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Tracking Holiday Spending Keeps Seasonal Stress Down

Posted by Emily Beatmann 
· Wednesday, December 2nd, 2020 

 

Holiday Helper Loan: Oh my garland! Tis the season to save with the 705 Holiday Helper Loan. Learn more!

Holiday Spending Hacks

Nothing is more heartwarming than seeing your loved ones’ faces light up when they open that perfect gift you (err, Santa) gave them.

Tyler’s new bike, Olivia’s new tablet and that gift card to mom and dad’s favorite steak place all add up to wonderful holiday memories… until the credit card statements show up.

The holidays will look different this year due to the COVID-19 pandemic, which is why most people will try even harder to make the season brighter for others. But, you don’t have to dip into Tyler and Olivia’s college savings to create a special time for everyone!

The most important thing to remember is to plan ahead: Have a set spending amount for gifts, wrap, entertaining, donations and travel.

Make a list and check it twice

Many are struggling financially this year, so it will be no surprise to those outside your family if your gift-recipient list is shorter this year. Once you trim your list, make a holiday treat or handmade token for those who got the cut. It really IS the thought that counts.

Once you have your list complete, figure out a realistic amount to spend on each person. Jot down a couple of gift ideas in your price range for that person.

Try the 705 budgeting tool to keep your spending in check. Click on “Trends” within Online Banking for regular monthly budgeting, but it also allows you to allocate more funds for holiday purchases. Using graphs and reports, it shows how much you’ve spent and how it will affect your budget in the months to come.

Shopping

Due to the pandemic, holiday shopping is already in full swing. Most people want to avoid crowds, so they are already hitting the malls. Retailers are well aware of this trend, and are offering pre-Black Friday sales and discounts.

Spreading out your holiday shopping over several weeks also makes it easier on your budget. Always shop with a list and keep track of your spending. As you buy your gifts, subtract from your total budget.

In addition to shopping the sales and collecting coupon codes for online purchases, know when to buy. December is the best time to buy cars, appliances, winter clothing and electronics. Also, know how much items cost before a markdown to know if you’re really getting a deal.

It is expected that online shopping will increase by 35% this year because shoppers don’t feel comfortable being in stores. Some states still have restrictions limiting retail establishments’ capacity and store hours.

If you’re shopping online, order early and expect delays in shipping. Increased shopping during the holidays will affect already-strained delivery companies. To avoid shipping delays and higher shipping costs, shop at stores that offer “buy online, ship to store” service. This service is free at most retailers, some of which offer curbside pickup.

Get the best deals on cards, decorations and gift wrap during the days right before and after Christmas. Discounts of up to 75% off can shave a lot off your holiday budget for next year.

Entertaining

Still reeling from the pandemic, most folks will host smaller holiday gatherings this year, which will save tons on food, treats and adult beverages. Many people are still working from home, so work parties and gift exchanges also will be virtual or postponed, keeping cash in your wallet.

If you’re hosting guests, keep costs down by asking everyone to bring their favorite side or dessert and include festive recipe cards with the chef’s name.

For the adults, serve a warm mulled wine or holiday punch or make one festive signature cocktail.

Use DIY decor featuring natural items, like holly and pine cones. Gather the kids and go on a hike to find outdoor holiday decorations. Not only will it save you money, but it will also give you some stress-free outdoor time with your family.

Save more by partying without plastic. Disposable plates and dinnerware are not great for the environment or your budget.

Travel

If you must travel home for the holidays, don’t forget to figure in other incidentals beyond gasoline and the cost of a plane ticket.

If you’re traveling by car, gas prices have luckily seen a steady dip. Still, the GasBuddy app can help you find the best prices for gasoline wherever you are, and you can even pay from the app. Don’t forget to figure in tolls and any emergency costs that may come up.

If you’re flying, consider baggage fees, parking and shuttle costs and the expense of ground transportation once you arrive.

And don’t forget Fluffy! You’ll need to pay someone to take care of your furry friends. The Rover app can help you find pet care options near your home.

Charitable giving

The holidays are a time for goodwill toward all. But if your budget cannot accommodate a monetary donation, volunteer your time. If you are able to make a financial donation, be sure to check that the charity you are supporting is legitimate by consulting Charity Navigator.

Keep your holidays dollars in check, and you may have some holiday spirit left over even after the last elf is packed away and the January bills start rolling in.

We at 705 FCU wish you all a happy, healthy and stress-free holiday.

Resources

https://www.forbes.com/sites/blakemorgan/2020/10/26/5-ways-holiday-shopping-will-be-different-in-2020/?sh=2def7bdd1558
https://www.thebalance.com/how-to-stick-to-your-holiday-budget-2385688
https://www.mentalfloss.com/article/60171/11-innovative-ways-track-your-holiday-spending
https://www.hgtv.ca/entertaining/photos/holiday-entertaining-on-a-budget-1922279/#currentSlide=1
https://www.moneycrashers.com/create-holiday-budget/

Categories : Savings Hacks
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7 Questions To Ask Yourself Before Making A Large Purchase

Posted by Emily Beatmann 
· Monday, July 9th, 2018 

Considering a Large Purchase? Make a Plan!

You’re convinced: You really want that Coach handbag. Or maybe you just know that gigantic entertainment center will transform your weekends. So you swipe your card and the dream item becomes yours. You’re thrilled! 

That is, until a few weeks later when the credit card bill comes, and buyer’s remorse hits. You can’t help wondering: Was it really worth the price? 

Don’t get sucked in again! Before you say “yes” to a large purchase, ask yourself these 7 questions: 

1. Do I have cash to pay for this item? 

woman coming out of a store after purchase a television

This question will help you determine if you can really afford the purchase. You need to have liquid funds that can cover the cost of your item. Putting it on credit means you’ll be hiking up the price once interest is tacked on, and you’ll be reminded of a possibly regrettable purchase for a long time to come. 

2. Is this the best price? 

 

When making a large purchase, it’s important to comparison-shop by checking several online listings and some brick-and-mortar shops as well. Visit coupon sites like CouponCabin.com for automatic savings. Also find out the best season for buying this particular item and wait for a sale if it makes sense to do so. Finally, consider purchasing a previously owned item for less.  

3. How many hours of work will you need to do in order to pay for this purchase? 

 

Calculate the total number of hours you’ll need to work to pay for this “must-have” item. Is it really worth the price? 

4. How else can I spend this money? 

Think about the money you’re about to spend on this single item. What else can that money buy? A few weeks’ worth of groceries? A year’s worth of monthly dinners out? Take some time to think of other ways you can spend this money before making a final decision. 

5. Have you splurged recently? 

 

If you can afford it, there’s nothing wrong with an occasional pricey indulgence. But, when luxury purchases become a habit, it can spell disaster for your finances. If you picked up a designer handbag just last week, you may be best off waiting a bit before buying the one that’s caught your eye today. 

6. How often will I use this item? 

Yes, it seems essential today, but looking ahead, how often do you think you’ll really use this item? If you can see yourself only using this purchase a few times a year, you may want to re-think your decision. 

7. How much will this money be worth if I put it into savings? 

You have the funds for this purchase, but how much would that money earn if you saved it? Check out this investment calculator to get that magic number. The results might leave you pleasantly surprised. 

Here at 705 FCU, we have several long-term savings accounts that can help your money grow. Give us a call or stop by, and we’ll help you choose one that’s perfect for you! 

SOURCES:

https://www.frugalrules.com/questions-to-ask-before-a-large-purchase/ 
https://www.makingsenseofcents.com/2016/08/what-to-do-before-a-large-purchase.html 
https://www.thebalance.com/before-you-make-large-purchases-2385817 
https://www.google.com/amp/s/amp.businessinsider.com/sc/things-to-consider-before-major-purchase-2016-10 

Categories : Budget, Credit Union, Savings Hacks
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Don’t Bet Your Retirement On An 8% Return

Posted by Emily Beatmann 
· Wednesday, January 18th, 2017 

Planning for Retirement

Planning for retirement can seem overwhelming. Here are Section 705’s suggestions for a successful future! In investing, time in the market is crucial. If past growth rates continue, the time you leave your savings alone actually matters more than the amount you save. Retirement Planning: IRA, 401K, and Stock Market

The problem with that, though, is that past growth rates probably won’t continue. Over the last 30 years, the stock market has averaged 7.8% growth, a rate that is the foundation of many retirement plans. If you’ve invested your whole 401(k) in total market index funds hoping for that growth, you may be unpleasantly surprised.

The 7.8% growth is a historical anomaly driven by demographic factors. Because of slowing industrial growth, decreasing population growth, and competitive overseas markets, that rate is projected to slow to 2% in the next year, and possibly past that.

This drop has significant ramifications. For 25-year-olds saving for retirement, a two-point drop over the next decade could necessitate saving twice as much before they retire.

Dealing with macroeconomic trends can be overwhelming. These steps can prepare your portfolio for struggling gains.

1.) Max out employer match

About 31% of American workers with access to a 401(k) don’t use it. Beyond the missed savings, employees are losing out on matching funds programs.

Matching funds programs are essentially interest payments. Your company will pay 100% interest on your 401(k) deposits. Increasing your 401(k) contributions to the maximum match level will minimize the impact of slow growth within your portfolio.

2.) Watch the fees

Ask your HR representative for a breakdown of your company’s investment management fees.

Review your fees and gauge if they’re reasonable. Most large companies have fees of 0.5%, with the numbers increasing for smaller companies to about 1.4% If you’re paying more, consider switching the funds you’re using.

3.) Revisit the Roth question

With the assumption that taxes usually increase over time, a Roth 401(k) generally makes sense for young people. However, with returns expected to drop and savings amounts likely to be a larger determinant of total wealth accumulation, it’s time to rethink this conventional wisdom.

If a tax deduction now in the form of a traditional 401(k) contribution would enable you to save more, it might be worthwhile. Growing your nest egg is essential; you can find ways to manage taxes once you’ve got enough saved for retirement.

4.) Look for predictable returns

As interest rates rise, growth slows as a result of decreased credit availability. That same force makes savings through other instruments more valuable.

An Individual Retirement Account (IRA) can hold savings certificate funds, like those available at 705 Federal Credit Union. These offer a predictable rate of return that isn’t dependent on macroeconomic forces, thus minimizing risk.

The principles of smart retirement planning don’t change. Spend less than you earn. Avoid debt. Invest as much as you can, as often, and as cheaply as possible. With a bit of planning, you’ll enjoy a prosperous retirement.

SOURCES:

Categories : Budget, Credit Union, Retirement
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Share Certificate: Keep Your Money Spinning

Posted by Emily Beatmann 
· Tuesday, June 28th, 2016 

What IS a Share Certificate?

coinsA share certificate is much like the familiar certificate of deposit (CD) offered by banks. It acts like a traditional savings account in that you deposit money to collect dividends over time. It differs from a traditional savings account, though, because you cannot withdraw or deposit money at will.

Instead, you agree to place your money on deposit for a preset period of time, called the “term length,” during which you may not make withdrawals without a penalty. Because you trust your money with the credit union for a longer period of time, longer term CDs are likely to have much better rates than a savings account.

You can deposit your money for as few as several months or as long as several years, but the longer you keep it on deposit, the better your rate will be (in most instances). For example, the average rate on a three-year deposit is, at the moment, 0.49%. Also, this rate is usually locked in, meaning it is not subject to change based upon how well the economy is doing at any given moment. In general, share savings certificates offer a much higher return than savings deposits, if you’re willing to wait the time it takes to get your money back.

What are the risks involved?

First, if you decide to withdraw your money earlier than the term you’ve chosen, a penalty typically applies. On average, these will cost you between three and six months of earned dividends. Depending on when you decide to withdraw, this can cost you more than you’ve made in dividends if you deposit in a certificate and then immediately withdraw it.

There’s also the risk of inflation. Should you choose to keep the money in the account for years at a time, you could actually end up losing money when taking inflation into account. Unfortunately, the only way to avoid that is to withdraw your money and take that penalty. Of course, inflation applies to all savings strategies, even the “tin can buried in the yard” approach. Other than inflation and penalties, your money is safe.

What insurance do I have against loss?

At for-profit banks, all certificates of deposits are backed by the Federal Deposit Insurance Corporation (FDIC). The FDIC insures them for up to $250,000. At a credit union, the National Credit Union Administration (NCUA) or a private insurance corporation (sometimes both) will insure your share certificate for the same amount. The insurance works the same way, for the same amount, regardless of who provides it. This insurance for your money happens automatically and requires no action on your part.

If you’re unsure, look for stickers near the teller windows with the letters FDIC or NCUA. If you see these letters, your deposit is secured. If you don’t, be sure to ask the representative assisting you with your account about insurance for your deposit. They’ll be able to tell you the name of the institution that provides it. The FDIC and the NCUA will automatically back you and keep you covered through the worst of economic disasters.

What are some different options of certificates I can have?

Though people tend to stick with the traditional certificate option, there are many more to choose from.
  • A high-yield certificate is more or less an advertising gimmick for one institution competing with another one for higher rates. Sometimes, they do have the higher rates promised, but they usually come with loopholes or very high minimum deposit requirements to secure the higher rates. Rates also change frequently, so be sure to ask your representative what the current rates are.
  • A bump-up certificate allows your rate to rise. This means that, if the institution offers a higher rate after you’ve purchased your certificate of deposit, you can request to change your rate to the higher one. The downside is that they may offer lower initial rates.
  • A certificate sold through a brokerage is called (as one might guess) a brokerage certificate of deposit. These are less like traditional CDs or certificates and are more like stocks. These notes can be bought and sold on a secondary market.
  • A liquid certificate allows you to withdraw money at any time without penalty. Unfortunately, the rates are often much lower than the rate on a traditional certificate of the same value would be.
  • One to watch out for is the callable certificate. In this, the institution can “call” your deposit back. Typically these have much higher interest rates, which is a positive. On the flip side, your institution retains the ability to shorten the term and give you your money back without the interest you would’ve earned.

Is a share certificate right for me?

There are many good reasons why a certificate would be the right choice. Certificates usually have minimum deposit amounts, so be sure you’ve got enough savings to spare that you can lock away a few hundred dollars, at least. If you’ve got trouble with impulse spending, certificates can be a great choice to lock your savings away from yourself. They also make an excellent vehicle for an emergency fund. Using a technique called “laddering,” you can take advantage of the higher rates offered by longer-term certificates while preserving the flexibility of shorter-term ones. If you’ve got the discipline to keep your money locked in a certificate for its term, you can seriously muscle up your savings. Stop by Section 705 to get the details on the account that’s right for you!
 

SOURCES:

 
Categories : Credit Union, Finances, Savings Hacks
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