Financial Preparation for 2019

Financial Preparation for 2020

Image of woman writing in journal
2020 is almost here. Are you ready?
Remember the Boy Scout motto: Be prepared! A brand-new year, always ripe with resolutions, is the perfect time to reassess your financial attitude, improve, and vow to do more.
“It’s a time of planning for going forward,” shares Sallie Krawcheck, co-founder of Ellevest. “We see a lot of people, often over the Christmas holiday, but certainly in the new year, taking stock of where they are on their personal finances and investments.”
Have you taken any steps to prepare for the financial realities of the coming year?
Here are some tips to get you started.
Tune your budget

It’s a great idea to begin the new year with a plan. A budget is just that-a plan that starts with the income you expect, along with your fixed expenses, such as rent or mortgage costs, homeowners association fees, insurance, utilities and transportation costs. The plan also incorporates your savings goals.

Then, the money remaining is designated for your other expenses. A realistic budget will help you set your financial goals and remind you to stick to them. These last few days in December, as the year draws to a close, is the perfect time to assess last year’s budget or to create a new one if you don’t yet have one in place.

Reviewing where you spent last year’s money will help you make better choices in 2020. If you did not save money for retirement, for example, this can be a new budget item.

While planning for the coming year, make sure to include a method for tracking your spending. You can do this on a spreadsheet or you can simply tag items in your financial account.

Even with a solid strategy in place, there will always be surprises along the way. Losing a job, a leaking roof or an illness can throw off your entire plan. Be sure to build an emergency fund into your budget.

Plan ahead to meet your goals
Next, consider how you will accomplish your goals. You’ll have short-term goals, such as purchasing a new car or home, as well as long-term goals, such as saving for retirement. Each set of goals requires a different kind of planning and saving.
Financial planner, Rachel Rabinovich, recommends setting up a separate savings account for each goal. This way, you can easily track your progress.
Experts suggest working backwards to determine how much you need to save for a specific goal. For instance, if you dream of taking an expensive vacation two years from now, determine the total cost of the vacation and then establish a reasonable time-frame and the amount you’ll need to save each month to reach that goal. Make sure the amount you plan on setting aside each month is doable, or you may just have to move your goal over by six months or more.
Spend mindfully

You can also make your financial future more secure by identifying the difference between your needs and wants. Needs are necessary for your survival, and include items like food and shelter. Wants are things that are not necessary but you would like-such as a luxury car or European vacation.

First, tend to your needs. Then, based on what’s left to work with, consider your wants. This might sound obvious, but for many of us, the line between wants and needs is often blurred. This can lead to awfully tight financial situations, even prompting us to “borrow from Peter to pay Paul.” By clearly differentiating between what you want and what you need, you can avoid this outcome in 2020.

Maximize retirement contributions

Retirement plan contributions can be a valuable source of savings, especially if you have the option of employer-matched funds. If you do, be sure to take advantage of them!

Also, check with your HR contact and your accountant to make sure you are contributing the optimal amount to your 401K and IRA. For the coming year, you can contribute $6,000 to a Roth or traditional IRA, or $7,000 if you are making “catch-up” contributions.

Check your flexible savings account (FSA)
If you have unspent money in your FSA, now is the time to use it. These pre-tax dollars often have to be spent before the end of the year. Do you need a new pair of eyeglasses? Are your teeth in desperate need of a cleaning or repair? This might be a good time to spend that money on self-care and other needs you’ve been pushing off. You don’t want to lose this money, so be sure to use it if you can.
Put the brakes on holiday spending
Avoid going overboard on your holiday spending. Think three times before you pull out your credit card. Going over budget now can mean spending the first few months of 2020 playing catch-up with your credit card bills. Spend less, and start the year off with a clean slate!

Why Choose A Credit Union?

Why Choose A Credit Union?

 

Q: I love my credit union, but I also have a checking account at a bank. Should I move my checking account to a credit union?

A: As a credit union member, you can expect to have a more rewarding experience. Because credit unions are member-owned and not-for-profit, they are more attuned to the needs of their members.

While banks and credit unions offer nearly identical services and account choices, there are some differences.

Let’s take a look at how having a checking account in a credit union differs from a bank.

1.) Image of a woman at the credit union teller lineAccount fees

To the unsuspecting consumer, big banks may not feel like money-hungry monsters. But while they’re happy to hold onto your money, once your account is up and running, expect to get hit with steep maintenance fees. The average bank charges consumers close to $150 each year for having an open checking account.

On the flip side, many large credit unions offer free checking or make it easy to avoid the fees, so you can set up your account and keep it running without it costing a dime.

2.) Overdraft fees

Sometimes, you miscalculate the funds in your account and overspend. If you make this mistake on a checking account at a bank, get ready to cough up those overdraft fees!

These fees usually top $30, and some banks will make consumers pay the penalty for each transaction they make while their account is overdrawn.

Most credit unions will be more willing to forgive the occasional error. While some credit unions do charge an overdraft fee, on average, these fees are a lot lower than what banks demand.

3.) Fewer strings attached

Most big banks won’t allow you to open a checking account unless you have a minimum balance of several hundred dollars. In contrast, 76% of credit unions have no minimum balance requirement at all.

4.) Credit unions are government-regulated

Both credit unions and banks are federally governed. A credit union that’s federally insured, like a bank with federal insurance, covers your accounts up to $250,000.

However, credit unions face more government restrictions on their investments and loans than banks do. This means your credit union has to be super-careful with how it invests your money.

5.) Superior service

When you’re banking with family, you don’t have to worry about overworked tellers, curt managers, or representatives who are indifferent to your individual needs.

When you stop by your credit union, you’ll be greeted with friendly, familiar faces and representatives who actually care. They’re always ready and willing to help you because they only have your best interests in mind – always.

Why choose a credit union for your checking account? With lower fees, fewer strings attached and better service, it’s the best place possible to park your money!

Don’t Be A Victim Of A Social Security Scam

Don’t Be A Victim Of A Social Security Scam

 

TOlder Woman Reviewing Social Security Statementhe Federal Trade Commission (FTC) is warning of a surge in Social Security scams heartlessly targeting the elderly who depend on Social Security benefits for basic living needs. The scammers also know that the elderly can be overly trusting, making them easy victims. And, unfortunately, these scams are too often successful.

Here’s how these scams work:

The victim receives a phone call from an alleged Social Security employee telling them their benefits have been suspended and need to be reactivated. To lift the suspension, they say, the victim must share their personal information.

Alternatively, the victim receives an automated voice message instructing them to call a specified number to reactivate their Social Security benefits. Upon calling the given number, the victim will be asked to provide their personal information.

In yet another version, the victim receives an email looking like it came from the Social Security Administration (SSA). The email includes a link asking the victim to update their personal information, and giving a similar backstory as above.

Protect yourself and your loved ones with these tips:

The Social Security Administration will never call about suspended benefits

Don’t believe a caller claiming your benefits have been suspended. Government agencies rarely make phone calls to private citizens. When they do, the citizen will always know in advance to expect that call.

Never share personal information via unsecured means

It’s best not to share personal information over the phone or the internet. If you must, verify you are interacting with the party you believe you’ve reached. The best way to do so is by contacting the SSA yourself at 1-800-772-1213.

Report all scam attempts

If you receive a phone call or an email from an alleged SSA employee requesting information, don’t respond. Instead, call the SSA at 1-800-772-1213 and ask if there is actually a problem with your benefits. If, as is likely, you’re being scammed, the SSA will be better equipped to stop the scammers.

You can also fill out a Public Fraud Reporting form at socialsecurity.gov 

Tell your friends and family

Tell anyone you know about these scams and warn them not to share their information on the phone and online.

Keep your money safe and send those scammers packing!

Invest in What You Care About

Invest in What You Care About

Q: I’m looking to make some investments, but I don’t want to compromise my principles. How can I make investment decisions that reflect my values?
A: It’s easy to see people doing bad things in the world. Whether it’s cigarette companies marketing to minors or companies employing cheap overseas labor, corporations are certainly not free from wrongdoing. Investors can quickly get a bad taste in their mouths after researching a company they’re considering.
Fortunately, there are a number of ways investors can use their money for good. If you’re interested woman with little girl on her lap reading to herin doing good and making good money in the process, read on. Here are three ways to identify investments that match your values.
1.) Ethical ETFs
ETF stands for exchange traded fund. They’re a kind of mutual fund people can buy and sell shares in. There are all kinds of ETFs, from those that focus on a specific sector to those that seek a certain level of fixed income.
There are also ethically focused ETFs. For example, the largest such fund is Barclay’s Women in Leadership fund (WIL). This fund targets companies that have a higher number of women in leadership roles, and it currently has about $30 million in assets under management.
There are other, similar funds, like those that target low carbon emission companies, or those that adhere to certain religious values and exclude alcohol, tobacco or pornography companies. Whatever your ethical stance is, there’s an ethical ETF that can help you invest according to your principles.
Of course, sticking to your guns has costs. These funds, as a category, have trailed behind their peers in the recent market rally. Their limited exposure shields them from market declines, but it also prevents them from taking full advantage of rallies.
2.) Microlending
If your concern is more with doing the most good for people with your investment dollars, you might consider going into the microlending business. Several sites, like Lending Club and Prosper, offer you the opportunity to make loans to individuals who might have difficulty accessing traditional financial institutions. It could be because they live in an area that is underserved by banks and credit unions, or because their credit history isn’t enough for what they’re trying to borrow. For people in the developing world, for instance, access to credit services is a serious barrier to entrepreneurship that microloans can help overcome. No matter the reason, microlending helps people get loans from everyday people instead of from financial institutions.
Of course, there are significant risks involved with microlending. There’s a reason why financial institutions set standards for credit scores and debt-to-income (DTI) ratios. People trying to borrow on microfinance sites may not be able to repay their loans. There’s also little in the way of verification. Someone might claim to need a loan to help pay for medical bills when, in actuality, they want to spend the money on luxury goods for themselves.
Despite the risks, microlending remains a viable way to use your investment dollars to achieve social good. Just be cautious about your lenders, and never invest more than you can bear to lose.
3.) Community investment
Perhaps you’re more concerned with improving your community. You want your dollars to stay local and improve the lives of people around you. The opportunity exists for you to do just that through community investment, and it’s easier than you think.
When you become a member of E&G Employees FCU, you help make it possible for us to make loans to local small businesses and individuals right here in the community. Just by opening a certificate or putting a larger deposit in your share account, you can enableE&G Employees FCU to finance projects that make our community a better place to live.
Unlike the alternatives, community investment bears very little risk. It still offers the same goods as other forms of ethical investment. You still get a return in the form of interest and the knowledge that you’re investing according to your values.

How To Spot an Investment Scam

How To Spot an Investment Scam

 

Image of Lock with the word securityYou’re online, and there’s a contest open to all. You know the answer, and the free gift is enticing. Should you enter?

You go into a shopping mall and are asked to fill out a form to enter a sweepstakes to win a car. You’d love to have the car, and, hey, someone’s going to win it. There’s no purchase necessary, so why not? “Don’t do it!” says Eric Stein, a scam artist who was interviewed (while in jail!) by The Wall Street Journal. He should know. In his interview, Stein provides the following information that will prove useful in avoiding the investment scams you so often read about.

  • Don’t respond to email or snail mail that you didn’t request, no matter how legitimate it looks. Scam artists have become very professional and will produce something slick, glossy and easy to understand. Don’t fall for it.
  • The online contests and car sweepstakes you see in stores are both used by scammers to target names and addresses. Don’t fill them out.
  • Avoid funds that are advertised as “low risk, high return” or “safe,” or promise an outrageous return such as 25% per quarter. If it sounds too good to be true, it probably is.
  • Don’t purchase financial products because a friend or clergy person recommends them. They may have already fallen for the scam without knowing it.
  • Don’t talk to a financial salesperson on the phone if you don’t know him. Don’t be polite – simply hang up. Anyone can call himself a “financial adviser” or a “business consultant.”
  • Buy stocks only from a licensed, registered broker.
  • Don’t buy unregistered securities. Keep your eyes open.
  • Don’t let the fact that traditional investments aren’t giving you the returns you want turn you into bait for scammers.

Top 10 Dos and Don’ts for Personal Loans

Top 10 Dos and Don’ts for Personal Loans

 

  1. Image of wallet with cash being taken out.Do use it to consolidate debt. Put all high-interest credit card debt and payday loans into one loan with a fixed rate, a fixed monthly payment and a closed-end term. You’ll save money and make debt management a lot simpler. Be sure to close any credit cards you pay off so you don’t rack up another large bill.
  2. Don’t use it to pay for your college tuition. Instead, go through Sallie Mae which you may connect to through E&G Employees FCU.
  3. Do use it to finance renovations on your home. Be smart about your renovations, though, and only choose those that will increase your home’s value.
  4. Do use it for moving expenses. Whether you’re moving cross-country for a job opportunity or another reason, a personal loan can help pay to transport your car, to move your belongings and to buy furniture for your new residence.
  5. Do use it to pay for large, unexpected expenses, like a funeral or adoption costs.
  6. Do use it to foot medical bills, especially for things that are not covered by most insurances such as fertility treatments, large dental treatments and cosmetic surgery.
  7. Don’t use it to pay for everyday expenses. If you find yourself doing this, you may be in financial trouble. Speak to a E&G Employees FCU representative for help with debt management and general financial guidance.
  8. Do use it to purchase a car, boat or RV.
  9. Do use it to take a dream vacation. Don’t do it twice a year, but a personal loan can help you finance your trip for a milestone anniversary or another special occasion that warrants an extravagant vacation.
  10. Do use it to pay for a wedding. A personal loan will give you more flexibility than a wedding loan.