How to Save Money By Simplifying Your Life

save-money-travel-photo-ccNearly half of households in the United States are “liquid asset poor,” meaning they have less than three month’s worth of savings in the bank, according to a report this year from the Corporation for Enterprise Development, a nonprofit that tracks household financial security. Surprisingly, 25% of those who are considered “liquid asset poor” are in the middle class with earnings of $56,113 to $91,356 annually. What’s even more surprising is that 89% are employed.

Statistics like these might make you wonder how we got here. The fact is, modern life has become more difficult and complicated than ever. We not only have more inconveniences and responsibilities than previous generations, but we also have more bills to pay. We work more, relax less, and spend most of our time planning for the future instead of enjoying the present. Everything costs more than it did generations ago, which is another reason so many Americans are living paycheck to paycheck. And when you’re living a hand-to-mouth existence, it can be next to impossible to break the cycle.

Breaking the Cycle in 5 Simple Steps

But what if someone told you it didn’t have to be that way? What would you do if you discovered that merely simplifying your life could help you save and prepare for a brighter future? The truth is, a simpler existence might be exactly what it takes to transition from a lifestyle of struggle into one where you’re able to enjoy life a little. It may not be easy, but change might just be within your reach.

Here’s how:

  • Pare down your possessions. If you’re struggling to keep up and feeling bogged down by life’s ups and downs, it might be time to lighten your load. The truth is, many of the belongings that bring you joy could also be a source of stress either because they require upkeep, take up too much space or come with additional financial costs. So, instead of holding on, figure out what you can sell and take the necessary steps to do so. You’ll not only simplify your life, but you’ll also rake in some extra cash in the process.
  • Cancel unnecessary services. Many monthly bills are non-negotiable, including things such as utilities, insurance, mortgage or rent payments, and transportation costs. But the rest? You can typically do without it. If you really want to simplify and get ahead, consider canceling services that aren’t necessary. This could include things such as cable television, expensive gym memberships (when there are many more affordable monthly plans out there), pricey cell phone contracts, or other unnecessary monthly subscriptions (magazines, movie rental/streaming services, etc.). Eliminating or cutting even a few of your monthly expenses can make a huge difference in your bottom line over the months and years. Plus, who doesn’t want fewer bills to pay?
  • Pay down debt. If you’re like most people, you have a few lingering debts from the past. The bad news is, those monthly debt payments might be part of the reason you’re struggling. They might even mean the difference between mere survival and getting ahead. Unfortunately, the only real way to escape the grasp of your debt is to make a commitment to become debt-free. Use the money you’ve freed up by paring down your possessions and eliminating unnecessary services to work toward becoming debt-free once and for all. It may take a while, but it will be worth it.

Utilize First Financial’s free, anonymous 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.

  • Make a commitment to save. When you’re living paycheck to paycheck, one surprise bill or emergency is all it takes to knock you completely off track. That’s why it’s absolutely crucial to begin saving for the future and for any unexpected expenses that might arise. Saving money might seem like a lofty goal, but it can be done if you make the commitment to never give up. Your future self will thank you.
  • Make it automatic. If you’re worried you’ll fall off the savings wagon in a hurry, the best thing you can do for yourself is make all savings automatic. This generally means setting up an automatic account transfer on payday or at the end or beginning of the month. Making it automatic helps you accomplish your savings goals in two ways: First, it ensures you’re saving on a regular basis by forcing you onto a savings schedule. Second, it forces you to live on less than what you earn, which is required if you truly want to get ahead and stay ahead.

It’s true that modern life has become burdensome and overly complicated in some ways, but it’s also true that our decisions often make it worse. Fortunately, the key to escaping a lifetime of struggle is often within reach if you’re willing to look hard enough. All it takes is a fresh perspective, a willingness to live on less, and the fortitude to make it happen. A simpler and more prosperous life can be yours if you want it.

*Click here to view the article source by Holly Johnson of US News.

5 Budget Killers You Can Avoid

budgeting-money-to-conquer-debtCreating a budget is the first step in taking control of your finances. Sticking to your budget is another challenge altogether.

Even when you believe you have factored in every cost you may encounter by week, by month or by year, somehow you end up needing more money than you allocated – right? If this sounds like you, you are likely encountering a budget killer (or several). Below are some of the most common costs that can cause you to veer off your budgeting course.

1. Account Maintenance Fees: Some big bank accounts and credit cards tack on fees if you don’t maintain your account or meet specific requirements. Some charge you extra if you don’t maintain a certain balance, if you write too many checks, or if you don’t make enough transactions. These can add up quickly. Make sure when choosing an account or credit card, you read the specifics of your account agreement carefully. Look into which checking accounts and credit cards offer services that fit your lifestyle.

Be sure to check out the variety of flexible Checking Account options that we offer here at First Financial including First Protection, High Yield, Free, Go Green Checking and more. Plus, if you’re on the hunt for a great new maintenance-free credit card with rewards, click here to learn more about our low-rate Visa Platinum Credit Card and apply online.

2. Subscriptions: While seemingly low monthly fees can be attractive, subscription magazines and online services (think Netflix, Hulu, etc.) add up. These costs are hurting your budget if you are not using the services or if you could find them elsewhere online for free. Eventually, these just become another add-on to your monthly payments so it’s a good idea every so often to re-evaluate whether yours are worth keeping.

3. Credit Card Interest: Credit cards have several attractive features: allowing you to buy now and pay later, providing cash back, and helping you earn points toward a new car, vacation or night out. Paying installments on your purchases over time may appear to be a great way to buy all your monthly and superfluous purchases. However, high interest rates add up over time if you carry a balance and you can find yourself deep in debt before you know it. You may think you are paying off your purchase when all you are doing is treading water by paying off the interest. To avoid this, it’s important to know the interest rates of your credit cards, pay off your balance in full every month, and save before you purchase. Carrying a lot of debt can have longer-term implications on your credit scores too. If you want to see how your debt is affecting your credit, check out our free and anonymous debt management tool, Debt in Focus and be sure to take advantage of our First Score service to learn ways to improve your score as well.

Did you know that our Visa Platinum Credit Card rate starts as low as 10.9% and offers rewards?* It’s a good idea to check the APR of some of your current credit cards to see if it’s time to switch! Keep in mind, we also don’t have any balance transfer fees – and as an additional BONUS, for a limited time if you are approved for a balance transfer of $5,000 or more to our VISA Platinum Credit Card, you will receive 10,000 bonus CURewards Points! You can apply for the balance transfer by stopping into any branch or calling 866.750.0100 to be sent a balance transfer request form.**

4. Excess Phone, Cable & Utility Bills: Many households are paying hundreds of dollars for TV, Internet, cell phone, and utility expenses each month. No matter how comfortable these tools make us, they are taking up valuable space in our budgets. Look through your bills carefully and try to scale back from services you aren’t using or do not need to use, from running the air-conditioning while you are at work to paying for a DVR on a second TV you never even watch. Also, be sure you are not paying for a level of service you don’t need. If these alterations don’t bring a big enough impact on your budget, consider alternatives like prepaid phone services and switching cable providers.

5. Convenience Fees: Certain businesses tack on “convenience fees” when you utilize their goods or services as a way to make up any added expenses that can incur during your transaction. Be wary of these types of fees before you make various transactions, to see if there is a less expensive way for you to do so.

Having an emergency fund can be a big help when you come in over budget. This money can save you from stress when you have fallen victim to these and other budget killers. It’s a good idea though to deal with the root issue instead of repeatedly ruining your budget and having to dip into your emergency fund. If you do have to use that money, it’s important to replace it and frequently evaluate your budget to match your changing lifestyle.

Article source courtesy of Fox Business.

*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.

**Additional bonus points will be reflected within 30 days from the balance transfer approval and can be viewed when signed into your VISA Platinum Card Account online through Online Banking. In order to redeem bonus points, an offer reference must be made to a First Financial representative. Bonus points can only be redeemed one time per member, on an approved balance transfer of $5,000 or greater during the promotional period of 4/28/14 – 12/31/14.

Saving May be Tough but Here’s How to Get a Handle on It

saveGetting on top of your finances can be a tough task. On paper the idea sounds simple, but in real life, it’s easier said than done.

By the time you pay down your consumer debt, put a dent in student loans, pay off your mortgage, and put extra money away for your children’s college fund and not to mention your own retirement, the list of demands for your savings is long! Online tools and advice from financial advisors suggest we can make it work but we need to rethink our approach and strategy. Here are some ideas to help you manage your savings goals:

Get real. If retirement sounds far away and “a rainy day fund” sounds kind of depressing, it’s time to rename these goals. For short-term savings objectives, identify what you want to buy and decide whether it’s important for you to finally take that dream vacation you’ve always wanted, or send your kids to college. The same extends to retirement. What does retirement look like to you: a vacation house, writing a book, or doing volunteer work? Visualize it then put a picture on your fridge so you can actually see it. It’s recommended that you should identify how much money you want to have put away at various ages in your life. Sixty-five may be hard to visualize, but goals targeted to ages 30, 40, and 50 will shorten your timeframes, making them more measurable and do-able.

Get started. The decision to save is based on a cumulative series of well thought out choices. You tell yourself you’ll save tomorrow and tomorrow never comes. If you don’t save one month it’s not terrible, but a series of those choices over your lifetime has consequences. Starting early really pays off and online tools and calculators will make the concept more real and easy for you.

Make savings planning a family affair. Providing an inheritance to your children is also about passing down values. The money tips we teach our children can be beneficial or crippling, even when we say we want our children to be financially educated to manage their finances in the future. Don’t be afraid of having money conversations as a family and talk to your kids about savings goals, spending and savings trade-offs, and even higher-level concepts such as inflation and investing, keeps everyone budget conscious.

Put your savings on autopilot. Did you know that you’re losing out on a lot of money when you don’t contribute the maximum allowable amount to your retirement plan? By committing to increase your 401(k) contribution by a percentage equal to your yearly raise will help you grow your pre-tax dollars before the money even gets distributed. Putting a stop to your daily temptations is also important – avoid going to the mall, only carry a small amount of cash in your wallet or simply leave your credit cards at home to cut back on your spending habits.

Hold your feet to the fire. When you’re spending money, ask yourself if this is a need or a want? Making this a habit enables you to keep track of your purchases and helps analyze your spending. It’s a good idea to make your own consequences when you fail to abide by your commitments – so bet on yourself. For example, if eating out has put a huge dent in your wallet, say out loud that you’ll limit yourself to two dinners out a week for the next month and then stick to your plan!

Go social. Sharing money-saving ideas or picking up tips from free sites like Mint.com and Moneyning can help make the topic of finance more enjoyable. Maybe you may want to consider starting a friendly money-saving competition — it holds you responsible, will help you stick to your saving goals and helps take your mind off your struggles.

Here at First Financial, we encourage our members to come in at least once a year for an annual financial check-up – to sit down with a representative at any one of our branches to make sure you are currently placed in the correct Rewards First tier for you, and also that you are receiving the best value, products and services based on your financial situation. Give us a call at 866.750.0100 or stop in to see us today!

Click here to view the original article source by Barbara Minnino of Fox Business.

7 Smart Ways to Take Advantage of Your Tax Refund

taxes08Tax season is often a time of stress for many, but it can be a joyful time for the roughly 75 percent of Americans who do receive income tax refunds.

While the refund really means you’re getting back money you loaned to the government at no interest, in practical terms it often means an unexpected infusion of cash into your wallet or bank account. It’s a great problem to have, but what should you do with your windfall?

The best choice for one person may not be the best choice for another. But experts agree on one thing – if you have debt, apply your refund to paying it off, whether it’s credit card debt, student loan debt, or other consumer debt.

If you’re getting a big refund ­– a check in the ballpark of $1,000 or more for taxpayers who don’t have a side business – consider adjusting your withholding so that you’ll have that money available to you during the year.

Here are the seven smartest things you can do with your refund:

Pay down debt. If you have any consumer debt – student loans, credit card balances or installment loans – pay those off before using your refund for any other purpose. Car payments and mortgages aren’t in this category, but you can also consider paying extra on your principal.

Add to your savings. Can you really ever save enough? You can use the money to build up your emergency savings, your kids’ college fund, or put it toward a specific goal, such as buying a house or a car, or financing a big vacation you’ve been dreaming about taking.

Add to your retirement accounts. If you put $2,500 from this year’s tax refund into an IRA, it would grow to $8,500 in 25 years, even at a modest 5 percent rate of return, TurboTax calculates. If you saved $2,500 every year for 25 years, you’d end up with more than $130,000 at that same 5 percent rate of return!

Invest in yourself. This could mean taking a class in investing, studying something that interests you, or even taking a big trip. Think about doing something that might add value to your life, such as taking a photography class or purchasing a special camera that could become a new hobby and potentially a side business in the future.

Improve your home. Consider putting your refund to good use by adding insulation, replacing old windows and doors, or other improvements that are more energy efficient. Or perhaps it’s time to remodel your bathroom or kitchen. You’re adding value to your home, and at the same time you’re improving your living experience too.

Apply your refund toward next year’s taxes. This is common among self-employed taxpayers, who are required to pay quarterly taxes since they don’t have taxes withheld. By applying any overpayment toward upcoming tax payments, you can free up other cash.

Splurge on something you’ve always wanted to do. If you’re out of debt and have substantial savings, this may be the time to take the cruise to Europe or trip to Thailand that you’ve always dreamed of taking. Such an experience can be life-changing, and you never know what impact it will have on your future until you actually do it.

Article Source: Teresa Mears for US News, http://money.usnews.com/money/personal-finance/articles/2014/03/28/7-smart-ways-to-take-advantage-of-your-tax-refund

8 Foolproof Ways to Grow Your Savings

Money plant over white backgroundA typical emergency fund should contain at least six months’ worth of net income (up to a year is recommended if you have kids or other dependents), and you should only touch it in a true emergency (no, under no circumstances is your dream vacation to Tahiti a true emergency).

Here are five examples of situations that qualify as actual financial emergencies:

  • Emergency 1: You’ve lost your job and need to continue paying rent, bills, and other living expenses.
  • Emergency 2: You have a medical or dental emergency.
  • Emergency 3: Your car breaks down and it is your primary form of transportation.
  • Emergency 4: You have emergency home expenses. For example, your air conditioning unit breaks down in 100-degree weather, your roof is leaking, your basement is flooded (no again, a kitchen in need of redecorating doesn’t count, no matter how much you hate that wallpaper or your “outdated” cabinets).
  • Emergency 5: You have bereavement-related expenses, like travel costs for a family funeral.

Here’s another reason why you should always have money in an emergency fund: If you don’t, and one of these five situations occurs, you’ll most likely be stuck using a credit card to handle it, leading you into (or deeper into) credit card debt. In fact, medical expenses are the leading contributor to credit card debt, with low-to moderate-income households averaging $1,678 in credit card debt due to out-of-pocket medical expenses.

Plus, paying for emergency expenses on your credit card (if you don’t pay off your bill immediately) will end up costing you more over time, when you rack up interest payments as you try to dig yourself out of debt. Having an emergency fund will not only save you more money in the long run, but it will also give you peace of mind in knowing you have the safety net to catch those unexpected curveballs when they arrive.

If getting six months of take-home pay together seems daunting, here are eight useful tips that might better help you boost your emergency savings: 

1. Direct Deposit into Your Savings

Think of yourself as a regular monthly bill you have to pay. All you have to do is arrange to have a set amount of money directly deposited from your paycheck into a savings account each month. The savings account is recommended because if you use your checking account, you may be tempted to spend the money you are trying to set aside. It might hurt a bit at first to take home a little less every month, but after awhile you won’t even notice it’s gone. Here’s a moment when the “set it and forget it” strategy works wonders!

2. Never Spend a Bonus Again

It feels great to be rewarded for your hard work. And it feels even better to spend that hard-earned bonus on something you’ll enjoy, like a trip to the Caribbean or a new tablet. At the same time, the pleasure of a vacation or new gadget is short-lived compared to financial security.

So make a pact with yourself to put every bonus you get from here on out to good use. If you direct 90 percent of your bonuses straight into your savings account as a rule, you’ll still have 10 percent to treat yourself with (plus the comfort of knowing that you’re building a well-earned safety net).

3. Cut Unnecessary Costs

This seems like an obvious one — and is easier said than done. Actually, most people spend money on more unnecessary items than they think. So take time to look at where your money is going in detail and begin to cut back. Saving $10 here and $5 there could help you put a lot away in the long run – you’d really be surprised.

4. Open a Seasonal Savings Account

Many financial institutions offer seasonal accounts meant to save for the holidays. These accounts give you reduced access to your accounts, charging a penalty each time you withdraw more than permitted. Since emergencies (hopefully) don’t occur often, a seasonal account could make sure you’re touching it only when needed.

Check out First Financial’s Holiday Savings Club Account – don’t put yourself into debt over holiday spending, save ahead and come out on top (and not in debt)!*

  • Open at any time
  • No minimum balance requirements
  • Dividends are posted annually on balances of $100 or more
  • Accounts automatically renew each year
  • Deposits can be made in person, via mail, payroll deductions, or direct deposit
  • Holiday Club funds are deposited into a First Financial Checking or Base Savings Account

5. Sell Unused Items

Rather than throwing these unused goods away, start selling them, and put that money into your emergency fund. All you need to do is post them to a site like eBay, Craigslist, or Amazon and you can get rid of items from the comfort of your home. You can also take your clothes to a consignment shop to have them sold for you.

6. Stop Spending $5 Bills

Instead of saving your pennies, put aside any $5 bills that come your way. Never spend a $5 bill again, and you’ll be surprised by how quickly this little trick will help you come up with a few hundred dollars to add to an emergency fund.

7. Earn Extra Income

You could pick up odd jobs to help do things for other people, freelance writing/blogging, or babysitting via websites like TaskRabbit.com, DoMyStuff.com, Elance.com, FreelanceSwitch.com, or Sitters.com. Or if you have the time – go out and find an additional part-time job as a cashier, server, or utilize your hidden talents in web design, catering, and so on.

8. Use Cash Back Rewards

If you get a cash-back reward for any spending on your credit card, just make it a rule that those dollars will be dedicated to your emergency fund. It may only add up to $100 extra each year, depending on your spending, but every little bit counts!

Article Source: http://www.dailyfinance.com/2013/12/18/eight-foolproof-ways-grow-your-savings/ 

*A $5 deposit in a base savings account is required for credit union membership prior to opening any other account. All personal memberships are part of the Rewards First program and a $5 per month non-participation fee is charged to the base savings account for memberships not meeting the minimum requirements of the Bronze Tier. Click here to view full Rewards First program details, and here to view the Tier Level Comparison Chart. Accounts for children age 13 and under are excluded from this program.

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Jackson Memorial Students Get Taste of Financial Reality

Tri-Town News article by Andrew Martins:

DSCN0228Financial independence can be a scary thing for young adults who are beginning to make their own way in life after graduating from high school or college. Unexpected costs arise, debt can become bloated, and temptations to spend frivolously crop up every day.

For a group of freshmen at Jackson Memorial High School, the sobering reality of money and adulthood was put on display during an event dubbed the Financial Reality Fair.

“The goal of the fair is to teach the kids the value of money and how to manage their money when they leave high school,” said Issa Stephan, First Financial Federal Credit Union president and CEO. “It is very crucial these days to be financially savvy, and there is a lot of temptation out there.”

Financial responsibility is a subject that Stephan believes should have a bigger focus in public schools. He cited the economic downturn that began in 2008 as a prime example for why such responsibility is imperative for the future.

“I think that since 2008, people are more conscious about money,” he said.

On Jan. 8, students tackled financial issues in a hands-on manner without potentially destroying their credit rating.

“These days, it is easy to get in trouble,” Stephan said. “Twenty years ago, you had to drive to the mall and take your cash to spend it. Now you can be sitting in your bed, clicking yourself away into financial trouble” on a computer.

The idea for the fair, according to First Financial Marketing Manager Jessica Revoir, was based on similar events held throughout the state by the New Jersey Credit Union League Foundation, which sponsored the Jackson Memorial High School event.

DSCN0230Students were initially instructed to choose a career. After each student selected a job, that career’s starting salary after taxes was used as the baseline for a monthly budget. The young adults were informed that some expenses were required, including food, clothes and rent; and some expenses were not required, including gym memberships and vacations.

Stephan said the point was to illustrate the importance of determining what is needed and what is not needed.

“If you move out [of your parents’ home], you have to pay rent and insurance, but people usually get in trouble with what I call ‘variable expenses,’ ” he said. “A lot of people see a smartphone as a fixed cost … but it is not. There are ways to make even a necessity much more affordable in the long run. If you shield the students from reality, they fall.”

Stephan said students were led astray on purpose as a means of letting them see the difference between what they want and what they need.

At the transportation booth, for example, a binder was purposely left open at a page featuring luxury cars and sports cars for purchase, rather than being left open at a page with less expensive vehicles or public transportation.

“We are trying to teach these kids that if they let themselves be manipulated financially when they get older, they can get into some serious trouble,” First Financial Investment and Retirement Center Coordinator Samantha Schertz said.

To Lisa Scott, who teaches honors economics and financial literacy, the fair provided an opportunity for her students to take a more tactile approach to learning the importance of finances.

“This really is experiential learning for our kids because, to them, the class is just the textbook and something they need to graduate, but then they come here and realize they need this to live and get through adulthood,” Scott said.

The fair was a sobering realization that made freshman Claudia Besse take a moment to consider her future.

“I learned that I am very grateful for my parents, for one,” Claudia said. “I never realized that your gross pay is not your takehome pay and that there are so many expenses. Cars are so expensive.”

Scott said those realizations are fueled not only because of the way that financial education is traditionally handled in school, but also because some parents provide everything for their children.

DSCN0223“What I am hearing as the kids go through the fair is they ask, ‘Does that cost that?’ A lot of kids don’t have to pay for the things they enjoy right now … so for some kids, this is a revelation,” Scott said.

Stephan said he and his staff hope the students will take what they learned at the event and apply it to their lives.

“I saw some kids calculating and trying to make smart decisions, and I saw others just not caring as much. And that, in a way, reflects society,” he said. “We need to try to catch people before they get into financial trouble.”

Click here to view the original article from Tri-Town News.

*First Financial is not responsible for any content listed on external websites.