How Much Do Your Financial Vices REALLY Cost?

What is one thing you just can’t live without? That little indulgence that helps you make it through the day. For some of us, it’s a jolt of caffeine. For others, Netflix and Hulu offer a sweet escape from the hustle and bustle of everyday life. What we sometimes fail to think about, is these little escapes can be a drain on our wallets. Here are some ways you can cut those costs.

Coffee/Energy Drinks

The mid-morning slump, the mid-afternoon slump, and the post-mid-afternoon slump. The idea is that sometimes the day seems to drag on for way longer than seemingly possible. Some people reach for the nearest Starbucks to replenish their energy reserves, while some crack open an energy drink in the hopes of pushing through the rest of the day. What neither often considers, is that these sources of liquid energy can really add up. The average price of a cup of regular (non-latte) coffee from Starbucks is $1.89, and that’s only the average – some areas will be much higher. That may not seem like much, but consider this: an American who drinks coffee at home will save approximately $427 per year over those who regularly visit coffee shops. When we look at energy drinks, on average they cost anywhere between $2-$4. They can be almost double the cost of coffee. A cheaper alternative – green tea! If saving money is high on your priority list, put your at-home barista skills to work.

Subscription Services

From snacks to pet toys, a new wardrobe, and everything in between, there is a subscription service for it all these days. Many in fact, sometimes forget what they have subscribed to, leading to a big bill each month. Arguably the most common subscription is Netflix, which will cost you around $12.99 a month (if you only want the standard package). Add in Hulu ($5.99), BarkBox ($22), and StitchFix ($20), and you now have a monthly subscription bill of slightly over $60. See how fast that adds up? Not to mention the ever-popular meal subscription services can run you about $200 a month. While these modern conveniences are well…convenient, they are also pricey. Most of us don’t want to give up our Netflix, and that’s fine. Take a hard look at all your subscriptions. Are you getting your money’s worth? Do you eat all the meals from the meal kit? Do you keep enough from StitchFix that the $20 a month fee is worth it? Odds are, you’ll find one or two subscriptions you can live without. Your quality of life will stay the same, and you’ll save money too.

Take Out

Do you look at a recipe and instantly get woozy? Cooking isn’t for everyone, and take out can taste great and you barely have to lift a finger to get it nowadays. Before you pull up DoorDash or GrubHub, consider that the average household spends $3,000 a year dining out. That’s no small amount. On closer look, a prepared meal at a restaurant costs on average, $13. Compare that to the average cost of groceries per person for an at-home meal…$4. Yes, that is a $9 savings just from eating at home. The good news is that anyone can cook. All it takes is a little preparation. Plan your meals, choose easy recipes, and don’t expect every meal you prepare to be a Michelin-star experience. Casseroles are an easy meal that is also inexpensive and tasty. If you are completely opposed to cooking, be responsible with your take out. Choose locally-owned businesses and restaurants so that your money is stimulating the local economy. When you use a delivery service, you aren’t just paying for the food. Your total also includes a service fee, tax, a delivery fee, and a tip. Many times your order total will be double. A recent study showed that your meal will cost you 32.8% more when you order food from DoorDash vs ordering directly from a restaurant.

Online Shopping

“Add to Cart.” The temptation is always just a click away. Surfing the net can bring some expensive side effects as you see a constant flood of targeted ads. It’s like they know exactly what you’re looking for. When an online retailer meets your wants and needs (and at such a deal), it becomes hard to pass it up. And free shipping? It can more than likely be a trap to get you to continue to spend. Sure, you are getting good deals on your online purchases, but this can also make you feel like you can buy just one more thing. Soon, your whole budget has been blown on online shopping. There are many ways you can curb this habit. For starters, make sure to delete your payment information from auto-populating in services like PayPal and Amazon. Secondly, set strict limits for yourself. In your budget, set aside some funds for online shopping. If you know this is the only money you have to splurge, you might think twice before clicking “complete purchase.”

If you do any of the things above, the first thing to remember is not to get discouraged. A cup of coffee or a new shirt never hurt anyone. With most things in life, our financial vices are all about moderation. We wouldn’t expect you never to visit a Starbucks or get take out ever again. Set realistic goals for yourself and hold yourself accountable, you’ll be amazed at the savings. At First Financial, we are here to help you reach your goals and attain financial stability. To get started, check out our handy budgeting guide.

How to Create a Budget and Make Your Money Work for You

Budget. Did you just get cold chills reading that word? It’s not a popular word, and it’s certainly not a popular idea. Typically, the idea of a budget is enough to take away any sense of fun you might have when thinking about spending your money. But, it doesn’t have to be.

There are several benefits to creating a monthly budget. When you have a budget in place, you instantly:

  •     Make your money work for you
  •     Assign each dollar in your account a job
  •     You get 100% control of your money
  •     You can track your expenses
  •     You’ll relieve some of the stress that finances can bring
  •     You will create a “safety net”

There are obvious benefits to creating and maintaining a budget, and there are just as many tools to help you budget as there are benefits.

So, where do you start?

First, figure out how much you make each month. Then, figure out how much you spend. Once you figure out what you’re bringing in vs. what you’re spending, you can start creating specific categories for your money. This is where you get to tell your money what to do.

Now, you’ve got a basic budget in place. You know what you’re making, what you’re spending, and your money has a specific goal. But, how do you keep track of all that information in a manageable way?

Budget apps! The great thing about budget apps – not only do they keep track of your budget, but you can take them with you everywhere you go. Check out some of the best budgeting apps for 2020.

Wally — Get the details of all your financial activity in an easy-to-digest template. Categorize spending destinations, set goals, and create charts. Wally provides you with the full picture of your account in a simple and colorful template. Easy to look at and easy to understand, Wally makes tracking and analyzing your financial habits easy.

Acorns — You know how it’s hard to overcome the mental hump of setting money aside? Well, Acorns removes that struggle from the equation. By rounding up each of your transactions to the nearest dollar, it puts the funds into an investment portfolio. This app looks out for “future you” and makes sure you always have a few acorns hidden away for a rainy day too.

Mint – Create budgets, track bills and receive a free credit report when you use Mint. However, it’s the budgeting feature that really makes Mint shine. It allows you to link your bank, loan, and credit card accounts and then uses the information from those accounts to suggest a budget for you based on your spending. Mint takes it a step further by breaking that spending down into categories like “entertainment,” “food and dining,” and shopping. The best part? You’ll be able to see how much you can save by cutting back in each category.

Mvelopes – A popular budgeting method is the envelope system, a style of budgeting, where you put cash in envelopes for different spending categories and when the envelope is empty, that budget category is spent for the month. This is great for people who like a cash only system, but for people who use credit and debit cards, this can be challenging. Enter Mvelopes, an app that makes it easy to follow cash style budgeting in a digital world.

Of course, while you’re downloading apps, make sure you’re using our mobile app! At First Financial, our app allows you to check your balances, transfer money, pay bills, review your spending and deposit checks remotely. Still have questions about budgeting and financial planning? Check out our handy budgeting guide, or make an appointment with one of our member service representatives and let us help get your budget on track!

 

Budgeting Mistakes that are Easy to Make

Hopefully by now in the second month of the new year, you’ve mapped out your monthly budget and expenses. If not, get started here ASAP.

Once your budget is set, it’s definitely not always foolproof. Here are a few categories in which you might forget to include in your budget, and a couple mistakes that are easy to make so you can be sure to avoid them.

Are you really ready for anything? Did you remember to include an emergency fund when you created your annual budget? If not, this is a big category you don’t want to forget about. If you have an unexpected emergency and you have no emergency savings account back-up, you’ll either be taking money out of other accounts you shouldn’t be touching or racking up debt on your credit card. Either way, it’s going to put a major dent in your budget. If you don’t have an emergency fund, start one as soon as possible.

Do you keep guessing about monthly bills? If you have utility or other bills that vary from month to month, you may have to guess what they may be when you are setting up your monthly budget. When you are estimating bills that change each month, be sure you factor in a number that’s higher than you think it would normally be. This way you won’t short change yourself and you can be prepared for anything that comes up.

Your budget won’t always be fully complete. Most likely, things are going to pop up for the month like a spur of the moment dinner out with friends, or that family member’s birthday gift you forgot to include when you initially crafted your budget. Things like this can really add up on a monthly basis though, if you forget to include them. At the start of each month, sit down and look at all the dates on the calendar for the month ahead. Think about who might have a birthday coming up, if there’s a weekend outing, and so forth. Factor in as many expenses as you can, and if you have a little leftover – give yourself a bit of a buffer just in case anything comes up last minute so that you won’t have to use your credit card.

Don’t forget about annual fees. Look back over what you spent last year if you can. Do you have a credit card with an annual fee, or maybe a gym membership, insurance policy, or warehouse shopping club annual fee? Jot them all down and take note of any annual fees that might be due. Plan ahead and try to set the money aside so you know you are covered when the bill comes in.

Like anything, there is a learning curve when you are first getting used to doing something like creating a monthly budget. Give yourself a bit of wiggle room and if you make a mistake, try to get back on track for the next month.

In addition to our budgeting guidebook above, also check out our online fillable PDF budgeting worksheet here. Come back each month and fill it out for the upcoming weeks ahead!

Article Source: John Pettit for CUInsight.com

Five Budgeting Tips You Can Live By

It’s hard to make budgeting decisions. It can be difficult to keep an eye on your short-term and long-term financial goals when you’re busy with everyday life. But putting together and following a spending plan can work wonders on your finances. Here are five tips you can use starting today.

1. Budget until there’s nothing left.

If you love spreadsheets, zero-sum budgeting might be the right move for you. It’s budgeting so every single cent is accounted for.

Try creating buckets for specific expenses — housing, transportation, food, and entertainment. After assigning amounts to these costs, stash what’s left over in savings.

When you sit down to put together your monthly budget, you can make categories for your big expenses and then create line items for smaller costs. Smaller expenses would include activities such as eating out or shopping.

The goal is to stay on top of your money from the beginning to the end of the month. Then repeat.

2. Get your loved ones involved.

Money management is a tough subject for most couples. However, avoiding money talks causes bigger issues that go beyond banking. That’s why you may want to work with your partner to decide on monthly spending — as a team. Discuss your short-term and long-term financial goals as a couple. Look over what you’ve got in your account(s) and go from there. But don’t forget about your individual needs. Both of you may also want to have cash for items or activities that bring you happiness. And if either of you is a big spender, have an honest talk about what you might be able to realistically cut back on.

3. Take advantage of technology.

Do you like using mobile apps? There are some great ones that exist for tracking your spending. Online banking apps also help you with automatic bill pay and lots of other features. You can view your cash in and cash out with ease and really get a handle on what money you’re spending. We’re all busy and any way technology can help is a plus. Of course, if you’re more comfortable keeping track of your expenses with pen and paper, that works too.

4. Give yourself time to adjust.

People who embrace budgeting for the first time often struggle. While getting over this is key to success, you shouldn’t expect to become a money pro right out of the gate. Understand that you’ll need time to adjust and that small setbacks are bound to happen when following a budget. Also, keep in mind that you might have to change your plan from time to time. An approach that worked last year might not work this year due to changes in your personal life or career. Don’t be afraid to switch things up if necessary.

5. Think about today and tomorrow.

Kick off budgeting with short-term goals like paying your credit card minimums or saving for a new car.

But don’t forget far-off goals and life events too. If you were to pass away, some of your everyday expenses stick around, like student loan debt and mortgage payments. You need to make sure your loved ones won’t be left without the cash needed to cover these costs. Getting life insurance is a good way to do this. This coverage, which insurers offer as part of term or whole-life policies, can cover some of your expenses and spare your family from having to pay out of pocket.

How to learn more about life insurance

Life insurance may seem complicated, but it’s not that hard once you know the basics. Of course, we are happy to help all of our members. Learn more here, and you can also use our TruStage Life Insurance Calculator to compare different types of insurance and learn more about your options.

TruStage® Insurance products and programs are made available through TruStage Insurance Agency, LLC and issued by CMFG Life Insurance Company and other leading insurance companies. The insurance offered is not a deposit, and is not federally insured, sold or guaranteed by any financial institution.

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Article Source: © Copyright 2020, TruStage. All Rights Reserved.

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The Rising Cost of Healthcare

It’s open enrollment season, and most of us are thinking about the best healthcare option for us going into the new year. Only one thing is certain when it comes to healthcare: the cost for us to stay healthy is constantly increasing. When it comes time to choose a plan, there are multiple factors to consider so you can budget wisely.

Choose your plans based on more than the premium. 

People often select their healthcare plan based on the monthly fee they will pay for coverage. However, when you choose a plan based solely on this component, you could end up paying more in the long run. There are several other factors to consider when choosing a healthcare plan that will fit your health as well as your financial needs. Factors include:

  • Co-payment (the flat dollar amount you pay when you need care)
  • Deductible (the amount you must pay before the insurance begins to pay)
  • Co-insurance (the percentage of permitted charges for covered services that you’re required to pay)
  • Maximum out-of-pocket costs (the maximum amount you will pay for healthcare services).

Take your previous health history into account. 

You can’t predict the exact amount of insurance you or your family will need. However, you can take your past medical history and family medical history into account when you’re selecting a plan.
By taking these factors into account, you should be able to get a ballpark idea of the amount of coverage you’ll need, barring no serious medical emergencies.

Choose wisely. 

When you’ve signed on for healthcare coverage and the open enrollment period passes, you aren’t able to change your plan during the year unless you experience a big life event. Healthcare.gov describes a big life event as marriage, having a baby, or losing your other healthcare coverage. If you experience one of those situations, you can typically amend your plan outside of open enrollment. Because of this, it’s important to choose a plan that works best for your health as well as your budget.

Plan ahead.

While healthcare coverage can be good to have when it comes to covering medical expenses, it never hurts to have extra funds. Before an unexpected medical expense arises, plan ahead and set aside some money every month in a savings account. Anything you can stow away for a rainy day will be helpful when the time comes to use those extra funds.

First Financial is here to help. Talk to one of our Member Service Representatives today about setting up a special savings account and be prepared for the unexpected.**
Like most things in life, there’s no one-size-fits-all health insurance plan. You have to choose the best one for you and your budget.

*This blog was written for financial purposes only, and not written by a healthcare professional. This article should not be taken as medical advice.

**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. 

How to Save Money Even on a Tight Budget

Saving money is important, but sometimes it can be hard to find extra money to save – right? While saving money can often be a challenge, it’s not impossible to do – even on a strict budget. Here are three ways you may be able to save when your spare funds are on the lower side.

Find deals online: Sites like Groupon or Living Social have a lot of deals in terms of entertainment and dining out. Did you know you can use them for much more? Both often have deals on electronics, automotive repair, health and beauty, home services and more! The best way to find these deals is to register with your zip code and browse around to find how you can save locally. If these are products and services that you’re already going to pay for or that you’re in need of, saving money in the process is an added bonus!

Trim it up: When you go on a diet, you may notice a little bit of weight loss in several different areas of your body. You should treat your budget the exact same way. Don’t try to cut back on (or completely cut out) one budget item, but trim a few dollars from different places. Some bills you aren’t going to be able to budge on, but you will most likely find a few areas you can cut back here and there. Take advantage of these savings and you’ll start to see it add up. Plus, you won’t feel as if you’re cutting anything out of your budget completely.

Spend more time at home: The more you’re out and about, the more you’re going to eat meals out and spend money on items you don’t really need. Instead of meeting your friends out for dinner and a movie, host a potluck dinner (ask everyone to bring something) – and watch your favorite movie or rent one from your local Redbox. You’ll save money, plus you can pause the movie when you need to and not spend a fortune on movie theater snacks. That’s a win-win for everyone!

Need help budgeting? Check out our online budgeting fillable worksheet!

Article Source: John Pettit for CUInsight.com