10 Life Events That Require Financial Planning

Sometimes even the best events in life – a birth, new job or dream relocation, need a financial plan. They might require more insurance coverage, a new budget, or guidance from a financial advisor. Here are 10 life events that should inspire you to do some financial planning:

1. The opportunity to buy a vacation home.

Summer rental homes can represent bliss, that great escape you have every year. Summer homes are often bought as emotions rise at the end of the season. But purchasing a vacation home can be a complicated long-term commitment. A financial planner, not a real estate agent, can tell you what to consider.

2. You got that big raise you’ve been counting on for years.

Pay raises are typically small and incremental, so getting a big raise is cause for celebration. They also mean it’s time to do some financial planning to determine how much you should be saving for the future, too. It might be time to bump up your retirement savings. Talk with your financial advisor ASAP!

3. Wedding bells are ringing, finally.

Couples might be marrying later these days than they used to. So when they finally do tie the knot, combining finances can be even more complicated. Prenups might be a buzzkill, but they can help protect each person’s savings and prevent any misunderstandings. They are especially important if either member of the couple is bringing children into the marriage.

4. You got your diploma.

Graduates might not think they have enough money to talk to a financial planner, but they face key money choices as they start repaying their share of the overall $1 trillion in college debt with “starter” jobs. They could certainly use help prioritizing payments for credit cards and student loans.

5. You’re relocating.

The 50 states can be as different as moving to another country. Tax rates differ and cost of living can shift dramatically. There are scores of moving-related expenses too. Make sure you do your homework and are prepared.

6. You just got an inheritance.

Baby boomers stand to inherit significant wealth in the coming years, and receiving lump sums also carries with it financial responsibility. It can raise questions about spending habits, charitable contributions, tax payments and a multitude of other concerns. You might want to get help from a professional as you figure out how to handle this money.

7. You’re expecting a new arrival in the family.

When a baby arrives, life inevitably gets way more complicated. It could be worth it to factor in some financial planning alongside baby naming or stroller shopping. You might want to open a 529 savings account (for future college), as well as take out additional life insurance policies.

8. You got your first real job.

Your college grad may act like they just want to have fun, but they often need guidance during this key life transition. Consider sending your child to a financial planner before they enter the workforce.

9. You get offered a generous severance package.

Emotions often run high when your employer offers a big severance package. It’s important to understand the complex financial issues associated with severance packages. You want to make sure you understand all the fine print before you sign on the dotted line.

10. You retire.

Retirement is considered the pivotal financial moment in a person’s life. If you haven’t already worked with a financial planner to figure out your plans and budget, then now is the time. In fact, financial advisors urge even clients in their 20s and 30s to start planning for this major life transition, to make sure they’re saving enough during their peak earning years. It’s also a good time to reflect upon what you’d like to do with your retirement. Get started by reviewing our retirement planning guide.

To set up a complimentary consultation with the Investment & Retirement Center located at First Financial Federal Credit Union to discuss your savings goals with a Financial Advisor, contact us at 732.312.1500 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.

Article source: U.S. News Staff for money.usnews.com

 

3 Things You Should Do With Extra Money ASAP

According to a recent report by CareerBuilder, 78% of Americans who work full-time live paycheck to paycheck. Thinking about the long term is hard, especially when it comes to finances, but life does get easier the earlier you start laying the foundation for good financial habits. Whether you have $100 or $1000 to spare every month, investing extra funds wisely can have a significant impact on your financial future.

1. Pay Off Your Debt

First and foremost, consider putting part or all of your extra income every month toward paying off your debt. Being in any kind of debt can definitely loom heavily over your life and finances. Instead of spending any extra cash, it’s smart to chip away at that mountain to become debt-free. You should start with your highest interest debt first and work your way down, though some people find more motivation to tackle their debt by focusing on paying the smaller debts first.

2. Put it in Your Emergency Fund

Having an emergency fund is not just a smart idea, it’s a necessity. Life is unexpected and you never know what can happen. Having an emergency fund can help you in life’s hardest situations, such as a car accident or the loss of a job. Begin putting money toward an emergency fund, any little bit helps. It’s ideal to have six months of expenses saved up just in case.

3. Invest in Your Retirement

After you’ve paid off your debt and put money in your emergency fund, it’s now time to think about the future – which means retirement. While it’s still years or maybe decades away, saving for retirement as early as possible means you reap more rewards later. And that can start with a 401k. Surprisingly, many full-time workers are unaware that their employers may match up to a percentage of your contribution to the company’s 401k plan. Find out what your company’s policy is and get started with contributing to your retirement as soon as possible.

A Roth IRA is another popular retirement savings account that allows your money to grow tax-free. When you’re ready to withdraw at retirement, you do not pay taxes on these funds. If you’re under the age of 50, the most you can contribute to a Roth IRA is $5,500 yearly. This basically means that those who have earned income, can put in just over $458 monthly to reap the most benefits in their retirement future.

If you have extra income at the end of every month, start with these three steps. It will set up a healthy financial foundation for you and your family. Going forward if you still have money leftover after that, you might want to start looking into investments or perhaps spending a bit on yourself.

Need help with retirement planning? To set up a complimentary consultation with the Investment & Retirement Center located at First Financial Federal Credit Union to discuss your savings goals, email mary.laferriere@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.

Article Source: Connie Mei for moneyning.com

 

How to Financially Prepare for a New Baby

A baby on the way is a very exciting time for any family. Whether you’re new parents or adding to your growing family, preparing for your new arrival can feel overwhelming. One of your biggest concerns is probably your finances. According to Parenting.com, the average middle class family will spend $12,000 on child-related expenses in the baby’s first year of life. That’s not a small chunk of change. So how do you prepare financially while trying to juggle all the new responsibilities that come with a new baby at the same time?

The earlier you start preparing, the better you’ll be able to set up for your baby’s future. Before your baby’s arrival, take a look at this checklist on easy things you can do to financially prepare now:

Redo Your Budget

With the arrival of your new bundle of joy, life as you know it will probably never be the same again. The same goes for your budget. It’s time to review and redo your budget, as baby expenses will now take up a large portion of your spending. Do your research and understand how much baby items really cost. From food to diapers, it’s probably more expensive than you think. You should also make a shopping list of everything you need once the baby arrives. Once you have an estimate, figure out how you can scale back your budget. Obvious areas to cut back on are entertainment and dining out (as new parents, you probably won’t have time for that anyway!).

Understand Your Health Insurance

One of the biggest costs to a new baby are medical costs. Not only does your baby need healthcare, which is especially crucial in his/her first year, but labor and delivery costs can be significant also. Well before your expected due date, take some time to understand your health insurance. Be sure to understand what is covered and what you will be paying for out-of-pocket. Also, once your child is born, make sure to add him/her to your own policy. Most health plans require you to do this within 30-60 days. Also consider choosing a pediatrician that is within your network to limit costs.

Shop Wisely for Baby Items

There are so many cute baby items on the market that you’ll probably want to spend a small fortune on. Try to prevent that from happening though. Yes, you’ll want to spoil your baby and that’s totally fine, but keep in mind that babies grow into toddlers very quickly. That also means they’ll grow out of those expensive clothes and toys you bought quickly, as well. There are a few items worth the cost, but learn to shop wisely for baby items and spend where it makes the most sense, like gear and food.

Plan for Childcare

Most companies in the United States offer new mothers 3 months of maternity leave and much less for dads. Eventually, you’ll have to go back to work and think about childcare. Having the help of grandparents or other friends and family will save you a ton, but if not – make sure to plan for childcare expenses financially and well ahead of time. You will also want to interview nannies or visit daycare centers to make sure you find the right fit for your family.

Start Thinking About College

Lastly, it’s never too early to start thinking about college. It may be 18 years away, but it’s also a huge expense so you want to start preparing for it now. You should start putting away money for your child’s education as soon as possible. Consider putting your money into a 529 college savings plan, where earnings will grow tax-free and won’t be taxed when taken out to pay for college.

Need help with a college savings plan? To set up a complimentary consultation with the Investment & Retirement Center located at First Financial Federal Credit Union to discuss your savings goals, email mary.laferriere@cunamutual.com or stop in to see us!*

Your finances will change drastically with a baby on the way, but you’ll be able to worry less and spend more quality time with your little one – with the right planning and preparing.

*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.

Article Source: Connie Mei for moneyning.com

Congrats Graduate! 4 Things to Do with Your Gift Money

Cash tops the list of popular graduation gifts year in and year out. If it’s your turn to don a cap and gown this year, congratulations – you probably pocketed a significant amount of change along with your achievement. So, what are you going to do with it?

Since we tend to view graduation gifts as a form of “extra” money (a psychological money trap known as mental accounting), it can be tempting to quickly reach for that wish list. Before you do though, consider these four ways you can use it to both celebrate your achievement and give yourself a better financial foundation for the future.

1. Celebrate the present.

You’ve achieved something important, so go ahead — spend some of that money on yourself, any way you’d like. Instead of blowing the whole sum, financial advisors recommend setting aside about 10% for yourself. If your cash gifts totaled the $1000, that still gives you $100 to spend on clothes, electronics, entertainment – whatever.

2. Invest in your future.

With the other 90%, one good choice is to invest in tools that will help you succeed in your next life steps. If you are jumping into a high tech job, maybe you’d like a new laptop or specialized software you could use to make work life more efficient.

There are also other practical needs like expensive furniture and household goods if you are moving out. Although the return can be harder to quantify, putting some of your graduation gift money toward these expenses is an investment in yourself.

3. Save for the future.

Graduation cash doesn’t have to burn a hole in your pocket – it’s okay if you don’t have a plan for it right away. In fact, saving it is a very good plan. If you’re already on a budget or would like to start, treat your graduation money like income and apply the 50/20/30 rule. Savings is the 20%, so calculate this much and set it aside.

Although you can certainly save for the future in terms of life after high school or college, you may need to first focus on shorter-term needs like living expenses. One of the best places to save your cash is in a separate savings account (or an account you won’t be using for daily purchases). Since you won’t see or use this money all the time, you’ll feel less tempted to spend the funds on impulse purchases.

4. Invest for your future.

Investing in your future is important, but so is investing for your future. For young investors, many financial advisors recommend mutual funds with low-cost index funds. The key is to choose an option that doesn’t require extensive management, knowledge, or risk, especially when you’re just getting started.

The amount you invest isn’t so important; after all, your money and your salary will grow for decades to come. They key is to start learning the ins and outs of investing. Not only will this give you another, potentially more profitable savings channel, you’ll learn solid investment management skills that will set you up for the future when you need to properly allocate the wealth you will accumulate for the rest of your life.

Questions about 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 732.312.1500 or stop in to see us!*

Regardless of how little or much your graduation cash amounts to, determine to enjoy a little, save a little, invest in yourself, and plan for the future. The way you choose to use this money can set a trend of how you’ll manage your money for years to come, so let it be a good one!

*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.

Article Source: Jessica Sommerfield for moneyning.com

 

3 Ways to be Financially Responsible with Your Tax Return

Here are some smart ways to spend your tax refund this year:

Pay down your debt. This may be the smartest choice when deciding what to do with your refund. Decreasing your debt helps alleviate the interest you’re paying, which will be a huge weight off your wallet and credit score. Debt can feel like a mountain, so use this opportunity to start digging yourself out from under it.

Put it into retirement. If you’re not steadily adding funds to your retirement account (401k, Roth IRA), you’re doing yourself a disservice. Even if you’re young and it doesn’t seem that important right now, you’ll be 65 before you know it.

Need help with retirement planning? 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 732.312.1500, or stop in to see us!*

Build up an emergency fund. If you’re doing a good job of saving for retirement, congratulations. But you may get yourself into trouble if that’s all you’re saving. Take this opportunity to use your tax return to create an emergency fund in case things go south (you lose your job, car dies, etc).

*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.

Article Source: John Pettit for CUInsight.com

Is this the Year You Keep Your New Year’s Resolution?

Now that the new year is officially here, many of us are coming to grips with a familiar, frustrating truth: there’s a big difference between making a new year’s resolution and keeping one. The good news is that we’re not alone. It’s estimated that approximately 40% of Americans make resolutions when the new year rolls around, but only 8% are successful in keeping them. Making a resolution only takes a moment of inspiration, keeping it calls for consistent dedication.

With the abundance of self-help books, podcasts, and seminars at our disposal, it’s easy to get tossed around on the latest and greatest informational waves. Too often, we jump from one fad to the next, spending substantial energy without moving closer to our end goal. It’s tempting to confuse activity with productivity. That makes it even more important to know the difference between the two. If you want to join the 8% of people who successfully stick to their resolution, you have to work smarter – not harder.

Simplify for Success

By limiting the variables in your resolution’s success equation, you can employ principles similar to those that make life hacks so popular. And while mental tricks and efficiency shortcuts aren’t substitutes for perseverance, they can help you avoid overthinking a problem or wasting time on unproductive practices.

As you work toward your resolutions, focusing on the following three aspects of each goal can help simplify your planning and streamline your pursuit.

1. Psychological

When the American Psychological Association weighs in on new year’s resolutions, it’s a good idea to hear them out. In an article on their website, the APA recommends a sensible approach that involves breaking large goals into smaller, attainable action steps. Following this recommendation increases the opportunities to tally some quick wins, and the psychological benefits of early success are invaluable to long-term achievement.

Example: If you want to build up an emergency fund of $1000, aim for saving $20 a week. It’s not as overwhelming, and over the course of the year, you get 52 chances to celebrate!

2. Physical 

Even if your resolution isn’t physical in nature (i.e. – lose weight, get in shape, run a marathon, etc.), it may be a good idea to incorporate some physical activity anyway. On the Harvard Health Blog, Heidi Goldman shares that exercise can help wire the brain in a way that protects memory and critical thinking skills. Considering the fact that “I forgot” and “I just can’t figure it out” are common excuses for breaking a resolution, improved clarity and brain function sounds pretty helpful.

Example: You resolve that 2018 is the year you finally learn to speak Italian. A 30-minute walk each day offers an excellent opportunity to practice your new vocabulary, and the cardiovascular exercise encourages the growth of new blood vessels in the brain, which can improve your brain’s ability to learn and retain new information.

3. Personal

In a previous post, we discussed the need for accountability. Here’s where the rubber meets the road. Recruiting someone to hold you accountable makes the resolution a little more personal because it involves a risk of social capital. The key is finding someone who knows you well enough to challenge you, but cares for you enough to encourage you as well.

Example: Let’s say you resolve to pay off credit card debt this year and you ask your best friend to hold you accountable. When you pull out a credit card to pay for dinner, your friend can offer a good-natured reminder that putting your meal on credit isn’t helping you reach your goal—the kind of reminder you’d easily brush off if it came from a stranger.

Just because the concept of keeping a new year’s resolution is simple doesn’t mean the process is easy. But if something mattered enough to inspire a resolution in the first place, it’s important enough work towards throughout the year. If you stick with it, you’ll probably find that the satisfaction that comes from accomplishing a goal is often more rewarding than reaching the goal itself.