Category Archives: Financial Advice

Financial Advice for Millennials

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The Great Recession created a perfect storm for millennials. It was the worst financial crisis the United States had seen since the Great Depression, and it left millennials playing catch up with their finances in the hopes of someday being able to retire. But even as they fight to break even, millennials continue to accrue debt.

The Federal Reserve recently released a study showing millennials have accumulated more than $1 trillion in debt including mortgages, auto loans, credit cards, and student loans. Additionally, Schwab’s 2019 Modern Wealth report revealed that 62 percent of millennials are living paycheck to paycheck while only 38 percent feel financially stable. Despite that statistic, millennials also say they spend nearly $500 a month in nonessential purchases.

While the numbers above look grim, there is still hope for millennials pursuing the “American Dream.” It is important to remember that paying off cars and credit cards, buying a home and working toward retirement are not impossible feats. Like everything else in life, finances are about balance and finding an approach that works best for you.

Create a budget. Budgets are not “one size fits all,” and no two people will have the same financial goals. First, find a strategy that balances rewarding life experiences and saving for the future. Be realistic when crafting your savings and spending goals. For example, you can’t expect to go immediately from saving nothing each month to saving $500 a month. Start with a number that is easily attainable and increase the amount when it’s feasible.

Automate your finances. It’s easy for us to spend more than we save. The trick to overcoming that urge is to put our finances on autopilot. If your paycheck is set up with direct deposit, have a portion of it automatically deposited into a savings account that you don’t touch. Also, set up recurring transfers from your checking account into your savings account. Automatic bill pay is another great way to get ahead. Using online bill pay ensures that your bills are paid on time and you don’t have to remember to pay them (or buy stamps to mail them out)!

Track your spending. How much money do you spend at Starbucks each month? How many Amazon boxes arrive at your door each week? Chances are, like most of us, you don’t keep track of a $5 purchase here or a $10 purchase there. But those small amounts begin to add up and they can add up quickly. There are a number of apps like Mint, Quicken, and Twine – that aggregate your financial transactions and organize them by category so you can create and monitor a budget. Get some budget set up tips here.

Avoid impulse purchases. Overspending is a common interference to achieving financial goals. The more we give in to unplanned or excessive purchases, the harder it is to save money or stick to a budget. Rather than caving to those impulse buys, implement new habits to help avoid traps. Give yourself a waiting period for large purchases. During that waiting period, talk to someone such as a friend, partner, or spouse who is financially sound – and get their opinion about the purchase before you pull the trigger.

Consider a side hustle. Part-time work is a great way to make a little extra money that helps trim down debt or pad a savings account. There are multiple rideshare apps and food delivery apps that allow you to work when you want and as much as you want. If you have a particular skill set like writing or computer work, you can always look for ways to contract out those skills to make a little extra money doing freelance.

Trim your monthly expenses. Do you have a gym membership you never use? Are you paying for cable you barely watch? Does GrubHub make regular deliveries to your place? The average millennial spends more than $500 a month in nonessential purchases. Look at your budget and see where you can trim items. Replace cable with a streaming service. Make dinner at home. Get rid of that gym membership you never use and go for a run outdoors. You’ll be surprised how quickly you can build back your savings by eliminating unnecessary bills.

At First Financial, we offer our members a variety of services including financial planning and credit management counseling. We want to help you find a way to save for your future in a way that also meets your immediate needs. Contact us to schedule an appointment to review your financial situation and find a path that gets you where you want to be.

How to Manage Financial Stress

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Are you financially stressed? Here are a few tips to help you maintain your cool and get back on track to achieving your financial goals.

Focus on the positive.

If you’re in debt, it’s a lot easier to focus on the negative. However, staying positive can help you remain calm and clear your head. List out the positive aspects of your money management skills, so that you can clearly recognize your financial strengths. You may be able to expand on those strengths to provide yourself with a solution.

Look back at your budget.

Go over your bills and expenditures with a fine tooth comb. There are always things that you can cut back on, so try to reduce any expenses and put that money to better use. Setting up an emergency fund, paying off debt, and putting money toward retirement are all good options.

Stop comparing yourself to others.

Its human nature to feel jealousy when you feel like you’re missing out. Avoid the fear of losing out by not comparing yourself to those around you. You don’t know their financial status – they may have material wealth, but could still be in worse shape.

Meet with a professional.

In most cases, stress comes from the unknown. If you don’t understand your finances – it can be stressful, but it will only get worse if you don’t ask for help. Before things get worse, seek someone who deals with similar situations every day.  If you are a First Financial member, we offer complimentary annual financial reviews. Stop into your nearest branch or contact us today to schedule an appointment.

Embrace the concern.

You shouldn’t be worrying about money all the time, but a little bit of worry can help you stay aware, keep your spending in line, and your savings on track.

Article source: Tyler Atwell for CUInsight.com

3 Good and Bad Reasons for Personal Loans

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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. Actual rate will vary based on creditworthiness and loan term. Subject to credit approval. Personal Loan repayment terms range from 12 to 60 months, and APRs range from 10.24% APR to 18% APR. Minimum loan amount is $500. Loan payment example: A $2,000 Personal Loan financed at 10.24% APR for 24 months, would have a monthly payment amount of $92.51. A First Financial Federal Credit Union membership is required to obtain a Personal Loan or Line of Credit, 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. 

Article Source: John Pettit for CUInsight.com

Ways to Keep Your Medical Expenses in Check

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Medical expenses have gone crazy. You don’t have to do the same.

In the United States, healthcare has grown into a $3 trillion industry. That’s $3,000,000,000,000. That’s a lot of zeros—so many that for most of us, the number doesn’t even seem real. But if we break it down to a personal level, that means the average American spends more than $11,000 per year on healthcare costs. If that doesn’t sound troublesome, consider the fact that the annual cost of healthcare for a family of four tops $28,000. With the median household income coming in at $63,000 per year, that means the average U.S. family can wind up spending more than 40% of their annual income on medical-related expenses.

Even with employer-provided health insurance, which covers roughly 56% of the US population, the employee contribution and out-of-pocket deductibles can leave families buried under an avalanche of medical debt. It’s hard to understand how an industry responsible for personal care can seem so unconcerned when it comes to the financial state of its patients. But with a growing number of hospitals being operated as investor-owned, for-profit businesses, return on investment often seems more important than compassionate patient care.

Difficult Times Call for Creative Approaches

As medical bills continue to climb, the corresponding rise in medical collection agencies only perpetuates the healthcare industry’s callous reputation. In a conversation about the cold, impersonal nature of medical collections, Elizabeth Rosenthal, author of An American Sickness, observed, “…to them [collection agencies], a bill is a bill is a bill. They don’t care if it’s for somebody’s heart transplant…or if someone spent a lot more money on a Rolex watch that they couldn’t afford.”

Over the last few years, medical bills have become the number one cause of bankruptcy in the United States. With that in mind, it should come as no surprise that GoFundMe campaigns have become one of the most popular ways for consumers to cover their medical costs. According to GoFundMe statistics, approximately 250,000 fundraising campaigns are established on the platform every year just to pay for medical expenses. The $650,000 generated by those campaigns points to a significant problem in the healthcare system.

If you’re one of the thousands of Americans struggling to keep your head above water as medical bills flood in, you might feel helpless. And while there are no magic solutions that can make legitimate medical debt disappear, there are a few steps you can take to stay afloat.

3 Ways to Keep Your Medical Expenses in Check

1. Review Your Bill
When hospital or doctor bills show up, it’s natural to skip right to the “Total Due.” This is not necessarily the best way to approach the statement. Glancing at the amount due could leave you feeling helpless, confused, and overwhelmed. Before you send any money, take time to review every line item listed. Due to complex medical billing codes, it’s not uncommon for incorrect or duplicate charges to wind up on the bill. If you notice discrepancies or questionable entries, it is your right as a consumer to ask your insurance company or medical provider for an explanation. The dispute process may be lengthy, but it’s better than paying for medical services you never received.

2. Consider a High-Deductible HSA
If you and your family are in relatively good health, a Health Savings Account (HSA) can be an excellent way to secure medical coverage while keeping your insurance premium under control. Traditionally available through employers, insurance companies, and some financial institutions, HSAs allow you to set aside money from your paycheck to be used specifically for medical expenses. These accounts feature higher deductibles than traditional insurance plans, but they make up for that by allowing account holders to deposit funds on a pre-tax basis, which can provide some savings and stress relief.

3. Create an Emergency Fund
Setting aside $1,000 in a savings account is a smart way to protect yourself against life’s unpredictable twists and turns. Minor illness and occasional doctor’s visits certainly qualify as unexpected expenses, so an emergency fund can help you address sudden medical needs without derailing your budget. If you decide to follow the previous suggestion and secure a high-deductible Health Savings Account, you may want to boost your emergency fund to a level that would cover your deductible. While this adjustment will likely take more work to establish, knowing you’re able to cover your entire deductible in the event of a medical emergency provides enough peace of mind to make it worth the effort.

The steps we’ve outlined may not solve all your problems or eliminate all your medical debt, but they can go a long way toward helping you feel like you have a little more control. If you need a little help in between – check our Financial Personal Loans, small personal loans that can help cover the costs of life’s necessary expenses.

*APR = Annual Percentage Rate. Actual rate will vary based on creditworthiness and loan term. Subject to credit approval. Personal Loan repayment terms range from 12 to 60 months, and APRs range from 10.24% APR to 18% APR. Minimum loan amount is $500. Loan payment example: A $2,000 Personal Loan financed at 10.24% APR for 24 months, would have a monthly payment amount of $92.51. A First Financial Federal Credit Union membership is required to obtain a Personal Loan or Line of Credit, 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. 

5 Bad Money Habits to Break Today

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When it comes to money, we all have some bad habits from time to time. Sometimes they’re learned early in life, and sometimes they’re picked up along the way. Here are 5 habits that you should kick ASAP.

1. Buying snacks at work

Getting hungry in the afternoon is totally normal. But if you find yourself feeding quarters into a vending machine or swiping your card at the convenience store every afternoon, you may have an issue. Just spending a couple dollars a day can really add up over the course of the year. You can probably buy the same snacks at the grocery store for a fraction of the price, and in larger quantity. And that’s without coupons. So next time you get that 2:30pm hunger pain, jot down a note to hit up your favorite grocer on the way home.

2. Making impulse buys

Whenever some people see something they like, they just have to have it. By taking time to think it over, you may eventually decide it wasn’t a wise purchase. Sometimes, all you need is a few minutes to let it simmer in your brain to realize it’s not worth it. Try out a “waiting period” next time you get the impulse to buy something, and see what happens.

3. Not saving money

We probably all started saving later than we should have – whether it’s for retirement, an emergency fund, or just a fun rainy day fund. If you save money first, and then budget the rest when you get a paycheck, you probably won’t even miss that money.

4. Carrying credit card balances

If you have a credit card you’ve probably heard about the evils of using it. While it can get out of control for some people, it can also be a valuable tool for others. If you regularly use your credit card, you’ve most likely carried a balance on occasion. Anyone who’s ever done this realizes how bad credit card interest can really be. Paying off credit card debt can take decades for some people. Don’t get trapped.

5. Paying big bucks for cable

There are plenty of other alternatives out there for entertainment. Cable can become very costly and sometimes that’s not your top priority in terms of bills. Netflix and Hulu provide hundreds of movies and TV shows at much lower rates. Do a price comparison and decide what’s best for your budget.

Article source: John Pettit for CUInsight

Changing Jobs? Check Your Finances First

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Are you considering a job change? If so, it is important to approach your job change with careful consideration.

Not only will a new role involve learning new skills, working with new people, and establishing a new routine, it will also require significant financial planning — at least in the transition period.

So, how can you set yourself up for success while transitioning to a new endeavor? By making sure your finances are in order.

 

5 Financial Tips to Remember When Considering a Job Change

Check your savings. If you already have another job lined up, your savings may only need to tie you over until your new paychecks start coming in. This might sound like a minor concern, but depending on the payroll schedule for your former company and your new employer, it’s entirely possible you could go a month or more between paychecks. If you’re leaving your job without another already lined up, you’ll need enough savings to cover expenses until you accept your next job offer. If you have the luxury of transitioning on your own time frame, aim to have several months’ worth of expenses in a savings account.

Trim your expenses. Admittedly, cutting expenses is never a fun topic of conversation. However, operating on a leaner budget (at least for a little while), can make your career transition far less stressful. So, before accepting a new job offer, take time to review your monthly budget and see if there are any belt-tightening adjustments you can make. Cut back on morning lattes, meal prep at home instead of buying lunch at a restaurant every day, or binge a Netflix series instead of going to a movie at the theater. You’ll be surprised how quickly little savings add up — and those savings can help you bridge the financial gap between jobs.

Review the compensation package. It’s natural to look at a job’s salary when trying to determine whether it’s a better opportunity. This is a good place to start, but there’s more to it than that. Does the prospective employer pay an hourly wage, salary, or combination of base plus commission? Do they cover a portion of employee insurance costs? Is the new employer’s paid time off plan equivalent to the one you’d be giving up? What about holidays? Be sure to compare the entire compensation package instead of just comparing the annual salary.

Account for relocation costs. If your new job will require you to relocate, it’s always a smart idea to look at the cost of living in your new location. A $10,000 per year raise is nice, but if you’re going to spend an additional $15,000 in housing expenses each year, the new job could cause you to fall behind financially. If you need help comparing living expenses, cost of living calculators can be extremely helpful. State income tax rates can be another location-dependent variable worth considering.

Don’t leave money behind. If your current employer offers a 401K or other retirement savings accounts, be sure to make arrangements to take those funds with you. This might seem like a no-brainer, but the fact that orphaned 401K accounts total an estimated $1 trillion – indicates it’s easier to overlook than you might think. When it comes to these employer-sponsored retirement plans, employees have three options when changing jobs: 1. Roll over funds to a 401K plan with the new employer, 2. Roll over the funds into an Individual Retirement Account (IRA), or 3. Withdraw the funds. It’s worth noting, however, that withdrawing the money usually incurs a steep penalty. To determine the best approach for your money, it’s always best to consult with a financial advisor. If you need a good place to start, check out the Investment and Retirement Center at First Financial.*

If you’re currently contemplating a job offer or thinking about what it would take for you to make a change, spend a little time crunching numbers. You can also contact your local credit union, and if you live, work, worship, attend school or volunteer in Monmouth or Ocean Counties in NJ – one of the financial representatives at First Financial FCU would be happy to help you make a financial plan. We can help you analyze your current finances, identify the best retirement rollover plans, and find ways to maximize your money in order to make your job change as smooth as possible.

*Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are: