How to Create a Budget and Make Your Money Work for You

Budget. Did you just get cold chills reading that word? It’s not a popular word, and it’s certainly not a popular idea. Typically, the idea of a budget is enough to take away any sense of fun you might have when thinking about spending your money. But, it doesn’t have to be.

There are several benefits to creating a monthly budget. When you have a budget in place, you instantly:

  •     Make your money work for you
  •     Assign each dollar in your account a job
  •     You get 100% control of your money
  •     You can track your expenses
  •     You’ll relieve some of the stress that finances can bring
  •     You will create a “safety net”

There are obvious benefits to creating and maintaining a budget, and there are just as many tools to help you budget as there are benefits.

So, where do you start?

First, figure out how much you make each month. Then, figure out how much you spend. Once you figure out what you’re bringing in vs. what you’re spending, you can start creating specific categories for your money. This is where you get to tell your money what to do.

Now, you’ve got a basic budget in place. You know what you’re making, what you’re spending, and your money has a specific goal. But, how do you keep track of all that information in a manageable way?

Budget apps! The great thing about budget apps – not only do they keep track of your budget, but you can take them with you everywhere you go. Check out some of the best budgeting apps for 2020.

Wally — Get the details of all your financial activity in an easy-to-digest template. Categorize spending destinations, set goals, and create charts. Wally provides you with the full picture of your account in a simple and colorful template. Easy to look at and easy to understand, Wally makes tracking and analyzing your financial habits easy.

Acorns — You know how it’s hard to overcome the mental hump of setting money aside? Well, Acorns removes that struggle from the equation. By rounding up each of your transactions to the nearest dollar, it puts the funds into an investment portfolio. This app looks out for “future you” and makes sure you always have a few acorns hidden away for a rainy day too.

Mint – Create budgets, track bills and receive a free credit report when you use Mint. However, it’s the budgeting feature that really makes Mint shine. It allows you to link your bank, loan, and credit card accounts and then uses the information from those accounts to suggest a budget for you based on your spending. Mint takes it a step further by breaking that spending down into categories like “entertainment,” “food and dining,” and shopping. The best part? You’ll be able to see how much you can save by cutting back in each category.

Mvelopes – A popular budgeting method is the envelope system, a style of budgeting, where you put cash in envelopes for different spending categories and when the envelope is empty, that budget category is spent for the month. This is great for people who like a cash only system, but for people who use credit and debit cards, this can be challenging. Enter Mvelopes, an app that makes it easy to follow cash style budgeting in a digital world.

Of course, while you’re downloading apps, make sure you’re using our mobile app! At First Financial, our app allows you to check your balances, transfer money, pay bills, review your spending and deposit checks remotely. Still have questions about budgeting and financial planning? Check out our handy budgeting guide, or make an appointment with one of our member service representatives and let us help get your budget on track!

 

How to Stop Thinking Your Paycheck isn’t Enough

Do you ever feel like your paycheck just isn’t enough to do everything you’d like to do? Maybe in some cases it may not be or you may have to find other ways to supplement your income, however most of the time – this feeling is a mindset that you can make positive changes to.

Here are five ways to change your thinking:

1. Stop comparing yourself to others. Social media is very good at allowing us to compare ourselves to other people. You see your friends posting a brand new car, going on lavish vacations, buying expensive shoes or clothes, and the list goes on. If you want what others have, you will always be disappointed. You also don’t know another person’s financial situation – maybe they put all those vacations on a credit card and will spend the next five years trying to pay it off. The bottom line is, stop looking at what others have and focus on all the good things in your life that you are grateful for.

2. Pushing your lifestyle ahead of schedule. What you can afford is different if you earn $20k a year, $100k a year, or $1 million a year – and for everything in between. If you make $50k a year but are trying to live a lifestyle of someone who makes $100k or more – your paycheck will never be enough and you will probably be in a great deal of debt. Change your mindset and live and spend within the means of your annual salary and your annual salary alone.

3. Take note of what you have, not what you’re lacking. If you make an espresso in a regular large coffee mug, it won’t look like a lot of coffee – right? The answer here is that it’s not about volume, but about contents. Don’t look at the glass as half empty, but instead half full. What are you thankful for? Try to appreciate what you do have rather than what you think you’re missing.

4. Cut off your spending on occasion. This idea is in relation to things that are not necessities. For example, think about any subscription services you pay for (cable, Netflix, gym, Amazon Prime, etc.) or extras that you might buy (coffee each morning on the way to work, snacks from the office vending machine everyday, and so forth). Do you “really” need these to survive? If you take a break from them do you miss them, or can you find other ways to satisfy these habits? This exercise will make you realize what are truly necessities and where you can scale back on your spending and save the money for something else more important.

5. Look for alternatives. There is probably a cheaper option out there for pretty much anything you want to do or purchase, you just have to do a little research. For example – do you really need brand name food? Opt for the store brand instead, you are guaranteed to save money and most times it is the exact same product. If you’re looking to cut your cable bill you might try using just Internet service and connecting through an online subscription like Hulu to save some money. The possibilities are endless, you just have to experiment and find what works for you.

The moral of the story here is that if you think your paycheck is never enough, it never will be. The goal is to change your mindset, save as much as you can, and research cheaper alternatives to getting what you want. You can do it!

Article Source: David Ning for Moneyning.com

Budgeting Mistakes that are Easy to Make

Hopefully by now in the second month of the new year, you’ve mapped out your monthly budget and expenses. If not, get started here ASAP.

Once your budget is set, it’s definitely not always foolproof. Here are a few categories in which you might forget to include in your budget, and a couple mistakes that are easy to make so you can be sure to avoid them.

Are you really ready for anything? Did you remember to include an emergency fund when you created your annual budget? If not, this is a big category you don’t want to forget about. If you have an unexpected emergency and you have no emergency savings account back-up, you’ll either be taking money out of other accounts you shouldn’t be touching or racking up debt on your credit card. Either way, it’s going to put a major dent in your budget. If you don’t have an emergency fund, start one as soon as possible.

Do you keep guessing about monthly bills? If you have utility or other bills that vary from month to month, you may have to guess what they may be when you are setting up your monthly budget. When you are estimating bills that change each month, be sure you factor in a number that’s higher than you think it would normally be. This way you won’t short change yourself and you can be prepared for anything that comes up.

Your budget won’t always be fully complete. Most likely, things are going to pop up for the month like a spur of the moment dinner out with friends, or that family member’s birthday gift you forgot to include when you initially crafted your budget. Things like this can really add up on a monthly basis though, if you forget to include them. At the start of each month, sit down and look at all the dates on the calendar for the month ahead. Think about who might have a birthday coming up, if there’s a weekend outing, and so forth. Factor in as many expenses as you can, and if you have a little leftover – give yourself a bit of a buffer just in case anything comes up last minute so that you won’t have to use your credit card.

Don’t forget about annual fees. Look back over what you spent last year if you can. Do you have a credit card with an annual fee, or maybe a gym membership, insurance policy, or warehouse shopping club annual fee? Jot them all down and take note of any annual fees that might be due. Plan ahead and try to set the money aside so you know you are covered when the bill comes in.

Like anything, there is a learning curve when you are first getting used to doing something like creating a monthly budget. Give yourself a bit of wiggle room and if you make a mistake, try to get back on track for the next month.

In addition to our budgeting guidebook above, also check out our online fillable PDF budgeting worksheet here. Come back each month and fill it out for the upcoming weeks ahead!

Article Source: John Pettit for CUInsight.com

How to Navigate Charitable Contributions and Tax Deductions

We all know the saying, “It’s better to give than to receive.” Giving makes us feel good, right? And we usually don’t think about what’s in it for us.

But, what about charitable giving? Depending on the amount of your charitable contributions, you could be in for a sizable tax benefit. As a matter of fact, if you factor your charitable donations into your budget, it will allow you to be more generous and lead to strategies that could improve your financial planning long term.

With tax season in full swing, let’s take a look at some benefits of charitable giving and what can be deducted.

That Altruistic Feeling

Whether we donate to them or not, we all have causes near and dear to our heart. If you’re an animal lover, ASPCA commercials probably tug at your heartstrings. If helping kids is where your passion lies, then charities like St. Jude’s and Shriner’s Hospital probably resonate with you. Regardless of where your loyalties lie, we all love the feeling of helping other people. Scientific studies have even shown that charitable giving activates pleasure centers in the brain.

Tax Benefits

Charitable donation deductions actually allow you to lower the amount of taxable income. Of course, you can’t donate to just any organization. In order for donations or gifts to qualify, they have to be recognized tax-exempt organizations. Typically – religious organizations, veterans’ organizations, and community organizations qualify as being tax-exempt.

Have you made any donations to state, federal, or local government for public purposes, such as to rehab a public park? You can deduct those donations. You can also deduct any expenses you incur as a volunteer for a qualified organization or if you donate a qualified vehicle.

What Does this Mean for You?

Let’s be honest. Taxes, deductions, and tax law can be overwhelming and difficult to understand if you don’t speak that language. It’s always a good idea to sit down with a qualified financial planner to come up with a plan for donating to charities. Your financial planner can help you figure out what types of donations will work for you and your future plans. They can also help you find organizations that share the same goals and ideals as you. Also, if you want to make charitable giving a recurring activity this year, look at setting aside money in a First Financial Special Savings Account.+ That way, you can save smaller amounts at a time to make it easier to give back instead of one lump sum all at once.

No matter which way you decide to give or which charity you choose to give to, giving back to organizations that do good – feels good. Additional information about charitable giving and tax deductions can be found in this article from the Investment & Retirement Center located at First Financial Federal Credit Union.* If you have other questions about charitable giving and how it may impact you this tax season, contact the Financial Advisors located at First Financial or click here.

*Securities sold, advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor. CBSI is under contract with the financial institution to make securities available to members. Not NCUA/NCUSIF/FDIC insured, May Lose Value, No Financial Institution Guarantee. Not a deposit of any financial institution. CUNA Brokerage Services, Inc., is a registered broker/dealer in all fifty states of the United States of America.

 +A $5 deposit in a base savings account is required for credit union membership prior to opening any other account. All personal memberships are part of the Rewards First program and a $5 per month non-participation fee is charged to the base savings account for memberships not meeting the minimum requirements of the program. Click here to view full Rewards First program details. 

Five Budgeting Tips You Can Live By

It’s hard to make budgeting decisions. It can be difficult to keep an eye on your short-term and long-term financial goals when you’re busy with everyday life. But putting together and following a spending plan can work wonders on your finances. Here are five tips you can use starting today.

1. Budget until there’s nothing left.

If you love spreadsheets, zero-sum budgeting might be the right move for you. It’s budgeting so every single cent is accounted for.

Try creating buckets for specific expenses — housing, transportation, food, and entertainment. After assigning amounts to these costs, stash what’s left over in savings.

When you sit down to put together your monthly budget, you can make categories for your big expenses and then create line items for smaller costs. Smaller expenses would include activities such as eating out or shopping.

The goal is to stay on top of your money from the beginning to the end of the month. Then repeat.

2. Get your loved ones involved.

Money management is a tough subject for most couples. However, avoiding money talks causes bigger issues that go beyond banking. That’s why you may want to work with your partner to decide on monthly spending — as a team. Discuss your short-term and long-term financial goals as a couple. Look over what you’ve got in your account(s) and go from there. But don’t forget about your individual needs. Both of you may also want to have cash for items or activities that bring you happiness. And if either of you is a big spender, have an honest talk about what you might be able to realistically cut back on.

3. Take advantage of technology.

Do you like using mobile apps? There are some great ones that exist for tracking your spending. Online banking apps also help you with automatic bill pay and lots of other features. You can view your cash in and cash out with ease and really get a handle on what money you’re spending. We’re all busy and any way technology can help is a plus. Of course, if you’re more comfortable keeping track of your expenses with pen and paper, that works too.

4. Give yourself time to adjust.

People who embrace budgeting for the first time often struggle. While getting over this is key to success, you shouldn’t expect to become a money pro right out of the gate. Understand that you’ll need time to adjust and that small setbacks are bound to happen when following a budget. Also, keep in mind that you might have to change your plan from time to time. An approach that worked last year might not work this year due to changes in your personal life or career. Don’t be afraid to switch things up if necessary.

5. Think about today and tomorrow.

Kick off budgeting with short-term goals like paying your credit card minimums or saving for a new car.

But don’t forget far-off goals and life events too. If you were to pass away, some of your everyday expenses stick around, like student loan debt and mortgage payments. You need to make sure your loved ones won’t be left without the cash needed to cover these costs. Getting life insurance is a good way to do this. This coverage, which insurers offer as part of term or whole-life policies, can cover some of your expenses and spare your family from having to pay out of pocket.

How to learn more about life insurance

Life insurance may seem complicated, but it’s not that hard once you know the basics. Of course, we are happy to help all of our members. Learn more here, and you can also use our TruStage Life Insurance Calculator to compare different types of insurance and learn more about your options.

TruStage® Insurance products and programs are made available through TruStage Insurance Agency, LLC and issued by CMFG Life Insurance Company and other leading insurance companies. The insurance offered is not a deposit, and is not federally insured, sold or guaranteed by any financial institution.

Corporate Headquarters 5910 Mineral Point Road, Madison WI 53705

Article Source: © Copyright 2020, TruStage. All Rights Reserved.

WEB-2507864.2-0519-0621

 

Tips for Going on a New Year’s Financial Fast

Worried about all the extra spending you did this past holiday season? While those around you are probably setting new year’s resolutions and going on strict food diets, have you ever thought about going on a financial fitness diet? By embarking on a financial fast – even for just a few weeks, you’ll build your savings back up, see if there are any areas in your budget you need to tighten up in the new year, and learn to be happy with what you have without going overboard on spending.

What exactly is a financial fast? It’s a period of time you’ll set for yourself in advance, to not spend any money other than on necessities. The fast can be a week or two, a month, or more – if you have the discipline to do it. In order to be successful, here are a few tips for staying on course.

What defines a necessity?

This might be the hardest part of a financial fast. A necessity is an actual “need,” something you really can’t live without. Groceries would certainly be defined as a necessity or medication, whereas buying coffee daily from your favorite local coffee shop on the way to work or going out to dinner with friends is a “nice to have,” but not a “need.”  Define your necessities in advance of beginning your financial fast and don’t let yourself stray off course.

Plan in advance.

Think about how long you’d like to go on this financial diet. Say you decide to financially fast for a month. You will need to plan ahead to see what things may come up in that month that you’ll need to prepare for.  Do any family members have birthdays in that month where you’d need to purchase a gift, do you have kids who may be attending a party and once again you’ll need to buy a gift, or are there any other upcoming events you have already RSVP’d to? You’ll need to plan ahead to be successful on this one. For any of the parties, can you bring a homemade gift or gift an experience? If not, you can still commit to trying to buy a less expensive gift in advance of your financial fast.

Pay only with cash.

Using a card to pay for items is easy – almost too easy. When you’re on your financial fast, leave the credit and debit cards at home and only pay for things with cash. A card makes it too tempting to keep spending. When you actually have to pay with physical money and see it disappearing from your wallet, that will have more of an impact on you and you’ll be likely to spend less.

Don’t get tempted.

While on your financial fast, try to stay out of places like the mall or other stores where you typically shop. You might even want to temporarily unsubscribe from advertising emails, and avoid viewing ads on TV or on social media. Try to escape from being tempted, and stick to your financial fast.

While it may be difficult in the beginning, after a short time on a financial fast – you’ll most likely see very quickly what some of your problem spending areas were. However, moving forward you’ll be able to pinpoint them, know what might be a temptation for you and how you can avoid it, as well as recognize the importance of setting a budget and sticking to it. You can do it!

Article Source: Emily Birken for Moneyning.com