Brace Yourself: Santa Shock is Coming

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Let’s talk about Santa Shock, shall we? No, not the “I saw Mommy kissing Santa Claus” kind. For this conversation, we will use “Santa Shock” to refer to that icy sense of regret that creeps in when you open those first post-holiday credit card bills. If you’ve ever blown past your self-imposed holiday spending limit, you know exactly what we’re talking about.

The realization that you racked up additional debt can be an isolating frustration—something you’d rather keep to yourself, but it might help to realize that roughly 77% of Americans admitted to crashing through their respective financial barriers just like you. We know, we know. You don’t want to celebrate other people’s bad decisions, but when it comes to financial challenges, misery may not love company, but it kind of likes having it around.

You overspent. Now what?

Let’s face the facts. Once the gifts have been opened, the holidays have passed, and the bills roll in, your budget may be a little tighter than you’d like. When you’re faced with those oversized balances, it can be tempting just to make minimum payments and figure out your finances later. But thanks to those pesky credit card interest rates, that approach not only makes the problem last longer, it also makes it more expensive. This year, why not get creative and recover from Santa Shock as quickly as possible?

3 Practical Tips for Paying Off Holiday Debt

If you want to pay off your holiday debt sooner rather than later, try these simple ideas to free up some funds and get your budget back on track:

Cut cable. Since the average cable bill is roughly $107 per month, this step doesn’t require much of an explanation. Unless you’re in the middle of a long-term contract with early termination charges, canceling your monthly cable subscription can save you more than $1,000 per year—more than enough to pay off all or most of your holiday debt. And with affordable streaming options like Netlflix and Hulu, you can still keep up with many of your favorite shows.

Closet clean out. If you got new clothes this past holiday season, you have to make room in the closet, right? Instead of packing them away, gather up your gently used items and try to sell them online. Apps like ThredUp, Poshmark, OfferUp, and Facebook Marketplace make it incredibly easy to reach thousands of potential buyers without leaving the comfort of your home.

Meal prep for a few months. Everybody has to eat. There’s no way around that. And while dining out is convenient, it can also end up costing you more than you realize. Depending on where you live, a single meal at a restaurant can set you back $10-12. If you go to a restaurant more than once a day, you may be spending far more than you need to. By planning ahead and preparing meals in advance, you can save on dining costs and redirect some of your food budget towards your credit card balance.

We’ve already established the fact that it’s fairly common to go over a holiday budget. However, sometimes we get carried away with the yuletide spending and wind up over our heads financially. If you find yourself deep in debt and unable to find a way out, don’t be afraid to ask for help by stopping into your local branch or making an appointment for an annual financial review. Our team can help you assess your current financial situation and recommend solutions for your specific needs. This may even help you avoid Santa Shock altogether next year!

4 Simple Categories to Create Your Budget

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It’s the new year – do you have a budget plan in place? If not, here are some great places to start!

1. Housing

Having a place for all of your stuff and somewhere to lay your head should probably be your biggest priority, so as you can imagine this category will be a large portion of your budget. Along with the mortgage, insurance and property taxes, make sure you include repairs and necessary utilities like gas and electric.

2. Transportation

Remember that when it comes to transportation, it’s more than just your car payment. Gas, insurance, repairs, and preventative maintenance like oil changes should all be included. Planning ahead will help keep your car on the road, which will keep money in your pocket.

3. Life

This category is huge. Several categories could be made out of this one, but if you want to keep it all together, it should include the following:

  • Cell phone
  • Food (at home or at a restaurant)
  • Health insurance
  • Medicine
  • Clothing
  • Entertainment
  • Tuition
  • Childcare

All of these things will add up to a large percentage of your budget, so if separating them into their own categories will help you, definitely do that.

4. Savings/Debt

This final category is one of the most important. Saving money for your future is something you want to make sure you’re doing every month. The earlier you start, the better. You’ll be surprised at how a little bit each month can really add up. Also make sure you’re steadily paying down your debt, whether it’s credit cards or student loans. Focus on paying them off and enjoy the freedom you’ll feel when that’s all accomplished.

Learn to create your own budget with our handy budgeting worksheet!

Article Source: John Pettit for CUinsight.com

 

Throw a Super Bowl Party That Doesn’t Break the Bank

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Now that the holidays are behind us, it’s time to plan for the next big event. That’s right—Super Bowl Sunday is just around the corner! As the NFL’s top two teams prepare to battle, the festivities leading up to the game will clearly show that the NFL has spared no expense in trying to make this Super Bowl the greatest championship game in history. So when it comes to planning your Super Bowl party, we suggest taking a different—and slightly more sensible—financial approach.

8 Ways to Throw a Budget-Friendly Super Bowl Party

If you’re looking for some ways to host a Super Bowl party that’s as frugal as it is fun-filled, here are a few of our favorite suggestions.

Start with a financial game plan.  Sounds better than “make a budget,” doesn’t it? Since Super Bowl parties are all about football, it makes sense to prepare like a coach. Setting a spending limit before you shop will help you stiff-arm the creative displays and impulse items at the grocery store. To quote Super Bowl-winning QB, Russel Wilson, “The separation is in the preparation.”

Team up with a co-host. Since football is a team sport, why not recruit a co-host to help you plan your party? Not only can the two of you share the cost of food and decorations, you’ll be able to split the stress of planning as well. Sounds like a win-win, doesn’t it?

Digital invites over classic invitations. Sure, Pinterest is packed with clever ideas for intricate Super Bowl invitations, but you know which detail those posts forget to mention? Postage costs. Rather than sending out old-school invites, create a Facebook event and share it with your friends or jump over to Evite.com, where you can design and send online invitations for free!

Downplay the decorations. Let’s face it, even though extravagant decorations might make impressive Instagram posts, people aren’t coming to your Super Bowl party to marvel at your elaborate sandwich stadium and coordinated team napkin displays. Don’t overdo it with the decorations. Dollar store party supplies are perfect.

Generic snacks: The Real MVP. Your guests will probably be snacking from the pre-game festivities to the post-game trophy presentation. What they won’t be doing is critiquing the subtle flavor undertones of your chips and pretzels. So rather than springing for brand name snack foods, grab the store-brand counterparts, serve them in a giant bowl, and kick back knowing you have money left in your food budget.

Encourage crowd participation. Food and drinks are usually the most expensive part of a Super Bowl party—especially if the beverages are of the adult variety. A pot luck meal plan and BYOB policy are great ways to ensure refreshment costs are divided evenly and everyone is guaranteed to have at least one dish they’ll enjoy.

Save big with Super Bowl promos. If you decide to provide all the food for your party, you might as well look for the best deals. Keep an eye on your local grocery store flyers, as they routinely run special sales on traditional party food. If you’re trying to stay out of the kitchen, check your local restaurants for money-saving party promos.

Make post-game meal plans. You plan, prepare, and present a spread of tasty food for your guests. Then, when the game’s over, you have to figure out what to do with the leftovers. Fortunately, game day favorites like burgers, chili, and sandwiches can make delicious meals for a few days after the big game. This makes meal planning easy and lunch costs less expensive.

With a little creativity and some careful planning, it’s entirely possible to throw a great party without throwing away money in the process. Whether you use all these ideas or just a few that work for you, following these tips will help you host a winning party without spending more than you should.

4 Ways to Save in January

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The holidays are over and that means most of us are strapped for cash. January can be a tough month for many recovering from holiday spending. Here are four ways you can save a little this month as you work to get your finances back on track.

Winterize your home.
This is the coldest time of the year, so make sure your house is ready for the cool temps. There are a variety of things you can do to save this month by lowering your energy bills. Check out these simple tips for winterizing your home. Your wallet will thank you.

Eat what’s in season.
After all the groceries needed for preparing those holiday meals, it’s no wonder you’ll want to cut down on food costs this month. Check out the various fruits and vegetables that are in season in January, many of which are sold at a lower cost. Surprisingly there are a number of yummy seasonal foods that are at their prime in the dead of winter, such as: broccoli, brussels sprouts, cabbage, cauliflower, grapefruit, kale, leeks, lemons, oranges, parsnips, tangerines, and turnips.

New year, new budget.
Take a look back at last year, what worked for your finances and what didn’t? Learning from the past is an excellent way to make smarter choices this year. This month, take a look at the year ahead, anticipate months that will be more costly, and plan accordingly.

Shop sales.
After holiday sales can be an excellent way to save on items you need for the coming year. Check out reduced prices on everyday household items (like household cleaners, soaps, and baking supplies) that are marked down simply because they come in holiday packaging.

Article Source: Wendy Moody for CUInsight.com

Budget Busting Rationalizations to Stop Doing Immediately

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Did you spend money you didn’t intend to this past holiday season? If you are regularly falling victim to money rationalization (talking yourself into a purchase you don’t really need or can’t afford), you are doing yourself and your budget no favors.

Have you told yourself any of the following lies recently? If so, make it your new year’s resolution to stop right now.

  1. It’s on sale! There’s a very good reason why retailers put things on sale, offer two for one deals and give discounts. By offering something on sale, it gives the consumer a sense of urgency about purchasing the item. You know that the sale or discount will not last forever, so you want to snatch up the item before you lose out on the great deal. The thing is, it doesn’t matter how good a bargain the price is if you don’t need that item, because it’s still too expensive. If you are tempted by an item that’s on sale, put it down and walk away. If you still want it the next day (or even the next week), go ahead and buy it. The sale will still be in effect, and you will know that this is a good purchase, and not just an exercise in retail psychology.
  2. Buy now and save later. Later is a great time to do things you don’t want to do, whether that’s budgeting or dieting. It’s very easy to promise yourself that you’ll pay for your splurge by saving money in the future. If you are trying to rationalize a purchase by thinking about what you can give up next week or next month to pay for it, then you simply can’t afford the purchase. If you haven’t learned how to budget (or diet, etc), you’re not going to magically wake up knowing how to do this in the future. Telling yourself no now will be the first step in being the savvy budgeter you hope to be tomorrow.
  3. I need a reward. After a stressful period at work or at the end of a major project, it can be easy to want to reward yourself with something nice. But looking at a new pair of shoes or an expensive car and thinking “I deserve this!” is not the right way to go about being financially secure. Giving in to impulse buys because of stress will not help you achieve your financial goals.
  4. I want to fit in. Sometimes the worst purchasing mistakes come from peer pressure. It’s much easier to spend money when everyone around you is doing the same. Even if your friends would never dream of putting pressure on you, just seeing them spend money can influence your decisions. If this is a problem for you, then shopping should no longer be an activity you do with friends. Find other ways to socialize with the people in your life. Your bank account will thank you.

The best weapon you have against spending rationalization is to know yourself. If you are aware of the things that deceive you into purchases, then it will be much easier to avoid them.

And if you haven’t created a budget for yourself – that might be part of the problem. Learn everything you need to know about budgeting with our quick budgeting guide.

Article Source: Emily Guy Birken for Moneyning.com

Do You Know What It Takes to Run a Successful Side Hustle?

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The process of finding financial security has gone through some dramatic changes over the last few decades. As recently as the 1980’s, conventional wisdom suggested following a career path that went something like this: Go to school. Get a good job. Work for one company for 20 years or more. Collect a pension. Retire in relative comfort.

If that approach sounds completely foreign to you, you’re not alone. On his personal finance blog, 20SomethingFinance, G.E. Miller observed, “Most twenty-somethings have never and (unfortunately) probably will never sniff the sweet security provided by a pension plan.” So, if there’s almost no hope of finding financial stability by following same path as previous generations, how can set yourself up for success? Two words: Side. Hustle.

What Does “Side Hustle” Really Mean?

With more and more people realizing that working a single job leaves them living paycheck to paycheck, side hustles are experiencing a considerable spike in popularity. Since we’ve already used the phrase twice in this article, you may be wondering exactly what constitutes a side hustle. Is it a second job? An online business?  In his new book (conveniently titled Side Hustle), Chris Guillebeau provides some much needed clarity. “A side hustle is not a part-time job. It is an asset that works for you.” This definition reveals a crucial distinction between trading hours for dollars, and building something that pays dividends for years to come.

Side Job vs. Side Hustle

Thanks to a surging economy and advances in technology, finding a side job is easier than ever. From Etsy to barista gigs and seasonal retail, potential work opportunities are plentiful. But if Guillebeau is right, the additional income you can earn from these jobs might not give you the long-term security you want. So, are they even worth pursuing? Do they offer any asset-building benefits? Absolutely. You just have to adjust your motivation for doing the work.

Rather than focusing on the job itself or the hourly wage it provides, entrepreneur Jeremiah Dew recommends looking a little deeper. “Find an endeavor that makes you become a better person—something that requires you to build a skill set that will help you in future ventures as well.” Sell crafts on Etsy in order to get better at e-commerce and digital marketing. Become an Airbnb host to upgrade your customer service skills. You get the point.

Success Requires a Different Perspective

When you’re trying to earn additional income, it can be tempting to jump at the first opportunity that offers real money. And while a traditional side job isn’t necessarily a bad thing, be careful not to confuse it with a legitimate side hustle. You may be able to earn extra money, but if your income is still tied to your ability to show up and perform a specific set of tasks, you’re not developing an asset. However, if you utilize those opportunities to gain experience and lessons that transcend a specific job or industry, you may be on your way to developing a successful, sustainable side hustle.

You Won’t Win Alone

Now, before you rush out and start a supplemental career, it’s important to remember the value of a good mentor. As the old saying goes, “A smart person learns from his mistakes. A wise person learns from the mistakes of others.” If you’re going to be wise about building your business, it pays to develop a relationship with someone who has experience running a business of their own, someone who made mistakes you can learn from. Whether you find them yourself or ask for suggestions from people you trust, the impact of a business mentor can be priceless.

From a financial standpoint, business ownership requires money management skills you won’t learn as an employee. Fortunately, your local credit union is an outstanding resource where you can find the knowledge, expertise, and programs to help you navigate the often-confusing early stages of your side hustle. By relying on their services and recommendations, you’ll be able to sidestep potential pitfalls and put yourself in a position to succeed. To learn more about the Business Services at First Financial, click here.