3 Debt Payoff Tactics That Should Never Be Used

conceptual image of a piggy  bank with tight belt  isolated on white background

Paying off your debt is an admirable goal and a great move for your financial health. But some ways of doing it might hurt more than they would help. Withdrawing from your 401(k), draining your emergency fund, or ignoring your monthly bills in the name of paying off your credit card debt may seem like good ideas in the moment, but they can have adverse consequences in the long run.  Don’t be tempted by any of them!

Dipping Into Your 401(k) – Not a Good Idea

There are plenty of reasons not to use your 401(k) to pay off debt, but let’s start with the potential financial ramifications. If you take money out early, before age 59½ — not only will that money be taxed at your current income tax rate, but you’ll also pay a 10% penalty.

By using your retirement funds to pay off your credit card debt, you’re potentially setting a dangerous precedent. You’re making tapping into your retirement fund an option for sticky financial situations, which could help you justify withdrawals in the future, even if they aren’t absolutely necessary. Unless you’ve exhausted all other legal options, try to leave your retirement savings alone for your future.

Draining Your Emergency Fund – Also Not a Good Idea

Because of high interest rates on credit cards and lower interest on savings accounts, it isn’t wise to keep a large cash reserve while carrying credit card debt from month to month. However, it’s also not a good idea to drain your cash reserves completely to wipe out your debt. Emergencies happen, and you need to have some savings in place to deal with them because a credit card isn’t an emergency fund.

The amount of emergency savings you should keep depends on your personal situation. As a starting point, everyone should have $1,000. Some people — like small business owners, custodial parents or sole breadwinners — may need more, while a single young professional without a mortgage will probably be fine with a small fund. Any savings greater than what you need for emergencies can be put toward debt, but don’t drain your entire rainy-day fund.

Neglecting Your Current Bills – Really Not a Good Idea

When you’re anxious to get rid of your debt for good, it may be tempting to cut corners elsewhere to pay it off as soon as possible. But ignoring your monthly payment obligations to pay down debt isn’t a sound approach. You’ll likely get hit with fees, and your late payments may be reported to the credit bureaus and remain on your credit reports for seven years.

Instead, pay your bills and minimum debt payments first. Then, provided you have a small emergency fund already, put the excess toward extra debt payments.

The Bottom Line

Pay down your credit card debt aggressively, but don’t hurt yourself financially by withdrawing from your 401(k), draining your emergency fund, or ignoring your monthly bills. Instead, aim to bring down your debt by making more or spending less, and allocating the extra funds to your credit card bills.

Don’t forget about First Financial’s 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.

Article Source: Erin El Issa for Nerdwallet, https://www.nerdwallet.com/blog/tips/debt-payoff-tactics-recommend/

“Where has your First Financial Visa Platinum Credit Card taken you?” Photo Contest

We want to see where your Visa Platinum Credit Card has taken you! Share your photo with a short description of where you used your Visa Platinum Credit Card from now until July 6th, 2015 to any of our social media platforms: Facebook, Twitter, or Instagram. Please post only one photo to only one of our social media pages – multiple photos do not earn extra entries. Winner will be announced on July 7th, 2015 and will receive a $50 Visa Gift Card and soft cooler filled with travel sized items. If you don’t have a Visa Platinum Credit Card, click here to apply today!

If you have any questions, feel free to contact us at 866.750.0100, email us at
info@firstffcu.com, or stop into any First Financial branch!

*To be entered, follow First Financial on Facebook, Twitter, or Instagram. Participants can post a photo on First Financial’s Facebook or Twitter page, or can post a photo on their Instagram and tag @firstfinancialnj using #MyFFVisaTravels. Posted photo should be from a trip that the participant used a First Financial Visa Platinum Credit Card on. Picture could be from a previous vacation within the last two (2) years as long as a First Financial Visa Platinum Credit Card was used during the trip. Enter on or before 7/6/15 at 11:59pm. One (1) photo will be chosen at random on or about 7/7/15 and the winner will be notified by the Marketing Department. Winner must be able to pick up their prize in a First Financial branch. No purchase necessary to enter or claim prize. You must be 18 years or old to enter. One entry per person. See credit union for details.


7 Benefits of a Credit Union Credit Card

FFNJ%208160%20m%20platinum%20card%20designs3-resized-600Here are seven reasons why consumers should consider using a credit union credit card:

1. You’re a member-owner. When you join a credit union you are a member-owner, not a customer, and this means you have the privilege of voting for the board of directors – volunteers who help lead the credit union.

First Financial Hosts its First LIFE™ Financial Reality Fair for Students at Lakewood HS

Press Release

LIFE Fair Housing Table and Wheel

Pictured above: Students from Lakewood HS spin the LIFE™ wheel and choose housing options.

Wall, N.J. – On May 20, 2015, First Financial Federal Credit Union held the first LIFE™ (Learning Independent Financial Education) financial reality fair event for the students at Lakewood High School. While the credit union has hosted financial reality fairs in the past, this fair has been revamped and is specifically sponsored and developed by First Financial. Approximately 160 sophomore, junior, and senior students participated in this hands-on version of the “game of life,” during which they were required to make on-the-spot financial decisions.

Dress for Success

Above: Dress for success table with career wardrobe options.

The LIFE™ Fair consists of a full day hands-on experience where students, after identifying their career choice and starting salaries, are provided a budget sheet requiring them to live within their monthly salary while paying for basics such as housing, utilities, transportation, clothing, and food. Once the students visit all the booths, they balance their budget and sit down with a financial counselor to review their expenses and get a “financial reality check.”

Getting ready for the real world - ties

Above photo: Students learn how to tie a tie, along with gaining resume writing and interviewing advice.

In regard to the school’s experience with their first ever LIFE™ Fair, Assistant Principal Major Finklin stated, “What an amazing experience for our students! The LIFE™ Fair afforded our students an opportunity to demonstrate skills they learned through our financial literacy curriculum and apply that knowledge in a fun and engaging way. We are extremely grateful to First Financial for providing financial counselors and other volunteers who helped our students better understand the real world financial concepts that they will utilize for the rest of their lives.”

LIFE Wheel

Above: The LIFE™ wheel.

While the LIFE™ Fair was certainly full of temptations, the students had to spend their money wisely while being able to save and budget themselves for the future – while also enjoying everything life has to offer. First Financial President and CEO, Issa Stephan, concluded, “Our mission for our first LIFE™ Fair was to help the students understand the value of money and how to manage their money, so as they grow as an adult they’ll become more financially responsible. Our credit union puts a high priority on financial education, after all – that’s how First Financial began 79 years ago, with a group of schoolteachers in Asbury Park.”

Additional photos from the event can be seen on First Financial’s Facebook page. To inquire about or set-up a LIFE™ Fair for a Monmouth or Ocean County, NJ school or business – please contact the Business Development Department at 732.312.1421, 732.312.1426, or email business@firstffcu.com.

# # #

About First Financial Federal Credit Union:

First Financial Federal Credit Union (formerly Mon-Oc Federal Credit Union) is a not-for-profit financial cooperative whose goal is to provide the highest level of quality products and personalized services while maintaining financial integrity and stability.  Our vision is to be a long-term financial partner with our Members. While First Financial has a highly trained, professional staff using the latest technology, we also pride ourselves on our personal touch. Unlike huge banking conglomerates, policy setting and overall strategic direction of First Financial are overseen by a volunteer Board of Directors made up of credit union members. The credit union is federally insured by the NCUA. For more information on First Financial, visit www.firstffcu.com.

Important Alert Regarding the U.S. Government Data Breach Incident

alert-resized-600It was recently announced that the U.S. Government has suffered a data breach affecting multiple Federal agencies and approximately 4 million individuals. The Federal Government has confirmed that the information hacked could be used to facilitate identity theft and fraud. The individuals affected are government employees and political appointees.

Below are recommended steps to remain vigilant against possible identity fraud:

  1. Be wary of emails or telephone calls that request information. Neither the U.S. Government nor our financial institution will ask you to provide any information in relation to this possible data breach incident.
  2. Check your Account Statements. Review your statements carefully and repeatedly. Any purchases, large or small, should be verified as a purchase you made.
  3. Check Your Mail and Your Email. Look for mail and emails addressed to you that you do not recognize. This may include credit card accounts, medical bills, or notices from companies with which you do not have a relationship.
  4. Get Help. You are not responsible for fraudulent transactions on your account, but you need to notify us as soon as possible if you see any suspicious activity. In addition, if you are concerned about fraud beyond the transactions on your current account, you may have access to an Identity Fraud Protection program that includes Fully Managed Identity Fraud Research, Remediation, and Recovery Services. We will submit your name to our Recovery Care Center and, within 24 business hours, you will be contacted by an Identity Recovery Advocate who will investigate the situation and work on your behalf to remediate any fraud. Contact us with any questions.
  5. Take Action. If you suspect that your identity has been compromised, you can place a fraud alert on your credit file by calling any one of the three major credit reporting agencies shown below. A fraud alert is a notation on your credit file to warn credit issuers that there may be a problem. The credit issuer is asked to contact you at the telephone number that you supply to validate that you are the person applying for the credit. This is not the same as credit monitoring.

TransUnion: 1.800.916.8800

Experian: 1.888.397.3742    

Equifax: 1.800.685.1111

In accordance with the Fair Credit Reporting Act, it is permissible for consumers to request a free copy of their credit report once every 12 months from each of the three major credit reporting agencies (TransUnion, Experian and Equifax).

To order a free credit report:

Online: www.annualcreditreport.com or by Telephone: 1.877.322.8228

First Financial would like to remind our members that your accounts with us are monitored 24/7 by an experienced team of security professionals for any suspicious or potentially fraudulent activity. First Financial employs the most advanced fraud detection and prevention technology to guard members’ accounts against unauthorized access and use. If our security team observes any unusual activity on member accounts, we will contact members immediately to determine whether the transaction activity is legitimate and authorized.

Don’t wait until it’s too late! Check out First Financial’s ID Theft Protection products – 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 and you can try it FREE for 90 days!*

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 enroll today!**

We will continue to monitor all members’ accounts for suspicious activity. If you have any additional questions or concerns, please give us a call at 866.750.0100 or email us at info@firstffcu.com. Thank you for being a valued member of First Financial.

*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. **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.

First Financial Foundation – 2015 Call for Scholarship Entries

Happy group of studentsThis year, our non-profit organization the First Financial Foundation – will be awarding (4) $500 scholarships to high school seniors who apply on or before 11:59pm on July 3, 2015 for its Erma Dorrer Literary Scholarship. The Foundation will begin accepting entries on Monday, June 8, 2015.

Based on membership feedback, the Foundation Committee has realigned this year’s scholarship requirements and all 4 scholarships will be given to high school seniors, who have been accepted to a 2 or 4 year college and will be attending in the Fall of 2015.

Applicants must answer the following two-part question to qualify (the questions can be answered via written essay or short YouTube video clip):

What is the best piece of financial advice you ever received and why? Who gave you the advice, and how are you using it currently or to shape your financial future?

Applicants can submit either a written essay or video clip to answer the question. Essays should be no longer than two pages, double spaced in 11 point font. Video clips should be recorded and uploaded to YouTube prior to applying, and no more than 2 minutes in length. Creativity is encouraged!

To qualify:

  • Two $500 scholarships will be awarded to two First Financial members (must be a member as of December 31, 2014) who will attend (Fall 2015 Semester) a 2 or 4 year college anywhere within the country.  The student must also be a graduating high school senior from the class of 2015. *Selected recipients of the scholarship will receive the scholarship via a deposit into their First Financial account. No printed checks will be awarded.
  • Two additional $500 scholarships will be awarded to two graduating high school seniors from within the Freehold Regional High School District (Howell, Freehold Township, Freehold Boro, Colts Neck, Manalapan, or Marlboro High School), who will attend (Fall 2015 Semester) a 2 or 4 year college anywhere within the country.  The student must also be a graduating high school senior from the class of 2015. *The student does not have to be a First Financial member to apply for the scholarship, however in order to receive the $500 scholarship – the student will need to open a First Financial membership and should they be selected as a recipient of the scholarship, it will be directly deposited into their First Financial account only. No printed checks will be awarded.
  • Students accepted to trade or technical schools will not qualify for this scholarship.
  • A valid copy of either a college acceptance letter, student schedule, or registration confirmation must accompany all applications.

Winners will be announced and notified via email by 5pm on July 24, 2015.

Deadline for entry submission is 11:59pm on Friday, July 3rd.

*To apply, please email the essay or the link to your YouTube video to the First Financial Foundation at foundation@firstffcu.com, or you may send a printed copy of your essay or flash drive (these will not be returned to you), and supporting documentation to the First Financial Foundation at PO Box 1172, Toms River NJ 08754.  Please be sure to list your contact information on your entry including your full name, address, phone, email, name & location of high school you graduated from in 2015, membership number and date of membership (if applicable), where you will be attending college in the Fall 2015 Semester, any volunteer work you participate in, and a valid copy of either a college acceptance letter, student schedule, or registration confirmation to a 2 or 4 year college. 

**Children or relatives of First Financial employees or members of the Board of Directors, or those living within the same household as a First Financial employee or Board Member – are not eligible to apply for the Erma Dorrer Scholarship.

Good Luck!