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.

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

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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