7 Tips for Financial Spring Cleaning

Metal Spike File With BillsSpring is not only a great time to spruce up your home and organize your closets, but it’s also an ideal time to clean up your finances too.

Sweep away winter bills.

Here’s a scary statistic: Consumer Reports estimates that 7% of all shoppers go into a new holiday season carrying debt from the previous one. And it’s costly.You certainly don’t want to continue making payments on your holiday purchases for another 9 months. Try to clear up this debt in the spring.

Polish your budget.

How are you doing so far now that the first quarter of the year has ended? Are you over budget or under budget? Do you even have a budget? If you’re close to your expectations – great, but if you’ve veered off track for any reason – perhaps because there’s been a job switch, you had a baby, bought a new house, or there’s been another life change – it’s time to re-evaluate the situation. Your budget will need to be refreshed to meet current needs as well as short and long-term savings goals.

Tidy up bad credit.

Have you been subject to high interest rates? Denied a loan altogether? Been unable to rent an apartment? If you’ve got bad credit, then you’re aware of these consequences. To improve your score, make your payments on time and avoid carrying large balances on your credit cards (keep your utilization rate — the amount you owe versus your total available credit — below 30%).

Purge clutter.

Now that you’ve filed your income taxes, shred statements, bills and other financial records and keep only the documents that are absolutely necessary. As a rule of thumb, you want to hang onto tax records and supporting documents for seven years, and it might be easiest to keep hard copies of those (even though the IRS is okay with digital copies). Definitely no need to hang onto paper records forever.

Dust off unwanted items.

To boost your savings goals or earn extra money to help pay down debt, sell your unwanted gift cards on a site like Gift Card Granny where you can get up to 95 cents on the dollar in return. There is also Thred Up – a site you can sell baby, kids and women’s clothing. Poshmark is another site (and free mobile app) where you can sell women’s clothing, shoes, and accessories. As for old electronics, consider Gazelle and Nextworth. You’ll get a fast quote, a free shipping label and quick payment once the item’s mailed in and inspected, and the payout is generous.

Clean up accounts.

Are there brokerage accounts that can be consolidated? Bank accounts you rarely — if ever — use that should be closed? Old retirement accounts from previous employers that should be rolled over? After years of bill paying online, do you have a huge list of creditors you have to scroll through every time you make a payment? Try to get all of these cleaned up and organized.

Straighten out spending.

We all know that the key to financial freedom is to spend less than you earn. However, given how easy it’s become to spend, and given the proliferation of ads, marketing schemes and various tactics that tempt us to buy more than we need, keeping spending in check is becoming increasingly challenging. It’s more important than ever that you control impulse shopping. How? Eliminate triggers such as browsing favorite online shops, heading to the mall after work to window shop, or buying something new when you’re feeling down to help boost your mood.

When it comes to need-based purchases, to get the best prices, use apps like Coupon SherpaRedLaser, and PoachIt.

Happy spring financial cleaning!

Article Source: Vera Gibbons for Marketwatch, http://www.marketwatch.com/story/7-tips-for-financial-spring-cleaning-2015-03-12

 

 

How to Choose What Financial Goals are Worth Setting

save-saving-housing-house-money-cash-e1394569718602Everyone needs financial goals in order to be efficient and successful, but determining which goals to prioritize can be difficult. If you don’t set enough goals, you may not save enough money. However, if you set too many goals it can be difficult to achieve all of them, and repeated failure can get you off track.

It’s best to prioritize how important different goals are in terms of the immediate future, as well as your long-term hopes and dreams. Once you know what is the most important to you, you can figure out which goals you should focus on. Survival should be your first priority; you need to pay for your basic needs first. After that, you can focus on longer-term goals. Consider these five questions as you set your next financial goals.

1. Do I need it to survive?

Obviously, you need food and shelter to survive. Your necessities have to come first. This means that you will need to have enough money to pay your rent and utilities, purchase groceries, and receive medical care when you need it. There are other things that may be necessary depending on your personal circumstances. You will probably require a job, and you might need a car to get there. You also will need clothing, so your first goal should be to afford basic necessities. If you can’t do that yet, then your other financial goals need to wait.

2. Is the goal too big or too small?

Setting goals that you can’t possibly achieve will only bring failure, and can potentially make you depressed or frustrated. If you can barely afford rent for your current one-bedroom apartment, you probably shouldn’t make a goal to purchase a four-bedroom home this year. But you can make long-term goals that include purchases you couldn’t possibly make now. Your income should increase as you become more experienced in your job field, and you can certainly make long-term goals that factor in your anticipated income.

You also shouldn’t spend too much time on goals that are really small. While setting some small goals may build your confidence (such as saving for a new dress or suit), setting too many small goals will pull your priority away from bigger goals.

3. How can I achieve my goal?

You can increase your chances of achieving your goal by taking extra steps to make it happen (outside of just making the goal itself). If you want to purchase a house, but you need to save for a down payment, start small. It’s good to start off by setting up a savings plan, finding out if you qualify for assistance, and cutting back on expenses. You don’t have to purchase a home (or a new car, or whatever else your big goal entails) right now. Make a plan for just how you can obtain your goal.

This is also true of other financial goals, such as moving up at work and making more money. If you want to move up, focus on the ways that you can improve your work performance and set yourself up for a promotion. Consider educational classes if necessary. You also might consider relocating if it will help you advance in your career. Taking proactive steps to achieve your dream will help you get there, and also may make you feel more accomplished and on-task.

4. Am I thinking about the future?

Vacations and fancy clothes can be wonderful, but you need to think about your future, too. Besides basic necessities, you should also prioritize your retirement savings. According to the United States Department of Labor, knowing your retirement needs, contributing to your employer’s retirement savings plan, learning about investment principles, considering using an IRA, and knowing about your social security benefits, can all help you plan for retirement.

Complete the necessary research in order to determine how much you might need to retire, and also to determine where you might want to live, which will affect how much money you need. You also need to consider your future health, and how it might impact your finances.

To get more information on planning for your retirement and schedule your complimentary appointment, contact First Financial’s Investment & Retirement Center at 732.312.1564 or email samantha.schertz@cunamutual.com.

5. How much time do I need?

This question factors into many of the other questions on this list. One of the best ways to achieve your goals is to set realistic ones, and to figure out when and how you will achieve them. Determine how many years you think it will take you to save enough for the type of home you want, or how much you need to save each year (and for how many years) to be comfortable in retirement. If you want to save for a vacation, consider how you will have to alter your current spending, and for how many months you will have to do so.

Short-term goals often take less planning, but it will still help you to determine how much time you need to achieve those goals. It’s easy to tell yourself that you can save enough for a trip in a few months, but actually sitting down and determining how much you need to save each month, and for how long, will help prevent overspending.

Here at First Financial, our first priority is helping you achieve your financial dreams by defining your dream goals and lifestyle, empowering you through financial education, building your wealth, planning your retirement, and managing your risk. Establishing financial goals is an important part of saving enough money, and being ready for the future and we are here for you! Stop into any one of our branches and sit with a representative to have an annual financial check-up for a review of your finances and portfolio. 

Representatives are registered, securities are sold, and investment advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free 800-369-2862. Nondeposit investment and insurance products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the financial institution. CBSI is under contract with the financial institution, through the financial services program, to make securities available to members. CUNA Brokerage Services, Inc., is a registered broker/dealer in all fifty states of the United States of America.

Article source courtesy of Sienna Beard of Cheatsheet.com.

Our Spring 2015 Newsletter is Here!

Our Spring Bi-Annual Newsletter has arrived! In a continued effort to “go green,” we’re publishing our newsletter electronically – it can also be found on our website and social media sites. Paper copies will be available in our branches in the coming weeks – stay tuned. This Spring “First Edition” newsletter covers some great new topics and talks about some of the exciting events and promotions going on at First Financial for 2015.

The Spring Newsletter Magazine features the following articles:

  • Upcoming First Financial Seminars (May – July 2015)
  • First Click – Remote Deposit Capture Announcement
  • “4 Easiest Ways to Budget” Article
  • Note from the CEO
  • Custom Debit Card Photo Contest Winner & Photo
  • Learn How to Earn Up to $240 a Year When You Open or Upgrade Your First Financial Membership
  • “Could Assumptions Harm Your Retirement Plan?” – IRC Article
  • Custom Debit Card Announcement
  • Popmoney Announcement
  • Financial Tips: Earn More. Save More. Spend Smarter.
  • New Freehold/Howell Service Center Grand Opening & Photo
  • Important information, holidays, phone numbers, and branch locations

To view a copy of the newsletter, click here.

Enjoy!

7 Not So Smart Things People Do in the Name of Being Frugal

quarter in handBragging about being thrifty may get your props from your peers. But just because a decision appears to be a savvy money move, doesn’t mean it actually nets savings.  Here are seven things people do in the name of frugality that actually cost them money — or worse.

Maintain membership in The Clean Plate Club. Just because it’s in your bowl doesn’t mean you have to eat it. If you’re full or it’s unhealthy, stop eating. Throw the rest away (or save it for later). Your choice is obesity or throwing out food. Neither are great, but obesity will cost you in medical expenses and lost wages. Tossing out uneaten food will teach you to serve yourself smaller portions.

Buy clothes that don’t fit (or you don’t like) because they’re on sale.  It’s not a good deal if you don’t wear it. And if it doesn’t fit now, it won’t be in style when in may fit in the future (though it probably won’t ever fit).

Manage your own investments. Yes, fees can eat away at your hard-earned savings. But unless you’re a financial professional, hire an expert to advise you on managing your finances (and there are some excellent arguments for why everyone should hire a neutral, non-emotional third-party).

Save half-used cosmetics. Look: If you found that eye concealer to be a shade too dark last summer, and the hair gel was too sticky, you will not feel differently next year. Plus, many beauty products have expiration dates for a reason. So, if you’re not going to use it now, toss it already.

Rent a storage unit to save valuable stuff. In general, no one stashes valuables in a $99/month self-storage unit. Storage Wars aside, most of those places are probably full of junk that no one wants in the event they are abandoned and the contents are auctioned off by the property owners. Sell, give or toss it, and find ways to curb your habit of accumulating too many things.

Drive a hoopdie. In addition to being frugal and driving your car well past its pretty, you are being political and rejecting our culture’s obsession gas-guzzling, status-making vehicles. But at some point your ride just gets too old to make financial sense.  Even if over the course of a year the repairs on your current car do not exceed monthly payments on a new one, there are other things to consider: Is your car unreliable, possibly leaving you without a way to get to work — or worse, stranded on the side of the road?

Clean your own home. So many highly paid people insist on cleaning their own homes. If you are a professional, your time is worth more money per hour than what it costs to hire a housekeeper to scrub it clean every week or two. However, if that pro is more efficient at this task than you are – use those hours to invest in your career or business, or just enjoy life.

Article Source: Emma Johnson for Forbes.com, http://www.forbes.com/sites/emmajohnson/2014/12/15/6-dumb-things-people-do-in-the-name-of-being-frugal/

 

5 Ways You Could Be Sabotaging Your Future Net Worth

The 3d person under a bill's rain. crise hopelessnessYou may not realize it, but the actions you take now can greatly impact your sense of financial security down the road. Many Americans inadvertently minimize their future net worth by focusing only on the short-term. It can be great to live in the moment, but in some situations it’s a good idea to take a step back to evaluate the long-term impact of your financial decisions.

Here are five ways many Americans are shooting their future net worth in the foot:

1. Renting a Home Instead of Buying

Purchasing a home is probably the biggest investment you’ll ever make, but if you choose a property wisely, it’s definitely worth it. Sure, you’ll need to come up with an initial down payment and you’re responsible for all upkeep and repairs, but in most cases these costs pay themselves back.

When you own the property, you build equity in an investment that will likely increase in value over time. Rather than making monthly rent payments to someone else, your mortgage payments are essentially an investment in your future. Homeowners enjoy the stability of knowing their monthly housing expenses are for the long term, whereas renters never know when their monthly rent will increase. Additionally, interest and property tax paid by homeowners is tax deductible, often offering the chance for an annual break from Uncle Sam.

Need a mortgage or you’d like to re-finance your current mortgage? First Financial has great, low rate mortgage options!  Check them out today. We also have a mortgage rate text messaging service, and when you text firstrate to 69302 – you’ll receive a text message whenever our mortgage rates change.*

2. Not Paying Into a Retirement Plan Early in Your Career

When you’re young, saddled with student loans and barely making enough money to pay the rent, it’s easy to put off saving for retirement because it’s still 40 years away. However, waiting until you’re older to start saving can have a significantly negative impact your financial stability in your golden years.

The earlier you start saving, the more money you’ll earn in interest. For example, if you opened a 401(k) account in your mid-20s, saved a total of $30,000 and realized an 8 percent rate of return, you would have approximately $280,000 by age 65. However, if you save the same amount, realizing the same rate of return, but wait until your mid-40s to start the process, you’ll have only about $60,000 at age 65. Many companies also have a 401(k) match program, where they’ll match your contribution to a certain percentage or dollar amount, so you’re essentially turning away free money by not taking full advantage of this opportunity.

3. Waiting Until Withdrawal to Pay Taxes on Retirement Plan

Traditional 401(k) and IRA plans allow you to make tax-free contributions into your retirement account, with the deductions made in retirement when you withdraw funds. However, it might be smarter to open a Roth 401(k) or IRA, where taxes are deducted upfront, allowing you the benefit of making tax-free withdrawals in retirement. This could be a savvy move, as there’s a very good chance you’ll be in a higher income tax bracket when you retire than you were when you opened your retirement account.

4. Leasing Vehicles Instead of Financing

At first glance, leasing a vehicle can seem like an attractive option — less money down, lower monthly payments and the ability to drive a higher-priced car than you could afford to finance. However, leasing won’t add any gains to your future net worth. The monthly payments you make are essentially rent to the dealership, as you don’t get to keep the vehicle at the end of the lease. Rather than paying off the car and driving it for a few years payment-free, you’re forced to return it and immediately start making payments on another model — and continue the cycle every few years when your lease is up. Additionally, you’re limited to the number of miles you can put on a leased vehicle, you have to pay extra for excess wear-and-tear charges and you’ll pay sky-high early termination fees if you need to break the lease early.

In the market for a vehicle?  At First Financial, our auto loan rates are the same whether you buy new or used.** Apply online 24/7!

5. Using Credit Cards to Overspend

Everyone wants things they can’t afford, but offers for zero or low-interest credit cards can make it very difficult to avoid temptation. It might seem harmless to book a vacation or purchase a new furniture set using a credit card with little-to-no introductory financing, but what if you can’t pay the balance off before the promotional period ends? It’s not uncommon for these promotional interest rates to rise from zero to 18 or 20 percent, which can seriously increase the initial price of your expenditures and leave you with a mountain of debt that can take years to pay off.

Do you have a large balance on a high interest credit card? Have no fear, First Financial’s Visa Platinum Card has a great low rate, no balance transfer fees, no annual fee, and rewards!*** Apply online today.

Making savvy financial choices now can help ensure you’re able to enjoy stability later in life. Sometimes it’s worth making initial sacrifices now to allow yourself to ultimately come out ahead. Always consider what the impact of the choices you make now will have on your long-term happiness before jumping head first into a decision you’ll grow to regret.

 *Subject to credit approval.  Credit worthiness determines your APR. Your actual APR may vary based on your state of residence, approved loan amount, applicable discounts and your credit history. 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.  See Credit Union for details. Standard text messaging and data rates may apply.

**A First Financial membership is required to obtain a First Financial auto loan and is available to anyone who lives, works, worships or attends school in Monmouth or Ocean Counties. Subject to credit approval.

***APR varies from 10.90% to 17.90% when you open your account based on your credit worthiness. This APR is for purchases, balance transfers, and cash advances and will vary with the market based on the Prime Rate. Subject to credit approval. Rates quoted assume excellent borrower credit history. Your actual APR may vary based on your state of residence, approved loan amount, applicable discounts and your credit history. No Annual Fee. Other fees that apply: Cash advance fee of 1% of advance ($5 minimum and $25 maximum), Late Payment Fee of up to $25, Foreign Transaction Fee of 1% plus foreign exchange rate of transaction amount, $5 Card Replacement Fee, and Returned Payment Fee of up to $25. A First Financial membership is required to obtain a VISA Platinum Card and is available to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties.

Article Source: Laura Woods of gobankingrates.com, http://www.reviewjournal.com/business/money/5-ways-you-re-sabotaging-your-future-net-worth

 

5 Types of Debt – What to Pay Off Now and Later

debt dollar billYou often hear that there’s good debt and bad debt. That’s probably because it would not sound too great if financial experts went around referring to bad debt and even worse debt.

After all, it’s challenging to live without owing somebody something – right? If you want to buy a house with cash, by the time you save up enough, it may be time to retire. If you’re saving up to buy a car free and clear, you may have to spend a lot of years riding the bus first. Most people get through life by borrowing money.

So sure, there’s good debt (the kind you probably can’t avoid carrying) and there’s bad debt (the kind you should try to get rid of sooner rather than later). One key to determining which debt to pay off now versus later is the interest rate: the lower it is, the longer you can carry the debt without it becoming a burden. Here are some guidelines to help you prioritize your debt.

Mortgage: Pay off later.

If you have a large mortgage and you win the lottery or come into an inheritance that allows you to pay your house off easily, doing it now is probably not a bad idea. But if you make it your main goal to pay off your mortgage, you might end up sacrificing other goals like saving for retirement or your kids’ college education.

Revolving credit card debt: Pay off now.

With the steep interest rates on credit cards (the national average is 13% APR for fixed-rate credit cards and 15.7% APR for variable-rate credit cards), this one’s a no-brainer. Revolving credit card debt is not good, and should be paid off as quickly as you can.

Not only is paying all of that interest expensive, it’s a result of a lifestyle people can’t yet afford. Once you establish a pattern of increasing expenses for your lifestyle, it could be impossible to catch up.

Did you know you can transfer your high-interest credit card balances to First Financial’s Visa Platinum Credit Card, which has a great low rate and no balance transfer fees?* Apply online today!

Student loans: Pay off later.

Let’s just stress that if you have a choice between buying a sports car or retiring that student loan debt, you know what the smart decision is (hopefully you were thinking to pay off the student loan first!).

In most cases, you’ll be just fine if you make the monthly student loan payment and don’t stress over paying it off any faster. Student loans typically tend to have a lower interest rate and an extended payment period. In most cases, if you have an extra thousand dollars, you’re better off using it to pay down your revolving credit card debt than putting it toward student loans (unless this is your only source of debt and your goal is to be debt-free).

Car loans: Pay off sooner rather than later.

If you can buy a perfectly good used car and borrow less, or buy a car without a loan, that’s ideal. But if you’re going to go into debt when you buy an automobile, try not to get stuck in a lengthy loan. Experian Automotive recently reported that in the second quarter of 2014, the average new car loan, for the second quarter in a row, was 66 months. That’s an all-time high. And that’s just the average. Approximately a quarter of new car loans are between 73 and 84 months long. Those are six and seven year car loans.

Historically, the average car loan has been around four to five years, with three years considered to be the sweet spot. Consumers are naturally attracted to an 84 month loan because the monthly payment is far lower than it would be if you took on a 36 month or even 60 month car loan. But you’ll likely pay thousands more with a lengthy loan. You may also find that your warranties will run out long before you make that final payment, and your car may not even last seven years depending upon what you bought.

Did you know at First Financial, our low auto loan rates are the same whether you buy new or used? Be sure to check them out today, and if you like what you see – you can apply for an auto loan online 24/7.**

Car insurance premiums: Pay off now, but only if you can.

This is small potatoes as far as your financial obligations go, and it may not be fair to call it a debt, since you pay as you go with insurance. Still if you have car insurance, it’s a financial obligation that you’re generally stuck paying indefinitely, so it feels like a debt.

If you can pay six or 12 months ahead of time instead of just once a month, you can avoid installment fees, which generally run between $5 and $9 dollars month. These additional costs, although relatively small individually, can add up over a 12 month policy period. Moreover, you’ve not only saved some money – you have one less monthly bill to worry about as you deal with your bigger debt.

On the other hand, if you’re going to have trouble making your car payment because you’re paying for a year’s worth of car insurance, stick with the monthly plan. Paying debt off successfully is really about successfully managing your cash flow.

*APR varies from 10.90% to 17.90% when you open your account based on your credit worthiness. This APR is for purchases, balance transfers, and cash advances and will vary with the market based on the Prime Rate. Subject to credit approval. Rates quoted assume excellent borrower credit history. Your actual APR may vary based on your state of residence, approved loan amount, applicable discounts and your credit history. No Annual Fee. Other fees that apply: Cash advance fee of 1% of advance ($5 minimum and $25 maximum), Late Payment Fee of up to $25, Foreign Transaction Fee of 1% plus foreign exchange rate of transaction amount, $5 Card Replacement Fee, and Returned Payment Fee of up to $25. A First Financial membership is required to obtain a VISA Platinum Card and is available to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties.

**A First Financial membership is required to obtain a First Financial auto loan and is available to anyone who lives, works, worships or attends school in Monmouth or Ocean Counties. Subject to credit approval.

Article Source: Geoff Williams of money.usnews.com, http://money.usnews.com/money/personal-finance/articles/2014/12/11/5-debts-you-should-pay-off-now-or-later