Affinity 01

F A L L

Going

Green to Protect the

Planet (and Save Money)

2 0 0 7

IN THIS

ISSUE

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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.

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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

1 Affinity Connections | FALL 2007

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.

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. © 2007 Affinity Federal Credit Union.

2 Affinity Connections | FALL 2007

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 • 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

Consider this:

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.

4 Affinity Connections | FALL 2007

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 you’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 owner’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 don’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?

7 Affinity Connections | FALL 2007

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.

• Small Business Start-Up Kit by Peri J. Pakroo J.D. ©2006 Nolo Press • Insurance Information Institute (www.iii.org) • The National Federation of Independent Business (www.nfib.com)

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.

8 Affinity Connections | FALL 2007

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.

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.

9 Affinity Connections | FALL 2007

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.

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.

11 Affinity Connections | FALL 2007

?

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

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 Std. Presort 73 Mountain View Blvd.

Basking Ridge, NJ 07920

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