8 Foolproof Ways to Grow Your Savings

Money plant over white backgroundA typical emergency fund should contain at least six months’ worth of net income (up to a year is recommended if you have kids or other dependents), and you should only touch it in a true emergency (no, under no circumstances is your dream vacation to Tahiti a true emergency).

Here are five examples of situations that qualify as actual financial emergencies:

  • Emergency 1: You’ve lost your job and need to continue paying rent, bills, and other living expenses.
  • Emergency 2: You have a medical or dental emergency.
  • Emergency 3: Your car breaks down and it is your primary form of transportation.
  • Emergency 4: You have emergency home expenses. For example, your air conditioning unit breaks down in 100-degree weather, your roof is leaking, your basement is flooded (no again, a kitchen in need of redecorating doesn’t count, no matter how much you hate that wallpaper or your “outdated” cabinets).
  • Emergency 5: You have bereavement-related expenses, like travel costs for a family funeral.

Here’s another reason why you should always have money in an emergency fund: If you don’t, and one of these five situations occurs, you’ll most likely be stuck using a credit card to handle it, leading you into (or deeper into) credit card debt. In fact, medical expenses are the leading contributor to credit card debt, with low-to moderate-income households averaging $1,678 in credit card debt due to out-of-pocket medical expenses.

Plus, paying for emergency expenses on your credit card (if you don’t pay off your bill immediately) will end up costing you more over time, when you rack up interest payments as you try to dig yourself out of debt. Having an emergency fund will not only save you more money in the long run, but it will also give you peace of mind in knowing you have the safety net to catch those unexpected curveballs when they arrive.

If getting six months of take-home pay together seems daunting, here are eight useful tips that might better help you boost your emergency savings:

1. Direct Deposit into Your Savings

Think of yourself as a regular monthly bill you have to pay. All you have to do is arrange to have a set amount of money directly deposited from your paycheck into a savings account each month. The savings account is recommended because if you use your checking account, you may be tempted to spend the money you are trying to set aside. It might hurt a bit at first to take home a little less every month, but after awhile you won’t even notice it’s gone. Here’s a moment when the “set it and forget it” strategy works wonders!

2. Never Spend a Bonus Again

It feels great to be rewarded for your hard work. And it feels even better to spend that hard-earned bonus on something you’ll enjoy, like a trip to the Caribbean or a new tablet. At the same time, the pleasure of a vacation or new gadget is short-lived compared to financial security.

So make a pact with yourself to put every bonus you get from here on out to good use. If you direct 90 percent of your bonuses straight into your savings account as a rule, you’ll still have 10 percent to treat yourself with (plus the comfort of knowing that you’re building a well-earned safety net).

3. Cut Unnecessary Costs

This seems like an obvious one — and is easier said than done. Actually, most people spend money on more unnecessary items than they think. So take time to look at where your money is going in detail and begin to cut back. Saving $10 here and $5 there could help you put a lot away in the long run – you’d really be surprised.

4. Open a Seasonal Savings Account

Many financial institutions offer seasonal accounts meant to save for the holidays. These accounts give you reduced access to your accounts, charging a penalty each time you withdraw more than permitted. Since emergencies (hopefully) don’t occur often, a seasonal account could make sure you’re touching it only when needed.

Check out First Financial’s Holiday Savings Club Account – don’t put yourself into debt over holiday spending, save ahead and come out on top (and not in debt)!*

  • Open at any time
  • No minimum balance requirements
  • Dividends are posted annually on balances of $100 or more
  • Accounts automatically renew each year
  • Deposits can be made in person, via mail, payroll deductions, or direct deposit
  • Holiday Club funds are deposited into a First Financial Checking or Base Savings Account

5. Sell Unused Items

Rather than throwing these unused goods away, start selling them, and put that money into your emergency fund. All you need to do is post them to a site like eBay, Craigslist, or Amazon and you can get rid of items from the comfort of your home. You can also take your clothes to a consignment shop to have them sold for you.

6. Stop Spending $5 Bills

Instead of saving your pennies, put aside any $5 bills that come your way. Never spend a $5 bill again, and you’ll be surprised by how quickly this little trick will help you come up with a few hundred dollars to add to an emergency fund.

7. Earn Extra Income

You could pick up odd jobs to help do things for other people, freelance writing/blogging, or babysitting via websites like TaskRabbit.com, DoMyStuff.com, Elance.com, FreelanceSwitch.com, or Sitters.com. Or if you have the time – go out and find an additional part-time job as a cashier, server, or utilize your hidden talents in web design, catering, and so on.

8. Use Cash Back Rewards

If you get a cash-back reward for any spending on your credit card, just make it a rule that those dollars will be dedicated to your emergency fund. It may only add up to $100 extra each year, depending on your spending, but every little bit counts!

Article Source: http://www.dailyfinance.com/2013/12/18/eight-foolproof-ways-grow-your-savings/

*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. Accounts for children age 13 and under are excluded from this program.

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Debit vs Credit Cards: Which is safer to swipe?

holiday-credit-or-debitWhile the tens of millions of Target shoppers who had their credit and debit card information stolen likely won’t be on the hook for any fraudulent transactions that may occur, debit card users could face much bigger headaches than credit card users.

That’s because debit and credit cards are treated differently by consumer protection laws. Under federal law, your personal liability for fraudulent charges on a credit card can’t exceed $50. But if a fraudster uses your debit card, you could be liable for $500 or more, depending on how quickly you report it.

“I know people love their debit cards. But man oh man, they are loaded with holes when it comes to fraud,” said John Ulzheimer, credit expert at CreditSesame.com, a credit management website.

Plus, if someone uses your credit card, the charge is often credited back to your account immediately after it’s reported, Ulzheimer said. Yet, if a crook uses your debit card, not only can they drain your bank account, but it can take up to two weeks for the financial institution to investigate the fraud and reimburse your account.

“In the meantime, you might have to pay your rent, your utilities and other bills,” said Beth Givens, director of the Privacy Rights Clearinghouse. The organization recommends that consumers stick to credit cards as much as possible.

Whichever card you decide to swipe, here are ways to protect yourself from scammers.

Be vigilant with your accounts: The Target hack is just the latest in a long history of data breaches, and it likely won’t be the last.

As a result, you should check your debit and credit account activity at least every few days and keep an eye out for any unfamiliar transactions. If you notice anything fishy, notify your financial instituion or credit card company immediately.

“Waiting until the end of the month to check out your credit card statement for fraudulent use is a relic of the past,” Ulzheimer said. “Fraud is a real-time crime, and we as consumers have to be constantly engaged.”

Set your own fraud controls: Financial institutions have their own internal fraud controls, but some transactions can slip through the cracks, said Al Pascual, senior analyst of security risk and fraud at Javelin Strategy & Research.

Many financial institutions will let you set alerts for account transactions. Even better, some allow you to block transactions that are out of the ordinary for you, such as for online purchases at a certain kind of retailer or for any purchases over $500.

“We believe that consumers are going to know best as to how to protect their account,” he said. “They know their own behaviors.

Did you know that First Financial has ID Theft Protection services? With Fully Managed Identity Recovery services from First Financial, you don’t need to worry. Should you experience an Identity Theft incident, your Recovery Advocate will stick with you all along the way – and will be there for you until your good name is restored. Click here to learn more and get started today!

Watch out for fraud hotspots: You should be especially wary of using a debit card online and at retailers more vulnerable to fraud.

Gas stations and ATMs are hotspots for so-called “skimmers,” or machines that scammers install to capture your card information. Watch out for ATM parts that look unusual and always cover your hand when typing your PIN in case a camera is watching, said Shirley Inscoe, a senior analyst with the Aite Group.

Don’t let your guard down: If you think your information has been compromised, don’t assume everything’s fine after a few months. Stolen card information is often sold to a variety of groups on the black market who may hold onto it for months or even years.

“Many times these fraud rings will wait until the news dies down and people have forgotten about it before they use that data,” Inscoe said. “It may not be used until next winter, so it really is a good idea for people to monitor their activity.”

If you fall victim to ID Theft, don’t panic – First Financial is here to help! Report the incident regarding any of your First Financial accounts immediately, by calling us at 732.312.1500 or emailing info@firstffcu.com

*Article by Melanie Hicken of Yahoo Finance – click here to view the article source.

The Basics: Student Checking

Students with laptop computerMany young adults enter the “real world” lacking the proper knowledge in financial literacy. The following information will assist with setting up and understanding the features and benefits of student checking accounts more clearly.

What Can a Checking Account do for You?

A checking account offers easy accessibility to your money anytime, anywhere and it also helps keep your cash secure – often times through use of a debit card. A debit card is a card that grants you electronic access to the money in your account, which is often referred to as a check card. You may also receive checks to make purchases or pay bills from your checking account. This makes it easier to spend and receive money without carrying cash. Checking accounts are also important for building credit, which you will need to make major purchases such as a car or a house in the future.

A great checking account option for students is Student Checking. The perks of Student Checking accounts vary among financial institutions, but many include free checks, free ATM usage, and better loan rates.

Preparation

Before opening a checking account, make sure you are prepared. Here are a few tips to remember when you begin the process:

  • Get all of your personal documents together. You will have to prove that you are who you say you are, to open an account. Make sure you have the proper identification such as a driver’s license, photo I.D. card, and Social Security card.
  • Know what services your credit union or financial institution offers. Does the institution provide online banking and bill pay? What fees (if any) does the account charge?
  • Look for branch and ATM locations. When choosing a financial institution, it’s a good idea to check for locations near your home, job, or school. It’s also a good idea to consider the locations and availability of their ATMs.
  • Be able to identify fraud. Many Americans have been exposed to financial scams as of late, and even more are unable to identify classic red flags. Common fraud attempts include propositions for “educational” investment meetings, or being offered money in exchange for paying a fee or making an initial deposit. Use common sense and be cautious around offers that seem too good to be true.

First Financial offers Student Checking to students who live, work, worship, or attend school in Monmouth or Ocean County, ages 14-23.*

The account includes the following features and benefits:

  • A free first box of checks and an allowance of the first mistake being free+
  • Free phone transfers to the account by parents
  • No per-check charges
  • No minimum balance requirements
  • No monthly service charge for having the account
  • A Debit Card issued instantly in one of our Monmouth or Ocean County      branches.
  • Free Online Banking with Bill Pay++
  • Unlimited in-branch transactions

Remember that it is important to establish yourself financially as a student. After your schooling is finished, you will begin your search for a career. Understanding your account and personal finance can only help you when you begin this independent stage of life, and First Financial is here to help you every step of the way!

*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. Accounts for children age 13 and under are excluded from this program.

 What the symbols mean:
+ Call or visit a branch to request refund of the first fee incurred. We must receive request within 90 days of date fee is charged in order to be eligible for refund. The eligible fees are NSF, Overdraft, and Courtesy Pay fees.
++ Bill Pay is free as long as 3 bills are paid through Bill Pay each month, otherwise a $6 monthly fee applies. 

Article Resources:

http://www.lifescript.com/life/money/save/5_things_to_know_before_opening_a_checking_account.aspx

http://www.foxbusiness.com/personal-finance/2013/10/28/5-financial-traps-awaiting-young-adults/

http://www.bankrate.com/finance/checking/chapter-1-checking-account-types.aspx

http://www.foxbusiness.com/personal-finance/2012/01/11/skinny-on-checking-accounts-for-teens/

http://money.msn.com/saving-money-tips/post–pick-a-checking-account-to-fit-your-student

http://www.bankrate.com/finance/savings/5-tips-for-opening-a-teen-checking-account-2.aspx

What’s Your Number? 5 Financial Figures You Need to Know

When we talk about personal finance, a lot of terms often get tossed around: APRs, credit scores, mortgage principles … you get the idea. It’s easy to get lost in all of these numbers, so we’re here to break it down for you. These five may be the most important – they’re the difference between a healthy bank account and debt collectors knocking at your door. Expenses.

1. Your credit score. This may be the most important number ever attached to your name. Your credit score decides your approval for a mortgage or auto loan; it also plays a role in what credit card offers you qualify for. It influences your rates on loans too, and much more. Moreover, many employers evaluate an applicant’s score during the hiring process.

To build a high score, you have to be a responsible borrower. That job is a little more complex than it might sound, so we’ll start at the beginning: Pay your credit card bills on time and in full.

Once you’ve got that down, another way to boost your credit score is to take out different types of loans to show you’re creditworthy.

That said, don’t take out all those loans at the same time, as each results in a hard inquiry, which takes a slight hit on your credit score. Your length of credit history has an impact on your score, and too many accounts opened at the same time may not look too good.

2. Your tax rate. When you file your taxes, you’ll find yourself in one of six brackets, from 10 to 35 percent. Don’t assume, though, that if you fall into the 15 percent bracket, you pay a flat 15 percent to the federal government every year — you’ll pay less.

That’s because the 15 percent bracket isn’t your effective rate (the final amount you end up paying); it’s your marginal tax rate, which says how much your last dollar is taxed.

Confused? Think of taxes as a stepladder: for single people, the 10 percent bracket ends at $8,700. The next rung on the ladder is the 15 percent bracket, from $8,701 to $35,350.

If you made $30,000 last year, the first $8,700 you made is taxed 10 percent; and the rest, that other $21,300 you earned, is taxed 15 percent. In sum, you end up paying $4,065, which means, again, your effective rate isn’t 15 percent but rather 13.55 percent, assuming you don’t claim any tax deductions, credits, or the like.

Here’s why this is important: If your employer withholds significantly more than you owe to the federal government, you might ask them to withhold a little less. That way, rather than get the extra cash back as a federal tax return in springtime, you can deposit the money into a savings account or save it for retirement by depositing it into an Individual Retirement Account (IRA), which are both Federally Insured by the NCUA.

3. Your personal savings rate. In America, saving a large portion of your earnings may be a thing of the past. The personal saving rate — how much of your disposable income is socked away rather than spent — is at just 4.6 percent as of the fourth quarter of 2012.

While this is much improved from a shocking low of 1.5 percent in 2005, it still represents a major decline from decades past, when Americans overall saved more than 10 percent of their income. What’s worse, in 2010, according to the Federal Reserve, just 52 percent of Americans spent less than they earned.

If you’re looking to save, check out your local credit union like First Financial! We offer a great variety of options in savings accounts and savings certificates, which are Federally Insured by the NCUA.

4. Your student loan debt. Americans hold more debt in student loans than in credit cards, to the tune of $1 trillion. Although rates on most federal and private loans are less than those for credit cards, the sheer amount of debt — sometimes as much as $100,000 or more — can make it difficult to afford even the minimum payments. Be sure to know your future obligations when taking out student loans, and take advantage of any beneficial repayment programs offered by your lenders.

You need to get a handle on your student debt, as it will affect the loans you take out in the future. The way you treat your student debt, and really any debt, has a bearing on your credit score, which in turn has a bearing on your future rates — or if you’ll be approved for a loan at all.

business finance5. Your net worth. It sounds daunting to try to put a dollar value to your name, but knowing this value will help you set smarter goals and create a sound financial plan. To calculate your net worth, you need to make a list of everything you own, everything you owe, and then subtract to find out the difference.

First, add up your assets, then your liabilities (or your total debts). Your rough net assets equation should be as follows:

Net worth = (cash + properties + investments) – (credit card debt + loans + outstanding payments of any other kind).

If you’re in the positive, ask yourself: “Am I allocating my resources as best I can to my short, medium, and long-term goals?” If all of your money is sitting in a low-yield savings account, consider investing a portion of it to diversify your portfolio. The Investment & Retirement Center located at First Financial, can help you do just that.**

If you’re in the negative, don’t stress – but rather develop a plan. The most important step you can take is to begin paying off your debt as soon as possible, starting with the loans that have the highest rates.

Once you know where you stand overall, you can budget better for future expenses, such as preparing to buy a car or saving for retirement.

**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.

Article Source: http://money.usnews.com/money/blogs/my-money/2013/03/18/whats-your-number-5-financial-figures-you-need-to-know

Save for Summer with a Summer Savings Account

penny%20blog%20summer-resized-600First Financial’s Summer Savings Account is ideal for employees who get paid 10 months out of the year. Members – especially teachers – particularly enjoy this Summer Savings Account because it allows them to have money available for summer expenses during July and August.

Not only does the Summer Savings Account offer competitive dividend earnings, our Members have the flexibility to choose the amount of money they would like to have deposited into their Summer Savings Account each pay period through direct deposit or payroll deduction.

The Member can elect to have their money transferred into a First Financial Checking Account in two different ways: Either 100% of funds can be transferred on July 1st, or 50% will be transferred July 1st, and the other 50% August 1st.  Funds will be easily accessible through an ATM, point-of-sale transaction with instant access debit card, online banking, or by writing a check.

This account can be opened anytime and does not require a minimum balance, just a $5 deposit in a base savings account to maintain credit union membership.*

Getting started with a Summer Savings account is simple – stop into any branch, or call us at 732.312.1500.

It’s never too late to start saving for summer! Get started today with a Summer Savings Account to make your summer more relaxing.

 *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. Accounts for children age 13 and under are excluded from this program. 
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