Saving May be Tough but Here’s How to Get a Handle on It

saveGetting on top of your finances can be a tough task. On paper the idea sounds simple, but in real life, it’s easier said than done.

By the time you pay down your consumer debt, put a dent in student loans, pay off your mortgage, and put extra money away for your children’s college fund and not to mention your own retirement, the list of demands for your savings is long! Online tools and advice from financial advisors suggest we can make it work but we need to rethink our approach and strategy. Here are some ideas to help you manage your savings goals:

Get real. If retirement sounds far away and “a rainy day fund” sounds kind of depressing, it’s time to rename these goals. For short-term savings objectives, identify what you want to buy and decide whether it’s important for you to finally take that dream vacation you’ve always wanted, or send your kids to college. The same extends to retirement. What does retirement look like to you: a vacation house, writing a book, or doing volunteer work? Visualize it then put a picture on your fridge so you can actually see it. It’s recommended that you should identify how much money you want to have put away at various ages in your life. Sixty-five may be hard to visualize, but goals targeted to ages 30, 40, and 50 will shorten your timeframes, making them more measurable and do-able.

Get started. The decision to save is based on a cumulative series of well thought out choices. You tell yourself you’ll save tomorrow and tomorrow never comes. If you don’t save one month it’s not terrible, but a series of those choices over your lifetime has consequences. Starting early really pays off and online tools and calculators will make the concept more real and easy for you.

Make savings planning a family affair. Providing an inheritance to your children is also about passing down values. The money tips we teach our children can be beneficial or crippling, even when we say we want our children to be financially educated to manage their finances in the future. Don’t be afraid of having money conversations as a family and talk to your kids about savings goals, spending and savings trade-offs, and even higher-level concepts such as inflation and investing, keeps everyone budget conscious.

Put your savings on autopilot. Did you know that you’re losing out on a lot of money when you don’t contribute the maximum allowable amount to your retirement plan? By committing to increase your 401(k) contribution by a percentage equal to your yearly raise will help you grow your pre-tax dollars before the money even gets distributed. Putting a stop to your daily temptations is also important – avoid going to the mall, only carry a small amount of cash in your wallet or simply leave your credit cards at home to cut back on your spending habits.

Hold your feet to the fire. When you’re spending money, ask yourself if this is a need or a want? Making this a habit enables you to keep track of your purchases and helps analyze your spending. It’s a good idea to make your own consequences when you fail to abide by your commitments – so bet on yourself. For example, if eating out has put a huge dent in your wallet, say out loud that you’ll limit yourself to two dinners out a week for the next month and then stick to your plan!

Go social. Sharing money-saving ideas or picking up tips from free sites like Mint.com and Moneyning can help make the topic of finance more enjoyable. Maybe you may want to consider starting a friendly money-saving competition — it holds you responsible, will help you stick to your saving goals and helps take your mind off your struggles.

Here at First Financial, we encourage our members to come in at least once a year for an annual financial check-up – to sit down with a representative at any one of our branches to make sure you are receiving the best value, and products and services based on your financial situation. Give us a call at 732.312.1500 or stop in to see us today!

Click here to view the original article source by Barbara Minnino of Fox Business.

7 Smart Ways to Take Advantage of Your Tax Refund

taxes08Tax season is often a time of stress for many, but it can be a joyful time for the roughly 75 percent of Americans who do receive income tax refunds.

While the refund really means you’re getting back money you loaned to the government at no interest, in practical terms it often means an unexpected infusion of cash into your wallet or bank account. It’s a great problem to have, but what should you do with your windfall?

The best choice for one person may not be the best choice for another. But experts agree on one thing – if you have debt, apply your refund to paying it off, whether it’s credit card debt, student loan debt, or other consumer debt.

If you’re getting a big refund ­– a check in the ballpark of $1,000 or more for taxpayers who don’t have a side business – consider adjusting your withholding so that you’ll have that money available to you during the year.

Here are the seven smartest things you can do with your refund:

Pay down debt. If you have any consumer debt – student loans, credit card balances or installment loans – pay those off before using your refund for any other purpose. Car payments and mortgages aren’t in this category, but you can also consider paying extra on your principal.

Add to your savings. Can you really ever save enough? You can use the money to build up your emergency savings, your kids’ college fund, or put it toward a specific goal, such as buying a house or a car, or financing a big vacation you’ve been dreaming about taking.

Add to your retirement accounts. If you put $2,500 from this year’s tax refund into an IRA, it would grow to $8,500 in 25 years, even at a modest 5 percent rate of return, TurboTax calculates. If you saved $2,500 every year for 25 years, you’d end up with more than $130,000 at that same 5 percent rate of return!

Invest in yourself. This could mean taking a class in investing, studying something that interests you, or even taking a big trip. Think about doing something that might add value to your life, such as taking a photography class or purchasing a special camera that could become a new hobby and potentially a side business in the future.

Improve your home. Consider putting your refund to good use by adding insulation, replacing old windows and doors, or other improvements that are more energy efficient. Or perhaps it’s time to remodel your bathroom or kitchen. You’re adding value to your home, and at the same time you’re improving your living experience too.

Apply your refund toward next year’s taxes. This is common among self-employed taxpayers, who are required to pay quarterly taxes since they don’t have taxes withheld. By applying any overpayment toward upcoming tax payments, you can free up other cash.

Splurge on something you’ve always wanted to do. If you’re out of debt and have substantial savings, this may be the time to take the cruise to Europe or trip to Thailand that you’ve always dreamed of taking. Such an experience can be life-changing, and you never know what impact it will have on your future until you actually do it.

Article Source: Teresa Mears for US News, http://money.usnews.com/money/personal-finance/articles/2014/03/28/7-smart-ways-to-take-advantage-of-your-tax-refund

9 Ways to Simplify Your Finances Now

simpify financesIf managing personal financial affairs were easy, we probably wouldn’t graduate nearly 70,000 accountants each year. Budgets, credit cards, insurance, retirement savings and more—it’s a lot to track, and things are getting more complex all the time.

A lot of people are losing the battle. One in three adults who say their finances have taken a turn for the worse also say their finances have grown more complex, according to a survey from Aite Group. Likewise, 43% of those who say their finances have improved also say their finances have grown less complex.

Simple is good. It’s understandable. It’s manageable. It doesn’t eat up a lot of time. It breeds confidence and makes tough decisions easier. “The financial frenzy people experience comes from being disconnected from their personal income,” says Melody Juge, managing director at Life Income Management.

Some things can’t be made simple. Income tax filing comes to mind, at least for some people. So do retirement account distributions. You can’t know how long you’ll live. But other things don’t have to be so difficult. Maybe you can get control of your money with a few simple tricks. Here are nine ways most Americans can simplify their personal finances:

  • Get down to one mutual fund. You’ll get great asset allocation and solid diversification within asset groups with just one target-date mutual fund. These are the fastest growing corner of the retirement savings world precisely because they are so simple. Choose a target-date fund for the year you turn 65 or 70, put all your retirement savings in it and go about the rest of your life knowing you have professional management and an asset allocation that will become more conservative as you age. Of course, there are drawbacks and you’ll have to look out for expenses when you choose. But investing for the long haul has never been simpler.

Questions about retirement savings or investments?  If you would like to set up a no-cost consultation with the Investment & Retirement Center located at First Financial Federal Credit Union to discuss your brokerage, investments, and/or savings goals, contact us at 732.312.1500 or stop in to see us!*

  • Keep two credit cards. You will save a bundle in annual fees and rid yourself of umpteen bills and solicitations. Use one card for monthly spending and the other only when you must carry a balance. Keep cards with the lowest interest rates or annual fees, or those that offer useful rewards.
  • Pay bills online. Most financial institutions offer an online bill pay service for no charge. Stamps, envelopes and physical checks are an obsolete expense. You’ll save time too. But best of all, your bank or credit union will automatically keep track of what you spend and where you spend it for easy review, which makes budgeting a lot simpler.
  • Choose one financial institution. You can probably get everything you need in one place. Stick with one. You’ll not only get better service, but cut down on monthly statements and get a better picture of your overall finances.
  • Automate everything. Arrange for direct deposit of your paycheck to eliminate constant car trips to your financial institution. Arrange for regular payroll or bank account debits to your retirement account — and for automatic increases in the amount as you get pay raises — to keep savings on track. Arrange automatic monthly payments via your online bill pay system to creditors to cover the minimum due and avoid late fees.
  • Get overdraft protection. Link your checking account to your savings account to avoid the cost and hassle of overdrawing your account.
  • Create an emergency fund. The goal is to set aside six months of living expenses to guard against unexpected expenses that derail your plans. But don’t let what may seem a large sum deter you. Start with $500, which is enough to cover the cost of most minor household emergencies. Add $100 a month until you reach your goal.
  • Pay yourself first. You should be saving at least 10% of what you make every month. Write that check first and budget to live off of what’s left.
  • Get organized through new technologies. Account aggregation through your financial institution or a service like Mint.com will allow you to view all your accounts in one place, says Linda Sherry, national priorities director at Consumer Action. She also recommends using a password manager like 1password or Dashlane to simplify your online transactions from any device, and setting up a folder in email for increasingly common online account statements.

*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. Nondeposit 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: http://business.time.com/2013/09/20/9-ways-to-simplify-your-finances-now/

Budget Tips for Planning for Life’s Unexpected Curve Balls

couple-worry-moneyLife doesn’t always go as planned, and many of life’s major events, like getting married, having a baby and buying a home can crowd your savings capability and even throw you into a financial tailspin.

When it comes to making ends meet, retirement is often left out of the savings equation. Eighty-four percent of people say saving for retirement has been undercut by a life event, according to this year’s HSBC Future of Retirement survey of more than 15,000 people. But people react differently when in crunch mode, the survey says, and in some cases, extreme measures are required to cover budget needs. Three tactics improve cash flow in a financial crunch: increase income, decrease expenses or a combination of both.

Time to Downsize?

In reality, you have more control on your spending side, particularly with flexible expenses like travel, entertainment, gifts and food. But if your financial woes seem irreversible, you may have to take a hammer to large expenses like housing.

In fact, 21% of women surveyed say they would downsize, compared to only 14% of men. And 31% of men say they would dip into their retirement savings to cover unexpected expenses.

Though experts concede downsizing may be extremely emotional, it’s more preferable than taking a chunk out of retirement savings. Actually, 29% of respondents say the financial strain of home ownership puts a real crimp in retirement savings.

If you have any questions about the home buying process, feel free to ask us! We know it can be an intimidating process at times, and we’re here for you. To apply for a 10, 15, or 30 year First Financial Mortgage – click here.* 

Rethink Your Lifestyle.

Today’s lifestyle norms may have something to do with one-dimensional thinking. Items once seen as luxuries are now seen as necessities, says Ravi Dhar, director of the Yale Center for Customer Insights.

Plus, what people do with their money has more to do with psychological and emotional issues than it does with crunching the numbers, claims Marcee Yager, a retired certified financial planner. “It’s never just about the money.”

Because non-financial issues often dictate financial decisions and create a domino effect, consumers need to look at both quantitative (intellectual) and qualitative (emotional) issues when making life choices, says Yager. “Without shared thinking, people’s heads start spinning.”

The idea that emotional understanding must be factored into financial decisions has gained very little traction, claims Yager. “Big investment banks don’t tend to make things soft and fuzzy.”

Dhar even questions the effectiveness of some system resources like the many online investment tools available to consumers. Calculators project four, six, or eight million dollar targets for a retirement 30 years into the future. He says the timeframe seems intangible and the goals unattainable.

For consumers looking to navigate their way out or steer clear of the financial weeds, experts offer the following:

Take small steps to wealth. The only way to build up reserves is to do it gradually. Budget a realistic portion of your paycheck to start an emergency fund or return to the basics. “The best thing people raising families can do is go back to the old traditional practice of putting money in an envelope or a cookie jar,” adds Yager.

Be flexible. Think about what’s possible to mitigate a tight financial situation. Baby boomers tend to be fearful of change, particularly of moving to unknown places, says Yager. In fact, new locales both in and outside of U.S. borders can create wonderful opportunities that improve your quality of life.

Keep a minimum three-month reserve for savings. Learn to cut corners, live on less and shop in cheaper places.

Write it down. Take a financial fitness quiz then put your pencil to paper. You need to see the numbers then monitor your day-to-day situation.

First Financial also hosts free credit management and debt reduction seminars throughout the year, so be sure to check our online event calendar or subscribe to receive upcoming seminar alerts on your mobile phone by texting FFSeminar to 69302.**

Turn to professionals. Reviewing your savings situation and retirement potential with a professional financial advisor can help to ensure that all your future requirements are identified.

If you would like to set up a no-cost consultation with the Investment & Retirement Center located at First Financial Federal Credit Union to discuss your brokerage, investments, and/or savings goals, contact us at 732.312.1500 or stop in to see us!***

Click here to view the article source, from FoxBusiness.com.

*A First Financial membership is required to obtain a mortgage and is open to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties. A First Financial Mortgage is subject to credit approval. See Credit Union for details. **Standard text messaging and data rates may apply.***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. Nondeposit 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.

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How to Talk to Your Aging Parents About Money

adult online educationAre bills piling up on Mom’s kitchen table? Are you worried that Dad might fall prey to a scam?

If so, it’s time to discuss if they need help with their finances. Proceed carefully though, because they may not see things as you do: A 2012 study found that while 24% of adult children think their parents will need a hand with money, 97% of the parents do not.

“Conversations about money with your elderly parents are really about control — something they don’t want to lose,” says David Solie, author of How to Say It to Seniors.

Try these tips:

THE GROUND RULES:

Drop the attitude. An “I-know-better” air isn’t the best approach. “Take care your concern doesn’t come across as if you think their intelligence is diminished,” says Solie.

Avoid saying “you should…” Those two little words are sure to put them on the defensive.

Bring in a third party. “To your Mom and Dad, you will always be a kid — which is why the talk may go better if you deliver it alongside an outside expert,” says Paula Span, author of When the Time Comes.

WHEN YOU’RE FACE TO FACE:

1. Opening line. “Mom, I just read an article with great tips about how to simplify managing your money as you get older. Can I share a few of them?”

The strategy: “Bring yourself into the equation as a helper, not an overseer,” Span says. Framing the advice as someone else’s ideas may make your parents more open to accepting them.

2. Dangle a carrot. “I think we can save you some money on your cable bill, Dad. How about we take a look?”

The strategy: Suggest a small, concrete action with a clear payoff to start. An Allianz survey reveals that 61% of older Americans worry about outliving their money, so helping your parents cut costs is a good first move.

Seeing how beneficial your suggestions can be is likely to make them more receptive to other, more serious forms of help.

3. Keep your warnings indirect. “I know you’re too smart for this, but I want to tell you about this scam I heard about so you can warn your friends.”

The strategy: Being straightforward — “Mom, Dad, you need to watch out for people who ask for your bank account online” — may feel patronizing to your parents. Instead, plant a seed that doesn’t reflect on their competence to manage their affairs, says Colorado elder-law attorney, Catherine Seal.

4. Ask if you can tag along. “My friend’s Dad keeps getting invited to free-lunch retirement seminars. Do you? I’d love to go if you go.”

The strategy: Instead of trying to put the kibosh on a move you know is not smart, stand beside them during the sales pitch, suggests Kim Linder, a caregiver consultant. Then ask tough questions that will push your parents to think before they leap.

5. Use metaphors. “You wouldn’t buy a used car without a mechanic checking under the hood. Same goes for your investments. Let’s have a financial advisor look into this.”

The strategy: “In the second half of life, the right brain becomes the gatekeeper for information,” says Solie. “We respond better to stories and metaphors — the stuff that gives meaning to facts and linear data.”

You may also want to talk to the financial experts available to the members of First Financial Federal Credit Union. To set-up a no-cost consultation with the Investment & Retirement Center located at First Financial, call 732.312.1500.*

*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. Nondeposit 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: http://money.cnn.com/2013/04/01/retirement/parents-money.moneymag/index.html?iid=SF_PF_Lead