insurance may pay a benefit in return for periodic premium payments. Unlike life insurance, however, that benefit is paid not upon the death of the policy owner, but upon his or her need for custodial care — what Medicare defines as assistance with such basic life functions as eating, dressing and bathing.

11 Affinity Connections | WINTER 2009

WHAT DOES LONG-TERM CARE INSURANCE COVER? Depending on the type of policy you choose, you receive a benefit for a specified number of years once you require custodial care. You may use this benefit to meet nursing home, assisted living, adult day care or home nursing care expenses. However, benefits are not generally paid until the end of what is called an elimination period that may vary from a few months to a year. Some long-term care policies offer benefits that are tied to the inflation rate and increase accordingly year after year. All policies charge premiums that, like life insurance, vary according to your age and medical condition at time of purchase. Premiums may also vary, depending on the: • length of benefit period

You should realize that Medicare and other traditional medical insurance programs do not cover long-term care expenses. Medicare may cover medically necessary care after a hospital stay of at least three days, but coverage for an extended period is limited. SHOULD YOU PURCHASE BOTH LIFE AND LONG-TERM CARE INSURANCE? The answer depends on your individual situation. Many people buy life insurance when their children are young and they haven't yet compiled enough assets to leave their loved ones financially secure. Often, they let their policies lapse when they've reached a point in life where major debts — mortgage, children's college tuition, etc. — are paid off and their assets are substantial enough to leave a meaningful legacy.

• amount of benefit • length of elimination period

How Much Insurance Should You Own?

Other people retain their insurance policies as part of an overall estate plan, so that heirs can use income tax-free death benefits to pay any estate tax due without liquidating real estate or other assets. And still others would never dream of giving up their policies because they own what is called permanent insurance— whole life, universal life or variable life policies that have accumulated cash value over the years. They may now access this cash value to pay future premiums or supplement retirement expenses.

Long-term care insurance, however, is not nearly as complex. If you can afford it, you should seriously consider purchasing it. Failure to do so can: • limit your options when it comes to choosing long-term care alternatives • force loved ones to make difficult choices under financial duress — should they deplete your assets to pay for care or maybe quit their job to take care of you themselves • leave you with no choice but to liquidate assets you had planned to leave as a legacy If you ultimately decide not to purchase long-term care insurance, you should keep your life insurance, so that your loved ones will be able to inherit the legacy you intended. You should also make certain you have enough assets to pay not only for care, but for the living expenses of your spouse or other family members who depend on you. Finally, when shopping for long-term care coverage, remember that both you and your spouse will require separate policies. Sources: 1 The American Society of Aging, “Americans Fail to Act on Long-Term Care Protection”, May 2003 2

Genworth Financial, 2008 Annual Cost of Care Survey

And what kind? Is your current coverage adequate? Affinity Insurance Specialists can help you find out. Visit www.affinityfcu.org or call 800-325-0808.

12 Affinity Connections | WINTER 2009

AFFINITY NEWS Is Your Contact Information Up To Date with Affinity? Unfortunately, identity theft, phishing, and other forms of fraud are all on the rise. We want to help you protect your identity. One way to help protect yourself is to ensure that your contact information is up to date with us. For example, has your address, email or cell phone number changed? Let us know – so we can be sure we have the right information to reach you. It only takes a minute to update your information: • Call our Member Service Center at 800-325-0808 • Log on to Internet Home Banking and complete the Address Change form under Applications and Forms • Visit one of our branches – find the closest at www.affinityfcu.org/locator

Let Affinity Help You Prepare Your Taxes! We offer a variety of tax resources to meet your needs, including: • Professional tax preparation from experienced CPAs • Access to TurboTax® OnlineSM, for the do-it-yourselfer, at special discounted prices for our members • Our Online Tax Center at www.affinityfcu.org/tax for tips, forms, information and more To learn more, or to schedule an appointment with a CPA, call 800-325-0808 or visit www.affinityfcu.org/tax.

Affinity’s New Website is Coming Soon! The www.affinityfcu.org site will soon have a completely new look! Our new website will be intuitive and easy to use – allowing you to find what you’re looking for when you’re looking for it! Even our Internet Home Banking area will get a makeover! We’re sure you’ll agree our new website will be easy to use. Stay tuned and look for the new www.affinityfcu.org coming soon!

Community News Affinity Partners with Community Hope to Aid Veterans. Affinity is proud to support the mission and work of Hope for Veterans® — a transitional housing and rehabilitation program, developed and operated by the nonprofit organization Community Hope (www.communityhope-nj.org). Hope for Veterans helps those who honorably served our country establish sustained independence through supported housing, recovery services and financial self-sufficiency through employment. In November 2006, the Affinity Federal Credit Union Foundation and the Affinity Learning Institute joined with Community Hope to launch the “Veterans Learning Institute” to help our veterans get back on their feet financially. Affinity employee volunteers serve as financial educators and job search tutors through monthly classes.

13 Affinity Connections | WINTER 2009

On Veterans Day 2008, Affinity hosted a luncheon to award certificates of completion to the group of veterans who participated in the educational classes over the past year. The occasion also served as a fitting way to honor and recognize their service to our country. “Affinity has been one of the earliest supporters of the Hope for Veterans Program since opening our doors in the summer of 2004,” said Carmela Lunt, President and Founder of Community Hope. “They have been a partner in the truest sense of the word. This partnership empowers our veterans to compete in the workforce and to budget their monies for necessities such as housing and transportation so they can be self-sufficient upon graduating from the program.” The Affinity Federal Credit Union Foundation 501(c)(3) supports local, community-based, non-profit outreach organizations through close volunteer relationships and monetary contributions. Find out more at www.affinityfcu.org/foundation.

WELCOME

Thank You for Choosing Affinity Since the last edition of Affinity Connections, the following companies have joined the Affinity Federal Credit Union family as Select Employee Groups (SEGs). We’d like to thank you for choosing Affinity. If you know of a business that wishes to take advantage of offering the benefit of Affinity membership to their associates, please have them call 800-325-0808. We’ll be happy to talk to them about the Affinity Federal Credit Union difference. A Partnership for A Better Tomorrow Ace Kitchens & Baths Inc. ACN Adaptive Pharmacogenomics, LLC AFM Consultants AFScott, LLC Aiello Sanitation Aldozz Foods, Inc. Alfred Aloisi Associates Alfred Dunner Retail All Pro Tents Inc. Amy Church Marinovic, Esq. Archer Cooperative Nursery School Athreya AVA Properties and Management, LLC Avelient, Inc. Bayshore Computers & Telecommunications Berkeley Periodontics Bill Roberts Remodeling Bill Wright's Guitar Studio, Inc. BKM Consulting, LLC Boatsafeus, LLC Bridgett Thompson Photography, LLC Camera One Career Resolutions Cassandra's Florals and Gifts Cavvy Services, Inc. Chronic Pain Solutions, LLC Coach A La Roach Columbus General Store Combo Vending, LLC Corporate Security Force, LLC Corporate Security Solution, LLC Delta Marcliff Insurance Agency Denise Marie Interiors, LLC East Dragon Karate Academy eBSTC Business System Technologies Corporation Eclectic Affairs, LLC EMESS Management Executive Financial Management, Inc. Expressions by Josephine Fox Media Group Gateway Academy GEM Obsessions, LLC

Genevieve Jones Photography Global Microsystems Inc. Goboss Productions, LLC Golden Years Unlimited, Inc. Hahr & Lyon Construction Heart & Vascular Center of New Brunswick, LLC Heritage Music Corporation Hovaco, LLC ICM Consulting, LLC Imports Décor Inc. inforeem Intersoft Technologies International, LLC James Famula, PGA Professional JC Rehab, LLC Jentrak Herbal Products Jerry's Place Just Etc. Klean Bubbles Laundromat KlemEnt, LLC L. Goodman Consultants Lane One, Inc. Laser Renew Leckner Marketing Consultants, Inc. Libertek, Inc. Living Life Therapeutic Massage & Bodywork LNC Technology, LLC Mauro, Savo, Camerino & Grant, P.A. Meals on Wheels Middletown Township of NJ Lions Club Midnight Express Courier, Inc. Mike's Automotive Service Center, Inc. Mirror Image Barber Shop Moczo's Catering Morrow & Associates, LLC MSO New Jersey Right to Life New Jersey Youth Golf Foundation New Mid Town Food Market NJ Center For The Healing Arts NJ Wait Staff NJANALYTICS, Inc. Noihsaf Basement, LLC Novehc Enterprises, Inc. Nucomm, Inc.

Open Gates to Fly Enrichment School of Tutoring P.D. Fiorentino, Inc. Plainfield Boxing Academy, Inc. Primerica A Citi Company Rightsourcepro, Inc. Riya Auto Sales & Rental, LLC Ronald M. Sidorsky, DPM Rose's QB Financial Services RTP Environmental Associates, Inc. Ruby Real Estate & Management, Inc. Safe Water Limited Liability Company Santronix Infosys, LLC Sargon Consulting, LLC ScienceFirst Sentimental Keepsakes by Leah, LLC Sierra Allied Health Academy, Inc. Sierra House Simmo Construction Co., LLC Sinfully Sweet LLC Smart Cents Consulting, LLC Smiling Dogs, LLC St. Joseph Academy, Inc. Stitch For You Stratis Business Centers Suzanne Garofalo Design The Arc of Middlesex County The Concierge Group, LLC The Liza Group The Presbyterian Church at Pluckemin The Radiology Center at Harding The Tri County Journal Thinksolutions, Inc. Three Stages Timber View Properties Inc. Top Cat Cleaning, LLC Two Guy's Concept, LLC UMS, Underwriters Marketing Service, Inc. Visionary Economic Business Solutions Warm Spirit What's Going On This Weekend, LLC WISEnterprises Yatek Consulting, LLC Zullo Building, Inc.

14 Affinity Connections | WINTER 2009

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Affinity’s Connections Magazine is printed entirely on Forest Stewardship Council certified paper. FSC certification ensures that the paper used in this magazine contains fibers from well-managed and responsibly harvested forests that adhere to strict environmental and socioeconomic standards. Please join Affinity in our commitment to improving the environment by recycling this magazine.

FOR YOUR CONVENIENCE Here is a listing of Affinity Public Access Branches and their hours: Basking Ridge Branch Mountain View Corporate Center 73 Mountain View Blvd. Basking Ridge, NJ 07920 Lobby Monday - Wednesday, Friday, 8:30 - 4:00 Thursday, 8:30 - 6:00 Saturday, 9:00 - 1:00 Drive Up Monday - Friday, 8:30 - 6:00 Saturday, 9:00 - 1:00 Bedminster Branch 1520 Route 206 North Bedminster, NJ 07921 Lobby Monday - Wednesday, Friday, 8:30 - 4:00 Thursday, 8:30 - 6:00 Saturday, 9:00 - 1:00 Drive Up Monday - Friday, 8:30 - 6:00 Saturday, 9:00 - 1:00 Cedar Knolls Branch Morris County Mall 235 Ridgedale Ave. Cedar Knolls, NJ 07927 Monday - Friday, 8:30 - 6:00 Saturday, 9:00 - 1:00

Denville Branch Saint Clare’s Hospital 25 Pocono Road Denville, NJ 07834 Monday - Wednesday, Friday, 8:30 - 4:00 Thursday, 8:30 - 6:00 Saturday, 9:00-1:00 Dover Branch Saint Clare’s Hospital 400 W. Blackwell Street Dover, NJ 07801 Monday - Wednesday, Friday, 8:30 - 4:00 Thursday, 8:30 - 4:30 Flemington Branch 275 Route 202 South/ 31 South Flemington, NJ 08822 Monday - Wednesday, Friday, 8:30 - 6:00 Thursday, 8:30 - 7:00 Saturday, 9:00 - 1:00 Hillsborough Branch Hillsborough Promenade 315 Route 206 North Hillsborough, NJ 08844 Monday - Wednesday, Friday, 8:30 - 6:00 Thursday, 8:30 - 7:00 Saturday, 9:00 - 1:00

Middletown Branch Country Square Shopping Center 1860 Route 35 South Middletown, NJ 07748 Monday - Friday, 8:30 - 6:00 Saturday, 9:00 - 1:00

Paramus Branch AT&T Wireless 15 East Midland Ave. Paramus, NJ 07652 Monday - Wednesday, Friday, 8:30 - 4:00 Thursday, 8:30 - 5:30

Morristown Branch Country Mile Village 1098 Mt. Kemble Ave. Morristown, NJ 07960 Lobby Monday - Thursday, 8:30 - 4:00 Friday, 8:30 - 5:00 Saturday, 9:00 - 1:00

Piscataway Branch Next to IHOP 1342 Centennial Ave. Piscataway, NJ 08854 Lobby Monday - Wednesday, Friday, 8:30 - 6:00 Thursday, 8:30 - 7:00 Saturday, 9:00 - 1:00

Drive Up Monday - Friday, 8:30 - 6:00 Saturday, 9:00 - 1:00

Drive Up Monday - Wednesday, Friday, 8:00 - 6:00 Thursday, 8:00 - 7:00 Saturday, 9:00 - 1:00

New Providence Branch A & P Shopping Center 598 Central Ave. New Providence, NJ 07974 Monday - Friday, 8:30 - 6:00 Saturday, 9:00 - 1:00

Not near one of these branches? You can also access your accounts via 50,000 surcharge-free ATMs, 1,700 shared branches, or through Internet Home Banking. For information, visit www.affinityfcu.org/locator.

C O N TA C T U S O N L I N E O R B Y C A L L I N G O U R M E M B E R S E R V I C E C E N T E R :

www.affinityfcu.org | 800-325-0808

F A L L

Managing Your Money in a

Changing

Economy

2 0 0 8

IN THIS

ISSUE

Dear Affinity Member, If you were a business owner in today’s challenging economy, you’d be looking for ways to increase profitability by reducing expenses, as well as raising revenues. This issue of Affinity Connections is dedicated to helping you do just that. Our lead article, “Surviving a Challenging Economy,” contains a number of ideas to help you reduce ongoing expenses, particularly debt, while positioning your investment portfolio to withstand today’s volatile markets. We also explore strategies to pay less at the gas pumps, including taking a closer look at the way you drive and maintain your vehicle. With gas prices at historic highs, many people are wondering if their next car should be a hybrid. We look at the advantages and disadvantages and review a variety of other important issues to consider when buying a new or used car. Of course, soaring gas prices influence other costs like food prices and we discuss whether shopping in bulk at places like Sam’s Club® and Costco® really makes more sense than patronizing your local supermarket. And we even focus on one important expense that you probably shouldn’t try to eliminate, no matter how tempting—your insurance premiums. But that doesn’t mean we don’t offer ways to reduce them. Finally, we provide advice on a variety of other topics, including debt management, a service that seems to be advertised everywhere these days, and the benefits of doing your holiday shopping now. As you can see, we’ve packed this issue with information you can use to make the best of our current economy. Take advantage of the opportunities it offers and improve your personal bottom line. Best regards,

Surviving a Challenging Economy.......................................... 2 – A Prudent Approach to Your Balance Sheet

Increase Your Personal Bottom Line...................................... 5 – Changing Your Behavior to Save Money

Come On Down!....................................................................... 7 – Great Opportunities for Car Buyers

Debt Management................................................................... 9 – What You Need to Know

Holiday Shopping....................................................................10 – Why Wait Until December?

Is Your Insurance Expendable?.............................................. 11 – Ways to Save and Stay Covered

John T. Fenton President and CEO

Your Financial Records............................................................12 – How Long Should You Keep Them?

IN EVERY ISSUE AFFINITY N E W S ....................................................................13 WELCOME N E W S E G s .....................................................14 – Thank You for Choosing Affinity

1 Affinity Connections | FALL 2008

Surviving a

Challenging Economy

Today’s economy is difficult, if not daunting, for many consumers. Rising energy and food costs are taking a bigger bite out of cash flow. Inflation is up, home prices are down and many home owners have been limited in their ability to sell their property. Investing has become increasingly challenging with volatile markets and interest rates lower than they’ve been in years. We can’t promise that by following the measures listed below, you’ll bring prosperity to your life, but we can assure you that by adopting a prudent, common sense approach to both sides of your personal balance sheet, you’ll be better positioned to withstand the pressures of today’s lackluster economy and take advantage of whatever opportunities it might offer. REDUCING EXPENSES The right side of your balance sheet represents expenses. And while paying less for goods that are increasing in price is by no means a simple task, it might be possible if you follow the strategies discussed in our article on pages 5 and 6 entitled, “More Ways to Increase Your Personal Bottom Line.” One of the most important steps you can take to reduce expenses is to decrease or eliminate debt. Before you say you couldn’t possibly do such a thing without putting a sizable dent in your savings, let’s take a closer look at the types of debt you might be carrying.

2 Affinity Connections | FALL 2008

• Credit cards Do you pay your balances every month? Or do you only submit partial payments and incur finance charges that may be as high as 21%? What makes more sense — to eliminate these charges or to continue paying them while your assets earn 2-4% in a CD or money market fund? Use assets generating a low rate of return to pay off high interest debt. And try to limit your impulse buying, so you don’t generate new debt. • Car loans Unless you’re taking advantage of the 0% financing offers that car companies make from time to time, take a closer look at the rate you’re paying. How does it compare to the rates offered by home equity loans or lines of credit? Generally, home equity loans charge lower rates and the interest you pay may be tax deductible. The key is to find a home equity loan that allows you to pay off your balance in the same period of time as your car loan. You don’t want to finance a short-term purchase with long-term debt. • Mortgages Rates are low and refinancing your mortgage can conceivably save you hundreds of dollars a month. Points and closing costs are a consideration, so make sure you factor them in when calculating your overall payments. Also, don’t step backward by taking out a 30-year mortgage when you only have a few years left to pay on your current loan. Other debt-related strategies • You may want to think about making extra principal payments on your

3 Affinity Connections | FALL 2008

mortgage. Again, taking money out of a 2-4% interest bearing account to pay for a 6-8% mortgage makes a lot of sense. And you’ll reduce your overall interest payments by thousands of dollars over the term of your mortgage. • When you’re contemplating which accounts you should tap to pay off debt, eliminate your IRA or 401(k) from consideration. Assets withdrawn from these accounts are subject to income tax at your tax rate, plus a 10% penalty if you’re under age 591⁄2. Besides, these accounts are earmarked for your retirement. And with many retirements lasting 20-30 years or longer, you’re going to need all the assets you can accumulate. • Resist the temptation to ignore your bills or postpone payments until you can better afford them. You’ll only incur finance charges and suffer a blow to your credit rating. Most credit card companies and other creditors will work with you to establish a payment schedule that you can manage.

INCREASING ASSETS Like a business, you have two ways to achieve profitability — reduce expenses and increase revenue. For individuals, revenue comes primarily from your job and your investments. As for your job, now is the time to buckle down and make yourself indispensable — the unemployment rate may not be up appreciably over the past several years, but clearly, we’re living in an uncertain environment. As for your investments, it’s tempting to alter your strategy. After all, today’s volatile markets can mean potential losses or possible opportunities for gains, depending on your point of view. In times like these, however, staying the course is often the smartest strategy. That’s because the individual investments you select for your portfolio don’t contribute nearly as much to your overall return as the way in which you allocate your assets across the three major asset classes — stocks, bonds and cash.

The chart below illustrates the results of a well known financial study that was conducted in 1986 and updated five years later. The study concludes that 91.5% of a portfolio’s return is attributable to asset allocation, while only 4.6% is attributable to stock selection. Other 2.0% Stock Selection 4.6%

Market Timing 1.8%

Asset Allocation Decisions 91.5%

The right allocation for one person, however, may be totally wrong for another. Your allocation should be a reflection of your objectives, time horizon, need for liquidity, risk tolerance and other factors. To develop it, you should consult with your financial advisor or use the free analytical tools available at websites such as www.mint.com or www.kiplinger.com. Once you arrive at an appropriate allocation, you should diversify your holdings within each asset class. For example, stocks or mutual funds that invest in stocks may be diversified by market capitalization, geographic location and investment style. Bonds, CDs and other fixed income investments should vary by maturity. In fact, many astute

fixed income investors ladder their portfolios with securities that mature several months (or years) apart in order to protect themselves against unpredictable interest rate fluctuations. THE KEY TO ANY ECONOMY . . . . . . is to adopt a consistent approach to both debt and investment management. The best approach enables you to take advantage of potential opportunities and avoid unnecessary risk. The current economy is challenging, but by reducing debt, controlling expenses and diversifying your investments, you’ll not only survive it, but position yourself for the upturn when it finally does occur.

Source: Brinson, Singer & Beebower

The high cost of stock market jitters

$20,000 $17,758

Before today’s market uncertainties compel you to abandon your equity investments in favor of safer alternatives, consider the chart on the right. It shows how a $10,000 investment would have been affected by missing the market’s top-performing days over the 10-year period from December 31, 1997 to December 31, 2007. For example, an individual who remained invested for the entire time period would have accumulated $17,758, while an investor who missed just 15 of the top-performing days during that period would have accumulated only $9,246. Source: Standard & Poor’s. Stocks are represented by Standard & Poor’s Composite Index of 500 Stocks, an unmanaged index that is generally considered representative of the U.S. stock market. Past performance is no guarantee of future results.

What Can You Do to Increase Your Bottom Line?

$13,782

$15,000

$11,189 $9,246

$10,000

$7,745 $6,547 $5,587

$5,000

Stay Invested

Miss Top 5 Days

Miss Top 10 Days

Miss Top 15 Days

Miss Top 20 Days

Miss Top 25 Days

Miss Top 30 Days

Affinity’s Financial Advisors can help you review strategies to improve your investment return. Call 800-325-0808 or visit www.affinityfcu.org.

4 Affinity Connections | FALL 2008

Increase

More Ways to Your Personal Bottom Line

Decreasing Day-to-Day Expenses

Notice something about today’s gas prices other than the fact that they’re skyrocketing?

wonder if your next car should be a hybrid or at least something other than an SUV.

They’re beginning to change people’s behavior.

There are ways to reduce not only your gas costs but the costs of the goods that have risen because of increased gas prices.

Maybe you simply don’t drive as much as you did before or at least think twice before you turn the ignition. Maybe you find yourself buying $20-$30 worth of gas because you somehow feel it’s less upsetting than spending $60-$70 to fill the tank. Or perhaps you’re starting to

5 Affinity Connections | FALL 2008

Let’s start with your behavior at the pump: • Do you really need premium? What does your owner’s manual say? Some automobile manufacturers require high octane gas for certain models, while others only recommend it.

If high octane gas is required for your car, bite the bullet and pay the extra money. Failure to do so may damage your engine. However, if high octane gas is only recommended, you have a decision to make. Fifteen to twenty years ago, fueling a high performance car with regular gas caused engine knock and vibration. Today, however, computerized sensors typically adjust your engine’s timing for the type of fuel you use. The result? No knocks, but possibly a slight reduction in performance and fuel economy. If this

is unacceptable to you, buy the gas recommended by your car manufacturer. If not, fill ‘er up with regular. One more thing — there are absolutely no benefits to be derived from using high octane gas in a car that doesn’t require it. You might as well be burning the additional money you spend. • Can you buy no-name gas? Gas is a fungible commodity. That means it doesn’t differ regardless of where you purchase it. However, major oil companies often add a detergent to their gas that may have a positive impact on engine deposits. If you’re planning to keep your car for a long time, you may want to take advantage of these benefits and limit no-name gas purchases to every second or third fill-up. • What about once you leave the gas station? What else can you do? The way you drive and maintain your car can have a major impact on how much gas it uses. For example: • Keeping your engine tuned can increase gas mileage by an average of 4%. • Replacing clogged air filters can increase gas mileage by up to 10%. • Removing 100 lbs. of the junk you’ve allowed to accumulate in your trunk can increase gas mileage by 2%. • Keeping your tires properly inflated and aligned can increase gas mileage by up to 3%. • Obeying posted speed limits can really save you money. Driving at 55 mph can actually increase fuel economy by 21% versus driving at 70 mph.

Make More Money While You Save

There — we just increased your fuel economy by 40%. And that’s not even counting no-brainers like avoiding unnecessary idling while you’re waiting for someone. BEYOND GAS SAVINGS The high cost of fuel has impacted the cost of manufacturing and delivering goods. These higher costs have been passed on to you. What can you do about them? Many people have begun relying on stores like Costco and Sam’s Club that sell bulk items, reducing the number of trips to the local grocery store. Is the savings worth the effort?

And, of course, there’s the question of storage. Do you have enough room to keep bulk items where you can access them conveniently? Finally, once you bring bulk items home, use them to generate even more cost savings. Drop the tall skim latte habit in favor of brewing your own coffee at home and bringing it with you. Dip into your stash of 500 paper bags to brown bag your lunch. Freeze chicken or beef in dinner-size packets. The possibilities are endless! Source: www.edmunds.com

Maybe. Buying vegetable oil in mammoth containers and 10 packs of aluminum foil may add up to hundreds of dollars in savings a year. But depending on the goods involved, you may actually do better at your local supermarket or office supply store. The key is looking at per unit cost—how much do the goods cost per ounce, pound or other basic measure. Surprisingly, bulk is not always going to be the best, although often it can be. In addition, you should think about whether you will actually use such large quantities of what might be perishable goods before their expiration date.

Increase your earnings with Affinity Green Rewards Checking. Good for you, good for the environment too! Visit www.affinity.fcu.org/greenrewards or call 800-325-0808 today.

6 Affinity Connections | FALL 2008

The combination of rising gas prices and a sagging economy has slowed car sales to a point that dealers are offering a wide variety of rebates, financing arrangements and other incentives. Should you take advantage of them? If you’ve been thinking about shopping for a car, now is a great time. It’s helpful, however, to make certain you’ve considered the following issues before you begin: 2009 OR 2008?

Come on

down!

Today’s economy offers

great opportunities

for car buyers

7 Affinity Connections | FALL 2008

It depends. Dealers traditionally offer whatever current year models are left on their lot at a substantial discount. You should realize, however, that the minute you drive out of the lot, your car will be worth considerably less than a 2009 model, particularly if the 2009 model has changed substantially. If you plan to drive your car “until the wheels fall off,” you may not be concerned about future trade-in or resale value. But, if you typically buy a car every 3-5 years, you might think about negotiating a great deal on a 2009 model to ensure a better trade-in value. NEW OR USED? Tough call. The benefits of each are obvious — new car panache vs. used car practicality. Clearly, a used car costs less than a new one, but it may also be poised for major unwarrantied repairs, depending on its age and condition. If you go the used car route, make certain you check its title through a service like CARFAX (www.carfax.com) to determine whether the car has ever been: • Seriously damaged in an accident or natural disaster • Repossessed • Returned as a lemon Checking the title can also inform you whether the car’s odometer has ever been rolled back.

LEASE OR LOAN? There’s no right or wrong answer. People generally lease because monthly payments are lower and they enjoy driving a new car every 3-5 years. Lower monthly payments, however, do not mean that leasing is less expensive than borrowing. With leasing, you’re making payments continually over the term of the lease. Moreover, you may be subject to various fees every time you enter a new lease. With borrowing, of course, your payments ultimately end at some point and you own the car outright. The value of your car, however, will be substantially lower than it was when you purchased it. So how should you proceed? Perhaps the following considerations will help you decide: • How many miles a year do you drive? Leases usually limit you to 12,000 or 15,000 miles per year. By driving more miles than your allotted amount, you’ll be subject to stiff mileage penalties at the end of your lease. • How hard are you on your car? Just because you don’t actually own your car doesn’t mean you don’t have to take care of it. Excessive wear and tear, mismatched tires and assorted dings will end up costing you more money than repairs and replacements as they are needed. • How long do you plan to keep your car? The longer you typically keep a car, the more it makes sense to purchase it. If you keep your cars for only 3-5 years, you might consider leasing as an alternative.

In the Market for a New or Used Car?

• How much do you wish to avoid an initial cash outlay? Leasing generally requires a lower outlay of cash initially than financing. You can finance 100% of the cost of your vehicle, but monthly payments will be much higher than those available through leasing. You should realize, however, that leasing often requires up-front fees, as well as possible down payments, if you wish to reduce your monthly payments. CAR LOAN OR HOME EQUITY LOAN? We touch upon this in our article entitled, “Surviving a Challenging Economy,” on page 2. Home equity loans offer lower interest rates than car loans. What’s more, the interest you do pay may be tax deductible. Home equity loans, however, are typically only available with 5 year or longer terms. In an apples-to-apples scenario — 5 year car loan vs. 5 year home equity loan — the home equity loan is the superior alternative. But if you wish to pay off your car in 2-3 years, you may find that a home equity loan will cost you more in interest payments over its duration . . . that is, of course, unless you make additional principal payments to your home equity loan that will enable you to pay it off in a shorter period of time. HYBRID OR NOT? Today’s gas prices have even confirmed SUV drivers wondering if they should reorder their priorities. After all, don’t hybrids get 45-55 miles per gallon? Except, the mileage you get from your hybrid depends on how you drive it. If you drive primarily on highways, you may not get many more miles to a gallon than

you would with a non-hybrid equivalent. If you have a lead foot when the light turns green, ditto. If you live in a congested area where you do a lot of stopand-go driving, however, you may find a hybrid to be a thriftier alternative at the gas pump. Furthermore, hybrids run up to 80% cleaner than conventional gas engines and have substantially lower emissions. Rising gas prices have caused a significant spike in hybrid prices. A hybrid Honda Civic, for example, costs 33% more than its non-hybrid counterpart. A hybrid Camry costs 36% more than a conventional Camry. And with demand exceeding supply, the difference may widen. You have to decide whether the gas savings you achieve is worth the price differential. And you have to be honest about your driving habits — will they help you achieve the gas savings possible through a hybrid or will they negate the potential benefits? LOYALTY PAYS Especially in a difficult sales environment, automobile manufacturers and dealers offer loyalty incentives to current customers. In other words, if you already own a GM car, you may stand to receive cash back when you buy another one. If you already lease a Ford, you might receive a lower interest rate on a new lease. Or you might receive other benefits like a reduction in excess mileage charges or waiver of fees or security deposits. While incentive programs are often well publicized, they are sometimes only available to customers who ask about them. So don’t be shy. You have nothing to lose except sticker price.

Affinity can help you find your dream car and choose the right financing plan. Visit www.affinityfcu.org or call 800-325-0808 today!

8 Affinity Connections | FALL 2008

Debt Management:

What you should know

before you call the 800 number

You know you might need debt management counseling when you begin to identify with the people in the TV commercials: • You’re being harassed by phone calls from creditors and collection agencies. • You can barely pay your credit card minimums. • You’re constantly late with your invoice payments. • You haven’t been able to work out a reasonable payment plan with creditors. Maybe you should do what the commercial says and call the toll-free number to free yourself of debt and take steps to restore your peace of mind. Or maybe you shouldn’t. Debt management counseling has become a $7 billion industry in the U.S. with bankruptcies high and consumer debt at record levels. Not all debt counselors are alike. And some can leave you in even worse financial shape than you were when you made the initial call. Here’s what you should know before you pick up the phone: • Counseling is key . . . Reputable debt counselors should offer such services as personalized budget counseling and courses in savings and debt management. Counselors should be trained and certified in consumer credit, budgeting and money management. And

Do You Need Debt Management Counseling? 9 Affinity Connections | FALL 2008

they should be willing to meet with you on an individual basis. • . . . and so is accreditation A Department of Justice ruling that anyone planning to file for bankruptcy must first complete a pre-filing counseling session has given birth to a proliferation of debt management companies. Make sure the companies you’re considering meet the standards of third party sources like the United States Trustee Program (www.usdoj.gov/ust) or the National Foundation for Credit Counseling, a 50-year old organization with strict accreditation guidelines (www.debtadvice.com). • Debt management programs may be a viable solution, but . . . . . . they shouldn’t be the first and only option offered by the company you’re considering. With a debt management plan, the counseling company negotiates with your creditors to reduce fees, finance charges and interest rates while scheduling a repayment plan. You deposit money with the counseling company every month and the counseling company pays your creditors. If you do participate in a debt management plan make certain you determine: • How long the plan will be in effect Many plans take 48 months or more to complete and require you to avoid using or applying for credit. Be wary of openended plans. Your counselor should at least be able to give you an estimate of your plan’s duration.

• How much the plan will cost Debt management plans typically require a set-up fee and a monthly payment, both of which may range from $10 to unconscionable amounts. The counseling company may also receive payments from your creditors. Make sure you shop around as fees vary greatly. And, if you are asked for substantial up-front fees, find another counselor. • If your creditors are really being paid Check your creditors’ monthly statements to make certain your counseling company is fulfilling its promises. Also check to determine whether payments are being made on time. Late payments, of course, can adversely affect your credit rating. You should realize that participation in a debt management plan can impact your credit rating, even if your plan pays your creditors on a timely basis. In addition, some creditors may not want to do additional business with you after you’ve completed your plan, but others will. In fact, many believe that debt counseling is a positive sign that a customer is getting his or her debts under control. And it is certainly a less onerous alternative than declaring bankruptcy. The counseling companies advertising on TV and radio aren’t your only options. According to the Federal Trade Commission, many universities, military bases, credit unions, housing authorities and branches of the U.S. Cooperative Extension Service operate non-profit debt management programs. For more information, visit www.ftc.gov.

Look to Affinity’s free Budget and Credit Score Enhancement Service (BASES) for the answer. Learn more at www.affinityfcu.org or call 800-325-0808.

Why wait until December to do your holiday shopping? In the past, towns began to decorate their main streets for the holidays right after Thanksgiving. Today, Halloween seems to be the starting point. But for savvy shoppers, would you believe Labor Day? It’s not too early to begin making your shopping list, checking it twice and logging onto the Internet to start shopping. Today’s difficult economy is especially rough on retailers, many of whom have already begun marking down merchandise. To take advantage of this environment, here are a few ideas to consider: • Collect promotional codes for immediate discounts How many times have you purchased something online and been asked to provide a promotional code that you didn’t have at checkout? The fact that you were asked indicates that a code is available, but where can you find it? Next time you’re asked, open up another window and:

Shop Now, Save Now.

– Check Google Enter the phrase used by the merchant—promotional code or coupon, for example—and the name of the merchant. Chances are, you’ll find codes that can save you meaningful dollars on the purchase you were about to make. – Check other websites You might also be able to find coupons or promotional codes on sites such as www.CouponCabin.com, www.FatWallet.com and www.Keycode.com. These sites contain numerous promotional codes, discount coupons and cash-back offers from a variety of retailers. • Compare prices without visiting different websites Are you really getting the lowest price possible? Instead of shopping at the websites of individual retailers, why not visit consolidated shopping sites like www.shopping.msn.com or www.shopping.yahoo.com? You can view side-by-side comparisons that will

enable you to purchase merchandise from the retailer offering the lowest price. PAYING FOR YOUR PURCHASES Whether you shop online or in person, consider paying by credit card. Under the Fair Billing Credit Act, purchases made by credit card offer an added level of protection. Specifically: • You are limited to $50 liability for disputed or fraudulent charges, with many credit card providers waiving this maximum. • You have the right to withhold payment while charges are being investigated. • You have the right to deny payment, if merchandise shipped to you is defective. • Many credit cards offer additional buyer protection benefits such as extended warranties and refunds in the event that purchases are damaged or stolen within a specified period of time. So just because the holidays are a few months away, that’s no reason to delay checking off your shopping list. Your early action can result in substantial savings.

With an Affinity Club Account you can save for those holiday purchases all year long. To find out about our savings accounts call 800-325-0808 or visit www.affinityfcu.org.

10 Affinity Connections | FALL 2008

Is Your Insurance

Expendable?

Admit it — those insurance premiums can be an expense that’s hard to justify in a difficult economy. And maybe you’ve even wondered if you should drop your coverage and pick it up again when the economy turns around. Insurance is probably the last expense you should give up in a difficult or, for that matter, a thriving economy. However, there might be ways to reduce your premiums: LIFE INSURANCE Life insurance premiums are based primarily on age and health. If you drop your policy today with the intention of purchasing another one at some point in the future, you may find that your premiums will be higher, simply because you’re older. Moreover, you may not be as healthy when you’re ready to resume your coverage. Also, depending on the nature of your condition, you will pay considerably higher premiums or perhaps be deemed “uninsurable.” This means that the insurance company will not assume the risk of covering you. If you have whole, universal or variable life insurance that earns cash value, you may be able to skip a premium or pay

a lower premium now and then, depending on how much cash is in the policy. Or you may consider replacing your policy with low cost term insurance that offers protection only without cash value accumulation. AUTO INSURANCE Clearly, you have no choice but to retain your auto insurance unless you plan to trade in your car for a skateboard. However, you might be able to reduce your premiums by: • Raising deductibles on collision and comprehensive According to the Ohio Insurance Institute, raising deductibles from $200 to $500 can reduce collision and comprehensive premiums by 15-30%. Raising it to $1000 can reduce premiums by considerably more.1 And you’ll still be protected in the event of a major loss. Your insurance company can advise you on the specific savings you may realize. • Eliminating collision and comprehensive coverage Experts suggest that if the cost of your collision and comprehensive insurance for your vehicle is more than 10% of its current value, you’ll pay more to insure it than the amount of money you’ll receive in the event of an accident.2

Check your vehicle’s value with an auto dealer or through a third party source like Kelley Blue Book (www.kbb.com). DISABILITY INSURANCE Disability insurance can be expensive, especially if you have to purchase it on your own because you’re not eligible for group coverage through your employer. Dropping coverage, however, can be catastrophic if you suddenly become disabled and find you need benefits. If you’re concerned about how you’re going to afford your disability policy, consider: • Lowering the monthly benefit you would receive if you became disabled. • Increasing the waiting period before benefits begin. • Checking your policy to make certain you’re not paying for optional coverages that would be “nice to have” but aren’t really mandatory. Remember — you purchased your various insurance policies to protect yourself and your loved ones from the unexpected. By dropping coverages, you run the very real risk of placing your family in far greater jeopardy than they face in a difficult economic environment. Endnotes: 1 Ohio Insurance Facts, 11/2007 2 Smart Money, “How much auto insurance do you need?”

Can Your Insurance be Improved? 11 Affinity Connections | FALL 2008

Paying too much? Not protected adequately? Affinity Insurance Specialists can help you find out for sure. Visit www.affinityfcu.org or call 800-325-0808.

How Long Should You Store Your

Financial Records? Tax returns, bank and brokerage statements, credit card receipts— Americans are inundated by paper that keeps arriving month after month and, sooner or later, overwhelms even the most diligent record keepers. If your file drawers are already stuffed with documents and you’re wondering where you’re going to file new ones, here are a few tips on how long you should keep various financial records before shredding them: Documents

How long should you keep them?

Tax Returns

Seven years, to be safe. The IRS has three years to audit your return and six years if it thinks you under-reported your gross income by 25% or more.

Retirement Plan/Savings Accounts

Keep your quarterly statements until you receive your annual summary, at which point you may shred them. Keep annual summaries until you retire or close the account.

Brokerage Statements and Trade Confirmations

Keep them at least until you sell the securities. However, you will need records of prices for which you bought and sold securities to determine whether you have capital gains or losses at tax time. As a result, you may want to keep this information for as long as you keep your tax returns, in case you are audited by the IRS at some point in the future.

Bank and Credit Union Records

Discard cancelled checks that have no long-term importance, but keep those that represent major, longterm purchases.

Credit Card Receipts and Statements

Keep your original receipts until you receive your statement. For tax-related expenses, keep your statements for the same seven year period you keep your tax returns.

Pay Stubs

When you receive your W-2 form for taxes, make sure the information matches that which is on your pay stubs. At that point, you can shred the stubs.

Bills

Once you receive a cancelled check, you can generally discard invoices or bills. However, you should keep invoices for major purchases, so you have a record of their value in the event of loss or damage.

IRA Contributions

Permanently. When you take money out of your IRA at retirement, you’ll need to prove whether you’ve already paid tax on contributions you’ve made.

Don’t forget — the same rules apply if you receive your financial statements and other records online instead of through the mail.

Want More Detailed Information? Visit www.bankrate.com to see a comprehensive list of how long you should keep various records.

12 Affinity Connections | FALL 2008

AFFINITY NEWS Announcing Affinity’s EasyFLEX Home Equity Line of Credit

Coming Soon — New Affinity Branch in Flemington, NJ

Imagine a home equity line of credit so flexible it gives you exactly what you need, when you need it. Like most lines of credit, you get immediate access to cash for any purpose. But with EasyFLEX, you can also take out up to three fixedrate loans at any one time. The only requirement is that you stay within your approved EasyFLEX limit. Visit www.affinityfcu.org/easyflex, call 800-325-0808, or visit any Affinity branch.

Our newest branch will be located at 275 Route 202 South/ 31 South in Flemington, NJ just south of the Flemington Circle. The new 4,100 square foot facility will feature full branch services, as well as many extras including coffee, safe deposit boxes, a children's activity area, an Internet café and a small meeting room available for members and community organizations to use.

Congratulations to the 2008 Affinity Scholarship Recipients Jessica DePrima - Basking Ridge, NJ, Monmouth University Keiona Eady - Cross, SC, Clemson University Thabo D’Anjou - Scotch Plains, NJ, Howard University Crystal Himes - Piscataway, NJ, Cornell University Andy Yuan-Jay Lee - Basking Ridge, NJ, George Washington University Brian D. Thorne - Lebanon, NJ, Kenyon College

Hours of operation will be 8:30 am to 6:00 pm on Monday, Tuesday, Wednesday and Friday; 8:30 am to 7:00 pm on Thursday, and 9:00 am to 1:00 pm on Saturday. Mark your calendar for these upcoming business events: • Business Networking Event - Wednesday, October 15th at 6:30 pm. Make new contacts and learn how Affinity can help your business grow. • Franchise Ownership Workshop - Tuesday, November 11th from 6:30 pm - 8:30 pm. Learn the common myths and misconceptions about franchises, franchise opportunities, legal obligations of owners and financing options. Stay tuned for information about our Grand Opening celebration, which will feature special offers and giveaways. For more information on the Affinity Flemington Branch, visit www.affinityfcu.org/flemington or call 800-325-0808, ext. 3550.

Community News Taking Political Action – Affinity continues to build support in order to protect credit unions.

Is your Congressman supporting credit unions? Here are a few of the New Jersey legislators that do support credit unions:

Affinity’s primary focus has always been the financial health and well-being of our members. This includes protecting your interests in the political arena.

• Congressman Rob Andrews (D-District 1)

Affinity’s Political Action Committee (PAC) and Regulatory and Political Issues Committee work together to educate legislators about the benefits of credit unions. We meet with legislators to explain what credit unions are, how they differ from banks, and how that difference benefits families across America. As a result, many legislators have pledged their support for regulatory relief, including the retention of the credit union tax exempt status. Affinity supports these Congressmen and we urge you to consider how their support plays a large role in the continuing strength of your rights as a credit union member.

• Congressman Frank LoBiondo (R-District 2) • Congressman Scott Garrett (R-District 5) • Congressman Frank Pallone (D-District 6) • Congressman Michael Ferguson (R-District 7) • Congressman Bill Pascrell (D-District 8) • Congressman Steve Rothman (D-District 9) • Congressman Donald Payne (D-District 10) • Congressman Rodney Frelinghuysen (R-District 11) • Congressman Rush Holt (D-District 12) • Congressman Albio Sires (D-District 13)

13 Affinity Connections | FALL 2008

WELCOME

Thank You for Choosing Affinity Since the last edition of Affinity Connections, the following companies have joined the Affinity Federal Credit Union family as Select Employee Groups (SEGs). We’d like to thank you for choosing Affinity. If you know of a business that wishes to take advantage of offering the benefit of Affinity membership to their associates, please have them call 800-325-0808. We’ll be happy to talk to them about the Affinity Federal Credit Union difference. AG Transport, LLC Alchemy United America Healthcare Inc. Anderson Ward Plantscapes, Inc. Andrews Plumbing & Heating Company Applied Retail Technologies LTD April's Creations Atlantic Rheumatology and Osteoporosis Associates, P.A. AUMTECH, Inc. Awl Facility Management Bernards Sports Chiropractic & Physical Rehabilitation Bfade Services, LLC Books To Books, LLC Borough of Glen Gardner Borough of New Providence Bridgewater Veterinary Hospital Bristol Management Consultants, LLC C. Blue Group, LLC Car Toyz of NYC, LLC Cardinal Technology Solutions, LLC Casa Colombo Civic Association CCW Car Service, LLC Center for Advanced Training & Studies Choice Cuts Barbershop Citizen Scales Inc. Compass Maritime Services, LLC Convenient Power Equipment DeSantis Construction, Inc. DJ Sweets Entertainment Document Solutions DT General Contracting, LLC Dumiec Holdings of New Jersey, Inc. Edgerton Realty Corp Elements of Beauty Equitable Metropolitan Realty, LLC

Faithful Hands Power Washing, LLC Fito's Transport, Inc. Franklin Communication Strategies, LLC G Lyfe Entertainment, LLC Gamma 88 Inc. Garden of Beadin, LLC GEO Services, LLC Glen Gardner Fire Company Gloriata Clinical Services, LLC Gostyla Limited Liability Company Grass Roots Lawncare & Garden Svc. Guidolicious Hair Affair At The Carter Henry & James Pavenski Modern Home Const. Co. Holiday Creations Holly Consulting Home Décor Designs, LLC Hope House Horizon Landscape Company Hunterdon Central Jr. Devils Youth Football Club HYJ Partners/DBA Municater Indigo Restaurant, Bar Catering IQE RF, LLC ITV Ventures Products J.J.L.L., Inc. Joseph's Landscaping, Inc. Kenneth B. Beckman Dental Clinic Keystone Plastics Inc. KGH Enterprises, LLC Knobbery.Com., LLC Knowlton Construction, LLC Law and Mediation of Michelle Leonard Link High Tech. Manik Media, Inc. Mayer Catering McDonald's Rockaway Media Logic, Inc. Millionaire Holdco, LLC Milon Builders, LLC

Mom's Against Predators Niros Colonial Corner Autobody, Inc. Office Solutions, Inc. Pawtastic Pet Sitting, LLC PBR Group, LLC Perfect Storm Apparel, LLC Perfection Detailing Photografism Plaza Lanes Inc. PRUDENTMD R&N Transport, LLC Revelation Kids, LLC Riverview Lawns, LLC RMKANE Consulting, LLC Sam Ash & Company Sandello's Plumbing & Heating SeaGate International, LLC Sincere Legends Sneha Software Solutions SPG Tennis Stinky Pete's Grooming Salon, LLC STL Systems, LLC Storage Assets, LLC DBA Lackland Self Storage Taamba Hardware Company Tents, Chairs & Party Wares, Inc. T/A Adams Rental & Sales The Historical Society of the Somerset Hills The Trademark Company, LLC Tony R. Construction, Inc. Total Health Physical Medicine & Rehabilitation Center Totowa Pediatric Group Township Of Mt. Olive Tradition Home Remodeling Unclejesses Travel/ World Ventures Vision Systems Group, Inc. Whitlock Packaging Corporation World Gym Z Mark, LLC 14 Affinity Connections | FALL 2008

FOR YOUR CONVENIENCE Here is a listing of Affinity Public Access Branches and their hours: Mountain View Branch Mountain View Corporate Center 73 Mountain View Blvd. Basking Ridge, NJ 07920 Lobby Monday - Wednesday, Friday, 8:30 - 4:00 Thursday, 8:30 - 6:00 Saturday, 9:00 - 1:00 Drive Up Monday - Friday, 8:30 - 6:00 Saturday, 9:00 - 1:00 Bedminster Branch 1520 Route 206 North Bedminster, NJ 07921 Lobby Monday - Wednesday, Friday, 8:30 - 4:00 Thursday, 8:30 - 6:00 Saturday, 9:00 - 1:00 Drive Up Monday - Friday, 8:30 - 6:00 Saturday, 9:00 - 1:00

Cedar Knolls Branch Morris County Mall 235 Ridgedale Ave. Cedar Knolls, NJ 07927 Monday - Friday, 8:30 - 6:00 Saturday, 9:00 - 1:00 Denville Branch Saint Clare’s Hospital 25 Pocono Road Denville, NJ 07834 Monday - Wednesday, Friday, 8:30 - 4:00 Thursday, 8:30 - 6:00 Saturday, 9:00-1:00 Dover Branch Saint Clare’s Hospital 400 W. Blackwell Street Dover, NJ 07801 Monday - Wednesday, Friday, 8:30 - 4:00 Thursday, 8:30 - 4:30 Hillsborough Branch Hillsborough Promenade 315 Route 206 North Hillsborough, NJ 08844 Monday - Wednesday, Friday, 8:30 - 6:00 Thursday, 8:30 - 7:00 Saturday, 9:00 - 1:00

Middletown Branch Country Square Shopping Center 1860 Route 35 South Middletown, NJ 07748 Monday - Friday, 8:30 - 6:00 Saturday, 9:00 - 1:00

Paramus Branch AT&T Wireless 15 East Midland Ave. Paramus, NJ 07652 Monday - Wednesday, Friday, 8:30 - 4:00 Thursday, 8:30 - 5:30

Morristown Branch Country Mile Village 1098 Mt. Kemble Ave. Morristown, NJ 07960 Lobby Monday - Thursday, 8:30 - 4:00 Friday, 8:30 - 5:00 Saturday, 9:00 - 1:00

Piscataway Branch Next to IHOP 1342 Centennial Ave. Piscataway, NJ 08854 Lobby Monday - Wednesday, Friday, 8:30 - 6:00 Thursday, 8:30 - 7:00 Saturday, 9:00 - 1:00

Drive Up Monday - Friday, 8:30 - 6:00 Saturday, 9:00 - 1:00

Drive Up Monday - Wednesday, Friday, 8:00 - 6:00 Thursday, 8:00 - 7:00 Saturday, 9:00 - 1:00

New Providence Branch A & P Shopping Center 598 Central Ave. New Providence, NJ 07974 Monday - Friday, 8:30 - 6:00 Saturday, 9:00 - 1:00

C O N TA C T U S O N L I N E O R B Y C A L L I N G O U R M E M B E R S E R V I C E C E N T E R :

www.affinityfcu.org | 800-325-0808 Std. Presort 73 Mountain View Blvd. Basking Ridge, NJ 07920

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F A L L

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ISSUE

3 8

Dear Affinity Member, The consumption and conservation of energy are quickly becoming some of the world's most pressing issues. Fortunately, some solutions are already underway. According to a recent energy report in The Wall Street Journal, alternative energy sources such as wind and solar power are becoming more price competitive in relation to traditional fossil fuels such as coal and natural gas. These alternative energy sources stand to gain momentum in the years ahead. In the meantime, as alternative energy is being honed and improved, we can all do our part to help leave less of an imprint on the planet by changing the way we live. Even if each of us takes small steps — such as using ecologically friendly products or taking advantage of the new federal energy tax initiatives — we can begin to forge a path toward a greener and cleaner environment. This issue of Affinity Connections provides simple ideas you can use to reduce waste, conserve energy and save money. At Affinity Federal Credit Union, we believe that taking steps to conserve energy and natural resources will provide personal, professional and financial benefits for us all in the future.

10 Investing 101 ................................................................2 – Be Prepared with Basic Principles

Going Green ................................................................3 – Doing Your Part

Business Insurance ........................................................6 – Choosing a Plan Wisely

Enjoying Retirement ....................................................8 – Create a Dependable Income

Tax Tune-Up ..............................................................10 – Get Ready Now

Fraud Alert ................................................................12 – Beware of Lottery Scams

Best regards,

IN EVERY ISSUE John T. Fenton President and CEO

AFFINITY N E W S ..................................................13 WELCOME N E W S E G s ......................................14 – Thank You for Choosing Affinity

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INVESTING 101

A Mini-Course in Investing You don’t have to be wealthy to enter the world of investing. It is important, however, that you understand some of the basic principles, as the world of investing is not a place to explore without adequate preparation.

RISK AND RETURN

WHAT IS INVESTING?

All investors, from the novice to the most advanced, must accept a certain level of risk in order to gain a return. The acceptable level varies from individual to individual.

Investing is putting your money to work in order to make more money. Unlike saving, where your principal remains constant and your money earns interest, investments can fluctuate over time, so you need to be comfortable with taking risks.

Speculative Stocks Bonds Cash

Affinity Can Help You Build Your Investment Portfolio

Every investment is two-dimensional — a function of risk and return. The higher the potential for return, the greater the potential risk to lose money on your investments.

A BALANCED INVESTMENT PLAN STARTS FROM THE BOTTOM UP A balanced investment plan takes into consideration what you can afford to invest along with your tolerance for risk. It should help you achieve certain financial goals. The financial goals you set for yourself are the reasons why you are investing in the first place. Why are you investing? To earn income? To reach a specific goal such as a new home or a secure retirement? A solid plan is built from the bottom up and is well diversified. Look at the investment pyramid at the left. At the base is the money you want to keep safe and relatively liquid. Here you’ll

find the majority of your assets, including savings accounts; certificates of deposit; money market funds; U.S. Treasury bills, notes and bonds—all of which establish a firm foundation. After you’ve built a solid base you can move further up the pyramid to where the risk-reward ratio becomes greater. Balanced mutual funds, high-grade municipal and corporate bonds as well as blue chip stocks all have the potential for greater return. At the peak of the pyramid are the most risky and illiquid investments. Only the most aggressive investors venture to this point, as these investments have the most unpredictable results. Investments in this category may include high-yield (junk) bonds, speculative stocks, raw land, stock options and futures. DIVERSIFICATION There are many ways to manage investment risk. One effective way is through diversification. By spreading your money among many different types of investments, you reduce the impact that any one may have on your portfolio—so all your eggs are never in one basket.

Affinity can help you examine your tolerance for risk and seek out the investments that best meet your objectives. Call 800-325-0808 to speak with an Affinity Financial Consultant today.

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Going Green to Protect It’s undeniable that how we live affects the planet. If each of us takes steps to leave a minimal environmental impact or what’s known as a “softer footprint”—working with nature instead of against it—we can work to preserve the Earth’s resources. Fortunately, new energy-efficient innovations have made it easier (and cheaper) for us all to be green in the twenty-first century. And even if you aren’t ready to invest in big-ticket, eco-friendly technology, some simple, common-sense approaches to energy-efficient living can help you save money in the home and on the road.

Your Home: Make Your World a Greener and Cleaner Place Consider this: • According to the U.S. Environmental Protection Agency (EPA), the average American household is twice as responsible for greenhouse gas emissions as the average car.

appliances like coffee pots and toasters) are “energy vampires” that suck energy even when turned off! By simply unplugging items and turning off lights you will save on energy costs and minimize carbon dioxide emissions.

• For every ton of household waste, another 70 tons of manufacturing waste is created.1

The chart below shows stand-by power usage of some common household appliances.

What does this mean to us as a society? It means that even the smallest of positive lifestyle changes we make in our homes today can have long-lasting beneficial effects for tomorrow. You need not spend a bundle to do it. Conversely, you may actually save money by changing to an eco-friendly lifestyle.

CHOOSE ENERGY-EFFICIENT APPLIANCES AND OTHER PRODUCTS

LIVE UNPLUGGED According to the U.S. Energy Information Administration (EIA), household operations account for about 20 percent of the greenhouse gas emissions that contribute to global climate change. A portion of these emissions is attributed to electricity used in the home. What do you have plugged in? Cell phones, chargers, laptops, printers, TVs? Many of these products (as well as small

efficient products. The EPA has created a program called EnergyStar® which certifies products that save energy. Today’s EnergyStar washers, dryers, ovens, dishwashers and other products, such as the new compact fluorescent lightbulbs (CFLs), not only save energy but last longer, too. All told, a homeowner that switches over to all EnergyStar ecofriendly appliances can expect about a 30 percent reduction in energy bills and greenhouse gas emissions.

Another way to reduce energy consumption is to upgrade to more Appliance Category

Audio Kitchen Office

Set-top Boxes Telephony TV-VCR

Appliance

Power Consumption In Watts Min

Avg

Max

Portable Stereo Component System DVD Player

0.7 1.1 1.3

2.2 3.0 4.2

7.7 15.1 12.0

Microwave Oven

0.0

2.9

6.0

Computer Printer, Ink/BubbleJet Phone/Fax/Copier

0.0 4.0 1.3

1.7 5.0 1.5

3.5 6.0 1.6

Cable Box Internet Terminal/Modem Satellite System

4.6 4.4 8.8

10.8 10.6 12.6

24.7 18.8 18.8

Answering Machine Cordless Phone

1.8 1.1

3.0 2.6

5.2 5.0

Television TV/ VCR

0.0 1.1

5.0 7.6

21.6 19.5

Chart Source: www.consumerenergycenter.org/myths/appliances.html

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the Planet (and Save Money)

HEAT AND COOL YOUR HOME EFFICIENTLY

WASTE LESS BY REUSING PRODUCTS

Almost 50 cents of every dollar of your home’s utility bill can be attributed to heating/cooling the home. You can reduce energy waste by installing proper insulation, caulking and weatherstripping as well as upgrading to new energy-efficient windows and doors.

According to the EIA, Americans generate more garbage and use more resources than any other country. In fact, the average citizen produces more than 1,000 pounds of trash each year! By buying only what you need and using products that can be reused rather than disposed of, we can help reduce waste as well as emissions.

Other fast energy-efficient fixes include: using programmable thermostats; regularly servicing your heating and cooling units; turning down hot water heater temperatures; and closing your fireplace damper.

Federal Tax Breaks for Green Homeowners The federal government offers tax credits for homeowners who take advantage of new solar technology and/or install energyefficient windows, insulation, doors, and roofs, as well as heating and cooling equipment. These credits are available for systems placed in service from January 1, 2006 to December 31, 2008. To learn more, visit www.energy.gov/taxbreaks.htm on the web.

Want to Do Your Part for the Planet?

Some easy ways to reduce waste include: buying large single containers for long or unlimited shelf-life items like laundry detergent; avoiding single or limited-use items, such as disposable razors or foil baking pans; carrying a reusable canvas or string bag instead of paper or plastic bags for shopping. IF YOU CAN’T REUSE, RECYCLE Recycling plastic, cans, glass and paper significantly reduces the amount of litter ending up in landfills and reaching marine and coastal waters.

How Much Energy Is Your House Using? Try This Calculator! You can measure your energy use online to get a picture of how much energy your household consumes. Go to www.epa.gov/climatechange/emissions/ ind_calculator.html on the web.

What’s more, recycling: • Decreases emissions of greenhouse gases that can contribute to global climate change • Conserves natural resources such as timber, water, and minerals • Helps sustain the environment for future generations To learn more about the importance of recycling, visit www.epa.gov/msw/ recycle.htm on the web. Endnotes: 1. The Hidden Life of Garbage ©2005 Heather Rogers Sources and further reading: • www.policycouncil.nationaljournal.com • www.epa.gov • www.eia.doe.gov

Sign up for Affinity online statements! Just visit www.affinityfcu.org, log in to “Home Banking,” select “Account Access,” then click on “Online Statements.” For more information or to sign up for Home Banking call 800-325-0808.

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Going Green to Protect the Planet (and Save Money) Your Commute: Greener Commuting Can Stretch Your Fuel Dollar Combined with energy usage in the home, more than 2.3 billion metric tons of energy-related carbon dioxide emissions are produced annually by America's road warriors.1 Ready to tackle the emissions problem? Walking or bicycling to work are two of the best ways to cut emissions. However, if you live more than a few miles from the office, as many of us do (or you simply don’t want to be seen at work every morning in your bicycling tights), the next best alternatives are to carpool with friends or take mass transit. You say you have no commuting pals or mass transit in your neighborhood? Don’t dismay. There are still steps you can take today for reducing fuel use that will help you save money and cut emissions.

SLOW DOWN

TUNE IT UP

By driving the speed limit you can save a bundle. Each mile per hour over the speed limit results in increased fuel consumption.

Keeping your vehicle on a regular maintenance schedule will improve gas mileage. Be sure to inflate tires, change spark plugs and replace dirty air filters.

As a rule of thumb, you can assume that each 5 mph you drive over 60 mph costs you an additional 20 cents per gallon for gas.

TAKE IT TO THE LIMIT

LIGHTEN UP Removing all extraneous “stuff” from your trunk and back seat will make your vehicle lighter, thereby maximizing fuel efficiency. STOP IDLING Idling is extremely wasteful. Turn off your car whenever possible to save fuel and reduce emissions.

TAKE IT EASY Aggressive driving—braking quickly and accelerating quickly—can lower gas mileage by as much as 37 percent.

Tax Break for Hybrid Vehicles The federal government provides a tax credit for individuals who purchase certain energy-efficient vehicles. The tax credit applies to vehicles purchased or placed in service on or after January 1, 2006 and can range anywhere from $250 to $3,150 depending upon the make and model. As of March 2007, more than 40 different models of hybrids were eligible for the credit. For more information visit www.IRS.gov and type "hybrid vehicles" in the search engine.

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Buy a hybrid vehicle. These new cars use a combination of gasoline engines and electric motors that reduce emissions and improve mileage. Although mileage will vary by make, model and size, you can expect as much as 60 mpg city/66 mpg highway for the top-mileage hybrid car. You can compare the gas mileage of your current vehicle with a hybrid vehicle at www.hybridcars.com/calculator. Endnotes: 1. National Journal Policy Council Sources and further information: • www.Edmunds.com • The Alternative Fuel Vehicle Institute (www.afvi.org/faq.html) • www.Hybridcars.com • www.fueleconomy.gov/feg/drivehabits.shtml

Business Insurance:

Choosing a Plan Wisely If you are a small-business owner, you understand that taking risks comes with the territory. For instance, you may have left a secure, full-time job to start up your new endeavor. Or perhaps youâ&#x20AC;&#x2122;ve taken out a loan to fund your business start-up. These are common risks entrepreneurs face when taking the leap from idea to reality. There are times, however, when an owner needs to avoid certain risks that could threaten a business. This is where a good business insurance policy comes into play. Business insurance is a powerful and necessary tool that can protect your business from unforeseen situations that may arise. Even if you have a Limited Liability Company (LLC) or a corporation, business insurance is a must. While an ownerâ&#x20AC;&#x2122;s personal assets are typically shielded under these structures, the business itself is not. THE ABCs OF BUSINESS INSURANCE A well-designed business insurance plan protects three things: its people, its assets and its reputation. A competent business insurance agent who is familiar with your industry can work with you to determine the areas in which your business is vulnerable. Your agent can also make sure you donâ&#x20AC;&#x2122;t over-insure for every possible risk. After all, your aim is to make a profit, not to go belly up paying insurance premiums. Property and liability are the two most common types of coverage for small business owners. However, other types of insurance may be equally important or even required by the state or federal government. In addition, depending upon the business you are in, you may need specialized protection for specific types of risks. PROPERTY INSURANCE Business property insurance should cover the premises as well as any assets, such as business equipment, machinery, furnishings, inventory, on-site personal property and the like. There are many policies available with a myriad of variations. With a basic policy you can expect to be covered for losses that arise from fire, smoke, explosions and vandalism. You can also get a broader form of

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coverage that adds on damages due to water, broken windows and falling objects, for example. Not all insurance plans are alike, so read the policy carefully to make sure you understand what is (and isn’t) covered. If there is an item in which you are interested, but you would rather not buy the entire package, chances are you can add a rider to a basic policy for that specific coverage — such as on the loss of accounting records or cash — and save money. LIABILITY INSURANCE General liability insurance covers your business for damages or injuries that took place on your property or that were caused by you or one of your employees. There are three categories of liability insurance: • Personal Injury Liability: Covers your business if someone is injured on your property and files suit. • Product Liability: Protects your business if a customer claims to be hurt by your product. • Auto Insurance: Legally required by most every state, provides coverage for damage caused by vehicles owned by a business. It can also cover “non-owned” vehicles such as employee automobiles used on the job. REQUIRED AND SPECIALIZED INSURANCE There are other perils that may or may not be covered under a broad liability or

Under-insured? Over-insured?

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property policy. If you are practicing medicine or law, for example, general liability will not provide the type of protection you need if someone claims that your business caused them harm. Knowing state and federal insurance requirements is essential, as is understanding the risks associated with your line of business. Here are a few examples of insurance not commonly provided under a broad liability or property policy, that may be essential for you to safely and/or legally run a sound business: • Workers’ Compensation: Required by nearly every state, this insurance pays for medical care as well as lost portion of wages for employees injured while employed. • Theft Insurance: Covers you if your office equipment is stolen. • Employment Practices Liability: Covers you against employee civil or legal rights claims such as harassment, wrongful termination and discrimination. • Business Interruption: Pays you if your business is forced to close for a period of time due to events such as fire or earthquake. • Key Man: Provides death benefits if a founder, owner or key employee who is crucial to the operation of the business passes away.

• Professional Liability: Also known as Errors and Omissions (E&O) or Malpractice Insurance, protects professionals (such as doctors, lawyers, accountants or any company that consults clients) against claims for mistakes or omissions. WHERE TO BEGIN To find the right plan at the right price with the right components, you will need to shop around. If your needs are very simple, you may want to start by checking with your trade association, professional organization or Chamber of Commerce, where you may be able to take advantage of group rates. Another approach is to enlist the services of a competent insurance broker or agent, well versed in your industry who can put a plan together or find you a packaged policy exactly for your type of business. An experienced agent or broker will make sure that your business is neither over-insured nor under-insured and will provide you with concrete ways your business can be proactive in minimizing risks which can save you headaches (and money) down the road. Whatever route you decide to take, it’s good practice to deal with a professional you know and trust who works with the most highly rated and well-respected insurance companies, so that you have the best protection possible. Sources and further information:

• Intellectual Property: Provides protection on trade secrets or patents.

Affinity Insurance Specialists can review your coverage to make sure you have the right insurance. Find out more at www.affinityfcu.org or call 800-325-0808.

Creating Your Own Paycheck During Retirement Ready to kick back and enjoy your retirement years? There are many things you will need to do to prepare for your new lifestyle. Creating a dependable income stream that you won’t outlive is one of them. Social Security alone will unlikely be enough to support an active retirement. Unless you receive pension checks from your employer, you will need income for everyday living since you will no longer have employment earnings. Here are some guidelines to help you start off on the right foot. PUT IT ALL TOGETHER Your first step will be to take a good, hard look at your income sources. You may want to enlist the services of a competent financial advisor who has experience in the areas of retirement and tax planning who can: • Review your Social Security benefits, IRAs, pension income, 401(k), stock

options as well as other savings, investments, assets and insurance • Help you analyze and target your retirement goals, income needs, tolerance for risk and intentions for your heirs • Take into consideration present and future tax issues DESIGN A PLAN When you begin withdrawing funds during retirement, it’s important to keep your savings growing while minimizing taxes and preserving principal. You’ll need an investment plan to accomplish this task. An asset allocation mix that is adjusted regularly can produce income while protecting against inflation’s negative effects on your purchasing power. 1. Create a Portfolio A diversified, well-managed portfolio of investments can help you achieve the level of income you will require for a

comfortable and secure future. A mix of investments that meets your objectives and risk profile, such as dividend-paying stocks, preferred stocks, municipal and/or corporate bonds, certificate accounts, certain mutual funds, exchange-traded funds and the like are the ingredients of

New Pension Laws Looking forward to receiving your company pension in one lump sum? Take note: The Pension Protection Act of 2006 changed the calculations for figuring out lump-sum payments from defined benefit plans. These changes will likely reduce lump-sum payouts to many workers nearing retirement age, but will not affect retirees who opt for the monthly check option. Before taking your retirement benefits, get a printout of the lump-sum payment versus the monthly check payments to calculate the difference.

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an income-generating portfolio. Regular review and adjustment of your portfolio, accumulated savings and withdrawal rates will help you stay on target. 2. Consider an Income Annuity As a supplement to an investment portfolio, you may want to consider converting a portion of your existing savings or investments to an income annuity. In exchange for a one-time investment, the issuing insurance company will guarantee to pay you a stream of payments for life. There are two types of payment options: • Fixed payments that do not change regardless of market conditions • Variable payments which fluctuate but offer the potential for higher returns Be aware that an annuity is a serious financial commitment for life. Surrender charges and other fees and expenses will apply, so read the prospectus carefully.

Investment Management Tip... Withdraw more than you need for your retirement living expenses during years when your investments have made especially strong gains. Move those excess funds to a money market account that provides easy access to your money when you need to supplement your income.

3. Delay Retirement If outliving your assets is still a concern, another way to create income is to simply not give up work entirely. A meaningful part-time job close to home can: • Bring in much needed income • Give your savings and investments more years to grow • Delay withdrawals from IRAs and other retirement vehicles • Allow you to build a social network that can add a new dimension to your life Source: Kiplinger’s May 2007 “Retirement Report”

You should always consider the investment objectives, risks, charges, expenses and tax consequences of any variable product or investment carefully before investing. Consult with a competent tax advisor before embarking on any retirement planning strategy.

Need to Adjust Your Asset Allocation?

It’s never too late to talk to the retirement professionals at Affinity. Call 800-325-0808 today to find out how you can create a steady income stream during your retirement years.

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Save Money at Tax Time

Give Yourself a Tax Tune-Up Waiting until the last minute to assess your tax situation is a surefire path to a larger tax bill from Uncle Sam. If you are serious about minimizing taxes, take action now to help reduce

amounts and deduction opportunities may phase out and even disappear as you reach certain income thresholds. Keeping apprised of the current year’s thresholds can help you plan better in order to optimize tax-saving opportunities.

next year’s tax bite.

For instance:

THINK TAX DEFERRED

• Taxpayers who are married and filing jointly cannot make Roth IRA contributions if their modified AGI is $166,000 or more in 2007.

Max out your 401(k) plan for this year. This will lower your 2007 taxable income while building your nest egg. If you are self-employed, fund a SEP-IRA (Simplified Employee Pension IRA). Traditional Individual Retirement Accounts (IRAs) also provide tax-deferred growth, and may even be tax deductible, depending upon your situation. (And don’t forget to take advantage of any make-up contributions, if you are age 50 or older.) BE AWARE OF THRESHOLDS Tax benefits from qualified tax-advantaged plans are often limited by your Adjusted Gross Income (AGI). Contribution

• For 2007, if you are covered by a retirement plan at work, your deduction for contributions to a Traditional IRA is reduced (phased out) if your modified Adjusted Gross Income (AGI) is: a) more than $83,000 but less than $103,000 for a married couple filing a joint return, or

One-Time Tax Deduction for 2007 Home Purchases If you made less than a 20% down payment on your new home this year, you may be entitled to a tax break on any Private Mortgage Insurance (PMI) premiums paid in 2007. This one-time tax deduction is only available for qualified home purchases (i.e., generally those used as a primary residence of the taxpayer) that are made in 2007 for homeowners who have Adjusted Gross Incomes below $100,000 joint or $50,000 single. Taxpayers who earn more may take a partial deduction for incomes up to $110,000 joint or $55,000 single. Source: Mortgage News Daily “An Update on PMI Tax Deductions” 5/30/07

b) more than $52,000 but less than $62,000 for a single individual or head of household.

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MAKE CHARITABLE CONTRIBUTIONS THIS YEAR Make your charitable contributions before year end so you can deduct them on your 2007 return. Be sure to keep proof of ALL donations no matter how small. The IRS has new record-keeping requirements stipulating that you can no longer deduct cash contributions unless you keep a record such as a cancelled check, bank statement or acknowledgement from the qualified charity. Additionally, if you have a large amount of income this year,

consider funding a charitable trust for an immediate tax benefit. Talk to your financial advisor for details. MONITOR RETIREMENT PLAN DISTRIBUTIONS Minimum distribution requirements on retirement plans kick in when you’re age 701⁄2 or older. Neglecting to take distributions results in a hefty tax penalty so make sure you’ve taken your required distribution for 2007 if you’ve reached distribution age.

REVIEW YOUR WITHHOLDING If your lifestyle has changed or you received a large tax refund last year, modify your wage withholding so that taxes paid during the year match those that you will owe. This way you won’t provide an interest-free loan to the IRS. The IRS has a handy withholding calculator on the web. Go to www.irs.gov and type “withholding calculator” in the search box. For more information, visit the IRS website at www.irs.gov/individuals/index.html. Source: www.IRS.gov

For More Tax Benefits, Open a Health Savings Account This Year! Eligible individuals can reap significant tax benefits by establishing Health Savings Accounts (HSAs) for medical expenses. The primary eligibility requirement is enrollment in a High Deductible Health Plan (HDHP). HSAs offer these benefits: • You can claim a tax deduction for contributions you, or someone other than your employer, make to your HSA even if you do not itemize your deductions on Form1040. • Contributions to your HSA made by your employer (including contributions made through a cafeteria plan) may be excluded from your gross income. • The contributions remain in your account from year to year until you use them. • The interest or other earnings on the assets in the account are tax free. • Distributions may be tax free if you pay qualified medical expenses. • An HSA is “portable” so it stays with you if you change employers or leave the work force. To learn more, talk to your Affinity Financial Advisor, or call 800-325-0808.

New This Year — Health Savings Account Funding Opportunity! Beginning in 2007, if you are covered by a High Deductible Health Plan (HDHP), you may be able to make a nontaxable Health Savings Account (HSA) funding distribution from your IRA [other than a Simplified Employee Pension (SEP) or Simple IRA] that would otherwise be included in income. For more information go to www.irs.gov/publications/p969/index.html. HSAs offered by Affinity are insured by the NCUA.

Get a Head Start on This Year’s Taxes!

The Affinity Tax Center can help you with your tax planning and preparation needs. To get started visit www.affinityfcu.org or call 800-325-0808.

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Did you know

You Can Manage Your Account at Over 1,700 Shared Branches! We know that having a branch location close to you is important. That's why Affinity is part of an extensive network of credit union branches that let you conduct transactions face-to-face, just as if you were at an Affinity branch. With shared branching at over 1,700 Credit Union Service Centers, you can do more than just access your money; you can make deposits and payments, transfer money between accounts — and much more. So whether you've moved, are traveling, or are just looking for a branch location closer to home, Affinity is there! Find locations at www.affinityfcu.org/locator.

Fraud Alert Update: Beware of Fraudulent schemes of every variety are on the rise. Some are new while others are old-fashioned scams that have been gussied up and recycled in newfangled ways to hook unsuspecting individuals. Nearing the top of the Federal Trade Commission’s (FTC’s) complaint list this year are bogus lottery notifications, an updated form of advance fee and checkcashing fraud that can lead to full-blown identity theft. IF YOU THINK IT SOUNDS TOO GOOD TO BE TRUE, YOU’RE RIGHT. Fake lottery notifications come in many shapes and sizes: internet, mail and telephone. Operators of these scams convince individuals via email or regular mail that they have won a lottery in another country. Sometimes they are so brazen as to use the telephone to convince

Be Safe! Be Smart!

Lottery Scams

consumers that they have “WON A LUMP SUM PAYOUT” in the tens or hundreds of thousands of dollars.

sale or purchase of lottery tickets, according to the FTC.

What normally follows are a series of fake “red tape” type documents that look legitimate. These documents request personal information such as bank and credit card information that the scammers use to drain bank accounts or make charges. Some of the schemes ask for an amount of money up front. Other solicitations include real-looking checks that victims are instructed to cash in order to pay a “processing fee” to the fraudulent operation. The winner turns into a loser after the “processing fee” is paid and the counterfeit check is discovered.

The FTC suggests that you ignore all mail, email and phone solicitations for foreign lottery or sweepstakes promotions. Never disclose your personal information. If you receive what looks like lottery material from a foreign country, notify your postmaster.

WHAT SHOULD YOU DO?

If you’ve been victimized, call the Affinity Member Service Center at 800-325-0808, inform your state attorney general’s office and contact the FTC at www.ftc.gov, or call toll-free 1-877-FTC-HELP (1-877-382- 4357); TTY: 1-866-653-4261. Sources:

These solicitations are illegal. Often based in Canada or another country, they violate U.S. law that prohibits the cross-border

• www.FTC.gov • San Francisco Chronicle, “Beware Canadian Lotto Scam,” 12/15/06

Keep apprised of the latest alerts. Please visit the Affinity web site often at www.affinityfcu.org/security.

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AFFINITY NEWS Announcing — Affinity’s Fall Inventory Clearance Sale! Saturday, September 29, 2007 from 9am to 3pm rain or shine, at AFCU Headquarters, 73 Mountain View Blvd., Basking Ridge, NJ. Members and non-members can shop for high quality, pre-owned vehicles at clearance prices.

Go Green Sweepstakes: You could win a 2008 Toyota Prius Hybrid when you use Online Bill Pay!

Affinity has competitive loan rates. Get pre-approved before the sale and you’ll be eligible to attend an invitation-only, pre-sale event! For more information, call our Member Service Center at 800-325-0808 or visit www.CUCarzone.com.

Coming Soon — Faster Check Processing at Affinity! Soon, we’ll be processing checks electronically. As a result, you will experience faster transaction times in our branches, an even higher level of privacy protection, and the checks you write will clear faster. To learn more, call 800-325-0808 or visit www.affinityfcu.org/check21.

Save paper, time and money! Enjoy the ease and convenience of Online Bill Pay and you could win a 2008 Toyota Prius Hybrid. Earn an entry for enrolling in Online Bill Pay and an entry for every bill you pay online between September 1 and September 30, 2007. Learn more at www.affinityfcu.org/billpay. 1. No Purchase Necessary. 2. Qualifying online bill payments must be $10 or more in value. Limit of one (1) payment per payee will be counted toward the sweepstakes entry period. 3. Sweepstakes begins September 1, 2007 and ends September 30, 2007. 4. Sweepstakes open to legal US residents 18 years of age or older with a unique, personal and valid social security number. 5. To receive a free entry or to obtain full official rules, please send a SASE to: Q3 2007 September Bill Pay Sweepstakes, P.O. Box 1369, Manhasset NY, 11030-6369. Please refer to official rules for complete details. Void where prohibited by law.

Community News Affinity’s Beth Degnan Receives Accolades from United Way We are pleased to announce that Beth Degnan, AVP, Office of the CEO and Affinity Federal Credit Union Foundation Chairperson, has been awarded the Somerset County United Way 2007 Alice Lull Corporate Philanthropy Award for her hard work, dedication, and wonderful contributions as a community volunteer and activist. This prestigious award is bestowed upon someone from Somerset County’s business community whose business has made significant financial and non-financial contributions to benefit one or more non-profit agencies. Beth was nominated for the Star Award by Julia Bey Ahmet, Director of Development at Community Hope, Inc. which operates the Hope for Veterans Program. Her tireless efforts helped to launch the Veterans Learning Institute, a new training program that focuses on financial education and personal growth skills to empower veterans’ successful transition back into the community. Affinity employee volunteers with specific skill sets in each particular subject

13 Affinity Connections | FALL 2007

matter present monthly workshops at the Hope for Veterans facility. In addition to the classroom setting, the veterans, as well as the staff, have access to the Credit Union’s library and Affinity’s comprehensive training programs on topics ranging from computer and communication skills to personal growth and education. Beth also received honorable mention for the Christian T. Nielson Unsung Hero Award, having been nominated by Andrea Krich, Executive Director of Making It Possible to End Homelessness (MIPH). Beth, with a select group of Affinity volunteers, developed weekly financial literacy classes presented at MIPH’s Amandla Crossing transitional housing program. Amandla Crossing is a one-year transitional housing program for homeless mothers and their children. According to the United Way, this is the first time one person was nominated for awards by two separate agencies in one year. Beth and her team at Affinity are truly dedicated to the aid and development of the underserved and those in need, in order to help break the cycle of homelessness and despair. Congratulations to Beth for being rewarded and recognized as a leader and for giving her time, talents, and resources to actively support our community and help make Somerset County a better place.

WELCOME

Thank you for choosing Affinity Since the last edition of Affinity Connections, the following companies have joined the Affinity Federal Credit Union family as Select Employee Groups (SEGs). We’d like to thank you for choosing Affinity. If you know of a business that wishes to take advantage of offering the benefit of Affinity membership to their associates, please have them call 800-325-0808. We’ll be happy to talk to them about the Affinity Federal Credit Union difference. A Little Touch of Love Absolute Dance Affinity Express Aiki Designs AJS Productions, LLC American Legion Post 306 Amscan, Inc. An Intense Imagination Arla Foods ASiM Astron Consulting Autumn Leaf Balance Financial Group BC Solutions B-Club, LLC Butterfly Beauty Supply C. Kelly Contracting, Inc. Circle R Electrical Contractors City of East Orange Class A Investors, LLC Classic Cuts Court Crazy 4U Crea Arts Curtiss-Wright Delois & Bell Enterprises, LLC Design Your Time, LLC Direct Floor Care E D Nesmith & Associates Edison Landscaping Services El Tumi Event Images Unlimited, LLC Fab Productions Ferrero USA Gerg Realty Corp, LLC Gomez Cleaning Hope’s What Not Shop Jeff’s Surgical Supply, Inc. Jimenez Landscape Contractors Key To Me Therapy, LLC Laddey, Clark, & Ryan, LLP Laris Consulting LTG Ventures, Inc. Market Consumer Insights, LLC McDragon Production, LLC

Mexican Boys Corp Services Midtown Toastmasters MKTINSITE, LLC Mosiac Psychotherapy Mount Calvary Missionary Baptist Church MP American Home Consultants New Jersey Community NETwork AATPA NLS Associates, LLC. Norseman Co., Inc Ojome Oncology & Hematology Specialists Peninsula Commercial Holdings, LLC Pinnacle Business Solutions Precision Design Prestige Accounting & Tax Services Quantumquest Limited Liability RMG Mortgage Royce Brook Landscaping, LLC S&M Landscape Lighting, LLC Scientific Strength Coaches, LLC Scooby Properties, LLC Seamless Technologies Southernmost Investments, LLC Spektrum Painting, LLC Stracor Inc. Strazzulla Holdings Strickland Business Group, LLC Sugar Tops, LLC Taloolah Entertainment Services The Longo Partnership Triangle School Trinity Innovative Enterprises, LLC U.S. Victory Veteran Systems, LLC UASOFT Inc. Valley OBGYN Associates, P.A. VE & Tou, LLC Virtually Managed Wade Hardwood Flooring Wahs Realty Corp, LLC Waiters Unlimited, Inc. Westfield Police Department Wycoff Trucking Yasmin, Inc. 14 Affinity Connections | FALL 2007

FOR YOUR CONVENIENCE Here is a listing of Affinity Public Access Branches and their hours: 73 Mountain View Blvd. Basking Ridge, NJ 07920 Lobby Monday - Wednesday, Friday, 8:30 - 4:00 Thursday, 8:30 - 6:00 Saturday, 9:00 - 1:00 Drive Up Monday - Friday, 8:30 - 6:00 Saturday, 9:00 - 1:00 1520 Route 206 North Bedminster, NJ 07921 Lobby Monday - Wednesday, Friday, 8:30 - 4:00 Thursday, 8:30 - 6:00 Saturday, 9:00 - 1:00 Drive Up Monday - Friday, 8:30 - 6:00 Saturday, 9:00 - 1:00

235 Ridgedale Ave. Cedar Knolls, NJ 07927 Monday - Friday, 8:30 - 6:00 Saturday, 9:00 - 1:00

1860 Route 35 South Middletown, NJ 07748 Monday - Friday, 8:30 - 6:00 Saturday, 9:00 - 1:00

Saint Clare’s Hospital 25 Pocono Road Denville, NJ 07834 Monday - Wednesday, Friday, 8:30 - 4:00 Thursday, 8:30 - 4:30

1098 Mt. Kemble Ave. Morristown, NJ 07960 Lobby Monday - Thursday, 8:30- 4:00 Friday, 8:30- 5:00 Saturday, 9:00- 1:00

Saint Clare’s Hospital 400 W. Blackwell Street Dover, NJ 07801 Monday - Wednesday, Friday, 8:30 - 4:00 Thursday, 8:30 - 4:30 315 Route 206 North Hillsborough, NJ 08844 Monday - Wednesday, Friday, 8:30 - 6:00 Thursday, 8:30 - 7:00 Saturday, 9:00 - 1:00

Drive Up Monday - Friday, 8:30- 6:00 Saturday, 9:00- 1:00 A & P Shopping Center 598 Central Ave. New Providence, NJ 07974 Monday - Friday, 8:30 - 6:00 Saturday, 9:00 - 1:00 15 East Midland Ave. Paramus, NJ 07652 Monday - Wednesday, Friday, 8:30 - 4:00 Thursday, 8:30 - 5:30

1342 Centennial Ave. Piscataway, NJ 08854 Lobby Monday - Wednesday, Friday, 8:30 - 6:00 Thursday, 8:30 - 7:00 Saturday, 9:00 - 1:00 Drive Up Monday - Wednesday, Friday, 8:00 - 6:00 Thursday, 8:00 - 7:00 Saturday, 9:00 - 1:00

C O N TA C T U S O N L I N E O R B Y C A L L I N G O U R M E M B E R S E R V I C E C E N T E R :

www.affinityfcu.org | 800-325-0808 Std. Presort 73 Mountain View Blvd. Basking Ridge, NJ 07920

Printed on recycled paper—50% recycled and 25% post-consumer waste.

PAID

Permit No. 225 Warminster, PA

Integrity Reliability Quality

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Accutest IN TEG RATIN G M ARKETIN G &

eC O M M U N IC ATIO N S

Logo Desi gn Col or Pal ette

Original

PMS 562

Icons removed from squares Removed rule above labs Modernizes logo, doesn’t appear as cluttered Use of existing typeface and color maintains consistency with original logo

Gray, use of a second color, applied to squares, updates and gives logo more dimension Use of existing typeface and color maintains consistency with original logo

Squares tinted to differentiate areas Font change for laboratories - more substantial and connected with Accutest name Use of existing typeface and color maintains consistency with original logo

New color for Accutest: deep blue green — cleaner feel, incorporates waterPMS and562 air Use of existing typeface maintains consistency with original logo

Lighter version of existing font gives logo an updated look New color for Accutest: a deep rich green — environmental, growth

PMS 562

PMS 562 PMS 562

PMS 562

PMS 7462 PMS Cool Gray 10

PMS 562

2 PMS 7462 PMS Cool Gray 10

PMS 7462 PMS Cool Gray 10

PMS 562 PMS Cool Gray 10

PMS 7462 PMS Cool Gray 10

PMS 562 PMS Cool Gray 10

PMS 7483 PMS Cool Gray 10 PMS 7462 PMS Cool Gray 10

PMS 7483 PMS Cool Gray 10

PMS 562 PMS Cool Gray 10

PMS 7470 PMS Cool Gray 10

PMS 7483 PMS Cool Gray 10

PMS 7470 PMS Cool Gray 10

PMS 7483 PMS Cool Gray 10

PMS 7470 PMS Cool Gray 10

Reduced box size gives the Accutest name more prominence

PMS 7462 PMS 562 PMS 3135 PMS 7462 PMS 562 PMS 3135

PMS 7462 PMS 562 PMS 3135

PMS 7462 PMS 7473 PMS 3135 PMS 7462 PMS 7473 PMS 3135

PMS 7462 PMS 7473 PMS 3135

PMS 7462 PMS 562 PMS 3135

Burst added to boxes gives more dimension while connecting the areas; it suggests power and the ability to grow and expand in business, science and technology Use of existing typeface and color maintains consistency with original logo

Lighter version of existing font gives logo an updated look Alternate Colors — water (aqua blue), land/growth (bright green), air (blue)

Lighter version of existing font gives logo an updated look Alternate Colors — water (aqua blue), air (blue), land/growth (deep rich green) Burst added to boxes gives more dimension while connecting the areas; it suggests power and the ability to grow and expand in business, science and technology

PMS 7462 PMS 7473 PMS 3135

PMS 7462 PMS 562 PMS 3135

PMS 7462 PMS 7473 PMS 3135

8 PMS 7462 PMS 7473 PMS 3135

PMS 7462 PMS 7473 PMS 3135

10-11 Box icon is modernized by squaring one corner, solidifies logo. Accutest is a company that is expanding into new areas — same company, new offers

PMS 7462 PMS 7473 PMS 3135

ACCUTEST ACCUTEST

10 Color: blue is calming, strong and steadfast Use of existing typeface maintains consistency with original logo

ACCUTEST

11 Lighter version of existing font gives logo an u pdated look Burst added to boxes gives more dimension while connecting the areas; it suggests power and the ability to grow and expand in business, science and technology Colors: Light, lively green and a darker, deep rich green — renewal/environmental, growth, better

ACCUTEST ACCUTEST

PMS 7462 PMS Cool Gray 10

Replace use of gray with color-identify boxes such as water (aqua blue), air (blue), soil or land/growth (existing green) Use of existing typeface and color maintains consistency with original logo

PMS 7462 PMS 562 PMS 3135

PMS 7462 PMS 7473 PMS 3135

PMS 7462 PMS 562 PMS 3135

PMS 7462 PMS Cool Gray 10

PMS 7483 PMS 7489 PMS Cool Gray 10

PMS 7462 PMS Cool Gray 10

PMS 7483 PMS 7489 PMS Cool Gray 10

Reduced box size gives the Accutest name more prominence 12 Color: Light, lively green — renewal/environmental Use of original typeface maintains consistency with original logo

PMS 7489 PMS Cool Gray 10

PMS 7462 PMS Cool Gray 10

PMS 7489 PMS Cool Gray 10

PMS 7462 PMS Cool Gray 10

PMS 7483 PMS Cool Gray 10

PMS 3135 PMS 430

PMS 7483 PMS Cool Gray 10

13 Lighter version of existing font gives logo an updated look Burst added to boxes gives more dimension while connecting the areas; it suggests power and the ability to grow and expand in business, science and technology Color: bold blue — solid, reliable 14 Font change for Accutest: The updated font is data oriented with a scientific feel, molecular in appearance The use of lower-case suggests a young and forward-thinking company Burst added to boxes gives more dimension while connecting the areas; it suggests power and the ability to grow and expand in business, science and technology

PMS 7483 PMS Cool Gray 10

PMS 3135 PMS 430

15-17 Font change for Accutest: the use of lower-case suggests a young and forward thinking company 15 Color: darker a deep rich green — environmental, growth, newer, better

PMS 7462 PMS Cool Gray 10

PMS 7470 PMS Cool Gray 10

PMS 3135 PMS 430

PMS 7473 PMS 7462 PMS 7483 PMS 7473 PMS 7462 PMS 7483

PMS 7473 PMS 7462 PMS 7483

PMS 3135 PMS 430

16 Color: bright, clean blue — clean, crisp, lively, new Burst added to boxes gives more dimension while connecting the areas; it suggests power and the ability to grow and expand in business, science and technology

PMS 7473 PMS 7462 PMS 7483

17 Replace use of gray with color-identify boxes as water (aqua blue), air (blue), soil or land and growth (deep rich green)

PMS 7473 PMS 7462 PMS 7483

18-22 New logo molecular “A” — Accutest is a scientific and technological company advancing/reaching into the future All areas are unique but connected 18 Use of original typeface and color- maintains consistency with original logo PMS 562 PMS Cool Gray 10

PMS 562 PMS Cool Gray 10

18 PMS 562 PMS Cool Gray 10

PMS 562 PMS Cool Gray 10

PMS 7489 PMS Cool Gray 10

PMS 7462 PMS Cool Gray 10

L A B O R A T O R I E S

PMS 7462 PMS Cool Gray 10

PMS 7489 PMS Cool Gray 10

PMS 7470 PMS Cool Gray 10

PMS 7489 PMS Cool Gray 10

21 Icon and logo unite using same color Color: rich blue green — sophistication Lighter version of existing font gives logo an updated look

PMS 7489 PMS Cool Gray 10

22 The up-dated font is data oriented with a scientific feel, molecular in appearance The use of lower-case suggests a young and forward thinking company Icon and logo unite using same color Color: bold blue — solid, reliable

PMS 7470 PMS Cool Gray 10

L A B O R A T O R PMS I E7462 S PMS Cool Gray 10

L A B O R A T O R I E S

PMS 7462 PMS Cool Gray 10

PMS 3135 PMS Cool Gray 10

19 Color: Light, lively green — renewal/ environmental Use of original typeface maintains consistency with original logo 20 Lighter version of existing font gives logo an updated look Color: Light, lively green — renewal/environmental

PMS 7489 PMS Cool Gray 10

PMS 7470 PMS Cool Gray 10

L A B O R A T O R I E S

PMS 7489 PMS Cool Gray 10

PMS 3135 PMS Cool Gray 10

23 Icon picks up the shape of the original logo Lighter version of existing font gives logo an updated look Color: bright, clean blue — clean, crisp, lively, new-fresh Icon and logo unite using same color

Name

Title Corporate 2235 Route 130 Dayton, NJ 08810 Phone: (732) 329-0200 Fax: (732) 329-3499 Corporate 2235 Route 130 Dayton, NJ 08810 Phone: (732) 329-0200 Fax: (732) 329-3499

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Corporate 2235 Route 130 Dayton, NJ 08810 Phone: (732) 329-0200 Fax: (732) 329-3499 www.accutest.com

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Business card samples A. Corporate 2235 Route 130 Dayton, NJ 08810 Phone: (732) 329-0200 Fax: (732) 329-3499 Corporate 2235 Route 130 Dayton, NJ 08810 Phone: (732) 329-0200 Fax: (732) 329-3499

Corporate 2235 Route 130 Dayton, NJ 08810 Phone: (732) 329-0200 Fax: (732) 329-3499

www.accutest.com

Name Title

Name Title Corporate 2235 Route 130 Dayton, NJ 08810 Name Phone: (732) 329-0200 Title Fax: (732) 329-3499 Corporate 2235 Route 130 Dayton, NJ 08810 Corporate Phone: (732) 329-0200 2235 Route 130 Fax: (732) 329-3499 Dayton, NJ 08810

www.accutest.com

Corporate 2235 Route 130 Dayton, NJ 08810 Phone: (732) 329-0200 Fax: (732) 329-3499 www.accutest.com Corporate 2235 Route 130 Dayton, NJ 08810 Phone: (732) 329-0200 Fax: (732) 329-3499

Name Corporate

Name Title Phone: (732) 329-0200 Fax: (732) 329-3499 www.accutest.com

Title 2235 Route 130 Dayton, NJ 08810 Phone: (732) 329-0200 Fax: (732) 329-3499 Name Corporate Title 2235 Route 130 Dayton, NJ 08810 Phone: (732) 329-0200 www.accutest.com Fax: (732) 329-3499

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Name Title Corporate 2235 Route 130 Dayton, NJ 08810 Phone: (732) 329-0200 Fax: (732) 329-3499

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20 Lighter version of existing font gives logo an updated look Color: Light, lively green — new growth/ environmental

Title

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G. 23 Icon picks up the shape of the original logo Lighter version of existing font gives logo an updated look Color: bright, clean blue — clean, crisp, lively, new-fresh Icon and logo unite using same color

Mission Statement: Mix

562C

562U

reliable, true, unity, integrity, refreshing, confident

1215C

Warm

128U

hope, support, rebirth

7407C

Warm/Nuetral

1245U

quality, valuable, positive, best of the best

7416C

Warm

1665U

energetic, mentally stimulating, color of change

Mix

7489C

7489U

growth, renewal, youthful, forward moving (go) environmental

Mix

7483C

7483U

life, nature, better, harmony environmental

4625C

Warm/Neutral

4695U

down to earth, steadfast, honest, reliable, wholesome

Cool gray 9C

Neutral

Cool gray 10U

To ensure environmental testing data and services are reliable, valid, complete and of the highest integrity. We will be our clientsâ&#x20AC;&#x2122; advocate for satisfying regulatory

intelligent, strong, corporate

compliance requirements and providing insights to help the industry be able to make confident decisions on the effectiveness of remedial activities.

Mix

7473C

7473U

health, friendly, calming

Mix

3135C

3135U

refreshing, lively, movement

Cool

7470C

7470U

balance, sophistication

Cool

2915C

2915U

peaceful, friendly, loyal

Cool

7462C

301U

unity, integrity, confidence, strong, stability

Mix

5265C

2758U

intrigue, authority, imagination, inspiration

Power/sun

Soil/land/earth

Water/ocean/lake/river

Air/sky

Color Palette

Air/Soil/Water â&#x20AC;&#x201D; (Sun) Daylight

1215C

7407C

7416C

128U

1245U

1665U

7489C

7483C

4625C

7489U

7483U

4695U

7473C

3135C

7470C

7473U

3135U

7470U

2915C

7462C

5265C

2915U

562C

562U

Cool gray 9C

Cool gray 10U

301U

2758U