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

Personal Finance Tips for the New Year

A new year just started – be sure to review the following to make sure you are financially set up for the next twelve months!

Review Your Beneficiaries

Make any needed updates to the beneficiary portion of your bank and retirement accounts, life insurance policies, IRA accounts, and so on. Choosing a beneficiary for your life insurance policy is important because your beneficiary will be the person(s) your accounts and policies will be payable to upon your death. Have you gotten married or had a child within the last year? This is also something to keep in mind when selecting a beneficiary and deciding if you need to make any changes this year.

It’s also a good idea to name a secondary beneficiary in case your primary beneficiary passes away. Review beneficiaries for all of your accounts annually. January is the perfect month to do so.

Check Your Tax Withholdings

It’s a good idea to review your W-4 form each year. If you remember from last year, it was the first year tax filers did their tax returns under the country’s new legislation. Was your tax return last year smaller than what you were used to in the past? Did you owe money on your taxes? If so, be sure to consult with your tax professional, put some money aside in savings, and review your withholding amount to see if anything should be adjusted.

Go Over Your Insurance Policies

You should also review your insurance policies on an annual basis: health insurance, life insurance, homeowners insurance, and auto insurance. You will want to review each policy to ensure you aren’t paying too much and that you have the right coverage. In looking at your homeowner’s insurance – do you have any newer bigger ticket items over the last twelve months that were not included in the previous year’s policy? If so, be sure to include them as you are reviewing for the new year ahead.

Look at Your Emergency Savings

Hopefully you have an emergency savings account with at least 3-6 months’ worth of savings in it that you don’t touch. If not, make it your new year’s resolution to start one ASAP! An unexpected accident or emergency can really set you back financially, so even if you are only contributing a small amount per paycheck – it’s important to have that back up bank account should you ever need it.

Contribute to a College Savings Fund

If you have children, are you contributing to a college savings fund to prepare for their future? A college education is not inexpensive these days, but there are some tax-advantaged products you can look into that will help you save over time.

Be sure to speak to your financial advisor, or if you are local to Monmouth and Ocean Counties in NJ – make an appointment with one of ours located within our Investment & Retirement Center. Our financial advisors would be happy to discuss 529 plan options with you at any time.*

Financially Plan for the New Year

It’s a brand new year with lots of blank pages – be sure to get a family savings plan in place, think about if you can afford to travel this year in January, or if your family will be celebrating any upcoming milestones this year. If so, think about opening a special savings account and automatically transferring funds from your paychecks into that account to save up for the year ahead.

Get started with a special savings account at First Financial, we are happy to help our members achieve their financial goals and dreams – and get off on the right foot in the new year!**

Article Source: Securian.com

 *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.

**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. 

3 Ways to Recover From a Blown Holiday Budget

Now that the holiday season has come to a close, you are probably looking at your bank statements and credit card bills with wide eyes.

So, what can you do to get yourself back on track financially after the holidays? Here are three helpful tips to set your budget straight.

Sell, Sell, and Keep Selling

Declutter your house and see what you can sell. It’s one of the easiest ways to get rid of extra things you no longer use, plus make some cash after spending during the holiday season.

  1. First, find out which big items you can sell and then list those on sites like Craigslist, Facebook Marketplace, or various selling apps (Let go, etc.)
  2. Next, look through your closets for brand name clothing that can be sold on eBay, or apps like Poshmark and Mercari. This can really add up. As you go through your closet, snap pictures of the items you are planning to sell on your smartphone and upload them to the above mentioned apps. See how you do – if your items don’t sell in a few weeks, then put them aside to sell at your yearly yard sale in the warmer weather or make a local clothing bin donation.
  3. Lastly, request a bag from Thredup.com or Kindermint.com and pack them with clothes that your family doesn’t need. Most of the items that don’t sell in steps 1 and 2, will be hand-me-downs or 50-cent-finds, so after awhile if nothing is selling and you only get a couple dollars for your items – you are still coming out ahead.

Don’t Spend Money in January

Have you ever tried a month without spending money? The idea is that you cut unnecessary spending (eating out, home décor buys, clothes, and so on), and eat out of your pantry, fridge, and freezer for the entire month.

You are permitted to give yourself $20-40 a week to spend on milk, eggs, bread, and fruit/vegetables at the grocery store – but that’s it!

This is a great time to use up any food items that you may have around but forgot about. Plus, an extra $300 or more would be nice to put toward any credit card debt, or replenish your savings account – right?

Earn Additional Income

Does your job allow you to add overtime or do freelance work? If so, take advantage in January and February to help you pay down those holiday bills.

Be creative. Perhaps you can ask your employer for overtime opportunities, or take on a small baby/pet-sitting position. Even renting out your home or car, can produce extra income if you have the means to do so and live/commute another way.

Recovering from high spending like the holiday season can be tough, but with these steps you can overcome that blown budget relatively quickly and start off the new year on a better financial path.

Article Source:  Ashley Eneriz for Moneyning.com

The Rising Cost of Healthcare

It’s open enrollment season, and most of us are thinking about the best healthcare option for us going into the new year. Only one thing is certain when it comes to healthcare: the cost for us to stay healthy is constantly increasing. When it comes time to choose a plan, there are multiple factors to consider so you can budget wisely.

Choose your plans based on more than the premium. 

People often select their healthcare plan based on the monthly fee they will pay for coverage. However, when you choose a plan based solely on this component, you could end up paying more in the long run. There are several other factors to consider when choosing a healthcare plan that will fit your health as well as your financial needs. Factors include:

  • Co-payment (the flat dollar amount you pay when you need care)
  • Deductible (the amount you must pay before the insurance begins to pay)
  • Co-insurance (the percentage of permitted charges for covered services that you’re required to pay)
  • Maximum out-of-pocket costs (the maximum amount you will pay for healthcare services).

Take your previous health history into account. 

You can’t predict the exact amount of insurance you or your family will need. However, you can take your past medical history and family medical history into account when you’re selecting a plan.
By taking these factors into account, you should be able to get a ballpark idea of the amount of coverage you’ll need, barring no serious medical emergencies.

Choose wisely. 

When you’ve signed on for healthcare coverage and the open enrollment period passes, you aren’t able to change your plan during the year unless you experience a big life event. Healthcare.gov describes a big life event as marriage, having a baby, or losing your other healthcare coverage. If you experience one of those situations, you can typically amend your plan outside of open enrollment. Because of this, it’s important to choose a plan that works best for your health as well as your budget.

Plan ahead.

While healthcare coverage can be good to have when it comes to covering medical expenses, it never hurts to have extra funds. Before an unexpected medical expense arises, plan ahead and set aside some money every month in a savings account. Anything you can stow away for a rainy day will be helpful when the time comes to use those extra funds.

First Financial is here to help. Talk to one of our Member Service Representatives today about setting up a special savings account and be prepared for the unexpected.**
Like most things in life, there’s no one-size-fits-all health insurance plan. You have to choose the best one for you and your budget.

*This blog was written for financial purposes only, and not written by a healthcare professional. This article should not be taken as medical advice.

**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. 

3 Steps to Reduce Your Impulse Spending

It can be tough to resist spending money. When you see something you want, especially when it’s at a price you like – it can be difficult to keep from making the purchase. With the way the internet and our smartphone apps have made it so easy to shop, the solution isn’t as simple as just avoiding the stores. If you’ve got an itch for shopping, here are three steps you can take to help you get back in control of your finances.

Take your time: During an impulse buy, for the most part – the whole process from finding the item to paying for it only takes a few minutes. Next time you’re about to hit the “buy now” button, slow down. Put the item in your online shopping cart, but wait before completing the transaction. Try not to buy anything the day you add it to your online cart. Let it sit and think – do you really need this item?

Think it over: If you’re still thinking about that item after sleeping on it, go back into your online shopping cart. In your cart you’ll be able to see the total price (including taxes and shipping), and decide for yourself if the item is really worth that total cost. At this point, look around some more online and try to find a better deal, but still – don’t buy the item (yet). After you’ve done all your research, put the item on your wish list or save it for later.

Be ready: You’ve thought about your purchase for days now, and you know you’re going to buy the item. You’ve done the research and you’ve found the lowest price. Do you have the money to make the purchase in your checking account? If the answer is yes, then go ahead and complete the transaction. If you don’t have the money now, save and start the process over when you’ve saved up enough to buy it without going into debt.

These same steps work for in store impulse purchases too. If you see something you’d like to buy when physically in the store – think about it for a day. The next day do some comparison shopping to make sure you are getting the best price. Still want the item on the 3rd day and you have shopped around and have the money to buy it? Head back to the store and make your purchase.

It pays (literally), to be a savvy shopper and reduce your impulse purchases!

Article Source: John Pettit for CUInsight.com

How to Create an Easy to Follow Budget

Are you the type of person that when you see something you like, you just buy it? It really is important to plan for the future and really take hold of your finances. If you or someone you know doesn’t budget well, here are a few easy ways to get started.

Housing: This category will most likely be the largest portion of your budget. If you’re a homeowner, along with the mortgage, insurance, and property taxes – make sure you include necessary utilities (gas, sewer, electric, etc.), and some extra cash for any emergency repairs. If you’re renting, you’ll still have to budget for your monthly rent and any utilities.

Transportation: When it comes to transportation, there’s a lot more than just your monthly car payment. Gas, insurance, and preventative maintenance such as oil changes – should also be included within your budget. This is another area where it’s a good idea to save some extra cash for any repairs you may not see coming. Planning ahead will help keep your car on the road, which will also keep money in your pocket.

Life: This budget category will cover a lot (think food, health insurance, medical, clothing, entertainment, wireless, tuition, childcare, etc.). All of these items will add up to a sizable portion of your budget. You may need to separate some into their own category and monitor them.

Debt and Savings: This final category is one of the most important. Saving money for your future (401k, Roth IRA) is something you want to make sure you’re doing every month. The earlier you start, the better. You’ll be surprised at how a little each month can add up over time when you make use of compound interest. Also, make sure you’re steadily paying down any debt you have – so you can enjoy your financial freedom.

Need help setting up a budget? Check out our budgeting guide.

Article Source: John Pettit for CUInsight.com