Is There Such a Thing as Good Debt?

3d man sitting sad with text 'debt'.Most of the time, the word “debt” has negative connotations. Debt costs you money and therefore takes money away from financial goals like saving and investing.
So could there ever be good debt? That’s no easy answer. How you use debt has a big impact on whether or not you can consider it “good.” If you have too much of a “good” thing — that’s when it can turn into bad debt. So let’s consider 3 types of debt: investing in a college education, buying a home, and starting a business.

1. Are Student Loans Always Good Debt?
Student loans aren’t always good debt, because most people don’t consider how long they’ll be paying back their student loans when they take them out. But that doesn’t make them bad. If you take them out to obtain a job that you could have only secured with a college education and earn enough to make your student loan repayments manageable, your student loan debt was a good debt.

Here are some tips for student loans:

  • Keep your total loans under your projected starting salary when you graduate. If you’re able to do that, you should be able to pay them off with the standard 10-year plan.
  • Cut down on the loan amount. Get college credits while you’re in high school, go to a community college for your first two years, stick to a state school, and apply for scholarships.
  • Get a job to pay for your living expenses while you’re in school so you don’t take out loans for living expenses.
  • Keep in mind that private student loans don’t offer the flexibility of federal loans, so try to apply for federal student loans first.

Check out our FREE student loan calculator here to help manage your student loan debt, which will show you how much you can save by consolidating multiple loans or how to pay off your high interest student loan debt as quickly as possible.

2. How Much Should I Borrow for a Mortgage?
Owning a home used to be considered the American dream, and for many people it still is. Most people need to take out a mortgage for their purchase. If you think you’ll be in the same area for several years and can put a 20% down payment on a home, a mortgage could be a good long-term investment. Interest rates on mortgages are historically low, and owning a home can also provide tax benefits. The nice thing about a home is that it’s an investment you can live in.

However, many people end up buying a home without thinking about how it will affect their lifestyle or how they’ll pay their mortgage if an emergency came up. To avoid this, here are a few rules of thumb:

  • Make a 20% down payment so you can avoid paying private mortgage insurance.
  • Don’t use your entire savings account for a down payment. Homes are a hotbed for dipping into your emergency savings, as there are far more unexpected expenses that come up than when you’re living in an apartment.
  • Boost your credit score before you buy. Make sure you have a score above 700 so you can qualify for the best mortgage rates available. This can save you thousands of dollars in interest over the life of the loan.

Try First Financial’s First Score Credit Counseling program; a low cost, interactive session ($30) with a First Financial expert, which simulates your credit score with various “what if” scenarios. You can email us at firstscore@firstffcu.com or call 866.750.0100, Option 4 to get started.

  • If you think you might move in the next five years, you might want to rent so you don’t have to move during a down market and possibly sell your home for a loss.
  • In figuring out your monthly housing costs, the principal and interest on the mortgage loom large. But don’t forget property taxes, insurance, utilities, repairs, landscaping, snow removal and other factors. Make sure that your monthly housing expenses leave room for other expenses too.

We offer a number of great mortgage options, including refinancing – click here to learn about our 10, 15, and 30 year mortgage features and see what a good fit for your home is!*

To receive updates on our low mortgage rates straight to your mobile phone, text FIRSTRATE to 69302 and each time our mortgage rates change, we’ll send you a text message with the new rates.**

3. What About Using a Loan to Start a New Business?
Entrepreneurship seems to be the new job security for many people in this generation. Incurring debt to start a business can be good debt if the funds help you to build a sustainable livelihood that allows you to repay any money borrowed and improve your financial situation. Just be cautious of how much debt you’re taking on.

Follow these tips to be financially smart and successful in your business:

  • Self-fund your business venture with savings first.
  • The smaller the investment, the quicker you can make money.
  • Do your research and get experience in the field before your launch. Some business opportunities require much bigger up-front investments, which may lead to a small business loan.

Did you know First Financial offers Business accounts, loans, and services? We understand that not every business is the same and, therefore, not every loan need can be the same.  This is exactly why we look at each individual business and create a customized lending solution to meet your specific needs. Please contact us at business@firstffcu.com and we’ll be happy to provide you with more information on business loans and services.

Debt Costs Money, So Use it Wisely
Debt can be good, but only if it helps you leverage your assets to build wealth. Every good debt has the potential to turn bad, so do your research first. The fewer monthly obligations you have, the more money you have to fund a lifestyle that you love.

Don’t forget about our free, online debt management tool, Debt in Focus. In just minutes, you will receive a thorough analysis of your financial situation, including powerful tips by leading financial experts to help you control your debt, build a budget, and start living the life you want to live.

*A First Financial membership is required to obtain a mortgage and is open to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties. Subject to credit approval. Credit worthiness determines your APR.

 **Standard text messaging and data rates may apply.

 Article Courtesy of Daily Finance Online by Sophia Bera

Down to Business: What to Consider When Writing a Business Plan

DowntoBizMattMegan

Remember writing term papers in high school or college? You had to prove a point using evidence provided by your research of the topic. In many ways, a business plan is proving the following thesis: “I can successfully operate a sustainable business.” So what research do you need to prove this idea?

  • Market Research – Who are your competitors in the area? What are their prices for comparable services? How will you differentiate your product/service from theirs?
  • Financials – Create realistic projections for the money you will make and lose over the next 3 years. Explain how you came up with these figures, and how they will figure in to the growth of your company. Also include the amount of money you, your partners, and your investors (if applicable) are contributing to the start up.
  • Biographies – Who’s who in the organization? What skills, experience, and talent does each of the business owners/partners bring to the proverbial table? Understand how each person will make the business successful.
    • What are the duties of each person employed by the company?
    • Each person should provide a personal financial statement
    • How will matters be resolved if the partners cannot agree on an issue?
  • Marketing Plan – How will your potential patrons know about your business? How much of your budget is devoted to marketing? Depending on the type of business, will you do traditional advertising, or organic word of mouth marketing?
  • The Company Itself – What product or service are you providing, and how will you be doing this? How did you originally get involved in the industry? What makes this industry a worthwhile use of your time, energy, and money?

These are only a few of the aspects to consider when creating a business plan. You can find many seminars on how to write a business plan for little to no cost at local libraries, local community colleges – particularly Brookdale Community College, and of course at First Financial Federal Credit Union. Formal templates can be found at www.SBA.gov or www.SCORE.org. Use these questions provided, along with one of their templates, to prove your thesis – you can, in fact, operate a successful business…once you have the right plan!

For more information about any of First Financial’s business accounts and services, you can contact Business Development Manager, Matthew Brazinski, at 732.312.1421 or Business Development Officer, Megan Shull, at 732.312.1426 or simply leave a comment below! 

First Financial Foundation Announces Winners of 2014 Erma Dorrer Literary Scholarship

Press Release

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(L to R): 2014 scholarship winners Kimberly Rogers, Demonica Britt, Michael Perry, President/CEO Issa Stephan, and Carly Burrus.

WALL, N.J. – The First Financial Federal Credit Union Foundation (www.firstffcu.com) recently awarded $500 scholarships to four deserving undergraduate students.

This year’s winners included: Kimberly Rogers of Ocean Township, Georgian Court University; Demonica Britt of Freehold, Seton Hall University; Michael Perry of Freehold, Boston College; and Carly Burrus of Neptune, Coastal Carolina University.

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Pictured above: 2014 scholarship winner Kimberly Rogers with Issa Stephan and her parents.

This year, there was one scholarship topic for student applicants to respond to: In today’s world, identity theft, building credit and maintaining good credit are essential elements in our financial lives.  How will you address these essential financial elements during your college years, and how will you guide your friends and family to address the above elements?  Your response should include details about how to protect yourself and what others should do to protect themselves from ID theft, as well as how you plan to build credit and maintain credit for your financial future.

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Pictured above: 2014 scholarship winner Demonica Britt with Issa Stephan and her daughters.

Applicants submitted a written essay or video clip to answer the question, and had to be a member of the credit union by 12/31/13 and about to attend for fall 2014 or currently attending a 2 or 4 year college anywhere in the country.

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Pictured above: 2014 scholarship winner Michael Perry with Issa Stephan and his parents and grandmother.

“We are thrilled to be able to aid these admirable and bright students in their journey of success and education,” said First Financial President and CEO, Issa Stephan.  “Our credit union puts a high priority on education, after all – that’s how First Financial began 78 years ago, with a group of schoolteachers in Asbury Park.”

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Pictured above: 2014 scholarship winner Carly Burrus with Issa Stephan and her mother.

View more about this year’s scholarships and the First Financial Foundation on First Financial’s website.

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About the First Financial Foundation:

Since 1994, First Financial has supported the Monmouth & Ocean communities with the Erma Dorrer Scholarship Program. Today, that program has been extended into the First Financial Foundation to assist charitable organizations of the Monmouth & Ocean County Communities.  The First Financial Federal Credit Union Foundation is a non-profit working to support a variety of community programs and organizations throughout Monmouth and Ocean Counties.  We direct 100% of your contributions to programs because all administrative expenses are paid for by First Financial Federal Credit Union.  To learn more, visit www.firstffcu.com.

How to Assess a Neighborhood When House Hunting

House-HuntingWhen you buy a house, you aren’t just buying a house. In a way, you’re buying a neighborhood. After all, you’ll likely choose a home partly because it’s close to work, the schools are great, or it’s walking distance to restaurants and stores.

In fact, you could argue that picking the right neighborhood is more important than picking the right house. The last thing you want is to buy property in a place where everyone is trying to leave. So if you’re looking for a home for your house, here are some things to consider.

1. What to look for. If you’ve been focused on your dream house and not your dream neighborhood, the most popular areas tend to be ones that offer an instant sense of community to those relocating there. If living in the right community is important to you, then it’s important to think about these five factors:

  1. Aesthetics. An attractive neighborhood indicates the residents care about it.
  2. Affordability. Sure, you want an inexpensive house, but you also want to be able to afford the cost of living in the neighborhood.
  3. Safe environment. Nobody wants a criminal as a neighbor.
  4. Easy access to goods and services. Can you make a quick run to the bank or grocery store, or will every day be a headache behind the wheel due to traffic congestion or construction?
  5. Walking distance to goods and services. If exercise and a sense of community are important to you, find a house near the establishments you’ll be frequenting that is accessible by foot.

2. Online research. You probably use websites like Zillow.com, Realtor.com, Trulia.com, or Homes.com to search for a new house. But there are neighborhood-related websites and apps as well. Here’s a sampling of what’s available:

  • HomeFacts.com. This website contains mostly neighborhood statistics and information, but it also has data on more than 100 million U.S. homes (type in the street address of your prospective house to get the scoop on the whole area). Wondering how many foreclosures are in the area or if there are any environmental concerns? This is your site.
  • NeighborhoodScout.com. Read up on crime, school, and real estate reports for the neighborhood you’re considering.
  • Greatschools.org. Here, you can find reviews written by parents and students of schools in the neighborhood you’re considering. You can also find test scores and other data that may help you decide if this is a school you want your kids to attend.
  • CommuteInfo.org. This site offers a commuting calculator. Plug in information like miles driven and how many miles per gallon your car averages, and the calculator will give you an average cost of what your commute costs may look like in a month and in a year.

3. Red flags. As you’d expect, spotting a neighborhood on the decline isn’t rocket science. For example, pay attention to the property maintenance – overgrown lawns and shrubs, toys left outside, garbage bins not taken in – often reflect that the area is not well cared for and it can negatively affect the property value.

Though things are subject to change, selecting the right neighborhood is important. Your neighborhood’s character will likely shape your family’s character.

If you’re looking to purchase or refinance a home, First Financial has a variety of options available to you, including 10, 15, and 30 year mortgages. We offer great low rates, no pre-payment penalties, easy application process, financing on your primary residence, vacation home or investment property, plus so much more! For rates and more information, call us at 866.750.0100, Option 4 for the Lending Department.*

You can also sign up for our Mortgage Rate Text Messaging Service to receive updates on our low mortgage rates straight to your mobile phone. To be a part of the program, text FIRSTRATE to 69302 and each time our mortgage rates change, we’ll send you a text message with the new rates.** 

*A First Financial membership is required to obtain a mortgage and is open to anyone who lives, works, worships, volunteers, or attends school in Monmouth or Ocean Counties. Subject to credit approval. Credit worthiness determines your APR.

**Standard text messaging and data rates may apply.

Article courtesy of US News Online by Geoff Williams.

ID Theft Risks That Lurk in Your Child’s Backpack

Girl walking away from School Bus while texting on her phoneWhile you’re out searching for the perfect back-to-school backpack for your child, the more important consideration other than style, size, and color should be — what can happen if a dishonest person gets a hold of it? The things your child carries in his or her backpack can become a huge financial headache if they fall into the wrong hands.

With identity-related crimes at historic levels, the odds are better than ever that a dishonest person will know the basics of taking advantage of the kinds of personally identifiable information, sensitive data (like passwords and credit card numbers), and the many other keys to your household economy that can lurk in your child’s backpack.

Here’s a short list of what a relatively creative thief might find in your child’s backpack, and what you can do to prevent the worst from happening.

1. A Smartphone

While obvious to you (hopefully), does your child understand the serious potential for disaster that a walk-about smartphone can bring to your doorstep?

It can be as simple as a scammer dialing 611 and ordering new services. Chances are good that there’s enough information in your child’s backpack for a motivated thief to get your name and thus the keys to your telephonic kingdom.

But there are other identity indignities that can be done. Many people store user name and password information on the Notes app of their phones. The Notes may contain other informational cracks and crevices as well and open up unsuspecting third parties — relatives and friends — to scams. Email scams, grandparent scams, an iTunes or apps shopping spree, malware installation — so many tidbits to exploit.

What to do: Talk to your kids about the dangers of an unsecured phone and discuss basic data storage details with them — like what information shouldn’t be on their phones. Is the phone locked with a passcode? It should be! Also have them set strong (think creatively alpha-numeric) passwords, and a Find Me app to erase the contents should the device fall into the wrong hands.

2. Their Laptop

You don’t need to be a movie buff to know that a computer is a dangerous thing in the wrong hands. Most issues associated with a lost phone come to bear here as well. Emails can be sent to relatives or strangers in the service of stealing money or wreaking havoc.

Beyond the irresistible cornucopia of files that may well be saved on the device, email is a treasure trove of personally identifiable information — everything from credit card numbers to more data like name, address, email addresses and birthdays — pieces of a puzzle that can be assembled to present a believable story to a customer service representative and then steal valuable goods and services, or used as a fly trap to accumulate even more personally identifiable information.

Does your child have access to your Netflix account? How about Amazon or iTunes? Where else have they gone in cyberspace that might have their information — or yours? Open social media sites that are set to login automatically afford a wide vista of scamming opportunities too.

What to do: Make sure your child gets into the habit of logging out of all their online accounts, and that they don’t store sensitive information on their laptops. Talk to them about the wisdom of not saving user ID and password information, and how to make a good one. Finally, have your child set a password — shared with you — to protect their device against the wrong person accessing it.

3. Keys and Name Tags

So, this is pretty straightforward: If your child uses a karabiner to attach his or her keys to their backpack, you’ve got a potential robbery waiting to happen.

Additionally, there are apps that can allow a fraudster (as well as a person who might want to use the app to avoid unnecessary inconvenience) to make a copy of a key that a locksmith can duplicate.

What to do: Tell your child to keep the keys to your home in their pocket rather than on their back.

4. Gaming Device

Playstation Vita is a popular gaming device — and not the only device that could cause you a world of woe should it fall into the wrong hands — but we’ll single it out for the sake of illustration.

The good news: Your personally identifiable information is safe even if someone grabs the device, because it’s password-protected and associated with your gamer’s access to the network.

That doesn’t mean that a bad player can’t do some damage. First, they can play games and wreck your child’s sterling reputation in the community. Worse: Whoever has that device can buy games and run up a hefty bill. One-click purchased games are something any malicious third party can rack up in the way of a very expensive just-because crime.

What to do: Have your child set a passcode for access to the device and make sure they share it with you.

When it comes to data security, best practices are universal. It’s your job to pass on what your kids need to know to stay safe and keep your family out of the crosshairs of ID theft.

To cover all your financial bases, enroll in one of our First Financial’s ID Theft Protection product plans – with our Fully Managed Identity Recovery services, you don’t need to worry. A professional Recovery Advocate will do the work on your behalf, based on a plan that you approve. Should you experience an Identity Theft incident, your Recovery Advocate will stick with you all along the way – and will be there for you until your good name is restored.

Our ID Theft Protection options may include some of the following services, based on the package you choose to enroll in: Lost Document Replacement, Credit Bureau Monitoring, Score Tracker, and Three-Generation Family Benefit.* To learn more about our ID Theft Protection products, click here and find out how you can enroll today – as well as get started with your first 90 days free!**

*Identity Theft insurance underwritten by subsidiaries or affiliates of Chartis Inc. The description herein is a summary and intended for informational purposes only and does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for terms, conditions, and exclusions of coverage. Coverage may not be available in all jurisdictions.

**Available for new enrollments only. After the free trial of 90 days, the member must contact the Credit Union to opt-out of ID Theft Protection or the monthly fee of $4.95 will automatically be deducted out of the base savings account or $8.95 will be deducted out of the First Protection Checking account (depending upon the coverage option selected), on a monthly basis or until the member opts out of the program.

Article Source: Adam Levin for Credit.com, http://www.today.com/parents/identity-theft-risks-lurk-your-kids-backpack-1D80042370

Will Paying Off My Car Loan Help My Credit Score?

Credit-Score-325x222There are a lot of different kinds of credit out there. One of the most common forms is the auto loan. Though we are all itching to pay off our long-term debts and own something free and clear, there are a few precautions to know about before racing to get that statement to read zero.

To determine if paying off your car loan will help your credit score, it is important to understand several factors that go into your credit score.

Multiple facets of FICO

First, it’s important to understand the components that make up your FICO credit score. There are five key elements that are used to makeup that all-important number:

  • 35% of your score is weighted toward your payment history
  • 30% is weighted toward the amounts owed on your credit cards
  • 15% is devoted to length of credit history
  • 10% is generated by new credit
  • 10% comes from types of credit used.

The relative importance of each category depends on the consumer themselves.

If you have an auto loan that you’ve been diligent about paying, you’ve benefitted from that 35% devoted to payment history. By paying it down, you are also contributing to that 30% element of amount owed, since theoretically you are decreasing your credit utilization rate. However, if you’ve been increasing the balance on other forms of credit, that may cancel out some of that good behavior.

If you have a 3 to 5 year car loan, you also have length of credit history going for you. The new credit category doesn’t really apply in this scenario.

Did you know First Financial’s Identity Theft Protection program not only protects you and your family members from ID Theft, but it also monitors its users’ credit reports? When you enroll in ID Theft Protection with First Financial, your credit report is monitored continuously for new or suspicious activity. If new activity occurs, an alert is sent via email and text message, allowing you to confirm whether or not the activity is fraudulent. To enroll in our ID Theft Protection services, stop into any First Financial branch or call 866.750.0100.*

Types of Credit

But what’s interesting is the 10% weighted to types of credit used. On a positive note, a car loan alters the types of credit you have, assuming you have things like credit cards or even a mortgage.  However, if you pay it off, you may eliminate this type of installment loan as a type of credit used (this is a very different type of credit than a credit card).

Your ability to pay installment accounts, in addition to others, demonstrates that you are responsible and diligent enough to plan your finances around all these different types of credit.

The Biggest Factor

Weighing against all this, however, is a large factor that requires you to look more holistically at your credit lifestyle. A general rule of thumb is that if you can pay off a debt of any kind, in full, do so (with the exception of a mortgage).

Need to get your credit score in check? Try First Financial’s First Score Program, a low cost, interactive session ($30) with a First Financial expert, which simulates your credit score with various “what if” scenarios. You can email us at firstscore@firstffcu.com or call 866.750.0100, Option 4 to get started.

If you have a great deal of debt, we also have a free, anonymous online debt management tool called Debt in Focus. In just minutes, you will receive a thorough analysis of your financial situation, including powerful tips by leading financial experts to help you control your debt, build a budget, and start living the life you want to live.

*Identity Theft insurance underwritten by subsidiaries or affiliates of Chartis Inc. The description herein is a summary and intended for informational purposes only and does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for terms, conditions, and exclusions of coverage. Coverage may not be available in all jurisdictions. 

Article courtesy of Nerd Wallet Online