Personal Finance Tips for the New Year

A new year just started – be sure to review the following to make sure you are financially set up for the next twelve months!

Review Your Beneficiaries

Make any needed updates to the beneficiary portion of your bank and retirement accounts, life insurance policies, IRA accounts, and so on. Choosing a beneficiary for your life insurance policy is important because your beneficiary will be the person(s) your accounts and policies will be payable to upon your death. Have you gotten married or had a child within the last year? This is also something to keep in mind when selecting a beneficiary and deciding if you need to make any changes this year.

It’s also a good idea to name a secondary beneficiary in case your primary beneficiary passes away. Review beneficiaries for all of your accounts annually. January is the perfect month to do so.

Check Your Tax Withholdings

It’s a good idea to review your W-4 form each year. If you remember from last year, it was the first year tax filers did their tax returns under the country’s new legislation. Was your tax return last year smaller than what you were used to in the past? Did you owe money on your taxes? If so, be sure to consult with your tax professional, put some money aside in savings, and review your withholding amount to see if anything should be adjusted.

Go Over Your Insurance Policies

You should also review your insurance policies on an annual basis: health insurance, life insurance, homeowners insurance, and auto insurance. You will want to review each policy to ensure you aren’t paying too much and that you have the right coverage. In looking at your homeowner’s insurance – do you have any newer bigger ticket items over the last twelve months that were not included in the previous year’s policy? If so, be sure to include them as you are reviewing for the new year ahead.

Look at Your Emergency Savings

Hopefully you have an emergency savings account with at least 3-6 months’ worth of savings in it that you don’t touch. If not, make it your new year’s resolution to start one ASAP! An unexpected accident or emergency can really set you back financially, so even if you are only contributing a small amount per paycheck – it’s important to have that back up bank account should you ever need it.

Contribute to a College Savings Fund

If you have children, are you contributing to a college savings fund to prepare for their future? A college education is not inexpensive these days, but there are some tax-advantaged products you can look into that will help you save over time.

Be sure to speak to your financial advisor, or if you are local to Monmouth and Ocean Counties in NJ – make an appointment with one of ours located within our Investment & Retirement Center. Our financial advisors would be happy to discuss 529 plan options with you at any time.*

Financially Plan for the New Year

It’s a brand new year with lots of blank pages – be sure to get a family savings plan in place, think about if you can afford to travel this year in January, or if your family will be celebrating any upcoming milestones this year. If so, think about opening a special savings account and automatically transferring funds from your paychecks into that account to save up for the year ahead.

Get started with a special savings account at First Financial, we are happy to help our members achieve their financial goals and dreams – and get off on the right foot in the new year!**

Article Source: Securian.com

 *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. Non-deposit 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.

**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. 

3 Good and Bad Reasons for Personal Loans

A credit card is a valuable tool when you need money in a pinch. But if you’ll need a little time to pay it back, it’s probably not the right financial tool for you. Getting a personal loan is a much better idea if you’re borrowing larger amounts of money that you won’t be able to pay back immediately. Here are some good and bad reasons for using personal loans.

Good Reasons

Investing in Your Home: Whether you’ve got an expensive repair that needs to be made, or you just want to redo your kitchen –  spending money on your home doesn’t usually come cheap.  A personal loan will allow you to up the value on your home and provide you with a fixed monthly payment that you can handle.

High Interest Debt: Credit card debt can be hard to get out from under. If you’re dealing with debt on multiple credit cards, you may be in some financial trouble. A personal loan with a fixed monthly payment can be a great option for you if you’re dealing with a mountain of debt that seems impossible to climb. However, you just have to remember to not continue to use your credit cards along with the personal loan, and further get yourself into serious debt.

Starting a Small Business: You’ve been dreaming about opening up your own business. Follow your dreams and make it happen. Startup costs can be expensive, so this is a great reason to get a personal loan.

Bad Reasons

Vacation: If you don’t have the money you need to take a vacation, the last thing you want to do is go into debt just to make it happen. Staycations are a good alternative and can be just as relaxing as a vacation, so save your money and by next summer maybe you’ll be ready to book that trip to the beach.

Investments: No matter how good you think you are at investing, it’s still a little like gambling. There are no guarantees when it comes to investing, so don’t put yourself into debt for something that may just end up putting you even further into the hole.

Wedding: Weddings can be super expensive. If you can afford a pricey wedding, great. But if you don’t have the funds for your dream wedding, do you really want to start off your new life together with a shiny new pile of debt?

Sometimes, for important items we need in life – the money just isn’t there. First Financial is dedicated to providing small personal loans that can help cover the costs of life’s necessary expenses. If you live, work, worship, volunteer, or attend school in Monmouth or Ocean Counties in NJ – this may be a great financial solution for you. Learn more and apply online today!

*APR = Annual Percentage Rate. Rates are subject to change. Maximum loan is $25K and maximum term is 60 months. Not all applicants qualify, subject to credit approval. A First Financial membership is required to obtain a personal loan, and is open to anyone who lives, works, worships, volunteers or attends school in Monmouth or Ocean Counties. A $5 deposit in a base savings account is required for credit union membership prior to opening any other account/loan. See credit union for details.

Article Source: John Pettit for CUInsight.com

Easy Personal Finance Tips Everyone Can Use

For the Average Joe, even if you feel you’re doing well with your finances, you could probably stand to make a few changes to your financial habits. If you’d like to spend less and save more, here are a few things to think about.

Be smart with credit cards: A credit card can be a valuable tool, but if used incorrectly, it can create debt that can be tough to manage. Only use your credit card for purchases you can pay off each month. This is a great way to build a good credit score, but always make sure you’re being careful when paying with plastic.

Find savings as often as you can:  It doesn’t matter how big or small the purchase, you can probably find it cheaper somewhere else. Have you checked the competitor’s prices? Looked online? More times than not, you’ll find just what you’re looking for on the internet, and usually for a lot less.

Use automatic bill pay: Have you mapped out your monthly bills and their due dates? If you haven’t, now would be a good time to start. Look at the due dates and design an auto pay schedule that will keep you from missing any payments. Paying your bills on time is a must if you want to keep your credit score up.

Be cheap: No matter how much money you make, you should always try to live below your means. The less you spend, the more you can save for your future, and you’ll be glad you planned ahead when retirement time comes around.

Article Source: John Pettit for CUInsight.com

Personal Finance Lessons Students Should Learn Before Graduation

How to make a budget.

It all starts with the budget. Here, students can compare earnings to expenses. It will give them insight into the value of a dollar. With a budget, students can plan for major purchases, eliminate debt and create good saving habits. Check out our budgeting guide here!

How to balance a checkbook.

While few people probably write checks anymore, students should still know how to balance a register. Even if they prefer to use an app to help keep up with their funds, the basic accounting skills they’ll gain from an old-fashioned register will give them insight into how their money flows. It will also teach them that even financial institutions can make mistakes, so it’s good to check the account for errors or fraud on a regular basis.

The real cost of credit cards.

Credit cards have advantages, but as anyone who’s gone into debt knows, those advantages can come at a significant cost if card holders aren’t careful. Understanding how compound interest works and what that $40 shirt will cost them if they take years to pay it off – will help them make wise choices with their credit.

How to build good credit.

Good credit can save them exponentially over a lifetime. Everything from home and auto loans, to job applications will be affected by a person’s credit score. Teaching students about what makes their score good, how to build it and how to monitor it will set them up for years of success.

What to do when it goes wrong.

Having a financial backup plan can make the difference between disaster and survival, when a major catastrophe strikes. Tools such as health and homeowners insurance and a savings account are critical, but increasing numbers of Americans do not employ these resources. Teach students how to plan ahead of time so they can weather inevitable disasters successfully.

Article Source: Jennifer Reynolds for CUInsight.com

How to Get Back on Track If You’re Drowning in Debt

bigstock-Businessman-Run-Away-From-Debt-103353212Getting out of debt is much harder than getting into it. But you can do it — and along the way, you’ll rid yourself of a lot of stress.

Countless people find themselves drowning in debt simply because they can’t control their spending. If this sounds familiar, try tracking everything you buy for a month, including all those “little” items that cost just a few dollars. Once you see how those purchases add up, you’ll realize how important it is to lay out a budget and stick to it.

Understanding how much you actually spend is a good first step, but that alone won’t get you out of debt. The following strategies for managing different types of expenses — and bringing in some extra income — can you help you reach a happy, debt-free future.

Control your credit card usage. If credit card debt is the problem, take these steps right away:

  • Cut up your cards: Save one card for use in emergency situations. Cut up all the others, and throw away the pieces.
  • Pay with cash: Only pay cash for purchases such as groceries, clothing, and gas.
  • Attack high-interest debt first: Pay off the credit card with the highest interest rate first. Once this card is paid off, apply what you were paying on it to the card with the next highest rate.
  • Negotiate a lower rate: Negotiate your interest rate with your credit card companies. Your issuer will usually work with you if you say you’re going to transfer the balance to another card with a lower rate.

Cut some recurring expenses. Most people have recurring monthly expenses that can be eliminated, including:

  • Excess phone service: If you have a mobile and a landline, you probably don’t need both. Pick one and stop paying for the other.
  • Satellite/cable television: Consider disconnecting satellite or cable service and replacing it with a streaming service, such as Netflix or Hulu. You can get entertainment at a fraction of the monthly cost.

Keep an eye on your indulgences. We all have little indulgences we like to spend money on here and there, but we often don’t realize how much they add up.

  • Specialty coffee: Stopping by Starbucks on your way to work every morning is certainly a luxury you enjoy, but you could save $25 or more a week by making your own coffee at home.
  • Fast food lunches: If you work outside your home, chances are you buy lunch out at least a couple of days per week. These costs mount quickly. Even if you spend only $40 per month eating lunch out, that’s $40 that could go to your savings account or toward a credit card payment.

Bring in extra income. When you lose control of your finances, getting out of debt requires serious action.

  • Take a second job: No one wants to work 16 hours per day, but if that’s what it takes for your family to thrive financially, then it must be done — at least temporarily. It may be that working an additional, part-time job for just 20 hours or less per week is all that’s necessary to help you out financially.
  • Sell things you don’t use: Many of us keep things we no longer need in the basement or storage shed. Sell any item you haven’t used within the last year online or have a garage sale.
  • Sell your (extra) car: If you’re a two or three-car household, chances are you could make do with one less car. Consider selling one if it isn’t a necessity.

Reduce debt — and stress.

It requires work and a commitment to doing what it takes to reduce your expenses-to-income ratio. Once you make that commitment, you’ll find that your bank account grows and your stress level decreases.

*Original article source courtesy of Pamela Sams of the LA Times.

The One Way to Never Fall Into Debt Again

bigstock-Debt-107518706

Debt is literally a four letter word; it just also happens to mean you owe money.

Many Americans have a dream they’ll never realize: living without debt. Yet, the dream is possible for nearly everyone – just be prepared for the sea change of behavior required to make it happen. If you are unprepared, your ship will never make it to the safe harbor of paradise, and you will crash upon the jagged rocks of financial ruin.

Follow these simple steps to make your dreams of a safe financial future come true, and steer clear of financial ruin.

Make Up Your Mind

Many people fall into debt because they grow complacent, spending above and beyond their means, living from paycheck to paycheck with barely enough to make the bills. They don’t have enough to pay for dinner out on Friday, the new clothes that go with it, or the movie after.

Yet they do it anyway, and on the credit card the spending goes. The honest, painful truth is that if you don’t have the money for those things, you shouldn’t be doing them. Learning to be satisfied with your limitations is difficult. You want to be accepted by your personal crowd, but if your crowd’s habits are decaying your account balance one bad habit at a time, you have to ask yourself if the consequences are really worth it.

Once you decide that the lush greens of financial security offer an abundance that the Jones’ can’t match, then the seas gets glassy and the waters are far easier to ease through.

Say Goodbye

Once you’ve made up your mind to live within your means, it’s time to say goodbye to your plastic.

Either cut them or bury them far, far away. You may even want to freeze your credit cards. You can’t open the dam for the credit flood waters if you don’t have access to it. Don’t panic. It’ll be tough at first to say goodbye because you’ll feel like you’re being left without a life preserver, but the truth is you’ll be gaining a lifeboat in exchange.

Pay Off Your Debt First

Cutting up your card was the first step. Now you must be proactive about slashing it to zero. Snowballing is an extremely effective way to quickly demolish your debt. Establish your payoff plan and stick to it. This debt is now a “need” on your financial map.

You have a plan for paying off your credit cards, now lay out your map to help you get from paycheck A to paycheck B.

Lay Out Your Map

What are your needs? What are your wants?

By organizing your finances by needs and wants on a paycheck to paycheck scale, you can pay off the needs first, then have whatever is left for you. When you draw your financial map, classify bills, debts, and savings as needs, don’t forget to calculate things like clothes and the once in a while purchases too. Otherwise, your budget won’t resemble reality. The only rule is to determine needs from wants when you allot your funds.

Track Your Money

The beauty of online bill pay is that using it for everything keeps you from running blind through your budget, while showing you exactly what’s happening with your balance. Without credit or debit cards sucking the life from your account, it’s one way in and two ways out – cash and bill pay.

Use bill pay for everything and withdraw your cash for the extras bill pay can’t handle such as gas and petty expenses. Once your cash is gone. You’re done. No more spending until the next paycheck is securely in your account.

Remember to withdraw enough cash to get you through. Allot the amount of cash required for groceries, fuel, kid’s needs, and anything else you may need for the period. If you know your child needs new clothes, establish a plan for that spending and only use cash you have readily available.

Some people label envelopes so they can distribute the cash they need to the places they need it, without cutting into funds from another category. Do whatever works for your mind and your system. The only unbreakable rule is that you can’t spend beyond the cash you have, so you must manage it well.

Once you have learned to live within your means, and have your debt under control, life will be sweeter and you’ll never return to the choppy waters of too much debt again.

*Original article courtesy of Vincent King of MoneyNing.