Help! I can’t afford to save money

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Sarah Schmalbruch of Business Insider, explains how you can actually save even when you think you can’t afford to at the moment.

Schmalbruch references authors Ellen Rogin and Lisa Kueng of the book “Picture Your Prosperity: Smart Money Moves to Turn Your Vision into Reality.” In the book, Rogin and Kueng believe the thinking behind you ‘can’t save’ is because it feels like you are losing money.

To turn around this negative thinking, Rogin and Kueng suggest using the ‘picture your prosperity’ method. The trick of the trade? AUTOMATE YOUR SAVINGS

To learn how to save more efficiently, view the full article here.

Your local credit union personal finance professionals bring you this website and other tools to help you make the most of your money. To find a local credit union you are eligible to join click here or go to asmarterchoice.org

Know what to file for your 2014 taxes

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Nerdwallet and Generations Federal Credit Union share important tips when gathering all the necessary documents to file for your 2014 taxes.  In addition, it is important to be mindful and aware of the impact the US Affordable Care and Patient Protection Act of 2010 will or can have on your tax regulations and health insurance.

A basic essential to getting started — create a central spot to store all of your important and applicable documents for filing. Keep everything in one place and be as organized as you can be!

Standard documents for everyone include statements, W-2s, and 1099s. However, each person(s) financial situation is unique. See if any of these documents/statements below are applicable to you.

  • Social Security numbers and birth dates for you, your spouse and any dependents
  • Income documentation, such as W-2 and 1099 forms
  • Pension payment, individual retirement arrangement (IRA) distribution and Social Security income documentation, including 1099-R and SSA-1099 forms
  • Records of alimony received or paid
  • Unemployment insurance payments and profit/loss statements if you operate a business or are self-employed
  • Records of property sales, moving, educator and education expenses
  • Mortgage-interest and student loan interest statements
  • Documentation of property and other state and local tax payments
  • Documentation of retirement contributions to IRA, Keogh SIMPLE or 401(k) retirement plans
  • Creditable energy expenses
  • Medical savings account contribution documentation
  • Charitable donation receipts
  • Child care and adoption expense documentation
  • Medical and dental expense receipts
  • Documentation for advance child tax credit payments, theft and casualty losses, and union dues
  • Investment and bank interest statements
  • Proof of medical insurance coverage for yourself and dependents

The earlier you prepare for your taxes, the fewer headaches you’ll have when filing. Also, the earlier you submit your taxes the sooner you’ll receive reimbursements!

Please note, the IRS tax filing deadline for 2014 is Tuesday, April 5, 2015

To learn more about the potential impacts the US Affordable Care and Patient Act of 2010 may have on you, please view the article’s full version.

Your local credit union personal finance professionals bring you this website and other tools to help you make the most of your money. To find a local credit union you are eligible to join click here or go to asmarterchoice.org

Saving for your retirement at any age

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via Getty Images

Nanci Hellmich of USA Today explains the power of saving early for retirement in each stage of your life. What matters is how much you save — you can’t afford not to save!

Below are suggested tips applicable to everyone looking to retire comfortably and securely.

20-somethings:

  • Develop healthy financial habits
  • Get out of credit card and/or college debt
  • Encourage parents to give their young-adult children a leg up

30-somethings:

  • Do a budget
  • Make sure you are contributing to your 401(k)
  • Avoid taking on too much debt so you can save
  • Have your retirement savings taken automatically from paycheck
  • Save the max in your plan

40-somethings:

  • Save aggressively
  • Seek a financial planner
  • Coordinate your retirement savings
  • Focus on smart investing
  • Figure our how much you’ll need to maintain lifestyle when retired
  • Save up the max allowed in your employer’s retirement plan
  • Turbocharge your savings in other ways

50 and older:

  • Save even more than 20% of your net income
  • Start thinking about when you’re going to take Social Security
  • Consider reducing your expenses
  • Get into the having of living on a fixed income

It’s important to stick to these suggested tips in order to main a comfortable and secured lifestyle when you retire. The more you save the more you can enjoy the golden years of retirement.

View more about each of these retirement savings tips, in the full article, available here.

Your local credit union personal finance professionals bring you this website and other tools to help you make the most of your money. To find a local credit union you are eligible to join click here or go to asmarterchoice.org

How parents can still educate their young adult children on money

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Parents can still motivate and advise their millennial children even if they are out of the house. Liz Weston of Bankrate, advises several smart strategies to help young adults get into the habit of saving their money.

Below are some ideas that can you the conversation started:

Be a 401(k) cheerleader.

Make sure they’ve got the right student loan repayment plan.

Help them set up a Roth IRA.

Share your story. 

Or share your regrets.

Weston advocates that young adults will probably be more likely to listen to  their parents financial advice compared to when they were younger. To read the full article, click here.

Your local credit union personal finance professionals bring you this website and other tools to help you make the most of your money. To find a local credit union you are eligible to join click here or go to asmarterchoice.org

Credit Unions: Big Believers in Small Business

A Smarter Choice would like to give special thanks to Lancaster Red Rose Credit Union for contributing the article below to our blog. They provided a very insightful article focused on how credit unions are focused on working with small business start-ups by providing financial assistance. Enjoy!

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The benefits of doing your personal banking with a credit union over a large financial corporation have been outlined numerous times.  And the public has been ready to make the move, as credit unions passed the 1 million member mark in 2014.  But it’s not only personal savings and lending where credit unions can make a difference.   Credit unions are big fans of small business!

Small business optimism is at it’s highest in several years.  In addition to an increase in the overall optimism index score, small businesses have big plans for capital investments. Half of all small-business owners surveyed said they plan to make investments next year, up from 43% in 2013 and 41% in 2012.

However, trends show that small business start-ups are reluctant to apply for small business lending with a financial institution.  Whether they feel that they will not be approved or they don’t want to take on the debt, 77% of those polled have never applied for a business or personal loan. Instead they are using their personal savings, reaching out to family and friends or even opting towards more unorthodox means of funding with online sites like Kick Starter or Go Fund Me.

By working with credit unions for their lending and account needs, small businesses enjoy the same  benefits as our members who hold personal accounts:

▪       Higher Rates and Lower Fees

Why is that? Because, as a non-profit organization, a credit union will put earnings to work for their members, including charging less fees and paying out higher interest rates.

▪       Small business lending

Cash flow is important to keep your company running and growing. Not only do credit unions not charge overly inflated interest rates, but loan decisions are made locally so there is no waiting game.

▪       Online banking and shared branching

Two common misconceptions about credits unions are that they’re outdated in their online banking offering and that you can’t access your money when you’re away from your local area. Neither one is true! Credit unions offer online banking and bill pay, as well as access to your funds from anywhere across the country.

It could be because small businesses and credit unions are founded on many of the same principals, including operating in the communities they ultimately serve and working towards giving back to those communities, that they work so well together.

Here are a few success stories on the partnership between credit unions and small business.

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Abby Kiebach, CEO at Lancaster Red Rose Credit Union
As the CEO of a community credit union serving Lancaster County, PA, Abby is dedicated to maintaining the strength and stability of LRRCU while providing personal member service to all current, and future, members. In her spare time, Abby loves to volunteer for a full range of local community organizations and spend time with her family.

Your local credit union personal finance professionals bring you this website and other tools to help you make the most of your money. To find a local credit union you are eligible to join click here or go to asmarterchoice.org

How to teach valuable money lessons to your child

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via US News Money

Geoff Williams of US News Money, recommends valuable money lessons that parents can teach to their children at any age. See what you should be teaching your child based on their age:

Kindergarten“According to the Money As You Grow website (moneyasyougrow.org), launched by the President’s Advisory Council on Financial Capability, a kindergartner should grasp four key concepts:

1. You need money to buy things.
2. You earn money by working.
3. You may have to wait before you can buy something you want.
4. There’s a difference between things you want and things you need.”

Sixth Grade: It’s time to set up an allowance and open a bank account.

“By now, according to Money As You Grow, children should understand the concept of saving, including what compound interest is. Conversely, they should understand that credit cards are loans, not free money, and that if bills aren’t paid in full within a month, you’ll wrack up interest, paying more than you originally spent. They should also recognize that putting personal information, such as bank account or credit card details, on a website can be risky because someone could steal it.”

High School Freshman: It’s time to start saving up for college.

“Ted Gonder, co-founder and CEO of Moneythink, a Chicago-based nonprofit specializing in educating inner-city high school students on financial literacy, says freshmen should also recognize how money can either help – or stand in the way of – achieving their dreams.

“They should have goals in mind for their lives and understand that money is inextricably linked to those goals’ fulfillment,” Gonder says.”

High School Senior: Now is the time to start having your teen  be responsible for paying some of their bills (e.g., cell phone or credit card).

“Ideally, by this age, your teen’s knowledge of money management should have significantly matured, so that he knows almost as much as you do about several financial concepts. Your teen, according to Gonder, should be prepared to enter his 20s with a sold understanding of:

View the entire article here, and see what Williams suggests on how to teach your child the value of money.

Your local credit union personal finance professionals bring you this website and other tools to help you make the most of your money. To find a local credit union you are eligible to join click here or go to asmarterchoice.org

Month to Month Savings Plan

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via US News Money

Geoff Williams from US News Money, provides 12 saving tips to help keep your NYE financial resolution stick. Check out each month’s tip below to start spending and saving accordingly:

January – “Open up an old-fashioned Christmas club account at a credit union (or if you prefer, a holiday club). These are savings accounts you put money into throughout the year and reserve for the holidays. You’ll earn a little in interest, but the main goal is to sock money away so you don’t wind up in financial trouble in December.”

February – Plan ahead to show that you care about your significant other. Do you homework by researching the best deal when buying flowers. Think outside of the box for inexpensive ways to celebrate that can be more sentimental.

March – This is the best time to stock up on winter clothing as retailers begin to roll out their spring/summer line. In addition, March is the ideal time to start organizing your taxes, giving you enough time to prepare before the April deadline.

April – Open up a Roth IRA! “You’ll pay income tax upfront when you funnel money into a Roth, but the funds you withdraw in retirement will be tax-free.”

May – Plant a garden! “According to a cost-analysis study from the seed company Burpee, if you spend $50 on seeds and fertilizer, you can grow $1,250 worth of vegetables. Even if you’re only partly successful due to your brown thumb, you’ll still get exercise and fresh air.”

June – Remember this tip, when watering your lawn you only need about an inch of rainwater a week.

July – Save those vacation days for October – April “travel experts say you can save 10 percent to 30 percent on hotel and airfare.”

August – Best time to stock up on back to school or work supplies.

September – Start preparing for the winter weather in your home.

October – Make your own costume or stock up on bulk warehouse club candy to save money for the holidays.

November – “Consider saving strategies for the holidays. If you host Thanksgiving every year, consider asking guests to bring a side dish. It’ll make the meal cheaper and mean less work for you. And, of course, look at those Black Friday deals – not just for gifts, but for yourself and your household. If you need appliances or home improvements, this can be a fine time to save money on those.”

December – “Now that it’s December, start thinking about how your tax bill will look. Consider paying your January mortgage this month, so you have extra interest to deduct. You can also donate to charity before month-end and reduce your tax bill. If you contribute more to your child’s 529 plan, you might get a partial deduction or credit on your state tax return, depending on where you live. And if you have a financial advisor, call him or her for tax advice and suggestions on how to prepare for the year ahead.”

We hope these tips help keep your spending in check this year. To view the rest of this article, click here.

Your local credit union personal finance professionals bring you this website and other tools to help you make the most of your money. To find a local credit union you are eligible to join click here or go to asmarterchoice.org

 

Common mistakes for first-time home buyers

CU Online

Generations Federal Credit Union wrote a very informative article on their blog about ‘Hasty Home Buying: 5 Mistakes to Avoid when Buying Your First Home.

Purchasing your first home is a monumental and proud moment for that individual or individuals. It is important however, to keep these common mistakes (listed below) in mind when you are negotiating or preparing to finalize your purchase. Remember to seek out financial advice – whether that may be from your credit union or relative – in order that others can help guide on the right path.

What to keep in mind when on the path to home ownership:

1. Not Getting Preapproved

2. Spending Too Much

3. Not Considering Closing Costs or Other Monthly Expenses

4. Disregarding Your Credit Score

5. Failing to Get a Proper Inspection

See what Generations FCU suggests for each of these common mistakes, in the full article.

Your local credit union personal finance professionals bring you this website and other tools to help you make the most of your money. To find a local credit union you are eligible to join click here or go to asmarterchoice.org

Millenials play key role in homeownership

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via Go Banking Rates / Huffington Post

Christina Lavingia, from Go Banking Rates and The Huffington Post wants to know what impact millennials will have on the housing market and economy.

Below are some factors that might explain why millenials are reluctant or even prohibited from becoming first time home buyers.

Gino Blefari, CEO of HSF Affiliates LLC, the operator of Berkshire Hathaway HomeServices, Prudential Real Estate and Real Living Estate franchise  states that “Millennials will impact the homeownership landscape,” Blefari said. “There’s no doubt first-time buyers were impacted by the tighter lending requirements in recent years, and as home prices continue to rebound, some of those first-time buyers who don’t have the equity of another home to help with a down payment were squeezed out. However, this generation still very much believes in homeownership.” 

One major contributing factor — STUDENT DEBT! “The average student who graduated from college in 2013 with student loans walked away with $28,400 in debt, according to the Institute for College Access & Success’ Project on Student Deb.” “A 2012 study by Young Invincibles found that then 30-year-olds who graduated in 2004, on average, were likely ineligible for a mortgage due to poor debt-to-income ratios.”

Another factor holding millenials back from making their first ‘adult’ purchase — the poor job market. Despite the economy’s some what recovery,  “unemployment rates are still low for recent college graduates, hovering around 11 percent for 20- to 24-year-olds in November.”

In closing, supply and demand might play favorably for millennials. “If a large segment of the population begins settling down and having families while still renting, there will be a lack of demand in the housing market. This will cause home values to fall overall, which won’t bode well for existing homeowners; however, it will place home affordability within reach for indebted millennials. Even if millennials preferred renting, if buyer demand is low enough, the cost to rent will outpace the cost to own, pushing many millennials to then enter the market.”

More information is provided, here.

Your local credit union personal finance professionals bring you this website and other tools to help you make the most of your money. To find a local credit union you are eligible to join click here or go to asmarterchoice.org

Don’t play games with your money

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via US News Money

Be careful you might be gambling your money away and not even know it! Geoff Williams of US News Money, explains the ways you could be jeopardizing your money by agreeing to the following:

  • Deferred-interest payment plans. “But deferred-interest plans can be a gamble. You’re betting you can make all of your payments before the time is up – and if you don’t, you will lose money. Maybe a lot”
  • Credit card cash advances. “Essentially, you’re betting that the upfront cash is worth the expense and that you’ll be able to pay your credit card company back quickly.”
  • Putting off repairs. Repairs are never fun and can never be predicted. While you may not have the money to pay upfront for the repairs, you are taking a risk by off setting the repair at a later date. The longer you wait, the bigger the bill comes out to.
  • Warranties. “When someone asks you if you want to buy a warranty, no matter what your answer is, you’re making a bet. If you purchase the warranty, you’re betting that down the road, your product will probably break.”  By declining a warranty you are in turn, betting on the product’s longevity. If it doesn’t work, you could be put in a situation that could cost you more in the end. Risky business!
  • Adjustable-rate mortgages. “But with an adjustable-rate mortgage, it will change eventually because it’s tied into the cost of borrowing money. Borrowers like adjustable-rate mortgages because the monthly payments always start low, and if the economy is healthy, an ARM’s interest rate often remains low, too.”

All of these situations can be risky bets, better to play it safe and follow Williams suggestions and tips by viewing the full article, here.

Your local credit union personal finance professionals bring you this website and other tools to help you make the most of your money. To find a local credit union you are eligible to join click here or go to asmarterchoice.org

Credit Unions are a Smarter Choice!