6 Smart Uses for Your Tax Refund

680856_21Expecting a tax refund? Sounds like a great time to jump start your finances.

If you’re expecting a refund, you might be tempted to rush out and spend it on a new car or a fancy vacation. After all, it might be the single biggest check you will receive all year.

In all, 70% of Americans are expected to get a tax refund this year, according to the IRS. Last year, the average refund amounted to $2,797.

But remember, this was your money all along, not a prize that’s fallen from the sky. There are much better uses for this chunk of cash that could actually pay off in the long run.

“There are great ways you can invest in yourself and get on sound financial footing,” said Gerri Walsh, FINRA’s senior vice president for Investor Education.

Here are six smart ways to put your refund to work for you:

1. Pay Down Your High-Interest Debt.

One of the smartest things you can do with your refund is to zap your credit card balances or other types of high-interest debt, Walsh said.

Facing down your debt with your refund bucks could yield sizeable savings. By lowering your balance, you reduce the amount of interest you owe.

“Getting debt under control and out of the way quickly can save hundreds, or even thousands of dollars, over time,” said Bruce McClary, a spokesman for the National Foundation for Credit Counseling.

2. Supersize Your Savings.

Your tax refund might help you sleep better at night if you use it to bulk up your savings.

“Make sure your emergency fund is fully funded,” Walsh advised.

Experts typically recommend having three to six months worth of living expenses in a savings account to cushion the blow of a job loss or another financial setback. But many people are woefully behind in achieving this goal. In a recent survey conducted by Bankrate.com, close to a third of respondents said they have no emergency savings.

Luckily, the IRS makes it easy for taxpayers to save their refunds. By opting for direct deposit, you can deposit your refund, for free, in up to three accounts in U.S. financial institutions. You can also direct your refund money toward the purchase of up to $5,000 in U.S. Savings Bonds.

Think of it this way: the more of your tax refund you save, the less of a chance you’ll end up needing to tap your credit cards if you hit a rough patch.

3. Fund Your Retirement Accounts.

The “found money” you receive today could make a big difference in the years to come. Consider making an extra contribution to your Roth or traditional IRA.

“That extra contribution could grow three or four-fold by the time you need it in retirement,” said Greg McBride, Bankrate’s chief financial analyst.

Remember the IRS’ direct deposit option? You can choose to have some, or all, of your refund money sent directly to your IRA. If don’t already have an IRA, you might want to use your refund money to start one.

The annual contribution limit for IRAs in 2016 is $5,500 ($6,500 for those 50 and above).

Does your company offer a 401(k)? If yes, while you’re focused on retirement, figure out whether you’re on track to save the max this year using FINRA’s 401(k) Save the Max calculator. The contribution limit for 401(k)s this year is $18,000 ($24,000 if you are age 50 or above).

Set up a no-cost consultation with the Investment & Retirement Center located at First Financial Federal Credit Union to discuss your savings and retirement goals. Give us a call at 866.750.0100, email samantha.schertz@cunamutual.com or stop in to see us!*

4. Bulk Up Your Kids’ College Funds.

Once you’ve taken care of more immediate financial concerns and your retirement, it’s time to think about your kids and their future.

Two types of college savings vehicles, 529 plans and Coverdell Education Accounts, offer potential tax benefits so long as the money is used for qualified educational expenses.

Why is so important to do what you can to bulk up your children’s college savings accounts? Every dollar you save reduces the chances your kids will face a heavy student loan burden down the road.

5. Invest In Your Career.

If you’ve been dreaming of developing new skills, or of getting a degree, this could be your shot. You might want to invest your tax refund in continuing education courses.

The payoff might be more than just a higher paying job—it might also include personal satisfaction. Now that beats a shopping spree at the mall, any time of the year.

6. Plan For Next Year.

No matter how you use the cash from your refund, there is one simple step any citizen should take: adjust your withholdings to prevent a refund next year.

A refund sounds great, but in reality it means you overpaid on your taxes over the course of the year. A tax refund is often referred to as an “interest-free loan” to Uncle Sam. It is money you might otherwise have used during the year to pay your bills, invest or reduce your debt, but that instead, you paid to the government.

For many taxpayers, figuring out how much to pay in taxes throughout the year to avoid getting a refund is a difficult task. Some people deliberately withhold too much from their paychecks, using this tactic as a forced savings plan. Many others, though, experience changes in their life that impact their tax status, whether that means getting married or divorced, having a child or changing jobs.

But if you can help it, you might be better off foregoing the refund and using the extra cash from each paycheck to invest or to pay down your debt throughout

*Original article source courtesy of Phyllis Furman of Business Insider.


A Simple Guide to Paying Off Lingering Debt

www.usnewsIf you find yourself collecting more and more debt while struggling to figure out how you will ever pay it all off, it might be time to develop a step-by-step strategy. Paying off debt starts with making a budget and continues with changing your habits and rewarding yourself for progress. A few contributors to the U.S. News My Money blog offer a guide to get rid of the debt that’s been following you around for too long:

1. Create a budget.

“The first step to solving your debt problem is to establish a budget,” says Money Crashers contributor David Bakke.​ You can use personal finance tools like Mint.com, or make your own Excel spreadsheet that includes your monthly income and expenses. Then scrutinize those budget categories to see where you can cut costs. “If you don’t scale back your spending, you’ll dig yourself into a deeper hole,” Bakke warns.

2. Pay off the most expensive debt first.

Sort your credit card interest rates from highest to lowest, then tackle the card with the highest rate first. “By paying off the balance with the highest interest first, you increase your payment on the credit card with the highest annual percentage rate while continuing to make the minimum payment on the rest of your credit cards,” says retail analyst Hitha Prabhakar.

3. Pay more than the minimum balance.

To make a dent in your debt, you need to pay more than the minimum balance on your credit card statements each month. “Paying the minimum – usually 2 to 3 percent of the outstanding balance – only prolongs a debt payoff strategy,” Prabhakar says. “Strengthen your commitment to pay everything off by making weekly, instead of monthly, payments.” Or if your minimum payment is $100, try doubling it and paying off $200 or more.

4. Take advantage of balance transfers.

If you have a high-interest card with a balance that you’re confident you can pay off in a few months, Trent Hamm, ​founder of TheSimpleDollar.com, recommends moving the debt to a card that offers a zero-interest balance transfer. “You’ll need to pay off the debt before the balance transfer expires, or else you’re often hit with a much higher interest rate,” he warns. “If you do it carefully, you can save hundreds on interest this way.”

5. Halt your credit card spending.

Want to stop accumulating debt? Remove all credit cards from your wallet, and leave them at home when you go shopping, advises WiseBread contributor Sabah Karimi.​ “Even if you earn cash back or other rewards with credit card purchases, stop spending with your credit cards until you have your finances under control,” she says.

6. Put work bonuses toward debt.

If you receive a job bonus around the holidays or during the year, allocate that money toward your debt payoff plan. “Avoid the temptation to spend that bonus on a vacation or other luxury purchase,” Karimi says. It’s more important to fix your financial situation than own the latest designer bag.

7. Delete credit card information from online stores.

If you do a lot of online shopping at one retailer, you may have stored your credit card information on the site to make the checkout process easier. But that also makes it easier to charge items you don’t need. So clear that information. “If you’re paying for a recurring service, use a debit card issued from a major credit card service linked to your checking account,” Hamm suggests.

8. Sell unwanted gifts and household items.

Have any birthday gifts or old wedding presents collecting dust in your closet? Search through your home, and look for items you can sell on eBay or Craigslist. “Do some research to make sure you list these items at a fair and reasonable price,” Karimi says. “Take quality photos, and write an attention-grabbing headline and description to sell the item as quickly as possible.” Any profits from sales should go toward your debt.

9. Change your habits.

“Your daily habits and routines are the reason you got into this mess,” Hamm says. “Spend some time thinking about how you spend money each day, each week and each month.” Do you really need your daily latte? Can you bring your lunch to work instead of buying it four times a week? Or perhaps you can start cooking more at home. Ask yourself: What can I change without sacrificing my lifestyle too much?

10. Reward yourself when you reach milestones.

You won’t pay down your debt any faster if you view it as a form of punishment. So reward yourself when you reach debt payoff goals. “The only way to completely pay off your credit card debt is to keep at it, and to do that, you must keep yourself motivated,” Bakke says. Just make sure to reward yourself within reason. For example, instead of a weeklong vacation, plan a weekend camping trip. “If you aim to reduce your credit card debt from $10,000 to $5,000 in two months,” Bakke says, “give yourself more than a pat on the back when you do it.”

Don’t forget about First Financial’s free, online debt management tool, Debt in Focus. In just minutes, you will receive a thorough analysis of your financial situation, including powerful tips by leading financial experts to help you control your debt, build a budget, and start living the life you want to live.

*Article source written by Stephanie Steinburg of US News.

8 Ways To Cut Costs For A Week & Maintain A Budget

bigstock-Time-To-Communicate-75279877-e1446813441441Saving money can be really challenging — sometimes after basic necessities like food, phone, and rent, it can seem like we already don’t really have anything left to put away. However, there are actually plenty of ways to cut your spending this week alone, and they’re usually in places that we don’t even think about.

In an article on cutting your spending in U.S. News and World Report, CPA and bestselling author of “Save Wisely, Spend Happily,” Sharon Lechter said, “Either you are a master of your money, or a slave to it. Use your mind and have fun.” On her personal website, Lechter suggested many tips for saving more, and the bulk of them come down to small, everyday tips as opposed to huge, life-altering changes. It usually just comes down to becoming aware of the places we spend money without even really thinking about it — like going to an evening movie instead of a cheaper matinee, or buying books when we have a library right down the street.

If you’ve recently taken stock of your finances and decided that you want to spend less and save more but don’t know where to begin, don’t fret. Here are eight extremely simple tips that you can try for a week or two to cut your daily expenses — and they almost all entail minimal self-sacrifice.

1. Figure Out Where You Spend.

OK, this one isn’t really a tip as opposed to a necessary first step to tracking your savings. In an article for U.S News and World Report, Senior Editor of the financial advice site Wisebread.com Meg Favreau said, “Making a budget is the most important thing you can do because then you will be able to understand where your money is going and where you can afford to make cuts.” After the big things, like rent and loan payments, write down everything you spend money on each week — from a morning cup of coffee to dinner out with friends, and tally how much you’re spending “extra.” This will enable to you to know how much you’ll be saving once you begin making adjustments (and for real motivation, multiply how much you spend each month by four and then by 52 to see how much you’re spending in an average month and year).

2. Pack Your Lunch.

Packing a lunch may seem incredibly simple, but I know from personal experience that this can be one of the hardest habits to break (anyone else ever realized they spent $15 on lunch every single day for the last 14 days, and then sometimes also eaten out for dinner too?). In an interview for a Bustle article about meal prep, registered dietician Sumi Tohan said it’s important to be real with yourself about what you’ll realistically eat for lunch each day. “If you plan meals that are too restrictive, full of supposedly good-for-you foods that you hate, it’s more likely that you won’t eat these meals,” Tohan says.

Instead, she recommends including at least one of your favorite foods with each meal and says to “avoid cutting out major food groups, such as carbohydrates, as doing so can leave you feeling hungry, unsatisfied, and with unbalanced nutrition.” So pack things you’re actually looking forward to eating each day, and not running around the corner to grab that $14 salad won’t seem like such a big deal.

3. Cancel Your Cable.

In that same U.S. News and World Report piece, Cameron Huddleston, contributing editor of the personal finance news site Kiplinger.com, recommended canceling your cable altogether. “There are so many other options out there for less, like Netflix and Hulu,” Huddleston said. If you live with roommates, talk about cancelling cable and setup an antennae for basic channels and Hulu and Netflix for everything else – this will add up to a personal monthly cost of about $7 a piece. As much as you may love channel surfing, paying a ton for cable just feels obsolete now.

4. Energy-Efficient Lightbulbs.

Trent Hamm, founder of the financial advice site The Simple Dollar, recommended switching out your regular light bulbs for the energy-saving kind (and also recommended to always be conscious of your thermostat use). It’s super simple and easy, and is a money-saving tip you literally never have to think about once it’s done.

5. Buy Staples In Bulk.

It’s always a good idea to buy things you use every day in bulk. It can feel really hard to put down $25 for something like toilet paper at one time, especially when there are smaller options for $5 nearby. However, buying in bulk can hugely reduce costs in the long-term. Plus, who likes running out of toilet paper?

6. Make Coffee At Home.

This is another one can be a challenge — everyone loves their morning, store-bought coffee. In another U.S. News and World Report piece on ways to cut costs today, retail expert Hitha Prabhakar said, “While a $4 morning coffee can satisfy the soul, it can also hurt the budget.” She recommended investing in a home coffee-maker, saying, “It’s a larger out-of-pocket expense, but it will easily pay for itself over time.” It’s also recommended to invest in some handy coffee-to-go cups so you can have something to carry and drink on your morning commute as well as when you get into the office — this definitely helped curb my desire to buy a cup on my morning commute.

7. Invite Friends Over Instead Of Going Out.

Hamm also recommended inviting friends in for dinner and drinks instead of going out. He noted that while this might seem like legwork, make it a team effort. Everyone can bring one thing and a drink of their choice, and you can make something large and cheap — like a big pasta dish. You’ll almost definitely end up spending significantly less than doing dinner and drinks out.

8. Remember: Exercise Is Free.

In the same U.S. News and World Report piece about cutting costs today, Wisebread blogger Sabah Karimi reminded readers that exercise doesn’t have to equal a costly gym membership. “You could sign up for fitness classes at a neighborhood recreational center, join the YMCA, take advantage of a corporate wellness program or commit to following DVD fitness programs at home,” Karimi said. There are also a ton of 100 percent free workout videos to be found from fitness experts all over YouTube for a super simple, cost-free way to exercise.

Spending less doesn’t mean a life of rice and beans or saying no to every social engagement that comes your way. It’s often just about greater awareness of some of the hidden places we spend money and working towards changing simple behaviors. Try some of the above tips and see how much you save.

*Article source courtesy of Toria Sheffield of Bustle.com.

Things to Do on a Budget in Monmouth & Ocean Counties this December 2015

christmasfamilyIt’s the most wonderful time of year!  With so many joyful and festive events happening this month, it’s definitely going to be hard to choose which ones to attend. Enjoy this special time of year with all of your family and friends – check out the many free or inexpensive activities happening this December in a town near you.

Tree Lighting Ceremonies:

Every Saturday & Sunday until December 20: The Asbury Park Bazaar & Market at Fifth Avenue have partnered to bring you one of the most spectacular holiday markets in New Jersey! The market features a curated roster of vendors, artists and local shops selling gifts and handmade goods including jewelry, accessories, art, photography, home goods, furniture, vintage, food, & much more! Enjoy live music, holiday performances, and special events every weekend by the giant Christmas tree with fake snow falling all around you. Children can get photos with Santa and there also attend kids craft workshops every Sunday. Warm up at the hot cider and hot chocolate tent or enjoy many other delicious holiday treats and festive cocktails at The Anchor’s Bend. For more information, call 732-829-2663.

Saturday, December 5 – Sunday, December 6: It’s the 31st Annual Holiday Weekend in Ocean Twp from 11am-4pm! Enjoy exhibits, trains, crafts, and handmade goodies all weekend long. This year, the Woolley House gets transformed into a holiday showcase to continue this holiday tradition. Check out the many homemade treats and one-of-a-kind gifts for everyone on your “nice” list. Children can even search the house for hidden nutcrackers in a Holiday Hunt. For more information, call 732-531-2136.

December 5-6, 12-13: Bring the whole family to enjoy this holiday treat. The Monmouth Players will be putting on a special production of Santaland Dairies for a limited time at the Navesink Arts Center (Atlantic Highlands). The show highlights the humorous accounts of working as a Christmas elf in “SantaLand” at a department store during the holiday season. Tickets are just $15 a person. For times and more information, call 732-291-9211.

December 5, 12, 18 & 19: The weather is cold, but the scent of Christmas is in the air! Come celebrate the holidays at Allaire Village (Farmingdale) for Christmas Lantern Tours and take a stroll through a lantern lit village, and learn about Christmas in 1836. Music, history, and a little bit of theater should be your new (or continuing) holiday tradition. Tickets are just $12.50 per person (not recommended for children under 5 as it is a walking tour and strollers are not permitted in the buildings). Spaces are limited so advanced ticket purchasing is highly recommended! For times and more information, 732-919-3500.

Sunday, December 13 & Sunday, December 20: Bring the whole family and have Breakfast with Santa at the American Hotel (Freehold)! From 10:30am-2pm, have a holly jolly meal with St. Nicholas himself. Hurry and reserve your seats today! For more information and reservations, call 732-431-3220.

Saturday, December 12-Sunday, December 13: American Repertory Ballet comes to Algonquin Theatre (Manasquan) to bring the magic, beauty and fantasy of The Nutcracker with Tchaikovsky’s magnificent score, stunning sets, thrilling choreography, and a massive cast. The classic story of a young girl and how a mysterious gift brings about enchanted dreams and fantastical scenes. Whether it’s your first time, an annual tradition, or an once-in-a-lifetime experience, ARB’s Nutcracker is a perfect holiday treat for the entire family. At 52 years, ARB’s production is the longest-running Nutcracker production in New Jersey, and one of the longest-running in the United States. For times and more information, 732-528-9211.