How to Shape Your Finances in a New Year

This is a good time to make sure your accounts are ready for whatever may come your way in these unprecedented times. Here are a few ways you can make sure your finances are in decent shape as we begin 2021.

Stop acting on impulse: Think about your spending habits. Do you make impulse buys whenever you want? No matter how big or small, impulse purchases can lead to trouble. If you have several entertainment subscriptions, do you know which ones you’d cut if your budget suddenly needed to be tightened? If last year taught us anything, it’s to expect the unexpected. Save as much money as you can, don’t overspend on unnecessary things, and try to keep a tight reign on your budget each month.

Know how to use a credit card: Enjoying the use of a credit card can be risky if not properly managed. Even if you find it easy to pay off your purchases each month and you love earning credit card rewards, what will you do if your financial situation takes an unexpected turn or you lose your job? Don’t spend above your means, and try to always pay your credit card bill off each month so you’re not racking up debt plus interest.

Look ahead to your future: Have you saved enough to enjoy retirement one day? Are you going to be able to leave something to your loved ones? There are often a lot of questions when it comes to your financial future and retirement. Even if you don’t have a child to be your beneficiary, most people are living longer than ever these days and you’ll want to make sure you don’t outlive your savings. If you haven’t checked in with your financial advisor lately, use the unpredictability of last year as an excuse to at least have a quick conversation with them.

Did you know First Financial has an Investment and Retirement Center which offers complimentary retirement consultations to our members?*

Contact one of our Financial Advisors today!

*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. Non-deposit 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: CUInsight.com

5 Ways to Financially Thrive in the New Year

The time for “New year, new me” resolutions is here, and we’ve got five (actually attainable) resolutions that you’ll want to keep up with all year long. Read on to find out five ways to make 2021 a financially great year.

Learn a new (financial) language. Does listening to financial talk sometimes feel like hearing a foreign language? Instead of simply nodding along, make a resolution to improve your financial literacy this year. Finally learn the ins-and-outs of money management. There are plenty of resources online that can help you decode the definitions behind personal finance terms. You can even make a Quizlet to help you commit the terminology to memory! If you’re worried about finding the time to teach yourself this new language, try incorporating some financial podcasts into your weekly routine. By listening to financial podcasts, you can improve your finance skills while still going about your daily tasks. It’s a great way to get stuff done and get a better idea of what is going on in your wallet and bank account.

Clear out the clutter. Recurring payments can be a great time saver, but they can also get out of hand very easily. Sit down and comb through your recurring payments so you can know exactly where your money is going and when it’s being taken. Take an especially close look at your monthly subscriptions. How many television streaming services are you subscribed to? Music streaming services? There are countless entertainment streaming platforms out there, but you don’t need to subscribe to all of them. Make a list of your entertainment subscriptions and figure out which ones you actually use and which ones are just cluttering up your monthly or annual payments. This applies to paid store memberships, too — if you don’t shop at that discount warehouse much anymore, don’t forget to cancel the membership card before you get charged for the new year’s renewal!

Get creative. Don’t let yourself feel trapped by the status-quo of savings, there are many ways to get creative with your finances. Need some extra money for tighter areas in your budget but don’t know how where to get it? Look into refinancing your existing Auto Loan from another lender with us! With our low rates, your monthly payment will be more manageable, which means you’ll have more money in your pocket, ready to put to good use.*

Making the switch from a high-interest rate credit card to one of our lower-rate cards could also decrease the amount of money you’re spending per term, freeing up funds to put elsewhere.** There are so many avenues you can take to save money. Get in touch with our Loan Department, and we’ll help you get creative in finding them!

Take up a new (money-saving) hobby. Trying a new hobby can help improve one’s mood and daily motivation, but don’t forget that it could also help your wallet! Want to try improving your culinary skills? Great! Ditch the costly take-out meals and door deliveries, and resolve to cook meals at home. Halting the high delivery costs, taxes, and tips (or gas money for drive-thru and pick-up options) will drastically cut down your monthly expenses, giving you more money to spare. You could also pick up a new hobby that could help increase your income. The internet has given us a wealth of resources when it comes to finding freelance work. Skilled at editing? Explore the world of freelance editing for supplemental income. Got an artistic side? Look into starting up an online shop to sell your handmade goods on sites like Etsy or Facebook Marketplace. The options are exciting and endless (and will provide you with some supplemental income)!

Plan it out! Most people shudder at the word “budget.” It’s never fun to sit down and decide what you can’t spend money on. Instead, why not give yourself the freedom to choose what you can spend money on? This tactic for approaching money management is called a “spending plan,” and it’s a lot less intimidating than a budget. A spending plan gives you a lot more flexibility in your finances while still keeping you focused on covering your monthly essentials.

The process of determining your “non-negotiable” expenses is mainly the same as a budget: you have rent, electric, water, internet, groceries, emergency funds, etc. The difference begins when you determine your flexible categories. For example, entertainment, personal shopping, dining out, date nights, and more. A spending plan gives you the freedom to set ballpark amounts for these categories without restricting you too harshly. As long as you have your monthly non-negotiables covered, how you distribute money from month to month in your other categories doesn’t matter as much. A budget is far more restrictive, which can put you in a panicked mindset of “money is always tight, I have no wiggle room,” whereas, a spending plan gives you the control to say “I have the room to spend a little extra here this month.” Start 2021 establishing a spending plan and giving yourself the freedom to choose where your money should go and how you want to spend it!

*APR = Annual Percentage Rate. Not all applicants will qualify, subject to credit approval. Additional terms & conditions may apply. Actual rate may vary based on credit worthiness and term. A First Financial membership is required to obtain a First Financial auto loan and is available to anyone who lives, works, worships, volunteers or attends school in Monmouth or Ocean Counties. See credit union for details. A $5 deposit in a base savings account is required for credit union membership prior to opening any other account/loan. First Financial FCU maintains the right to not extend credit, after you respond, if we determine you do not meet our guidelines for creditworthiness. Current loans financed with First Financial FCU are not eligible for review or refinance.

**APR varies up to 18% when you open your account based on your credit worthiness. These APRs are 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 Fees. 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 Credit Card and is available to anyone who lives, works, worships, volunteers, or attends school in Monmouth or Ocean Counties.

The Latte Factor: One Way to Get Your Finances on Track in 2021

How often do you find yourself saying, “I can’t afford that!” Whether it’s about an unplanned expense or something that you want to buy. David Bach, author of The Latte Factor, says that’s usually just a lie we tell ourselves.

In his book, The Latte Factor, Bach lays out several key points that can be summed up as: Small amounts of money spent on a regular basis costs us far more than we can imagine.

The Latte Factor came about after a class Bach had taught some years ago. One of his students said she couldn’t afford to save, but she was drinking a latte at the time (and almost every day in his class). He ran the numbers and showed her that if she skipped the latte, she would save $5 a day. What does $5 a day mean to you? Let’s do the math. $5 a day is $150 per month. Would you like to save an extra $150 per month? What’s the value of $150 per month saved in 10 years from now? That’s $1,800 a year saved and $18,000 in 10 years from the Latte Factor alone. Over 25 years, five dollars a day will net you almost $50,000. It’s amazing how such a small difference each day can make a huge impact over time.

As you head into the new year, vow to stop saying “I can’t afford that!” and take a second look at your finances. You don’t have to starve yourself of enjoying everything that life has to offer. Instead, pick one thing you know you spend money on that you might be able to do without. Is it your morning latte, eating out for lunch every day, subscription service, etc.?

If you want to get serious about getting your finances in order this year, here are two recommendations:

  1. Buy The Latte Factor and read about how Zoey turned her morning latte into the words “I CAN afford this.” It’s a quick read and it’s really eye opening!
  2. Take a look at your current debt. Instead of making multiple payments on multiple loans, have you thought about consolidating those payments into one lower monthly payment? You may even get a lower interest rate that will minimize the amount of interest you’re paying.

Apply for a First Financial Consolidation Loan online, or contact us to see if we can help you get started in getting your finances in order this year.*

Happy New Year and Keep Thinking First!

*APR = Annual Percentage Rate. Actual rate will vary based on creditworthiness and loan term. Subject to credit approval. A First Financial Federal Credit Union membership is required to obtain a Personal Loan, and is open to anyone who lives, works, worships, volunteers or attends school in Monmouth or Ocean Counties. A $5 deposit in a base savings account is required for credit union membership prior to opening any other account/loan.

Could Your Budget Handle a Decrease in Income?

One of the most difficult situations to deal with is a decrease in income, especially if you are like many Americans of late – living paycheck to paycheck. Many of us base our lifestyle around and live right up to the limit of what our income can afford us to purchase. Living this way can really hinder your budget no matter how much you bring in.

However, spending above our means and not sticking to a budget can really be a problem – because what happens if life throws out a curveball? This unfortunate instance happened to many Americans this year during the COVID-19 pandemic. Here are a few ways to make sure you are financially prepared should you ever experience an unexpected income drop.

The Importance of a Variety of Income Sources

One of the best ways to handle a potential loss of income is to build up income from various sources, if possible. This can be important so that you aren’t relying on one source of income for everything.

If you don’t make as much as you’d like in your daily 9 to 5, starting a side business or part-time job in order to be able to fall back on additional income can be a help. Try to consistently save some of your extra income when times are good so that you are prepared the next time a crisis happens.

What Can You Cut from Your Budget?

It’s important to know which items you would cut in a pinch from your budget if you had to. It’s also good practice to plan ahead of time and figure out where you could cut back if you ever needed to.

Look at your spending patterns, and figure out what is most important. Items such as groceries and bills are necessities, and will need to be managed even if you are making less. However, dining out and added services such as cable can always be temporarily cut from your budget if you needed to.

Review what you spend money on currently and start to get prepared. You could even think about cutting back on some of that spending now, and put it aside in your emergency savings fund to be ready for a rainy day.

Do You Have an Emergency Fund?

This is one of the most important savings accounts to ever have. An emergency fund’s purpose is to be a safety net in the event that your income takes a cut, and you no longer have enough money to meet your current financial obligations. When you have somewhat of a buffer saved in the bank, you’ll feel better prepared and less stressed should you experience any sort of financial emergency. Continue to save what you can and keep putting it away into your emergency savings account – every little bit helps!

Article Source: Moneyning.com

Should You Take Out a Personal Loan or Line of Credit?

When it comes to Personal Loans and Personal Lines of Credit, the options for how to use the funds are endless. While both offer flexibility in the different ways you can use them, there are certain instances where choosing a Personal Loan might be a better fit than a Personal Line of Credit and vice versa. Let’s explore these options and help determine which is the best choice for you and your budget.

Consider the Nature of the Expense

Personal Loans are distributed in one lump sum and are typically best for large, one-time expenses. Popular uses include back-to-school costs, paying off high-interest debt, and higher education expenses. In contrast, Personal Lines of Credit are revolving and operate similarly to a credit card – where you only pay on the amount you use for a specified term. This credit line is consistently available – once you pay off the money you have borrowed, the funds open up again.

A Personal Line of Credit can be optimal if you aren’t sure how much money you will need to borrow or for how long. Common examples of ways to use a Personal Line of Credit are supplementing irregular income, making home improvements, and having a backup for when unexpected expenses arise.

Evaluate the Terms and Your Budget

One way to remember the difference between a Personal Loan and a Personal Line of Credit is that a Personal Loan is fixed and a Line of Credit can change over the term. If you’re looking for a way to budget a certain amount each month, a Personal Loan ensures that you’ll pay a set amount each month for the life of the loan. With a Personal Line of Credit, the term will typically be longer and you’ll only pay on what you use. For example, if you are approved for a $10,000 credit line and only use $2,000 of the money, you will only need to make payments on the amount you’ve used. Alternatively, if you have a Personal Loan – you’ll make payments on the total amount of money borrowed, whether you’ve used the funds or not.

Qualifying for a Personal Loan vs. a Personal Line of Credit

Typically, receiving approval for a Personal Line of Credit is more challenging to obtain than a Personal Loan. Why?  Due to the flexible nature of a Personal Line of Credit, having a good credit score is a significant factor in the decision to approve funding. On the other hand, a Personal Loan with its fixed term and amount borrowed – usually allows for easier approval.

Making the Decision

Why is it important to know the differences beyond the interest rate when it comes down to Personal Loans and Personal Lines of Credit? While often confused, these loan types have distinct differences that – if not chosen wisely, you could end up paying more. Factor in the end result of what you will be using the loan or line of credit for, how soon you’ll be able to pay it back, and take a close look at what your monthly budget is before you apply.

If you’re looking to fund the next step in your life, First Financial can help you achieve your financial goals. Talk to us today about your options and how to choose the right solution for you. Learn more about our Personal Loan and Line of Credit options here, and apply online 24/7!

*APR = Annual Percentage Rate. Actual rate will vary based on creditworthiness and loan term. Subject to credit approval. A First Financial Federal Credit Union membership is required to obtain a Personal Loan, and is open to anyone who lives, works, worships, volunteers or attends school in Monmouth or Ocean Counties. A $5 deposit in a base savings account is required for credit union membership prior to opening any other account/loan. Federally insured by NCUA.

 

How Much Do Your Financial Vices REALLY Cost?

What is one thing you just can’t live without? That little indulgence that helps you make it through the day. For some of us, it’s a jolt of caffeine. For others, Netflix and Hulu offer a sweet escape from the hustle and bustle of everyday life. What we sometimes fail to think about, is these little escapes can be a drain on our wallets. Here are some ways you can cut those costs.

Coffee/Energy Drinks

The mid-morning slump, the mid-afternoon slump, and the post-mid-afternoon slump. The idea is that sometimes the day seems to drag on for way longer than seemingly possible. Some people reach for the nearest Starbucks to replenish their energy reserves, while some crack open an energy drink in the hopes of pushing through the rest of the day. What neither often considers, is that these sources of liquid energy can really add up. The average price of a cup of regular (non-latte) coffee from Starbucks is $1.89, and that’s only the average – some areas will be much higher. That may not seem like much, but consider this: an American who drinks coffee at home will save approximately $427 per year over those who regularly visit coffee shops. When we look at energy drinks, on average they cost anywhere between $2-$4. They can be almost double the cost of coffee. A cheaper alternative – green tea! If saving money is high on your priority list, put your at-home barista skills to work.

Subscription Services

From snacks to pet toys, a new wardrobe, and everything in between, there is a subscription service for it all these days. Many in fact, sometimes forget what they have subscribed to, leading to a big bill each month. Arguably the most common subscription is Netflix, which will cost you around $12.99 a month (if you only want the standard package). Add in Hulu ($5.99), BarkBox ($22), and StitchFix ($20), and you now have a monthly subscription bill of slightly over $60. See how fast that adds up? Not to mention the ever-popular meal subscription services can run you about $200 a month. While these modern conveniences are well…convenient, they are also pricey. Most of us don’t want to give up our Netflix, and that’s fine. Take a hard look at all your subscriptions. Are you getting your money’s worth? Do you eat all the meals from the meal kit? Do you keep enough from StitchFix that the $20 a month fee is worth it? Odds are, you’ll find one or two subscriptions you can live without. Your quality of life will stay the same, and you’ll save money too.

Take Out

Do you look at a recipe and instantly get woozy? Cooking isn’t for everyone, and take out can taste great and you barely have to lift a finger to get it nowadays. Before you pull up DoorDash or GrubHub, consider that the average household spends $3,000 a year dining out. That’s no small amount. On closer look, a prepared meal at a restaurant costs on average, $13. Compare that to the average cost of groceries per person for an at-home meal…$4. Yes, that is a $9 savings just from eating at home. The good news is that anyone can cook. All it takes is a little preparation. Plan your meals, choose easy recipes, and don’t expect every meal you prepare to be a Michelin-star experience. Casseroles are an easy meal that is also inexpensive and tasty. If you are completely opposed to cooking, be responsible with your take out. Choose locally-owned businesses and restaurants so that your money is stimulating the local economy. When you use a delivery service, you aren’t just paying for the food. Your total also includes a service fee, tax, a delivery fee, and a tip. Many times your order total will be double. A recent study showed that your meal will cost you 32.8% more when you order food from DoorDash vs ordering directly from a restaurant.

Online Shopping

“Add to Cart.” The temptation is always just a click away. Surfing the net can bring some expensive side effects as you see a constant flood of targeted ads. It’s like they know exactly what you’re looking for. When an online retailer meets your wants and needs (and at such a deal), it becomes hard to pass it up. And free shipping? It can more than likely be a trap to get you to continue to spend. Sure, you are getting good deals on your online purchases, but this can also make you feel like you can buy just one more thing. Soon, your whole budget has been blown on online shopping. There are many ways you can curb this habit. For starters, make sure to delete your payment information from auto-populating in services like PayPal and Amazon. Secondly, set strict limits for yourself. In your budget, set aside some funds for online shopping. If you know this is the only money you have to splurge, you might think twice before clicking “complete purchase.”

If you do any of the things above, the first thing to remember is not to get discouraged. A cup of coffee or a new shirt never hurt anyone. With most things in life, our financial vices are all about moderation. We wouldn’t expect you never to visit a Starbucks or get take out ever again. Set realistic goals for yourself and hold yourself accountable, you’ll be amazed at the savings. At First Financial, we are here to help you reach your goals and attain financial stability. To get started, check out our handy budgeting guide.