Tips for Recovering Your Finances After the Holidays

If you overspent during the holidays this year, you’re not alone. According to a survey, 36% of consumers went into debt during the holidays, owing up to an average of $1,249. Regardless of how much you owe, there are steps you can take to help recover your finances after the holidays are over. Here’s what we recommend for building your finances back up after an expensive holiday season.

Assess Your Finances

The first thing you’ll want to do is assess your overall financial situation. This includes fully understanding your monthly budget and determining your short and long-term financial goals. Then create a spreadsheet of your expenses, debts, payment due dates, and interest rates. If you’re new to budgeting, our make a budget worksheet is a great place to start.

Cut Unnecessary Expenses

Once you’ve fully mapped out your budget, you should have a better understanding of where you spend your money most. You’ll likely notice there are expenses from products or services that you don’t need or even use. When paying off debt or building savings, it’s best to trim down your expenses as much as you can. For example, you can cancel any underused subscriptions that you might have forgotten about. You can also try cutting back on frivolous expenses like dining out, Starbucks coffee, or delivery services. If the purchase is for something non-essential, see if you can find a less expensive version or cut it from your budget entirely.

Evaluate Credit Card Usage

Take an inventory of all the credit cards you’re using and evaluate if they have any rewards or annual fees. If you’re using cards with high fees or you’re carrying debt across multiple accounts, consider consolidating your debt with a balance transfer to a low-rate credit card. This way you can pay down your balance without the extra interest. It’s also recommended you find room in your budget to pay more than the minimum monthly payment. This will not only help you pay down the debt faster but will help your credit score, too.

Start Planning For Next Year

It’s never too early to start planning for the year ahead. Start by putting away $50 a month toward holiday gifts for the end of the year. Before you know it, you’ll have enough funds to cover gifts for your family and friends. Make a list of the people you’re buying gifts for now, and potential ideas to see how much you’ll need to save up for. Some items will likely be cheaper to buy out of season, which will help with your overall holiday budget for next year.

Whether you need assistance with debt repayment, creating a budget, or even opening an account, First Financial can help! Visit one of our branch locations or contact us to speak with a representative today.

 

Ways to Manage Price Inflation and Increasing Costs

You’ve most likely noticed increasing prices as you check out at the grocery store and fill up your gas tank lately. Last month, consumer prices on goods took a huge jump and increased by 7% from the previous year. This is the highest inflation rate our country has seen in 40 years!

Here are some ways you can manage the current inflation environment and help your bottom line at the same time:

Shop Your Cabinets and Pantry First. Before you hit the store – check your cabinets, pantry, and shelves to see what non-perishable items you already have at home. This will allow you to see what you have already bought previously, shorten your grocery list, and save you some money on your food shopping bill. This also goes for checking toiletry items and cleaning supplies you already have at home, as well as look in your freezer too. It’s easy to forget what you may have already purchased and didn’t realize you had!

Meal Prep. Planning your meals ahead and making a grocery list based on the ingredients you’ll need for the week, will allow you to (hopefully) stick to the list in front of you and not buy extras. Try not to deviate from your list, oftentimes these additional purchases end up spoiling before you get a chance to use them and then end up in the garbage can.

Reduce Waste. This goes hand in hand with meal prepping. Plan out your meals and ingredients for the week ahead. Try to find recipes and ingredients that you can use in multiple meals. For example, say you purchase and cook a whole chicken on Sunday. Use the leftovers for lunches for the week ahead by making a grilled chicken salad on Monday, chicken noodle soup on Tuesday, and a chicken burrito bowl on Wednesday.

Try Using Store Brand Products. Most of the time, you’re going to pay more for a name brand product. While in the store, comparison shop. Typically, you’ll find that the generic store brand is cheaper and is essentially the same exact item.

Buy in Bulk. When you can and if you have the storage space, it’s usually cheaper to buy items in bulk. Think toiletries and household cleaning supplies, pasta, rice, cereal, etc. If you don’t have the space or need that much at the moment, see about splitting the items and costs with a friend or family member.

Cut Back on Meat. Meat tends to increase one’s grocery bill. Try going meatless once or twice a week if you can, and switch to less expensive protein alternatives on those days like beans, lentils, and cheese.

Save on Produce. Try to buy produce that’s in season, which will be cheaper – or buy from your local farm market. Also buying frozen fruit and vegetables will help you save money too.

Try to Save on Gas Prices. Can you carpool to the office or work from home at all? If not – look into signing up for a fuel rewards program, use a credit card that offers cash back on gas purchases, or download a comparison app to see which gas stations near you are the cheapest.

Share. Instead of making large purchases during these times, for items that you probably won’t use every day – see if you can share with or borrow from a friend or family member for expensive tools, appliances, or equipment.

While it may seem that prices and cost of living continues to increase, the suggestions above can certainly help you save some hard-earned money these days. Don’t forget to review this list before you visit the store next!

Article Source: The Penny Hoarder

Get a Fresh Start to Your Finances with these Resolutions

Entering the new year means setting an annual resolution. Whether you’re looking to better your wellness, career, or relationships – there’s one resolution that’s crucial to all aspects of your life: improving your financial fitness. Rather than investing in a pricey gym membership or a resolution that’s difficult to stick to, take the opportunity to set financial goals that are easier to achieve than you think. Here’s our guide to getting a fresh start to your finances in 2022.

Create a Budget

Creating a budget may sound scary, but it can actually be very empowering once you’ve finished. Having a full understanding of your income and expenses can help you be more aware of your financial state and help you save more money down the line. There are steps you can take to make the process easier.

  • Review your expenses from 2021 to see where you spend your money and how you can better save.
  • Create a list of essential spending categories such as rent, food, transportation, clothing, internet, cell phone, insurance, etc. – and write down how much you spend on each.
  • Add up your monthly income and deduct your expenses. The amount left can be used toward building savings or on entertainment.

When building a budget, it’s recommended to use the 50/30/20 concept when planning out your expenses. Meaning, 50% of your income should go toward necessities, 30% on wants, and 20% on savings and debt repayment.

Reduce Debt and Improve Your Credit

Speaking of debt repayment, another goal to make for yourself in 2022 is to work toward reducing any debt that may be lingering. To start, make a chart of everything you owe and organize it by the size of the debt and interest rates. Check your credit score to better understand your financial fitness and where there’s room for improvement. Then, calculate what you owe and use the monthly budget you created to build a realistic repayment plan.

To prioritize debt repayment, you’ll need to trim your budget and eliminate any unnecessary expenses that are not essential. We also recommend refraining from using credit cards and allocating cash for your needs instead. While this is not ideal, a tight budget will only be temporary until you’re in better financial standing and your credit score improves. Plus, you can always treat yourself once you’ve achieved your repayment milestone (within reason, of course)!

Build Your Savings

Having a savings account is essential whether you need an emergency fund, money for retirement, or to buy a home. While it may sound daunting to build and maintain a savings account, the key is to start small. You’ll want to first evaluate what you’d like the savings to be for and how much you’ll need. Then, dedicate a certain amount of your paycheck to go toward your savings and make the transfer automatic. While it’s recommended to keep 20% of your income for savings and debt repayment, you’ll need to evaluate what works within your budget and when you’ll need the funds. Even if you’re starting with $25 per paycheck, you’ll be surprised how quickly the account will grow without you even thinking about it.

If you need help with creating a budget, managing debt repayment, or building savings, the team at First Financial is here to help! Visit one of our branch locations or contact us to speak with a representative today.

 

Money Moves to Make Before Year’s End

It’s almost a new year – are you financially ready? Have you hopefully started planning ahead and setting financial goals for the new year? Here are a few things you can do to prepare your finances for the end of one year and beginning of the next.

Review Retirement Contributions: How much are you putting away for retirement? Before the start of a new year is an ideal time to review this amount, so that if you need to make any adjustments – you can start fresh in January. It’s also a good time to see if you would be able to increase the amount going into your retirement account(s). Did you get a year end raise, and if so – can you increase your retirement savings moving into the new year?

Spend Any Flex Account Dollars: If you have a Flexible Savings Account (FSA), the money usually needs to be used by 12/31 every year or you will lose it. Check out your FSA and see if you have any remaining money available that can be used on a year end eye exam, new glasses, dental work, or medical supplies.

Donate to Charity: The end of the year is a great time to make a donation to your favorite charity. Not only will it allow you to clean out your home and donate any clothing, appliances, or toys in good condition that you no longer use – you’re also helping a local worthy cause during the season of giving. Donations are also tax deductible, so be sure to get a receipt for tax time.

Review Your Budget: This is the perfect time to review your budget from the year that’s ending, and decide if it worked well enough to continue into the new year – or if you need to make some adjustments. Sit down and really look over the numbers. Ask yourself what worked well and what went wrong – and be honest. If something didn’t go as well as you had hoped this year, decide how you’re going to revise your budget to allow it to work in the new year.

Wishing you a happy, financially healthy holiday season and upcoming new year!

 

Article Source: Moneyning.com

What You Should Know Before Using Buy Now Pay Later

If you shop online, we’re sure you’ve seen Buy Now Pay Later (BNPL) payment options like Klarna, Afterpay, Affirm, Zip, and Sezzle – as you are checking out. For some, this might be an easy way to pay online and manage your budget – however, there are some risks and hidden fees you should be aware of before trying out a BNPL payment option.

What is Buy Now Pay Later, and how does it work?

BNPL is a type of payment deferment option, which typically allows the buyer to purchase an item with little to no money paid up front and remaining payments are made in installments. Items with BNPL options usually apply to clothing purchases, furniture, and electronics, and can range in price from $100 all the way up to a few thousand dollars. If you select this option during checkout, you’ll get an email with a payment schedule (usually about 4 fixed payments that you would either make bi-weekly or monthly until the balance is paid). Paying this way is often advertised as being quick, and with no interest or finance charges.

BNPL companies also don’t usually perform a hard credit inquiry when you apply to use this method as a payment option. They typically only will require that the applicant is at least 18 years of age, has a cell phone number, has either a debit or credit card currently, and that the applicant’s identity can be validated.

While this might sound easy and convenient – you do need to be aware of some hidden fees and read the fine print first.

Things to consider before using BNPL:

  • Don’t financially strain yourself – While Buy Now Pay Later might seem like an easy way to pay for a big ticket item, you still need to be aware of your monthly budget and have a good sense of the money coming into your bank account. Even though you might qualify for this type of installment loan, can you actually afford to pay the amount they’ll be asking for by each payment due date?
  • BNPL products often come with hefty late fees – These payment services are quick to advertise that they don’t charge buyers any interest, however if you miss a payment deadline – get ready to be hit with a pretty expensive late fee. In addition, you may also get blocked from making future purchases and have the late fees or failure to repay on time – sent to a debt collector or listed on your credit report. Late fees for BNPL can range up to 25% of the original order amount. Before choosing BNPL as a payment option, it’s always a good idea to read the disclosures and understand what you might be responsible for if you make a late payment. In addition, if you are paying the installment with a debit card or directly through your bank account and don’t have enough available to cover the payment – you’ll also likely be hit with non-sufficient funds fees from your financial institution. This makes your initial purchase, a very expensive one.
  • Payment protection options – Another issue with BNPL is that you won’t find the same payment protections that you’d have available to you by using a credit card. Buy Now Pay Later does not have the dispute protections available that a credit card does when the item purchased is a scam, or if it arrives broken (or not at all). Returning items purchased this way can also be a hassle. The payment company may hold you responsible for the cost of the purchase, even if you returned the item – or it might take a very long time for a return payment to be processed. It’s also important to read through the return policies of whichever BNPL company you decide to use beforehand, since some may differ.

The moral of the story? For some shoppers, BNPL installment payment options may certainly be a beneficial and easy way to pay, and may work out just fine. However, before you decide to use this type of loan as a payment method – it’s important to carefully read through all of the terms and conditions, be aware of the company’s policies, have a monthly budget, and know what fees you could potentially get charged. In addition, because this is a relatively new type of loan – there aren’t as many protections in place for consumers. It’s definitely a good idea to be prudent and ensure that you fully understand all the terms of the loan before deciding to pay this way.

 

Article Sources: NBC News and the Consumer Financial Protection Bureau

 

How to Tip in Different Scenarios: Updated for 2021

A few years ago, we published a blog post about tipping in various situations. Since it’s been a little bit, and the world has changed a lot over the past 18 months – here is an update on how and what is considered an ideal tip for service in 2021.

Tipping does not only let you show your appreciation to a delivery person or server’s hard work – you’re likely also helping them pay their monthly bills or pay for tuition. Keep scrolling!

Server at a Restaurant

Many servers earn only about $2 per hour. Tipping them 20% makes a huge difference. Did their service exceed your expectations? Tip them 25%! The restaurant industry has particularly suffered a great deal over the past year and a half. Many servers were either out of work as restaurants were closed, or once they reopened – many had trouble and are still having trouble finding enough employees. Your server may be doing double or triple the amount of work than in normal times lately, so if they went above and beyond – it makes a difference to show your gratitude for excellent service.

Buffet Restaurant

At buffet restaurants, you choose and get your own food. However, remember that servers still refill your drinks. They also prepare new clean plates, silverware, and cups for you. Consider tipping them at least 10%. If they showed superb service, don’t hesitate to be a little bit more generous with your tip!

Takeout

The fact that your food was prepared for you, and you now don’t have to worry about what to cook for dinner tonight is something to be grateful for. Tip at least 10% and make the server or cashier’s day a little brighter.

Delivery

Thanks to hardworking delivery drivers, your cravings for some fresh, hot pizza have been satisfied! Tip them at least $2 to $4. If they deliver your food in bad weather or are driving a further distance to get to you, try tipping them some more.

Coffee Barista

While you’re not required to tip coffee baristas, a small act of kindness can go a long way. Place a dollar in that tip jar, enjoy your coffee, and make your favorite barista feel appreciated for their hard work. After all, that first cup of morning coffee is definitely something to get your day started off on the right foot!

Bartender

Wondering if you still need to tip a bartender? Of course you do! Preparing your favorite drinks requires art, expertise, and speed – so honor their craft by giving at least $1 or $2 per drink order.

Hairstylist or Barber

Getting a new haircut , color, or hairstyle is one of the best ways to pamper yourself. Give your favorite hairstylist or barber a 20% to 25% tip. After all, they help you look your best!

Tattoo Artist

Not everyone can draw a permanent, beautiful, and unique piece of art on your body. Given this, tattoo artists should receive at least a 20% tip. If you love how your tattoo turned out, why not tip more?

Manicurist

Apart from getting a new haircut, getting a manicure or pedicure may be another one of your favorite forms of self-care. Tip like you would to a hairstylist. Manicurists also typically deserve a larger tip for keeping your nails clean and colorful – especially if you visit the same one every two to three weeks.

Uber/Lyft/Taxi Driver

Not sure how much to tip an Uber, Lyft, or taxi driver? Around 15% to 20% will do. If you had a great ride and your destination’s a bit far, feel free to raise your tip.

Conclusion

While tipping allows you to applaud good service, it can also mean so much to servers, baristas, delivery drivers, hairstylists, and other passionate workers. Therefore, a general rule of thumb is to tip from 10% to 25% depending upon the situation. When in doubt, always try to be more generous if you can!