3 Ways to Stop Overspending During These Times

Posted on June 30, 2020 by VP of Marketing and Business Development Jessica

Given the current pandemic that continues, you’re most likely more mindful of your finances these days. Even if you have a budget set up, you may still find that money feels a little tight right now. The last thing you want to do in these current times, is rack up unnecessary debt or spend too much money. Here are 3 easy ways to stop overspending.

Cut back on takeout: It’s great to support local businesses right now, but don’t overdo it. Have you been consistently making trips to your favorite fast food drive thru or ordering takeout/delivery? If your takeout budget has increased, your grocery budget needs to decrease. Be mindful of what you are spending on food and if the takeout is taking over your budget.

Pay with cash: After you pay your bills for the month, try to use cash for anything else. Other than necessities that you may still want to purchase online for health and safety reasons, are you shopping online and using a card just to pass the time or buy items you don’t really need? Using cash may prevent you from adding that one extra item to your Amazon or other online shopping cart.

Make do with what you have: Delayed events are happening all over. Movies and concerts have either been pushed back or cancelled. As much as you might want to spend money you normally would spend on summer concert tickets on something else, keep it in your savings account. For now – watch a movie on Netflix you haven’t seen yet, or on your cable network’s free on demand movies. You can also login to YouTube and view a past live concert at no cost. There are many ways to improvise and save money!

Article Source: John Pettit for CUInsight.com

Should You File for Bankruptcy?

Posted on June 19, 2020 by VP of Marketing and Business Development Jessica

Your debt feels impossible. New bills and past due notices are showing up constantly. Creditors won’t stop calling. As you feel like throwing your hands in the air, you wonder – should I file for bankruptcy?

Due to the pandemic, this is a reality that many might be facing. Millions of Americans across the country have been unemployed since earlier this year. It’s incredibly easy to get behind on bills when the money isn’t coming in, but the bills are still showing up. It’s an overwhelming feeling.

The longer this pandemic continues, the more likely it is that you’ll see an attorney on a TV commercial asking if you’re thousands of dollars in debt, feeling overwhelmed by creditors and looking for a solution. Next – they’ll present the option of filing for bankruptcy, which who wouldn’t want to have their debt forgiven, right? Not so fast.

Filing bankruptcy might help you get rid of your debt, but it’s important to understand the serious, long-term effects it can have on your credit. When you file bankruptcy, it remains on your credit report for 7-10 years as a negative remark, and it affects your ability to open credit card accounts or get approved for loans with favorable rates.

What exactly is bankruptcy? Bankruptcy is a legal process designed to help individuals and businesses eliminate all or part of their debt, or in some cases – help them repay a portion of what they owe. There are several types of bankruptcy, but the most common types are Chapter 7, Chapter 11 and Chapter 13.

Chapter 7 forgives most of your debt and allows you to keep all of your assets with a few exceptions, depending on state and federal laws. During the process, you and your creditors are invited to a meeting where they are allowed to make a case as to why a federal bankruptcy court shouldn’t forgive your debt. Once your case is approved, your debt will be forgiven, and none of your creditors will be allowed to hassle you over the forgiven debt.

Chapter 11 is generally for small business owners. It allows small business owners to retain their business while paying back debts according to a structured plan. With this option, business owners give up a certain amount of control to court officials, debtors, or counselors assigned to help them rebuild their credit. Despite losing some control of the business, owners are able to keep their business running while working on their financial future.

Chapter 13 is different than Chapter 7 in that it requires you to come up with a plan to repay your creditors over a 3-5-year period. After that, your debt will be forgiven.

Things to consider if you’re thinking about filing bankruptcy:

It’s important to note the serious impact bankruptcy can have on your credit report. Bankruptcy effectively wipes out everything on your credit report – good and bad remarks, and will stay on your credit report for 7-10 years.

This also means any account you’ve paid off or left in good standing that could positively impact your credit score, is also wiped out. Any hard work you’ve put into building your credit is basically nonexistent once you file bankruptcy. All the negative remarks will be gone as well, but you will also be considered high-risk when it comes to lending moving forward.

Bankruptcy affects your ability to open lines of credit – credit cards, mortgages, auto loans, personal loans, etc. Because you will be labeled high-risk, most banks will likely deny any application you submit for a line of credit – even though your credit score might have gone up when your credit report was initially wiped out. If you are approved for a line of credit, you’ll likely get a much higher interest rate which will make your monthly payments higher too.

Should you file for bankruptcy?

When it feels like your debt is caving in on you, bankruptcy might seem like the only way to reach financial peace. Here are a few steps to consider taking before you consider filing.

Take a moment to talk to your creditors. Negotiate and see if there are options to make your debt more manageable. Can you lower the interest rate? Is it possible to settle for less than you owe? Can you set up a payment plan?
Talk to us about your financial picture. We might have options that will allow you to consolidate your debt into one, more affordable payment.
Go through your house. Do you have things you don’t use or need that you can sell? If so, sell some of those items and apply that money to your debt.

Also, it’s important to note that not all debt is eligible for bankruptcy. While bankruptcy can eliminate a lot of your debt, some types of debt cannot be forgiven:

Most student loan debt.
Court-ordered alimony.
Court-ordered child support.
Reaffirmed debt.
A federal tax lien for taxes owed to the U.S. government.
Government fines or penalties.
Court fines and penalties.

Bankruptcy should be the last option you consider. Look through your debt, see what you owe and carefully weigh all your options. Again, make an appointment to come in and talk to us and we can help you review your options. We’re your credit union, and we’re here for you!

5 Ways Being Home Can Save You Money

Posted on June 9, 2020 by VP of Marketing and Business Development Jessica

As the public health emergency continues, what are you up to these days – working from home? Taking fewer trips? Eating at home more? Chances are, you’re probably saving money on gas and your usual food tab.

Hopefully, there are other areas where you’ve been able to save money as well. Check out these tips below that can help save you money whether you’re quarantined or not!

Unplug It

How many devices do you leave plugged in during the day? Did you know that even in standby mode, any electronic device that is plugged in will still suck energy?

Energy.gov reports that “an appliance constantly taking in 1 watt of electrical current is equivalent to 9kWh per year, adding up in annual costs (basically $1/watt/annual). Considering how many appliances are used in an average household, costs can quickly add up to $100-200 a year.”

If you’re not using it, unplug it. Or, use a power strip that can be turned off. It’ll save you money in the long run!

Save Water

You might be tempted to throw half a normal load of wash in, but first ask yourself – are there enough dirty clothes to make it worth it or do you have an energy efficient load sensing washing machine? Another tip to conserving energy is washing in cold water when you can, since the majority of your machine’s energy consumption happens when it needs to heat the water.

While you’re home – conserve water by taking shorter showers. If each member of your family reduces their shower time by 3 minutes, you’ll save about $100 a year on your water bill.

Check Your Policies

You’ve probably seen the car insurance commercials advertising a credit to customer accounts. Check into that. Give your insurance company a call or check your account online. Most companies are giving their customers a 15 percent credit because they aren’t driving as much. In some cases, customers are getting a $150 credit added to their policy for the duration.

Don’t sleep on the chance to save some money on your auto insurance. While you’re at it, check on your other policies and accounts. You might find other places offering a similar discount to help out their customers.

Cool It Now

What is your thermostat set on? If you’ve adjusted your thermostat during the day now that you’re working from home more, you might want to tweak that a bit to offset the cost.

Find Your New Normal

We’ve all said it – “when things get back to normal.” But now we’re all in the position to redefine what normal looks like for us. Take a moment to reevaluate your priorities and budget. Are their unnecessary subscriptions you can cut? Is there a magazine, streaming service or even gym membership that is no longer valuable because you’ve found an alternative? If so, cut those from your budget and save some money each month.