30 Money Mistakes You’re Probably Making This Summer

morning empty beach and footprints on sand

Summer is a time to cut loose and have fun. But, if you’re not careful, that fun can lead to overspending, failing to keep tabs on your finances, and making money mistakes due to distractions. You certainly don’t want to be paying for those mistakes the rest of the year. So, to maintain your financial well-being while enjoying all that summer has to offer, avoid making these money mistakes for the rest of the season.

1. Overspending on Summer Fun Rather than Saving

There are plenty of temptations to spend on in the summer — travel, concerts, cocktails by the pool, and nights on the town. However, you shouldn’t stop contributing to your retirement account to fund summer fun. To avoid the temptation to overspend, contribute to retirement accounts by having payments automatically deducted from your paycheck or bank account. Then you can only spend what’s left after funding your savings.

2. Not Having a Budget for Summer Activities

To avoid overspending in the summer, you should plan activities in advance and create a fund to cover the cost. You can open a separate account or even put cash in an envelope — and stop spending once the money runs out. Without a budget for summer fun, you could end up relying on credit (and paying for your summer fun well into the next few seasons).

3. Missing Payments While Traveling

It’s easy to miss deadlines for bills — or forget to make payments entirely while traveling. “If you forget, expect late fees and a ding to your credit report,” said Jim Wang, creator of the money-saving blog WalletHacks.com. To avoid the cost of fees and a drop in your credit score, set up automatic payments through your service providers or your bank, so your bills are paid while you’re on vacation. If there are bills you can’t pay automatically, and you forget to make a payment, call the billing department to explain why you missed it and ask if you might be able to have the late fee waived.

4. Not Putting Mail Delivery on Hold

Forgetting to contact the U.S. Postal Service to stop mail delivery while you’re on vacation could put your finances at risk. To lower your risk of becoming a victim of identity theft, you can put a hold on your mail by filling out an online form at USPS.com.

5. Failing to Keep an Eye Out for Fraud

Whether you’re traveling this summer or just staying busy by having fun in the sun, it’s easy to forget to keep tabs on your accounts for unusual fees or activity. However, you shouldn’t let your guard down during the summer. Log on to your bank and credit accounts regularly and set up alerts to receive text messages or emails when charges are made to your accounts to spot fraudulent activity quickly. Additionally, you should get a free copy of your credit report at AnnualCreditReport.com to make sure unauthorized accounts haven’t been opened in your name.

6. Falling Prey to Summer Scams

Scammers take advantage of a variety of opportunities during the summer months to get people to part with their money. If you’re not careful, you could become their next victim. One of the most common scams involves offering deeply discounted vacation rental properties or vacation packages, according to the New York State Attorney General’s office. Deals that seem too good to be true and require an upfront payment or wire transfer are red flags. In many cases, vacationers arrive at their destinations only to find that the rentals don’t exist.

7. Cooling an Empty House

The air conditioner likely takes the biggest bite out of your home energy bill during the summer by accounting for nearly 50 percent of your energy use. So, if you leave the temperature setting too low while you’re at work or on vacation, your energy bill will likely soar. Try installing a programmable thermostat, so the temperature will automatically adjust while you’re away to keep you from wasting energy cooling an empty home.

8. Keeping the Blinds Open During the Day

When you’re heading to work, close the blinds to keep the sun’s rays from warming your home and making your air conditioner work harder — which means a higher electric bill. Reflective blinds can reduce heat gain by about 45 percent when closed and lowered, according to the U.S. Department of Energy. Medium-colored draperies with plastic backings can reduce heat gain by about 33 percent.

9. Leaving Electronics Plugged in While on Vacation

If you leave electronics plugged in when you leave for vacation, you’ll be paying for electricity you’re not using. You can also use a power strip to turn off energy vampires with the flip of a switch. Doing this can shave 5 percent or more off your home energy bill.

10. Setting the Water Heater Too High

Leaving the water heater at its regular setting when you go away on vacation can result in wasted money too. Even when you’re at home, you should turn down the temperature on your water heater during the summer. You can save up to $30 on your energy bill for every 10 degrees you lower you water heater temperature, according to the Department of Energy.

11. Buying a New Air Conditioner Without Research

If you need to replace your air conditioner during the hot summer months, don’t let the heat push you into making rash purchasing decisions. It’s best to consult with a professional or do extensive research on ratings and proper installation techniques to get the most out of a big-ticket investment.

12. Overpaying for Child Care

Paying for child care during the summer when kids are out of school can easily break your budget. You might be able to cut the cost by pooling babysitting resources, according to nonprofit financial counseling agency, Take Charge America. For example, you could hire one babysitter to watch several children in the neighborhood and split the cost among multiple families. Or, you might be able to get several family members or friends to take turns watching the kids.

13. Spending Too Much on Summer Activities for Kids

Parents spend more than $950 per child on average for summer activities, according to a report by American Express. Fortunately, there are several ways to minimize these costs. Try looking into summer camps offered through your city’s recreation department, community center or YMCA. Many churches and religious groups also offer affordable camps and programs for kids.

14. Taking a Vacation Rather than a Staycation

It’s fun to get away, but taking a vacation can put a strain on your budget. Americans who plan to travel this summer expect to spend an average of $941 per person on their trips, according to the American Express Spending & Saving Tracker. Planning a staycation — rather than a vacation, is a way to cut costs and explore the town in which you live. This option eliminates two of the biggest expenses: lodging and transportation costs.

15. Charging a Vacation to a Credit Card without Plans to Pay it Off

If you charge a $3,000 beach vacation for a family of four to a credit card with a 9.90% APR and pay it off over 18 months, it would cost you an extra $240 in interest. If your APR is 19.90%, it would cost you an extra $494 in interest. If you are going to put a vacation or portion of your vacation on a credit card – be sure to have a plan in place to pay it off immediately.

16. Not Being Flexible With Travel Plans

Flights in the summer tend to be more expensive because there’s an increase in demand, said Kyle Taylor, founder of the money-saving blog, The Penny Hoarder. And you’ll pay even more if you’re not willing to be flexible about the day of week you fly. Try to use an airline or travel site’s “flexible dates” option when searching for flights to find the lowest fares.

17. Waiting Until the Last Minute to Book a Flight

If you plan to fly to your summer vacation destination, don’t wait until the last minute to book your flight. You’ll pay about $200 more per ticket, on average, if you book a flight within seven days of departure than if you book a flight three weeks to three months in advance, according to CheapAir.com. If you book between seven and 13 days from departure, you’ll pay at least $75 more.

18. Overpacking When Flying

Overpacking can be a costly mistake, especially if you’re flying on an airline that charges you to check bags. For example, American Airlines, Delta and United all charge $25 for the first bag you check and $30 to $35 for a second bag. You can avoid fees on most airlines by taking only carry-on bags — which means packing only the essentials. Or, you can stick to Southwest Airlines, which lets passengers check two bags for free.

19. Saying Yes to Car Rental Upgrades

If you rent a car for summer travel, don’t feel pressured to say yes to add-ons or upgrades. “Be polite to car rental agents trying to get you to spend more money, but decline their invitations to upgrade your vehicle, pay for insurance or prepay for gas,” said Kendal Perez, a savings expert with Coupon Sherpa. “Upgrading your car will only result in additional rental fees and gas costs, while insurance coverage is likely redundant with that provided by your personal auto insurance or your credit card.”

20. Using Debit Cards to Reserve Hotel Rooms

If you don’t use credit cards — or use them only sparingly, be careful about using a debit card to reserve a hotel room for your summer vacation. Some hotels charge an “incidental deposit” as a security deposit or for other possible charges to your room, such as room service. Typically, the charge is removed shortly after you check out. However, that money is on hold, meaning you might not be able to access needed funds in the event of an emergency. Save the expense and headache by reserving rooms with a credit card instead.

21. Using the Wrong Credit Card Overseas

A common mistake that novice travelers make when overseas is using their regular credit cards without checking to see if they charge foreign transaction fees. While many card companies charge these fees for currency conversion, some issuers offer no foreign transaction fee cards, which can save you up to 3 percent per charge. Be sure to double check your card before you take it overseas.

22. Not Notifying Your Card Company About Your Trip

If you travel outside of your normal geographic region, let your credit card company know in advance. If you don’t, the company’s fraud department might think your purchases are fraudulent.

23. Using Public WiFi While Traveling

During summer travel, people often log on to unsecure networks during layovers or while visiting local coffee shops in the cities they’re visiting. Travelers should know they’re putting personal information at risk when they log on to accounts using public WiFi networks, as hackers can steal their personal information. To avoid putting your information at risk, you can use a virtual private network (VPN) to send and receive information while using public WiFi.

24. Not Waiting for End-of-Season Sales

You might want to upgrade your grill, patio furniture or warm-weather wardrobe now that summer is here. But you likely won’t get the best prices on seasonal items until the end of summer. Waiting for fall to shop can save you 50 percent to 60 percent in some cases.

25. Not Taking Advantage of Sales Tax Holidays

You can save a lot of money by doing your back-to-school shopping during sales tax holidays, said Howard Dvorkin, founder of Debt.com. Seventeen states —primarily in the South, waive sales tax on items like clothing, school supplies and computer purchases on select days in the summer. You can learn more about sales tax holidays at the Federation of Tax Administrators’ website, Taxadmin.org.

26. Buying Produce That’s Not in Season

With the abundance of fresh fruits and vegetables available during the summer, it doesn’t make sense to spend more on produce that’s not in season yet. Stick to seasonal produce — such as peaches, watermelons, corn and tomatoes to save money. Another way to save on produce during the summer is by visiting your local farmers market.

27. Paying for the Gym When You’re Exercising Outside

If you’re taking advantage of the nice weather to exercise outside, don’t keep forking over money for a monthly gym fee. Instead of opting to ditch your membership — and pay an early termination fee or initiation fee to rejoin, ask if you can freeze your membership.

28. Failing to Take Advantage of Free Activities

You can avoid spending a lot of money on entertainment in the summer by taking advantage of free activities. For example, your town might offer free concerts or movies in the park. Your public library might offer free events and activities too. Check your city’s community calendar for events. Many recreation centers, museums, zoos and botanical gardens also offer free admission on certain days of the week.

29. Paying Full Price for Entertainment

Whether you’re traveling or looking for something fun to do at home, there’s a good chance that you can avoid paying full price for entertainment. For example, look for discounts on admission to amusement parks, zoos, and museums on daily deal sites such as Groupon and LivingSocial. Don’t forget to take advantage of discounts you can get through memberships in organizations like AAA or AARP. For example, AAA members get up to 30 percent off tickets to Six Flags amusement park.

30. Not Budgeting for Summer Weddings

Most weddings occur between May and October, making summer an especially pricey season if you’re invited to attend or participate in the celebrations. For example, the cost of being a bridesmaid or groomsman can top $1,000, according to a recent GOBankingRates survey. Wedding guests can spend $600 or more on average, on travel and gift costs. To reduce this cost, think carefully before you accept invitations, and keep travel costs in mind. Bridal party members should carefully consider each event associated with weddings, such as bachelor and bachelorette parties and wedding showers. Make sure what you spend on a gift is an amount you can afford.

Article Source: Cameron Huddleston for Go Banking Rates, https://www.gobankingrates.com/personal-finance/money-mistakes-probably-making-summer/

9 Signs You’re Spending More Money Than You Have to and How to Fix It

Expenses. Yellow Card File on Background of White PC Keyboard. Archive Concept. Closeup View. Blurred Illustration. 3D Rendering.

Sometimes it’s tough to find a healthy balance when it comes to your finances. While it’s nice to treat yourself every so often, doing it on the regular can be one of the signs that you may be spending too much money. Even though money is a taboo topic and can be a sensitive issue, it’s important to be honest with yourself. While it would be great to make millions of dollars and spend it frivolously all over town, you also need to keep your financial future in mind.

According to the financial app Mint, you might want to be more careful with your money if you’re not paying your bills on time, you’re paying for your necessities with credit cards, or you’re struggling to meet minimum payments. If you find yourself dealing with these things on the regular, it might be a good idea to create a budget and start using cash so you can keep an eye on your finances and spend less money. Feeling stressed about money is something that no one should have to deal with on a daily basis – that’s why it’s important to be honest with yourself and be aware of the signs that you’re spending too much.

Need some help in that department? Here are nine signs you may be spending more money than you need to.

1. You Carry A Large Balance On Your Credit Card

Having more than 30% of your credit card limit on your credit card is considered to be a big no-no. If you find that your credit card limit is higher than your savings account, you might want to switch things up. Some credit cards do have tools where you can track your expenses online. You can also use money apps such as Mint to figure out exactly where everything is going.

First Financial’s Visa® Platinum Credit Card comes fully loaded with higher credit lines, lower APR, no annual fee, no balance transfer fees, a 10 day grace period, CURewards redeemable for merchandise and travel and so much more!* Click here to apply online today or transfer your higher rate credit card balance. 

2. You’re Easily Swayed By Your Social Activities

It isn’t fun missing out on adventures with your friends. But while happy hour sounds awesome, paying your bills is even better. According to Business Insiderauthor of Living Well, Spending Less: 12 Secrets to the Good Life, Ruth Soukup says, “This can be as innocent as going out to eat when you’ve already exhausted your restaurant fund for the month, or as extreme as paying rent you can’t afford in order to keep up with your friends.”  It really won’t be fun when you can’t afford your rent – stick to your budget and don’t spend outside your means.

3. You Don’t Have An Emergency Fund

Ideally, you want to have 10 percent of your income in your savings, but even five percent is good – as long as you have some type of savings built up. Essentially, you want to make sure that you have enough in your bank account for those rainy days. According to Business Insider, billionaire John Paul DeJoria – it’s important to always have at least three to six months’ worth of savings in your account, depending on how much you make annually.

4. You’re Living Paycheck To Paycheck

You probably need to re-adjust your finances if you find yourself living from paycheck to paycheck and not saving any money at the end of the month. According to U.S. Money, if you have a budget, but still find yourself short at the end of every month, it might be time to cut your expenses and re-evaluate.

Check out our free budgeting and savings calculators at firstffcu.com to get started!

5. You Don’t Have A Budget

Certified money coach Ashley Feinstein, founder of “Knowing Your Worth” says, “I recommend that every client keep a money journal for at least a couple of weeks to get conscious about where their money is going.” If there’s one thing you need to do ASAP on this list, it’s creating a budget to help get your finances on track.

6. Your Fridge Is Empty

You might be thinking that this has no correlation with your spending habits, but it actually does. Think about it: if your fridge is empty and you never have to do the dishes, it probably means you spend a lot of money eating out. According to the website Cheat Sheet, if you’re spending an average of $45 for two people and eating out for dinner once or twice a week, you’ve probably already spent more than you would on a week of groceries.

7. You Borrow From Friends Or Family

While it’s probably okay to borrow every now and then (in addition to paying them back on a timely manner), you don’t want to be borrowing from friends or family every time you need to pay your rent.  According to the Huffington Post, if you’re constantly asking your friends and family for money, then it means you either are spending way too much or you need to look for a new job.  Not to mention, constantly borrowing from a loved one can put strain and tension in your relationship.

8. You Don’t Know Where Your Money Is Going

If you find yourself forgetting where all your money is going to, whether you use cash or credit, then it might be a sign that you need to fix your finances. According to U.S. Money, people who shop a lot tend to ignore exactly how much money they spend. It’s best to figure out a budget with exactly how much spending money you have, so you know your spending limit.

Try our 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.

9. You Feel Stressed About Money

The American Psychological Association conducted a survey in 2015 and found that 72% of Americans were stressed about money at least once in the month. One of the key signs you need to pay attention to is how money actually makes you feel. Sometimes finances can make you feel edgy or anxious when you don’t have control over them. However, if you keep track of every penny that goes in and out of your account, then that anxious feeling could subside.

While spending money may bring you happiness, it’s important to budget your finances so you can have some in savings. While there are plenty of ways to spend your money, it doesn’t necessarily mean you should.

*APR varies from 11.15% to 18% 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: Raven Ishak for Bustle.com, http://www.bustle.com/articles/170200-9-signs-you-may-be-spending-more-money-than-you-have-to-how-to-fix 

12 Money Rules to Live By

bigstock-Piggy-bank-on-money-concept-fo-118171091One-size-fits-all financial advice isn’t supposed to work. We’re all as unique as snowflakes, so the financial rules that guide us should be molded to our individual situations.

Except it turns out that rules of thumb can be really helpful.

A study of West Point cadets, for example, found teaching rules of thumb was at least as effective as standard personal finance training in increasing students’ knowledge and confidence as well as their willingness to take financial risks. Researchers found money rules of thumb actually were more effective than teaching accounting principles to small-business owners in the Dominican Republic.

Besides, we all have busy lives — sometimes, we just want an answer. If you’re tired of the “on the one hand this, on the other hand that” approach to financial advice, check out these guidelines that have been collected over the years. Perhaps you’ll find some one-size-fits-all advice that suits you.

1. Car buying: Buy used and drive it for 10 years

New cars are lovely, but they’re expensive and lose an astonishing amount of value in their first two years. Let someone else pay for that depreciation and take advantage of the fact that today’s better-built cars can run well for at least a decade if properly maintained. You can save hundreds of thousands of dollars over your driving lifetime this way.

2. Car loans: If you have to borrow, use the 20/4/10 rule

Ideally, you wouldn’t borrow money to buy an asset that loses value, but you may not always be able to pay cash for a car. If you can’t, protect yourself from overspending by putting 20% down, limiting the loan to four years and capping your monthly payment at no more than 10% of your gross income. A big down payment keeps you from being “underwater,” or owing more on the car than it’s worth, as soon as you drive off the lot. Limiting the length of the loan helps you build equity faster and reduces the overall interest you pay. Finally, capping the size of the payments prevents your car from eating your budget.

3. Save for college

Retirement saving is more important, but get in the habit of putting at least $25 a month aside for college soon as your child is born. Your kids can always get student loans, but as you’ve probably heard, no one will lend you money for retirement. Your children will not thank you if the price for their education is your having to move in with them because you’re 70 and broke. The good news is that even small contributions to a 529 college savings plan can add up over time. “Starting early can mean the difference between choosing the college that is right for your child as opposed to the one that offers the best financial aid package,” says Joe Hurley, founder of SavingForCollege.com.

Our Investment and Retirement Center can help you get your colleges savings in order with a 529 College Savings Plan – give us a call at 732.312.1564, email Samantha.Schertz@cunamutual.com or stop into any branch!

4. Credit cards

If you carry a balance, look for a low-rate card to help you pay off your debt. If you pay in full each month (as you should), find a rewards card that returns at least 1.5% of what you spend. Don’t mess with rewards cards if you’re dragging around credit card debt. Focus on paying it off fast with a low-rate card. If you pay in full, though, you should regularly review your rewards programs to make sure you’re getting enough value from them. The programs can change, as can your spending and the way you use rewards. “Even if you don’t want to ‘play the game’ and manage a complicated wallet, there’s no excuse for earning less than 1.5% back for all of your purchases,” says NerdWallet credit card expert Sean McQuay.

Our Visa Platinum Credit Card is the perfect addition to your wallet! We currently have a special 80th Anniversary Introductory Rate for a limited time! From 7/1/16 through 2/28/17 all qualifying new consumer Visa Credit Card Accounts will be eligible for .80% APR on purchases and balance transfers for 8 months! Qualifying existing consumer credit cardholders who are approved for a new balance transfer between $800 and $8,000 are also eligible for the same anniversary rate.*

5. Emergency savings

You need to be able to get your hands on cash or credit equal to three months’ worth of expenses. The classic emergency fund advice — that you need three to six months of expenses saved — is great, but it can take years to save that much and you have other priorities that are more important (see “retirement,” below). While you build up your cash stash, make sure you have a Plan B. That could be money in a Roth IRA (you can pull out your contributions at any time without paying taxes or penalties), space on your credit cards or an unused home equity line of credit.

6. Insurance

Cover yourself for catastrophic expenses, not the stuff you can pay out of pocket. Insurance should protect you against the big things— unexpected expenses that could wipe you out financially, such as your home burning down or a car accident that triggers a lawsuit. You want high limits on your policies, but high deductibles, too. “Making a series of small claims doesn’t make financial sense in the long run. You may gain some small insurance payments, but you risk a rate increase that could more than cancel out your gains,” says NerdWallet insurance expert Amy Danise.

7. Mortgage amount

If you can’t afford the payment on a 30-year, fixed-rate mortgage, you can’t afford the house. You may be able to save money by using another kind of mortgage, such as a hybrid loan that offers a lower initial rate. But if you’re using an alternative loan because that’s the only way you can buy the home you want, you may have set your sights too high. A budget-busting mortgage puts you at risk of spiraling into ever-deeper debt, especially when you add in all the other costs of homeownership.

8. Mortgage rates

Fix the rate for at least as long as you plan to be in the home. Plans can change, obviously, but you don’t want a big payment jump to force you out of a home you hoped to live in for years to come. If you’re pretty sure you’ll be moving in five years, a five-year hybrid could be a good option. If you think you may stay for 10 years or more, though, consider opting for the certainty of a 30-year fixed rate.

First Financial offers great low-rate Mortgages to get you into your dream home – check out our current rates on our website at www.firstffcu.com!

9. Mortgage prepayments

You have better things to do with your money than prepay a low-rate, potentially tax-deductible mortgage. Shaving years off your mortgage and saving money on interest sounds great. But before you consider making extra payments to reduce your mortgage principal, make sure more important priorities are covered. You should be saving enough for retirement, for one thing, and have paid off all other debt, since most other loans have higher rates and the interest isn’t deductible. It would be smart to have that emergency fund built up as well and to be adequately insured. If you’ve covered all of those bases and still want to pay down your mortgage, have at it.

10. Retirement: Save 15%

If you got a late start or want to retire early, you may need to save more. Run the numbers on your retirement plan. For most people, 15% including any company match is a good place to start. Even if you can’t save as much as you should, start somewhere and kick up your savings rate regularly. Retirement should be your top financial priority, by the way. You can’t get back lost company matches, lost tax breaks and the lost years where your money isn’t earning tax-deferred returns.

11. Retirement, Part II

Leave retirement money for retirement. When your retirement fund is small, you may feel like spending it doesn’t really matter. It does. Taxes and penalties will cost you at least 25% and likely more of what you withdraw. Plus, every $1 you take out costs you $10 to $20 in lost future retirement income. Once your retirement fund is larger, it may be easy to convince yourself there are good reasons to borrow or withdraw the money. There really aren’t. Leave the money alone so it’s there for you when you need it.

To set up a no-cost, no obligation consultation with our Investment and Retirement Center contact us a call at 732.312.1564, email Samantha.Schertz@cunamutual.com or stop into any branch!

12. Student loans

Your total borrowing shouldn’t exceed what you expect to make your first year out of school. At today’s interest rates, this will ensure that you can pay off what you owe within 10 years while keeping payments below 10% of your income, which is considered an affordable repayment rate, says financial aid expert Mark Kantrowitz, author of “Twisdoms about Paying for College.” What if you didn’t limit your borrowing and are now struggling? You have options. “If you have an overwhelming federal loan balance, income-driven repayment plans are there for you,” says NerdWallet student loan expert Brianna McGurran. “It’s tempting to want to hide from your debt or be ashamed of it, but you’re better off looking into the repayment options that are out there. You’ll see there are ways to find relief.”

*APR = Annual Percentage Rate. APR varies from 0.80% to 18% when you open your account based on your creditworthiness. This APR is for purchases and balance transfers and will vary with the market based on the Prime Rate. Subject to credit approval. No Annual Fee. Other fees that apply: 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. The qualifying period for the 0.80% promotional rate is between 7/1/16 and 2/28/17. New accounts will receive 0.80% APR on all purchases and balance transfers for 8 months starting from the date the account is opened. Current First Financial Visa Credit Cardholders will be eligible to receive 0.80% APR on balance transfers with a minimum of $800 and maximum amount of $8,000 for an 8 month period starting from the date the balance transfer is posted. 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.

Original article source courtesy of Liz Weston of Nerd Wallet.

6 Important Financial Steps to Take in Your 30s

bigstock-busines-finance-money-and-bo-101189672-e1456837421206When you hit your 30s, you may start thinking about your major life goals, both personal and financial. Although you may be able to defer some of your personal life decisions, such as career changes, starting a family or moving to a new place, some major financial decisions should not wait any longer.

Many financial decisions can have a gradual, yet enormous, impact on your life. Making them at the right time ensures that you can meet your goals and achieve financial security. Here are seven key financial steps people in their 30s should take.

1. Build an emergency fund.

Whatever your current income is, you need to establish an emergency fund. Think about how you would pay next month’s rent if you lost your job. Or, if your car broke down, would you have enough money to repair it? Having a financial buffer means you don’t have to hit the panic button — or go into debt — when faced with an unforeseen expense.

Start by aiming to save enough to cover up to three months of your household expenses and gradually grow your emergency fund to cover at least six months of expenses. If money is tight, building an emergency fund can be overwhelming, so start small. Contribute an hour’s worth of wages each workday and gradually increase it to two hours’ worth of wages per workday. If that’s unrealistic, save $50 per week ($200 per month) and increase it to $75 a week or more as you are able. Use automatic deposits to your savings account to ensure regular contributions.

2. Make a plan to pay off debt.

As you turn 30, it’s smart to think about setting a strong financial foundation for your future, and that starts with paying off your debt. Not all debt is bad. Good debt includes your home mortgage or education loan, but if you have high-interest credit card debt or personal loan debt, it’s time to take these financial matters seriously.

The best strategy is to start paying off debt with the highest interest rate first. For instance, clearing credit card debt with a 22% interest rate would yield a better return on your money than paying off your home loan with a 4% interest rate. If you need help, work with a debt management professional to figure out how best to tackle your debt.

3. Start (or keep) maxing out your 401(k).

Unlike maxing out your credit cards, maxing out your 401(k) or other retirement plans is a good thing — and now is the time to start.

If you have an employer-sponsored retirement plan, contribute as much as you can. If you’re not yet able to make the maximum allowable contribution, you should contribute at least enough to get the matching contribution from your employer if the company offers it. This is essentially free money; don’t let it go to waste. If your employer doesn’t provide a retirement plan, open a traditional IRA or Roth IRA account. With an IRA, you can contribute up to $5,500 in 2016.

If you work for yourself and don’t have access to an employer-sponsored retirement plan, you should establish your own. Some of the most popular options include a self-directed Solo 401(k) if you have an owner-only business or are self-employed, SEP IRA, or SIMPLE IRA plan. For these plans, the contribution limits each year are as follows:

  • Solo 401(k): Up to $53,000 for 2016, plus catch-up contributions of $6,000 for individuals over age 50.
  • SEP IRA: Up to $53,000, or 25% of compensation.
  • SIMPLE IRA: Up to $12,500, plus catch-up contributions of $3,000 for individuals over age 50, if the plan allows it.

4. Start investing now.

One of the biggest advantages you have in your 30s is time, so it pays to start investing early. Consider this example of two investors. At 30, Steve started investing $1,000 a month and did so until age 40. Even though he stopped, he didn’t withdraw his investment and let it grow until his retirement at age 60. On the other hand, Bob started investing at 40, contributing $1,000 a month until age 60.

Assuming an average rate of return of 5% compounded annually, Steve accumulated $154,992 at the end of the 10 years, but since he didn’t withdraw this money, it grew to $411,240 by age 60. Bob ended up with $407,460 with the same investment terms. This is the magic of time — and compound interest — working in Steve’s favor. With compound interest, your return is added to your principal each year, so your savings grow much faster than with a simple interest rate, when the return amount is the same each year, based on the original principal amount.

5. Figure out the right investment strategy for you.

If asset allocation is a foreign concept to you, now is the time to demystify it. Asset allocation is about picking the right proportion of different investment types (or asset classes) to match your portfolio with your risk appetite, investment time frame and financial goals. Some investments, like stocks, are more risky — and tend to yield higher returns — than others, like bonds. For instance, if you wanted a more aggressive investment strategy, you would want to create a portfolio with more exposure to stocks, and if you wanted less risk, you’d dial up your exposure to bonds.

Your asset allocation will have a huge impact on your net wealth over time. A portfolio that is too conservative may leave you with an insufficient nest egg, whereas a risky allocation could yield higher returns, but might keep you up at night when the market is volatile. It may be best to consult with a financial expert to come up with an investment strategy that fits with your goals and your tolerance for risk.

6. Start saving for college.

You should begin saving for college expenses as soon as you have a child. It may seem a bit early to get started, but college costs are going up, and the sooner you start saving and investing for this major expense, the better off you’ll be. A tax-advantaged plan, like a 529 college savings plan, can help you come up with the necessary funds to support your child’s college education. Considering the long time horizon, you may want to follow a relatively aggressive investment strategy for the plan.

Take the long view

“Setting goals is the first step in turning the invisible into the visible,” says author, entrepreneur and motivational speaker Tony Robbins. When it comes to your financial life, this couldn’t be more true. While working on a financial plan, you must consider the long-term perspective — the far-off personal and financial goals you want to achieve — to determine the best steps to take today.

Though it may not always feel like it, you have control over your financial life. Making educated decisions and taking action early can help set you on the path to financial security and achieving your goals.

To learn more about your retirement, savings, and investment options, set up a complimentary consultation with the Investment & Retirement Center located at First Financial Federal Credit Union to discuss your savings goals! Feel free to contact us at 866.750.0100, email samantha.schertz@cunamutual.com or stop in to see us!*

*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.

Original article source courtesy of Dmitriy Fomichenko of Nerd Wallet.

5 Basic Principles You Should Follow to Achieve the American Dream

bigstock-Family-Moving-Home-With-Boxes-6143817Coined by author James Truslow Adams in his 1931 book The Epic of America, the “American dream” is described as,

“‘[T]hat dream of a land in which should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement… It is not a dream of motor cars and high wages merely, but a dream of social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position.”

Everyone’s path to reach the American dream is different. Yet there’s always some common ground — namely, that through hard work we hope to retire comfortably and on our own terms.

Five basic principles to help you achieve the American dream.

Unfortunately, as we’ve seen from a number of recent polls, Americans’ finances aren’t necessarily on solid footing. U.S. personal savings rates are pretty poor, debt levels among middle-class families are high, and distrust of the stock market still exists following the credit bubble and mortgage crisis that precipitated the Great Recession. Now more than ever the American dream appears to be on the brink of disappearing.

But it doesn’t have to.

If you follow five basic principles, you too can achieve the American dream of a comfortable retirement for you and your family.

1. Get a degree.

It’s perhaps one of the oldest debates: “Should I go to college?” Not going to college means saving potentially five- or six-digits in student loan costs, but not getting a degree could constrain your ability to move up the socioeconomic ladder. However, as Pew Research showed in a study two years ago, not going to college could have dire consequences on your ability to comfortably retire.

Based on Pew’s analysis, which looked at the median salaries of millennials ages 25 to 32 who were working full-time, those with high school degrees were earning $28,000 annually. By comparison, millennials who obtained bachelor’s degrees or higher were netting $45,500 per year. Both of these figures are in 2012 dollars. This $17,500 difference could be huge over the course of four decades: Not only can this income difference be invested and compound many times over, but presumably the college graduate will have greater opportunities to move up the economic rungs to collect an even higher wage.

If you want to get your retirement savings off on the right foot, you need to seriously consider getting a college degree.

2. Save as much as you can.

Secondly, Americans need to kick their loose spending habits and learn to live on a budget. A Gallup poll conducted in 2013 showed that only around a third (32%) of U.S. households kept detailed monthly budgets. Not keeping a budget makes it very difficult for you to understand your cash flow, and if you don’t understand how money is entering and exiting your checking account, you’ll have a tough time optimally saving for retirement and funding your emergency account.

Thankfully, the solution is easier than ever these days: budgeting software. There are countless choices when it comes to budgeting software, and all programs handle the grunt work of doing math. Many can even help you formulate a strategy to save money. But budgeting also takes resolve on your end. This is where some keen budgeting tips can come in handy. Make sure you’re doing what you can to get everyone in your household involved so you all remain accountable for your spending habits, and consider having what you save automatically deposited into a savings or retirement account on a weekly, biweekly, or monthly basis to reduce the urge to spend.

The earlier you start saving, the quicker your nest egg can grow.

3. Invest for the long-term.

The next step would be to take the money you’ve saved and look to invest it for the long-term.

Although your investments could take on many forms, it is strongly suggested that you consider putting at least some of your money to work in the stock market. I know what you might be thinking, and yes, the stock market does have its pullbacks from time to time. Since 2000, we’ve witnessed two separate 50%+ drops in the broad-based S&P 500. However, we’ve also witnessed all 35 stock market corrections of 10% or greater in the S&P 500 completely erased by bull market rallies since 1950. Over the long term, stock market valuation tends to rise at a rate of 7% annually, including dividend reinvestment. This means you could double your money almost once every decade, assuming this average holds true.

 

Additionally, you’ll want to focus on buying solid businesses, because trying to time your buying and selling activity is almost assuredly not going to turn out well. A study by J.P. Morgan Asset Management, using S&P 500 data from Lipper, between Dec. 31, 1993 and Dec. 31, 2013, shows that investors who held throughout the entirety of both huge 50%+ drops still gained more than 480% over the 20-year period. By comparison, if you missed the 10 best trading days, your return dipped to just 191%. If you missed a little more than 30 of the best trading days over this approximate 5,000 trading-day period, your return would fall into the negative. That’s the power of long-term investing and compounding in action.

Questions about retirement savings, estate planning, or investments? To set up a complimentary consultation with the Investment & Retirement Center located at First Financial Federal Credit Union to discuss your savings goals, contact us at 732.312.1564, email samantha.schertz@cunamutual.com or stop in to see us!*

4. Be tax-savvy.

The fourth thing you’ll want to do is aim to give back as little of your wages and capital gains as possible to the federal and state government. There’s no way of getting around completely paying taxes (so don’t try it!), but there are things we can do to reduce our tax liability.

One of the smartest moves you can make is contributing to a Roth IRA. Although there are numerous investment tools we can choose from, the Roth IRA is arguably the best, because investment gains within a Roth are completely tax-free as long as no unqualified withdrawals are made. In addition, there are no age contribution limits with a Roth IRA (unlike a Traditional IRA), meaning you can keep contributing well beyond age 70. There are also no minimum distribution requirements. This point is important if you want to allow your money to continue growing, or aim to have a hefty inheritance to pass along to your family.

Also, take into consideration where you’re living, as well as how you plan to withdraw your money during retirement. All 50 states seemingly have different tax laws, with some states being far more tax-friendly than others. If you choose to live and retire in a tax-friendly state, you could wind up saving a lot of money over the course of your lifetime and during your golden years.

Having a withdrawal plan in place prior to retirement means that you’ll have laid out exactly how much money you’ll need each year when you retire. Having a plan in place can potentially keep you from withdrawing too much money from say a 401(k) or investment account each year, and having that withdrawal bump you into a higher tax bracket. Making small adjustments can save you big bucks come tax time.

5. Understand how to use debt.

Finally, it’s important that you maintain discipline when it comes to utilizing debt, as high levels of debt can cripple your ability to save, and can crush seniors’ budgets during retirement.

What you’ll want to keep in mind is that there are different kinds of debt, and they’re not all bad. Student loan debt can be a good thing since it allows you to get a better paying job, but what you may want to consider is not aiming for Harvard. In-state colleges can often be cheaper than the most prestigious colleges, and may even offer a better return on your investment.

What you’d want to avoid is racking up debt on credit cards because you wanted the latest outfit or gadgets for you home. Since nearly all vehicles depreciate in value over time, auto loans are another notorious source of bad debt you should try to minimize.

Check out 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.

Long story short, the better you manage your debt, the less likely it is to keep you from being able to sock away a good chunk of your income for an emergency or retirement.

The American dream has, and always will, require hard work, so be financially proactive and go claim your piece of the pie.

*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.

Original article courtesy of Sean Williams of The Motley Fool.

Top 5 Financial Regrets…and How to Avoid (or Move Past) Them

bigstock-Man-regretting-something-98035493

When was the last time you heard the phrase “no regrets”? Maybe it was accompanied by the acronym “YOLO,” or you saw it written in script on a sappy motivational poster.

It’s time to get real. Most of us do have regrets — especially when it comes to our finances.

According to a new survey from Bankrate.com, 75 percent of Americans say they have financial regrets. Apparently, we’re the most remorseful when it comes to saving — especially for retirement, and after that, emergency expenses. The site reported 42 million Americans regret not starting their retirement saving earlier, and that those concerns increased with age. Millennials said they regretted excessive student loan debt most, with 24 percent of respondents under 30 listing it as their chief financial regret. Other top concerns included taking on too much credit card debt and not saving enough for a child’s education.

There are no do-overs in finances, unfortunately, but you can do better. Here are the top 5 financial regrets with suggestions for how to turn the situation around.

1. Retirement Savings

If you’re feeling behind, you need to get on the automatic bandwagon. Saving by automatic contribution (a 401(k) or similar plan) works because you make a good decision one time and get to dine out on it for years.

If you’re starting late, you need to aim to stash away 15 percent of your income (including matching contributions). Not there yet? Ratchet your contributions up 2 percent a year until you hit that mark. Also look into catch-up contributions that allow you to contribute an extra $1,000 to an IRA or $6,000 to a 401(k) if you’re 50 or over. Working longer can also help. The money in your retirement accounts can continue to grow, and when it comes to Social Security, you’ll get an increase in benefits of about 8 percent per year (guaranteed) from age 62 until age 70.

How will you begin preparing for your retirement today? To set up a complimentary consultation with the Investment & Retirement Center located at First Financial Federal Credit Union to discuss your savings goals, contact us at 866.750.0100, email samantha.schertz@cunamutual.com or stop in to see us!*

2. Emergency Expenses

“Everybody can start saving for those minor emergencies, because it’s not really a question of if, it’s just a question of when,” says Aron Szapiro, policy and finance expert at HelloWallet.com.

He’s right — it’s only a matter of time before a minor health expense or unexpected car maintenance comes into play, and the only way to prepare is to start saving. Let your first goal for your emergency fund be $2,000. Once you’re there, congratulations — you’re ahead of many Americans (63% of whom don’t have enough savings to cover a $500 emergency). Then, aim for three months’ worth of living expenses. You’re on your way to being ready for anything.

3. Credit Card Debt

Sit down with a notepad and make a list of everything you owe and — this is key — the interest rate for each debt. It’s usually a smart move to make paying off credit card debt your first priority, because it usually has the highest interest rates. Szapiro says there’s “something magical” about paying it down.

“If you have a really high interest rate of 18 percent or 20 percent, every dollar you put towards the credit card is a guaranteed return of 18 percent or 20 percent,” he says.

That’s a pretty significant return rate, and it’s risk-free.

(Note: There is one investment you can make that beats that credit card interest rate return — grabbing employer matching dollars offered in a retirement plan. If you have credit card debt and need to save for retirement, aim to do both simultaneously, even if you don’t do either fully until the credit card debt is gone.)

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.

4. Student Loan Debt

Although student loan debt is a top regret for many Americans, especially millennials, taking it on can be an investment in future salary and capital. Federal student loans tend to have low interest rates and sometimes have tax benefits, and there are forbearance options in the event of major financial difficulty.

You can also look into options to refinance your student loans at today’s low interest rates (just know that doing so takes forbearance and other payment options off the table). However, don’t prioritize paying off student loans over saving for your future. The latter will serve you better — especially if there are matching dollars in play.

5. Saving for Children’s Education

Regrets for not saving are understandable — but because financial aid exists, you have to put retirement first. That said, a smart way to start is with a 529 plan, which in many states offers an immediate tax benefit. Some plans also offer the option to contribute small amounts of money (e.g., $25) every month or pay period (again, automatically) which adds up over time.

“There’s no one magic number. It’s not like saving for a down payment for a house or something where you have a specific goal, a specific time you want to do it,” says Szapiro. “It’s something where the more you save, the more options you’ll have.”

Our Investment & Retirement Center can also assist you with setting up a 529 College Savings Plan – be sure to contact them today at 866.750.0100, email samantha.schertz@cunamutual.com or stop in to get on the right track!

*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.