Category Archives: Financial Advice

A Few Things You Can Cut From Your New Year’s Budget

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When it comes to finances, what would you like to do differently in the new year? When looking at your money and the way you spent it last year, what needs to change?

Here are a few things you should remove from your budget in the new year:

Unnecessary daily expenses: We all like coffee every day. But do you really need Starbucks every morning? It’s gets very expensive if you spend at least $5 a day buying coffee. That’s $25 each work week and $100 or more a month!  This will eventually add up to well over $1,000 at the end of the year. Instead, stock up coffee to brew at home and use the price difference to beef up your emergency fund.

Phone apps: The vast majority of phone apps are free, but for a lot of people – spending 99 cents on one here and there doesn’t seem like a big deal. If you’re one of those people who spends a lot of time on your smartphone throughout the day, then it might be time to think about which apps are costing you money (whether it’s up front or from in-app purchases).

Spending with coupons: You’re probably thinking, “this sounds like saving money!” While coupons can be helpful tools, they’re only helpful if the coupon is something you were already planning on buying. Don’t be swayed by a deal or discount if it’s not something you need. Buying things you want (and don’t need), is an easy way to throw money away. Make smart or necessary purchases, and use coupons to make those buys even better.

Kick the new year off right – think savings instead of spending!

 

5 Ways to Curb Impulse Buying

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It’s so hard to fight the urge to spend money. You’ve earned it, so why can’t you spend it – right? It’s certainly fine to give in once in a while, but impulse buying can really throw your budget, especially if you’re buying higher priced items.

Impulse shopping is far from uncommon in America. According to a survey from CreditCards.com, about 54% of Americans have spent $100 or more on an impulse purchase. The survey also points out that 84% of Americans have made impulse purchases, and 20% have even made purchases of at least $1,000 on impulse – wow!

If you’re looking for ways to finally kick this type of habit, here are five tips to help overcome impulse buying:

Make a Shopping List

The easiest way to fight impulsive shopping is by making a list. When you go shopping, know exactly what you’re there for and stick to the original mission. If an item is not on the list, you don’t buy it – it’s as simple as that. Sticking to the shopping list will take some self-discipline but with a little practice, it will become second nature.

Create a 30-Day Rule

Impulsive purchases happen essentially because you don’t give yourself the time to rationally think about the purchase. The next time you feel the urge to buy something, tell yourself to wait 30 days. After the 30 days, do you still want it? Are you still thinking about it? If so, go ahead and buy it – but you’ll find that most of the time, you’ve long forgotten about it already.

Budget in Impulsive Purchases

Some people just can’t help it. They’re going to buy random items regardless of how much planning they do. If you’re one of those people, that’s okay. Just put it into your budget. Create a category for “miscellaneous spending” or in other words, impulse purchases. Once you’ve reached the max for the category during a given month, you’ll have to wait until the next month to buy anything else. This way, you can satisfy your urge to shop while controlling it at the same time.

Bring Cash Only

Another way to stop yourself from impulsive buying is to leave all your credit cards at home. Just bring cash. Doing so will put a limit on how much you can buy. Of course, you’ll want to be prepared and know how much cash you’ll need to bring for at least essentials, but this could be a very effective method if you’re good with keeping track.

Think About Those Long-Term Goals

Thinking about the future is actually very difficult, as shopping can be fun and the thrill of making a purchase even more so. But think about your long-term goals and all the things you want to save up for. You’ll realize that there are probably more important things than what you’re about to buy. Is that pair of designer jeans really worth delaying your vacation? And what about another new tablet or other electronic device? Is that more important than saving for retirement?

The answer could very well be yes, but most of the time – opt to save up and spend it on something that truly matters.

Article Source: Miranda Marquit for Moneyning.com

How Much Should You Tip?

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Tipping. Conversation about the topic can spark lengthy debates with opinions ranging from staunch support to extreme opposition. Some consumers appreciate the opportunity to reward the service industry for a job well done. Others feel the practice places an unfair expectation on the patron, inflates the overall cost of goods or services, and leads to increased employee turnover.

Historically, the American tipping model allows wait staff at upscale restaurants to earn a comfortable living, but those working at smaller establishments often struggle to make a livable wage. The wide disparity in earning potential stems from a 1966 law that established a federal minimum wage for tipped employees. The current minimum wage for tipped employees? $2.13 an hour. If that figure sounds shocking, consider the fact that it hasn’t changed since 1991.

Should the federal minimum wage for tipped employees be raised? Perhaps. There are advocates on both sides of the issue. Are there alternate ways to create a more equitable earning system? Absolutely. Tipping is standard practice in restaurants across the country, but the service industry extends beyond the dining room walls. And while 15-20% seems to be the going rate for a restaurant tip, you may be wondering how much to tip in other areas.

Here are a few general rules, courtesy of DealNews, to help you tip with confidence:

Waiter/Waitress: 15-20% minimum
Tipping Tip: We’ve already covered this one, but here’s an additional reminder – if you use a coupon or discount promotion, be sure to tip on the original price, not the discounted total.

Food Delivery Driver: 10% (or $2 minimum)

Tipping Tip: If you live far away from the restaurant (20-30 minutes), consider adding a few dollars extra to help the driver cover the additional gas expense.

Hairstylist/Barber: 10-15% for standard service, 15-20% for exceptional service

Tipping Tip: It’s hard enough to find a hairstylist you like. When you finally do, tipping them well can not only show your appreciation –  but help establish a great relationship going forward.

Tattoo Artist: 10-20%

Tipping Tip: Like most purchases, this one can vary based on the size and detail of the tattoo you choose. As for the exact amount, if you’re pleased with the artist’s work and you have any thoughts of becoming a return customer, the goodwill you build with a solid tip is well worth it.

Bartender: $1 per drink or 15% of the bill

Tipping Tip: You can take a wait-and-see approach by tipping when you close out your tab, or you can increase your odds of getting good service by tipping ahead of time.

Car Wash Attendant: $2-3 for a basic wipe down, $5-10 for more extensive washes

Tipping Tip: If you’re going to spend money on a quality car wash, investing a few extra dollars in a tip will help you ensure your attendant pays attention to the little details that make your car shine like it should.

Uber/Lyft Driver: $2-3 for a standard trip, $5-6 for extended trips

Tipping Tip: Along with lowering their fares, most ridesharing apps have added a tip option. This should save you from navigating from the whole “So sorry…I don’t have any cash on me” conversation.

If you find yourself in a situation other than those listed above, and you’re unsure about the standard tipping rate, it’s usually safe to assume that 18% of your total bill is a quality tip. It may not qualify you as a high roller, but you certainly won’t have to deal with dirty looks on your way out either.

How to Bounce Back from a Spending Spree

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We’ve all been there. We intend to make a few purchases then suddenly we realize we’ve gone overboard with our spending. You may feel the urge to panic – but before you do, consider these tips for damage control after going on a spending spree.

Prioritize purchases
When the dust has settled and your panic begins to recede, start to look back over what you’ve bought. Are these things vital to your life, or are they all “extras” that you don’t necessarily have a need for? Sure, it’s fun to get new things, but if you’ve spent too much, you may need to think about returning some things to get your money back on track.

Get back on budget
Sure, you’ve gone over the limit, but it’s time to move forward and recover. Remember how you typically spend and if that’s been working for you, go back to your old ways. Don’t beat yourself up over what’s in the past. It’s time to regroup and remember your limits.

Plan to pay back
Stick to your original budget, but also consider ways you’re going to make up for the damage you’ve done to your wallet. If you’ve charged your purchases, now’s the time to dip into that debt repayment fund you’ve hopefully been saving up. If you shopped with cash, plan for ways you can trim your spending until your finances are where they were before your spending spree.

Reflect on patterns
Getting in this position every once in a blue moon is not cause for too much concern. But, if overspending and busting your budget is becoming a pattern, you need to stop and assess the issue. Is there a particular reason why you’re shopping/spending habits are getting out of control? Understanding why you’re behaving the way you are, will help you to make corrections and learn from your mistakes.

Need help with your budget? Check out our budgeting guide!

Article Source: Wendy Moody for CUInsight.com

3 Bad Money Habits You’re Passing on to Your Children

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It can be easy to forget in our busy day-to-day lives, that our children are paying close attention to our words and actions. They emulate what they see around them and grow increasingly impressionable with age. It’s important to positively influence them by demonstrating proper behaviors and habits they can learn from. When it comes to finances, there are a variety of ways you can properly educate your children, including discouraging them from practicing these three bad money habits.

Impulse buying

When you go shopping do you follow a set shopping list? If your answer is “no” and you shop with your children, it’s time to start sticking to your plan. When you’re shopping, and grabbing things without any forethought, you are showing your children that sticking to a budget is not your priority. They may also view your impulse shopping as disorganized and unstructured. Instead, instill in them the importance of writing down a plan and getting only what’s necessary, to stay on the right track with spending.

Not talking about money

As children get older and they begin to understand the value of money, it’s important they are taught to be open about financial issues. Some view money matters as difficult or awkward to talk about. But, when it comes to building confidence in your children, it’s vital they learn the skills necessary to effectively manage their personal finances. Developing healthy financial habits from an early age is extremely important and it begins with everyday conservations.

Living above your means

If your child asks for something at the store, but you don’t have the money to buy it, it’s okay to use that old saying, “money doesn’t grow on trees.” So many Americans live outside of their means in an effort to “keep up with the Joneses.” Instead of raising entitled children that expect everything no matter how tight funds are, teach them the importance of differentiating between “wants” and “needs.” Help them understand that it’s okay to splurge on occasion, but it’s more important to budget and save in order to maintain good financial standing for a happy, stress-free life.

Article Source: Wendy Moody for CUInsight.com

Do Your New Year’s Resolutions Need a Do Over?

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Believe it or not, it’s May already. You’ve flipped the calendar page four times, and if you’re like more than 80% of the general public, it’s been a few months since your New Years’ resolutions crashed and burned. Have you taken the time to analyze why your good intentions didn’t pan out? Maybe they were too ambitious. Maybe they weren’t challenging enough. Whatever the reason (or excuse), your resolutions are over. Done. Finished. Or are they?

Failed goals aren’t ashes. They’re embers.

Is it possible to revive resolutions that haven’t shown signs of life in months? Absolutely. To stoke your motivational fire, you’ll need to revisit the reasons you set those goals in the first place. Take a close look at the things you want to accomplish, and then determine whether they’re still a realistic possibility. If so, recommit yourself. If not, adjust your expectations. But once you decide to have another go at it, work smarter not harder.

Find your momentum with micro-goals.

While it can be discouraging to examine missed goals or failure in general, author Erin Lowry addresses the topic of failed resolutions with refreshing candor on her Broke Millennial blog. Lowry shared, “Like most of us, I fail each year at my New Year’s resolutions. Then I realized I should apply one of my favorite money tactics to my resolutions. Micro-goals. I’m a big believer in setting a lofty goal and then working backward to chunk that goal down into manageable pieces.”

The beauty of micro-goals lies in their universal application. Financial Goals. Fitness ambitions. Relational hopes and dreams. Whatever the category, micro-goals can help you get back on track. The key to starting over is finding a way to gain momentum, and breaking your big goals into smaller goals can set yourself up for easy wins. Then, as you experience the sense of accomplishment that comes from completing each little task, you’ll find the inspiration to carry on toward your ultimate destination. Like the peaceful painter, Bob Ross, once said, “There’s nothing in the world that breeds success like success.”

Take another run at those financial goals.

Are you doubling back to pursue a financial resolution like paying off debt, building an emergency fund, or saving for retirement? Remember, you don’t have to do it alone. Your credit union can be an incredible partner in your pursuit of financial stability. From low-interest loans and high-interest savings accounts to financial counseling and investment advice – credit unions provide a wide array of solutions designed to help their members win with money.

Not a credit union member? Your first micro-goal is an easy one: become a credit union member as soon as possible! If you live, work, worship, volunteer, or attend school in Monmouth or Ocean Counties in New Jersey – you are eligible to become a member of First Financial. It’s easy, get started now!