Articles of Interest
Tips for First Time Homebuyers
Even if you're not a first-time home buyer, looking for and financing a home can be stressful. When you don't know where to begin or what to do, it can be even more stressful. We've got a few tips for first-time homebuyers to get the most out of your home buying experience.
Determine how much house you can afford and get pre-approved.
When you're ready to look for your dream home, it's important to know how much home you can afford. This will narrow down your home search and will give you a realistic view of the types of homes you can buy inside of your price range. You will also avoid the temptation to purchase a home where you'll struggle to make the payments.
Save up for a down payment.
With such a big purchase, having a down payment to invest in your home is important. A good rule of thumb for a down payment is to save 20% of your mortgage. For instance, if you have a $100,000 mortgage, your target down payment is $20,000.
If 20% of your mortgage doesn't seem feasible, there are other options for first-time homebuyers that will allow you to save and invest a smaller amount into your mortgage. If you're wondering how much you need to save to achieve your desired payment, check out a down payment calculator for reference.
Payoff as much debt as possible
One of the factors that will determine your creditworthiness is your debt-to-income ratio. A debt-to-income ratio measures the total amount of debt you're paying off each month compared to the amount of income you're bringing in within the same period. If the amount of debt you're paying off is considerably more than your income, this will negatively impact your credit score. In turn, this will hurt your chances of being pre-approved for and financing a mortgage.
Try at all costs to avoid inquiries on your credit report
When you're looking to finance your first home, one item that first-time homebuyers seem to overlook is avoiding new lines of credit. For instance, opening a new cell phone line, television service, or even setting up a utility account will all affect your credit score and your inquiries.
Before you buy a house, your focus should be on maintaining and improving your credit score while saving as much as possible for a down payment and closing costs instead of building new avenues of credit.
Buying your first home is no easy feat. When you finance your home with Welcome Federal Credit Union, we're with you every step of the way. Pre-approval has never been easier, and you'll be well on your way to opening the door to your new home. Start today!
The Benefits of Charitable Contributions
We all know the saying, “It’s better to give than receive.” Giving makes us feel good, right? And we usually don’t think about what’s in it for us.
But, what about charitable giving? Depending on the amount of your charitable contributions, you could be in for a sizeable tax benefit. As a matter of fact, if you factor your charitable donations into your budget, it will allow you to be more generous and lead to strategies that could improve your financial planning long term.
With tax season just around the corner, let’s take a look at some benefits of charitable giving and what can be deducted.
That altruistic feeling
Whether we donate to them or not, we all have causes near and dear to our heart. If you’re an animal lover, the ASPCA commercials probably tug at your heartstrings. If helping kids is where your passion lies, then charities like St. Jude’s and the Shriner’s Hospital probably resonate with you. Regardless of where your loyalties lie, we all love the feeling of helping other people. Scientific studies have even shown that charitable giving activates pleasure centers in the brain.
Charitable donation deductions actually allow you to lower the amount of taxable income. Of course, you can’t donate to just any organization. In order for donations or gifts to qualify, they have to be recognized tax-exempt organizations. Typically, religious organizations, veterans’ organizations and community organizations qualify as tax exempt.
Have you made any donations to state, federal, or local governments for public purposes, like donating to rehab a public park? You can deduct those donations. You can also deduct any expenses you incur as a volunteer for a qualified organization or if you donate a qualified vehicle.
What does this mean for you?
Let’s be honest. Taxes, deductions, and tax law can be overwhelming and difficult to understand if you don’t speak that language. It’s always a good idea to sit down with a qualified financial planner to come up with a plan for donating to charities. Your financial planner can help you figure out what types of donations work for you and your future plans. They can also help you find organizations that share the same goals and ideals as you. Also, if you want to make charitable giving a recurring activity this year, look at setting aside money in an Welcome Federal Credit Union Savings Account.
While you shouldn’t donate funds just for your benefit, if you happen to be donating anyway, there’s no harm in deducting the amount on your taxes. No matter which way you decide to give or which charity you choose, giving back to organizations that do good feels good.
Meal Planning on a Budget
The beginning of a new year is a great time to change up your diet in a way that fits your budget. Meal planning is popular among those who desire to eat healthy while maintaining a healthy budget. While there are many resources available for recipes, we have a few tips on how to make the most of your meal planning options.
Plan your shopping trips and meals in advance.
Take some time to look at the grocery store circulars or online deals to see what is on sale for the week. Once you know what meats and seasonal fruits and vegetables are being offered at a good price, you can research recipes to maximize your meal planning options for the season. These prices tell you how much they are by amounts so you can compare with your recipes to determine your budget before you're in the store.
Check out meal planning resources via a Google search and on sites like Pinterest. There are meal preps and plans available from home cooks and more popular sources like Food Network. Be willing to try new recipes and look into meat-free recipes to conserve your funds. There are plenty of cost-effective options that can be a good source of protein.
Choose different recipes with the same meat.
Whether you're making meals for a family or you're making lunches for yourself, buying in bulk is always best. If you've found a few recipes for chicken that you think you'll like, buy the chicken in bulk and freeze what you don't use right away. This will keep your meat fresh and ready for when you're ready to use it. For example, you could use chicken for the following meal planning recipes:
- Chicken Burrito Bowls
- Teriyaki Chicken Bowls
- Chicken, Broccoli, and Rice
With the money you save on supplies, you will be able to allocate elsewhere for something you want and possibly didn't have the funds for originally.
There are so many different choices that make meal planning flexible and customizable depending on your particular preferences and tastes. Make sure to mix it up so your tastebuds won't get bored since this is easy to do with meal prepping.
Choose recipes that require a limited number of ingredients.
It's easy to get carried away when you're looking at what sounds and looks good for meals. Make sure to get recipes that have either a limited number of ingredients or items that you need to buy. If you find recipes that have common dried spices that you have in your kitchen, this could work as well and help you branch out and try different recipes and combinations.
Branch out and experiment with flavors that you're confident will work well together.
Keep track of all your transactions and budget with a Welcome Credit Union Checking Account. Use these tips and tricks and you will be well on your way to being a savvy meal planner that works for your tastebuds as well as your budget.
Which Credit Card Rewards Are Right For You?
Believe it or not, there isn’t a “one size fits all” credit card rewards program. For every card on the market, it seems like there are a million different ways to earn rewards.
With all the options, the research can be overwhelming and you might not know where to start. We’ve come up with a few ways you can choose the right credit card rewards program.
Is a rewards card right for you?
That’s the first question you need to ask yourself. A rewards card isn’t right for everyone. Here’s a handy checklist to run through to help you decide whether or not a rewards card is a good fit for you:
You have a good credit score. Most card issuers are looking for consumers who have a FICO score of at least 670. Of course, a higher credit score will help you get a lower interest rate, but at that mid-600 range, you will get your foot in the door. FYI, the higher your credit score, the more lucrative rewards programs you’ll have access to.
You can pay off your balance every month. Rewards cards usually have a higher-than-average interest rate. When you carry your balance over each month, you could end up paying more in interest charges than you earn in rewards.
You can maximize the value of your rewards. A rewards card can cost you money if you don’t maximize your reward-earning potential. If you don’t earn enough points, you can actually lose money if your card has an annual fee.
Now that you’ve determined you could benefit from a rewards card, let’s talk about choosing the card with the program that best suits your lifestyle and spending habits.
Choosing the right card
There are three main things to consider when choosing a card: your spending habits, personal preferences and credit score. If you don’t look at your spending habits and personal preferences, you could end up spending a lot of money and racking up rewards that aren’t right for you.
Let’s say you have a large family and your primary expenses are groceries and gas. It would make sense for you to have a credit card that offers bonus rewards on those purchases. But, if you’re single, have a small grocery budget or don’t have a car, those rewards wouldn’t make sense.
Use your cards for everything
The more you use your card, the more rewards points you’ll rack up. But, don’t let that be an invitation to start spending money on things you don’t need. Instead, use your credit card in the place of cash or your debit card whenever possible.
Start looking for everyday situations where you can use your credit card instead of another payment method – gas, groceries, food, etc. But, always make sure you only spend what you can pay off every month.
What if a rewards card isn’t for you?
Rewards cards aren’t for everyone, and there’s nothing wrong with that. Maybe your credit score isn’t in the right range for a rewards card, or maybe you’re not interested in using your card to gain rewards. Maybe you’re looking for a credit card for emergencies only. If that’s the case, we can help you. We have a number of credit card options, and some have super low APRs, great rates on balance transfers and low rates on cash advances.
Holiday Shopping on a Budget
‘Tis the season…to avoid going broke buying presents for your loved ones. It’s easy to do, right? Sometimes we get carried away and spend more money than we intended to. You don’t want to look like a cheap gift-giver, but you also don't want to buy the whole store.
So, how do you buy awesome gifts for everyone without breaking the bank? We have a few tips for you to keep your trees and your wallets full.
Make a List, Check It Twice
Hey, the process works for Santa so it can work for us! Start with a list of people you plan to buy for, jot down the gifts you think they’ll love and then check it twice. Santa has to buy gifts for the whole world, but you don’t have to. If your shopping list includes more than five people outside of your immediate family, trim your list. Look at alternatives like homemade gifts or baked goods so you can spread holiday cheer without looking like a Scrooge.
Create a Budget Based on Your Finances
Your best friend started a great job a few years ago and always gets you the most amazing gifts. However, if you’re in a different place in your financial life, don’t overextend yourself to match gifts. Look at your budget and see what you can do. Don’t shop based on what you think you should spend. The saying “it’s the thought that counts” really does ring true. It's still possible to give thoughtful gifts to your loved ones without breaking the bank.
Homemade From The Heart
While there are many options to choose from at one store or another, the best gifts sometimes don’t come from the store. Another way you could save some money on presents this season is by making your loved one(s) a gift. The possibilities are endless on what you can make. Often times, a gift that is handmade from the heart is priceless and more special. If you need some inspiration on what to make, check out Pinterest for a few ideas.
Keep It Local
Shopping local is a great way to save a little cash while also supporting local businesses. Because there are fewer hands involved, buying local can often save you some money. You’ll likely save money by purchasing green beans from a produce stand because the farmer doesn’t have to divvy up his profits the way a chain supermarket does. It’s also a great way to improve your local economy. For example, every $100 you spend at a local business, $68 stays in the community. Follow your local news and check Facebook pages in your area to see what area businesses are offering locally made products.
We know that holiday shopping can be stressful. You’re paying your regular bills, taking care of your everyday expenses, and planning for holiday shopping on top of that. It can be tempting to open multiple credit cards or store cards, which come with incredibly high-interest rates. Don’t get stuck paying big balances on multiple cards. We have numerous options that can help you fund your holiday shopping without spending more.
Our Visa Platinum Credit Cards offer you the freedom to choose...
- Ultra-low APR Platinum Card
- Low APR Platinum Rewards Card featuring More 4U Rewards
Plus, you will enjoy all the benefits of paying with Visa:
- Spending Flexibility
- 24/7 Fraud Protection
- Worldwide Acceptance
- Online Account Access
Let us help. Stop by, check out our website or give us a call to see what options we have to help you.
4 Tips to Jumpstart Retirement Planning
Retirement. It seems like a lifetime away, right? Probably something you plan to worry about when you’re a little closer to your retirement date. However, financial experts suggest that the best time to start planning is in your 20s when you typically start earning a steady paycheck.
To put it into perspective, if you start saving at 25 and put away $3,000 a year for 10 years, by the time you reach 65, your $30,000 investment could grow to more than $338,000.* Regardless of your retirement date, it’s never too early to start planning for your retirement. You may be asking, "Where is the best place to start?" and "How should I invest my money to maximize the returns I see at retirement?" Both of these are great questions that we will delve into on this post.
Set your goals
This applies to 20-somethings, 30-somethings, and 40-somethings. How do you know what steps to take if you don’t know where you’re going?
Sit down and figure out your goals. Do you want to buy a house one day? How long do you need to rent and save money? What “bad debt” do you need to pay off now to help you in the long run? These answers may change as life circumstances change, but it’s helpful to know what your goals are and create a plan to achieve them before you set out on your savings adventure.
Take advantage of your employee benefits
Does your company offer a retirement savings account? Most full-time jobs will offer either a 401(k) or a SIMPLE IRA (Savings Incentive Match Plan for Employees Individual Retirement Account). It’s important to understand what these accounts are, how they work, and whether or not it’s a viable option for you. What's the difference in a 401(k) and a SIMPLE IRA?
A 401(k) is an investment account you make contributions to out of each paycheck. If your employer matches your contribution up to a certain percentage, that’s free money going into your 401(k) in addition to the contributions you’re making.
A SIMPLE IRA is a tax-deferred employer-provided retirement plan. Like a 401(k), you make pre-tax contributions from your paycheck, and your employer can also elect to match your contributions up to a certain percentage. Unlike a ROTH IRA, when you reach retirement age and begin drawing from the SIMPLE IRA, you will pay taxes on the money you've saved.
Good debt vs. bad debt
Believe it or not, there is such a thing as good debt. Debt to buy a home or to start a business is considered good debt as it can be used as collateral. To our 20-somethings, listen up! Consumer debt - credit cards, car loans, and student loans - are always bad. Most consumer debt comes with high-interest rates, which only hurt you as you get older.
No matter what age you are, the best thing you can do is to avoid buying things you can’t afford. But, if you have debt or need to go into debt for a major purchase, have a plan to get out of that debt promptly. Look for places in your monthly budget where you can reduce spending and cut unnecessary costs.
Check out debt consolidation and refinancing options
Consolidating debt and refinancing loans are two great ways to save money on your monthly payments. Debt consolidation is typically used for unsecured debt and is especially effective for high-interest debt like credit cards, while refinancing a loan enables borrowers to “redo” an existing loan to get a lower monthly payment, different term length or a more convenient payment structure.
Both options are a great way of saving money each month. Ideally, you’d be able to measure the savings you’re seeing and put that toward your retirement planning. It might not sound like a lot of money, but even if you were able to save $50 a month, at the end of a year you’d have $600 to put toward your retirement.
Do you have debt that can be consolidated? Do you have loans that can be refinanced? You never know what your options are until you ask. Check with someone at our branch to see if we can save you some money each month to put toward your retirement.
Truth is, there are a dozen different ways you can prepare for retirement early and start saving money. You just have to find the ways that work for you.
Budgeting for Healthcare Costs
It’s open enrollment season, and most of us are thinking about the best healthcare option for us in 2020. Only one thing is certain when it comes to healthcare: the cost for us to stay healthy is constantly increasing.
When it comes time to choose a plan, there are multiple factors to consider so you can budget wisely.
Choose your plans based on more than the premium
People often select their healthcare plan based on the monthly fee they will pay for coverage each month. However, when you choose a plan based solely on this component, you could end up paying more in the long run. There are several other factors to consider when choosing a healthcare plan that will fit your health as well as financial needs. Factors include:
- copayment (flat dollar amount you pay when you need care)
- deductible (the amount you must pay before the insurance begins to pay)
- coinsurance (the percentage of allowed charges for covered services that you're required to pay)
- maximum out-of-pocket costs (the maximum amount you will pay for services).
Take previous health history into account
You can’t predict the exact amount of insurance you or your family will need. But you can take your past medical history and family medical history into account when you’re selecting a plan.
By taking these factors into account, you should be able to get in the ballpark of the amount of coverage you'll need, barring no serious medical emergencies.
When you've signed on for healthcare coverage and the open enrollment period passes, you aren't able to change your plan during the year unless you experience a big life event. Healthcare.gov describes a big life event such as marriage, having a baby, or losing your other healthcare coverage. If you experience one of those situations, you can amend your plan outside of open enrollment. Because of this, it's important to choose a plan that works best for your health as well as your budget.
While healthcare coverage can be good to have when it comes to covering medical expenses, it never hurts to have extra funds. Before an unexpected medical expense arises, plan ahead and set aside some money every month in a savings account. Anything you can stow away for a rainy day will be helpful when the time comes to use those extra funds. Welcome Federal Credit Union is here to help. Talk to one of our Member Service Representatives today about setting up a savings account and be prepared.
Like most things in life, there's no one-size-fits-all health insurance plan. You have to choose the best one for you and your budget.
*** This blog was written for financial purposes and not written by a healthcare professional. This article should not be taken as medical advice.
Last-Minute Halloween Costumes on a Budget
Halloween is almost here and that means your time to find a costume is limited. If you are like many Americans, a Halloween costume is something that seems to slip to the bottom of the list every year. Whether you are putting together a last-minute fix for your kid or a low-key costume for the neighborhood party, we have a few options for you
Stick with the classics
Everyone knows Charlie Brown. While his dreary disposition may not seem like the ideal inspiration for a fun Halloween costume, it is important to remember that Charlie always keeps it simple. Stock up on the following materials and create your own Peanuts ghost costume.
- 1 white bed sheet
- 5 sheets of black cardboard paper
- 1 pair of scissors
- 1 container of glue
Punny is priceless.
Everyone knows someone who doesn’t like to dress up. If you are that person, you’re in luck, this one's for you. This costume commandeers the style of our Canadian brothers and relies heavily on denim. Grab your favorite pair of jeans, a denim jacket or shirt, and one “HELLO MY NAME IS” name tag. Fill out the name tag with the name “Jean” and you’re good to go. As a bonus, this costume will definitely keep you warm even on a cool October night.
- 1 pair of jeans
- 1 denim top
- 1 “HELLO MY NAME IS” name tag
- 1 marker
- Denim shoes or hat (optional)
Kick it old school.
Style is always changing and with decades of life experience comes decades of outdated apparel lining the back of your closet. Dig into your closet and revitalize one of your favorite old-school looks. From the bell-bottoms and big collars of the 70’s to the big hair and bright colors of 80’s your Halloween costume is hiding in your closet, you just have to find it.
- Willingness to relive past fashion mistakes
At the end of the day, Halloween is about having fun. Keep the stress and the cost low this year and handle the whole process in-house with these easy last-minute costume ideas.
Handling the Cost of Education: 2 Sides to Every Coin
On average, college students who physically attend college will leave their school $18,000 in the hole. That’s a $5,000 jump compared to the generation before, who averaged $13,000 of student loan debt after graduating in 2004. While this number is troubling, it’s just the tip of the iceberg. With seemingly no sign that this trend will reverse any time soon, a couple of questions become clear. Is college worth it? What are my payment options? What about debt? Before you take the plunge, let us discuss your options and find the best plan for you.
Is college worth it?
- Yes, it is. Despite rising costs, the social stigma of a college degree alone is worth the price once you enter the job market. College also provides several unique educational and professional experiences that help develop prospects and define personal goals. While the cost is great, a college degree is akin to gold (in value and weight) after graduation.
- No, it is not. The trade-off simply isn’t the same as it used to be. Gone are the days when you could pay for an entire semester with paychecks from a part-time job. Even if a degree is a hot commodity in the job market, it is not worth nearly $20,000 in debt right out of the gate. Building a resume through real-life experience sets you up ahead of your peers in experience while idyllically leaving you entirely out of debt.
Is it possible to further my education without signing up for a lifetime of debt?
- Knowledge is expensive, but it’s also an investment in yourself. We respect the courage it takes to embark on that journey and are always ready to help make it happen. As a Welcome Federal Credit Union member, you have access to some of the lowest-rate student and personal loan options in the country. As compared to federal student loans that are set at a fixed rate, private or alternative loans from your credit union have variable rates. Also, with private loans, your credit score can determine the interest you have to pay. This can help you shoulder the burden of financing your in-person or online education.
- The verdict is in and the latest trends show that enrollment in online classes is on the rise from traditional pursuits, like university masters programs to new platforms, like MasterClass. Combine that with the undeniable practicality of technical schools and it’s easy to see that there have never been more opportunities for alternative learners to chart their own paths and spend less money doing it.
Getting a degree is paramount for several professional fields. It is a fact that will remain true for the foreseeable future. In some cases, it is absolutely necessary to take on those costs. Luckily for you, when this is the case, you have a dedicated team of financial experts at your disposal to help you make the numbers work. I f you’re ever feeling overwhelmed, talk to one of our experts before you make your next move. From the campus to the keyboard, we are here to help make it happen.
Make Your Money Work for You
Every day you hustle. Nose to the grindstone getting through the workday. You’re working hard for your money, but have you ever stopped to think how your money can work for you?
Making your money work for you goes beyond an emergency fund or simply being debt free – although, both concepts are a necessity in this instance. It’s about taking the money you’re already making and making it generate returns for you.
But, how? There’s no simple answer or even a single way to do it, but these tips can help you get started.
Get out of debt
First things first, if you have debt get rid of it. After all, you can’t invest in you and your future if you’re giving your money to other people. The first step to a debt-free life is figuring out exactly how much you owe. Most people don’t even know how much debt they’re in, according to a study from The Federal Reserve.Once you know how much debt you have, decide how you’re going to pay your debt.
The most important way to change the way you handle your money is to budget. By creating a budget, you are telling your money what you want it to do. When you assign each dollar into a category, you’re controlling where your money goes and what it does. It’s a great first step in reaching your financial goals. Think about it this way: your budget is like a fitness tracker in that it helps you monitor your money. When you monitor your money and know where it is and what it’s doing, it’s easier to make it do what you want it to do.
Utilize retirement accounts
Don’t sleep on opportunities to invest in a 401(k) or Roth IRA. A 401(k) is great because you’re contributing pre-tax money into your account, and you get free money from your employer in the process. Think about it like this: you earn $100,000 a year and your company offers a 3% match on your 401(k). If you invest $3,000 (3% percent of $100,000), your company will match that leading to $6,000 being added to your 401(k). A Roth IRA works just a little differently. Unlike the 401(k), a Roth IRA leverages after-tax income. However, when you begin to withdraw the money at retirement, you won’t pay taxes on your withdrawals.
Start a side hustle
Uber, GrubHub, Instagram – all of these companies began with an idea that blossomed into billion-dollar companies. What’s your passion and can you turn that into a billion-dollar idea? Consider starting a side hustle and find ways to make some extra money. It could be a traditional second job, a work-from-home job or turning your ideas into ways that add to your savings. If you can structure your budget and expenses around your primary source of income, any money you make from your side hustle can go straight into your savings.
Create passive income streams
Passive income is money you earn with little to no effort involved. Once it’s set up, passive income will earn you money while you sleep. Creative passive income does require some type of investment upfront, whether that’s time or money, but it’s an investment that can lead to huge payoffs later.
Building your future is important, and it takes a lot of hard work. At Welcome Federal Credit Union, we’re just as interested in your future as you are. We want to help you take the necessary steps to make your dreams come true.
Maybe you need to consolidate your debt or look at options to pay off some debt. Maybe you’re looking to refinance your car in order to lower your payments and save a little money each month. Whatever it is, let us help you.
Stop by and see us or give us a call to get started.
Don't Let High APR's Hold You Hostage
Actor Hill Harper said it perfectly: “Credit card interest payments are the dumbest money of all.”
This year wasn’t kind to credit cardholders’ wallets. In 2019, cardholders paid an average of 17% APR – the highest level recorded by the Federal Reserve since 1994. To put it into perspective: in 2009, the average APR registered just under 13% and in 2016 it hovered around 12.5%.
(See chart below)
Even the maximum APR has climbed significantly. Financial institutions typically over a wide range of APRs. As a result of the increase, maximum APRs are around 25% with the media standing at 21%.
So, what does this mean for you?
Well, it means you’re likely paying more in interest than you’ve ever paid. But, don’t worry. There are several ways around paying high interest rates that will actually help you in the long run.
Avoid balance carryover Ultimately, the best and most responsible way to use a credit card is to pay off the balance monthly. By paying your balance in full each month, you avoid paying interest while reaping the benefits a credit card has to offer. Plus, it helps improve your credit score.
Avoid spending more than you have We’ve all done it. We have a credit card for emergencies only, but something comes up we really want, and it finds its way to the credit card. Next thing you know, there are multiple unnecessary purchases on there that you’re trying to pay off. The best habit to get into is not spending more than you can pay off monthly. The more you put on a card, the more interest you’re going to be charged.
Do your research If you’re thinking about signing up for a credit card, do your research. First of all, know your credit score. That’s going to be a huge factor in determining your APR. Also, consider why you want a credit card. Are you looking for cash back options? Do you want to earn points or airline miles? Don’t wander and apply aimlessly. Look at the specific types of cards that are designed for the purpose you want and see which card best suits your needs.
Obtaining and maintaining credit by using credit cards doesn’t have to be a scary experience. Have you talked to someone at Welcome Federal Credit Union? We have several types of credit cards that could fit your needs.
Before you go with a big box bank, talk to us and see how we can help.Stop by a branch or call us today.
4 Hacks to Raise Your Credit Score
Your credit score. Chances are you either love it or hate it. It’s either the greatest thing in the world or a total hindrance.
Or, maybe you don’t really know enough about your credit score for it to make an impact on your life.
As a whole, Americans’ credit scores are beginning to increase but our knowledge of credit and how it works is declining. A recent survey from credit scoring company Vantage Score and the Consumer Federation of America found that 32% of the people surveyed didn’t know they had more than one credit score. That percentage has risen by about 16% since 2012.
Let’s forget about how many credit scores we have for a second and answer a very basic question: what is your credit score?
Your credit score is a three-digit number ranging from 300 (the lowest possible score) to 850 (the highest score). Lenders use your credit score to make decisions about whether or not to offer you credit – such as a credit card, car loan or mortgage loan. Your credit score is also used to determine the terms of the offer – what your interest rate will be and whether or not you’ll have to make a down payment.
Your credit score is calculated by looking at these categories:
- Payment history
- Your income-to-debt ratio
- Total debt
- Length of credit history
- Types of open credit
- Public records (such as bankruptcy)
- Number of inquiries for your credit report
- New credit
So, what is considered a good credit score?
The average credit score in the United States ranges between 670 and 710. According to Experian, a “good” credit score is anything that falls between 661 and 780, which is about 38% of the population.
To put that into perspective, to qualify for an FHA mortgage loan, your credit score has to be a 580 or higher with a 3.5% down payment. Usually, if an applicant falls in that “good” credit range, they’re likely to be approved for credit at competitive rates.
Now that we know what a credit score is and what classifies as good one, the next question to look at is: why does your credit score matter?
Think of your credit score like a report card you used to get while you were in school. Your report card measured your progress during the school year, and your credit activity puts you into a scoring range. But, unlike grades, credit scores aren’t stored as part of your credit history. Instead, your score is generated each time you apply for credit. Fun fact: it actually negatively impacts your credit score if you have multiple inquiries in a short period of time.
What are your major financial goals? Buying a home? Buying a car? Chances are, your credit is likely going to be a factor in framing that financing picture. Your score will actually tell a lender whether or not you qualify for a loan and how good the terms of the loan will be. For instance, the lower your credit score is, the higher your interest rate on a car loan will be.
If you’ve looked at your credit report, and you’re surprised to see it’s lower than you thought, don’t worry.
There are simple ways to fix that.
- Pay your bills on time. That goes for ALL your bills – not just credit cards and loans. Fun fact: payment history is the most heavily weighted factor of your credit score. It makes up 35% of your credit score.
- Keep your credit card balances low . Credit history accounts for 15% of your credit score so keep those old accounts open even if you don’t use them.
- Space out your credit applications . Each time you apply for a line of credit, the inquiry is noted on your credit report. One or two inquiries aren’t a huge deal, but when you have a bunch within a two-year period, it can cause your score to fall.
- Mix up your credit. Your credit mix, or the types of credit accounts you have, accounts for 10% of your credit score. Basically, lenders want to see that you can use different types of credit responsibly.
Credit doesn't have to be scary or overwhelming. There are many responsible ways to start out slowly and build worthwhile credit for the future. Welcome Federal Credit Union can help.
Are you looking for help building or establishing credit? We have a number of ways to start you on the right path. Let us help you! Stop by one of our branches today or give us a call to see what options we have.
Question is, how prepared are you to deal with life’s unexpected curveballs?
There’s no way to predict when life will happen. One minute you’re looking at a little extra money in the budget and feeling good about the small surplus. The next minute your new puppy swallows part of a chew toy, and you’re off to the vet. There goes your small surplus and budget.
Life’s unexpected events can be overwhelming and figuring out how to handle the new debt plus the monthly recurring debt can be stressful.
What happens if your car breaks down, you have to move, or your water heater has to be replaced? Illness and employment are equally as unpredictable. If you are laid off, how long could you pay your bills without living off credit cards or borrowing money? You're not alone. Did you know that 40 percent of Americans can’t cover a $400 expense out of pocket?
So, what happens if you find yourself in this position? Believe it or not, you have a few options – smart, safe and legal options – to help cover those unexpected expenses.
Maybe haggling over a bill doesn’t come naturally to you, but this is a great way to save a little money each month. Most doctor’s offices and hospitals will work with you on payment plans as long as you are paying something on it each month. It’ll help show that you’re good for some of the balance now and can pay some later.
Avoid predatory lenders
Don’t let your circumstances make you feel like payday loans or predatory lenders are the only way out. Payday lenders prey on people who are vulnerable and in tight situations. In 2016, Google banned payday lenders from advertising on its site because of their predatory practices. They offer attractive offers, right? Lump sum payment, a few weeks to pay it back – no sweat, right? Wrong. Most payday loan companies charge anywhere from $10 to $30 for every $100 borrowed which equates to an interest rate of almost 400%!
Beware of the credit card
Credit cards are definitely better than payday loans but be mindful of your interest rate on your card. If you’ve got a high interest rate, you could be paying more in the long run if you don’t pay off the balance in full relatively soon. Also, if you’ve got a “no interest until” card, remember that while you’re not paying interest right now, if there is a balance on the card when the time period is up, your credit card company will retroactively add its interest rate to the amount left.
Get a personal loan
Even if your emergency doesn’t have a specific category, a personal loan can still be an option for you and the interest rate will, oftentimes, be much lower. Credit unions are a wealth of information and knowledge. They’re a really great resource for getting on the right track financially. They have who can help make sense of the best personal loan or the right credit card for you.
Our lending experts at Welcome Federal Credit Union can talk you through the loan options we have and help you obtain the one best suited for your needs. We’re here to help. Getting off track financially happens, but it doesn’t have to be hard.
Stop by our branch or call us at (888) 932-8148.
Reverse Mortgages Blog
Reverse mortgages. Depending on your circumstances, choosing between a reverse mortgage or another option can be easy or difficult. Most of us have heard about reverse mortgages, but few know how they work.
“If you haven't saved as much as you thought by a certain time, or your expenses are more than you thought they’d be, a reverse mortgage could be an option. These types of loans are structured so that it’s basically like getting an equity loan or mortgage on your property,” said Loan Specialist, Clint Bramlett. “Instead of paying the loan back, you live in your house until you decide to move out, or death. After either of these events, the bank will then take the house and sell it. Hopefully for a profit.”
If a homeowner opts for a reverse mortgage, they are no longer liable for the payments on the house. However, the taxes and insurance must be paid or the loan will be foreclosed.
"Homeowners can elect to take the money in a lump sum or a line of credit similar to a home equity line of credit," Bramlett explained. While you won't have a monthly payment, the interest on the loan will increase.
"Before a homeowner can begin the process of obtaining a reverse mortgage, they must go through financial counseling with a HUD-certified counselor," Bramlett added. There are several qualifications a homeowner must meet for a reverse mortgage loan. Including:
- At least 62 years of age
- Live in the home as a primary residence
- Sufficient equity in the home
- Meet financial eligibility criteria established by HUD
Because a reverse mortgage is intended for a more mature audience, Bramlett states; "It's structured so there are some protections in place for the demographic it serves.” A reverse mortgage isn’t a good idea for everyone. For example, if you'd like to keep your home in the family, a reverse mortgage is not the right choice. When the homeowner passes, the bank then sells the house to recoup the money it's owed.
If you're considering a reverse mortgage, “You’re at the point in your life where you’ve retired, you have equity in your property and you’re passing a true piece of heritage. It’s a nice inheritance for your kid,” Bramlett said. With a reverse mortgage, “You can’t pass it down. It’s no longer an asset to pass down to your kids.”
There are pros and cons to a reverse mortgage. It’s an excellent way to eliminate your monthly mortgage payment, put cash in your hands and keep your home. However, it’s important to remember that not all properties will qualify. You must have a certain amount of equity in your home, and the reverse mortgage is secured by placing a lien on your home.
"Taking out a reverse mortgage is a big decision," Bramlett cautioned. There are several things to take into consideration. First and foremost, Bramlett urges homeowners to do their research before beginning the process. The two most important pieces of advice Bramlett offered for homeowners were: talk to a financial planner and don’t take more than needed.
“The reverse mortgage should be a piece of the larger picture with your other investments,” Bramlett said. “The best idea is to get the money in a line of credit so you can use it when you need it. If you don’t need it, don’t use it. Don’t leverage it to the max.”
What is your mortgage situation? Have you or someone you know considered a reverse mortgage? Let us help or answer any questions you have.
Stop by a branch today or give us a call at (919) 474-3240.
It’s that time of year again!
Summertime is winding down. Teachers are prepping to return to their classrooms and start decorating. School supply lists are starting to surface. A new school year is right around the corner.
A new school year means only one thing – back-to-school shopping is almost here! Which means you'll be sending your students back into the classroom before you know it.
According to the Huntington Backpack Index, in the 2018-2019 school year, the amount parents paid in back-to-school supplies was estimated as follows:
- $637 elementary school kids,
- $941 for middle school children, and
- $1,355 for high school students
There’s no way around it – school shopping is expensive. But, it doesn’t have to be. Much like financial planning, saving on back-to-school shopping requires a plan as well. With the right planning and preparation, back-to-school shopping doesn’t have to break the bank.
Before you go shopping and buy a bunch of supplies, take inventory of your house. Check drawers and cabinets to see what supplies you have that can be used again. Look at backpacks, lunchboxes and even school clothes from last year to see what can be kept and what needs to be replaced. From there, make a list and determine what your child needs and what you have.
Get the school’s supply list
Generally, retailers like Target and Walmart usually have copies of the supply lists divided by grade, school, and district, and those lists are usually available online before they’re in the store. Check the lists, do a little research regarding prices and make a budget accordingly. You can check with your child’s teacher to make sure you’re getting the most important items.
Don’t forget about discount stores and couponing
Do you want to save some real money? Purchase things like notebooks, pencils, and paper at discount stores. If you're into couponing, you can save some big bucks there as well. Poke around the internet and see where the deals are before you hit the stores.
Take advantage of tax-free weekend
The tax-free weekend is a prime opportunity to save on back-to-school supplies. Depending on the states' tax rate, shoppers can save anywhere from 4% up to about 9%. Tax-free weekend is held each year to coincide with the back-to-school season. Not sure when your state’s tax-free weekend is? Click here to find out.
If you want to see actual savings, don’t go into back-to-school shopping without a plan. Rather than charging up your high-interest credit card, talk with us about a loan with a plan that works for you. You’d be amazed at the savings you find.
Back-to-school shopping doesn’t have to be overwhelming or expensive. For help or questions about savings, check with any of our experts at Welcome Federal Credit Union.
Stop by our branch or call us at (919) 474-3240
Building Blocks to Help Millennials Create a Financially Sound Future
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 to even, millennials continue to accrue debt.
In February, the New York Federal Reserve released a study showing that millennials have accumulated more than $1 trillion of debt including mortgages, auto loans, credit cards, and student loan debt. Additionally, Schwab’s 2019 Modern Wealth report, a May survey from Charles Schwab, 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 statistics 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 towards retirement are not impossible feats. Like everything else in life, finances are about balance and finding an approach that works for you.
Create a budget
Budgets are not “one size fits all,” and no two people will have the same budget or goals. First, find a strategy that balances rewarding life experiences and saving for the future. Be realistic when crafting your saving and spending goals. For example, you can’t expect to go immediately from saving nothing each month to saving away $400 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 on direct deposit, have a portion of it directly deposited into a savings account. Also, set up recurring transfers from your checking account into your savings account. Automatic bill pay is another great way to get ahead. Most credit unions offer bill pay to their members to pay monthly bills straight from their accounts. This ensures that bills are paid on time and you don’t have to remember to pay them!
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. Those small amounts begin to add up and they add up quickly. There are a number of apps - Mint, Quicken, and Twine - that aggregate your financial transactions and organize them by category so you can create and monitor a budget.
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 those traps. Give yourself a waiting period for large purchases. During that waiting period, talk to someone - 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.
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. You’ll be surprised how quickly you can build back your account by eliminating those unnecessary bills.
At Welcome Federal Credit Union, we offer our members a variety of services including financial planning and credit counseling. We want to help you find a way to save for your future in a way that also meets your immediate needs. Let us help you review your financial situation and find a path that gets you where you want to be.
Give us a call today! (919) 474-3240
5 Ways to Travel on a Budget This Summer
Isn’t it funny how you look forward to summer all year long, yet somehow it still seems to show up earlier than you expected? Between work obligations, family responsibilities, and the valiant attempt to maintain some semblance of a social life, most of our schedules are so full that time flies whether we’re having fun or not. So, here we are—standing at the summertime starting line. Even if you don’t have a fully funded vacation fund, wouldn’t you like to get away for a little rest and relaxation? And wouldn’t it be nice to do it without blowing up your budget or going into debt?
5 Suggestions for Budget-friendly Summer Travel
- Score some last-minute deals. Remember when your parents and teachers would warn you about the dangers of procrastination? They may have been right about schoolwork and household chores, but it turns out waiting until the last minute can be a good thing when it comes to travel planning. To help travelers just like you, the good folks at SmarterTravel.com managed to identify 18 online resources that specialize in finding last-minute deals on hotels, flights, tours, cruises, and more! You spent years telling your mom that you do your best work under the pressure of a deadline—here’s your chance to prove it.
- Stay with friends or family. Catching up with friends and family is fun, right? If they just so happen to live somewhere you want to visit and you can save a little money by staying with them, wouldn’t that make your trip even better? Yeah, we thought so too. Financial benefit aside, staying with someone you know is also a fantastic way to get recommendations for the best local restaurants and attractions. And with all the money you save on lodging expenses, you can probably afford to take your hosts out for a nice meal while you’re in town. See? This works out great for everyone!
- Bring your own food. Next to lodging, dining is often the most expensive part of traveling. You already know dining out can be expensive, but if you’re heading to a popular vacation spot, chances are it will be even pricier. Once you figure out where you’re staying, spend a little time meal planning. By shopping for groceries before you go and preparing most of your own meals during your stay, you can save hundreds of dollars and keep your trip under budget.
- Plan a day trip. OK, maybe you don’t have room in your budget for a weekend getaway or spending a few days with friends. That doesn’t mean you can’t have any fun. Day trips are an excellent way to break out of your regular routine and save money while doing it. Take a look at a map. You can probably find an interesting destination within a two- or three-hour drive of your home. Do a little research and find a fun activity or two that you can enjoy while you’re there. Head out early in the morning, spend the day creating spontaneous memories, and grab a good meal before heading back home. We bet that when you look back, these day trips will be some of your favorite travel memories.
- Collect experiences instead of “stuff.” Think back on your favorite childhood vacation. What makes that particular trip stand out from the others? Time with family? Seeing new places? Unexpected adventures? Whatever your answer may be, we’re pretty sure it wasn’t the $10 gift shop keychain you begged your parents to get for you. Sure, trinkets are fun for a little bit, but the joy they provide rarely sticks with you. Experiences, on the other hand, are not only enjoyable in the moment; they often get better with time. If you’re going to plan a last-minute summer getaway (and you definitely should), focus on creating memorable experiences rather than spending too much money on souvenirs you’ll probably lose anyway.
We started this article talking about procrastination and how you can make it work for you. But even though there’s an adrenaline rush that comes from pulling off a last-minute travel miracle, it would be nice to enjoy a stress-free vacation next summer, wouldn’t it?
As soon as you get back from this year’s impromptu summer excursion, why not start putting a little money into a vacation-specific savings account each month? By keeping your vacation fund in a savings account until you need it, you not only reduce the temptation to spend it on something else, you gain the ability to earn interest throughout the year.
To make the most of your savings, speak with a service representative at Welcome Credit Union and ask us which account would be the best option for your vacation-saving goal.
How Much Does It Take to Be “Rich”?
The results of a recent YouGov survey show that most Americans think you need to make $100,000 per year to be considered “rich.” Assuming you weren’t one of the people interviewed for that survey, does $100,000 a year sound like wealth to you? What if someone makes less than six figures per year? Can they still be considered wealthy? How can someone with a goal of getting rich know when they’ve finally arrived?
What does “rich” even mean?
Here’s the challenging thing about defining what it means to be rich or wealthy—it’s all relative. In a recent article for CNBC, reporter Kathleen Elkins shared that, according to the 2018 Global Wealth Report, “If you have just $4,210 to your name, you're better off than half of the people around the globe.” That report went on to show that anyone with a net worth of $93,170 or more ranks in the world’s wealthiest 10 percent. How about that? It turns out wealth has little to do with your income after all.
Yes, earning a lot of money can help you build wealth, but there’s more to it than that. We’ve all heard stories of individuals who made massive amounts of money yet wound up broke and bankrupt. At the same time, there are many examples of ordinary people who earned average salaries and somehow managed to retire with extraordinary wealth and financial stability. When you analyze their stories, you find that those who were successful focused less on their income and more on their net worth. If you want to “get rich,” you’ll need to make your money work for you instead of the other way around.
Net worth is the key to lasting wealth.
Maybe “net worth” is a new concept for you; maybe it’s not. Either way, let’s define the term for the sake of clarity. Credit Suisse, the research institute that compiled the Global Wealth Report mentioned above, defines net worth as "the value of financial assets plus real assets (principally housing) owned by households, minus their debts.” Simply put, your net worth is the difference between what you own and what you owe. By this definition, it’s easy to see why income is only part of the wealth equation. You might earn $250,000 per year, but if your debts and payments outweigh your income and assets, you’re just broke at a higher level.
Do you want to get rich? Start with these simple steps.
- Follow a budget.
Whether you make minimum wage or a CEO’s salary, it’s essential to have a plan for how you’ll spend your money. Some experts recommend zero-based budgeting where you designate where every single dollar will go during the month, starting with your basic needs (housing, food, utilities) and financial obligations (credit card payments, loan installments) and placing any remaining funds into savings. Others recommend a broader 50/20/30 guideline, which dedicates 50% of your income to needs, 20% to savings, and 30% to wants. These are only two out of many budgeting approaches. There are pros and cons to each, so take your time and find the right fit for your finances. Remember, the best budget for you is the budget you follow.
- Minimize your debt.
To create a substantial net worth, it just makes sense to limit your debt. If you’re starting out on your own and haven’t racked up mountains of debt, do your best to keep it that way. If you’ve made some poor financial decisions that left you saddled with considerable debt—especially high-interest consumer loans and credit card balances, create a plan for paying off those debts as quickly as possible. If you need help formulating a plan, you can find a variety of resources online. You can also see if your credit union offers debt counseling services. Once your money is no longer going to pay off debt, you’ll be able to take significant strides toward building wealth.
- Invest in assets.
Speaking of strides toward building wealth, investing in appreciable assets is the best way to build your net worth. The most common assets are real estate, stocks, and bonds. While real estate appreciation varies by location and depends on fluctuating market conditions, it is historically a safe investment that increases over time. Buying individual stocks is also a reliable way to grow your money, but this kind of investing can often be a high risk, high reward proposition. If you’re looking for stable growth over time (which we highly recommend), investment products like 401(k) accounts and a mutual funds offer stability through diversification. Since there are so many investment options available, it’s always a good idea to consult a qualified financial advisor before committing your hard-earned money.
So, how much does it take to be rich? That answer is going to be different for everyone. Your situation is unique, which means your road to riches will be as well. Fortunately, you don’t have to plan your route alone if you’re a Welcome Credit Union member. Our financial advisors are ready to help you find your starting point, establish your financial goals, and select the best products and tools to accomplish those goals.
5 Ways to Get a Great Car for Less
Premium styling. Flawless paint. Glistening tires. That unmistakable new car smell. Everything about a new vehicle practically begs you to buy it. When you close your eyes and think about driving your brand-new set of wheels off the lot, it quickens your pulse a little, doesn’t it? Shopping for your next vehicle is a uniquely exciting experience. Until you look at the price tag, that is.
If you haven’t priced cars recently, you may be surprised by the figures you find. According to a 2018 report by Edmunds, the average loan amount for a new car jumped to more than $32,000, and the average monthly payment rose to $558. Sure, the latest models may be nice, but facts are facts—that’s a lot of money to pay for a car.
Now, before we go any further, if you’ve been saving up for your dream car and figured out how to buy it without demolishing your budget, then by all means, go for it! But if you find yourself in the market for a new vehicle and you want to avoid overspending, we’ve got five tips to help you hang onto more of your hard-earned money.
5 Ways to Save Money When Buying a New Car
- Do your research. The last thing you want to do is show up to a car lot with no idea what you’re looking for. Lack of preparation puts you at the mercy of the salesperson. And while they may be genuinely nice people, sales professionals make their living by getting you to buy a product at the highest price possible. So, before you head to a dealership, narrow down your choices by doing your research. Thanks to the Internet, companies like NADA, Car and Driver, and Car Connection can help you sort thousands of options by everything from location to price to trim packages.
- Get pre-approved. Once you’ve determined which vehicle fits your preferences and meets your needs, it’s smart to get pre-approved for financing. If you are a credit union member, there’s a good chance you’ll find better financing rates through your credit union than through another lender. Once you’re pre-approved, you’ll know how much you can afford, what interest rate you’ll pay, and how much your monthly payments will be. This information gives you the upper hand in price negotiations and keeps you from getting distracted by dealer tactics that focus strictly on monthly payments. Pre-approval lets you negotiate based on the most important aspect—price.
- Shop for incentives. When sales are lower than expected, automakers will often extend money-saving incentives to encourage buyers to purchase their vehicles. This is an instance where the manufacturer’s loss can be your gain. If you’re not already loyal to a particular make or model, you may be able to take advantage of dealer incentives such as discounts, rebates, and lower APR on financing. If you are loyal to a specific type of car, that can work in your favor as well, as some car companies will offer customer loyalty incentives to encourage you to keep driving their cars. To learn more about the incentives that may be available near you, click here.
- Ask for a lower rate. There are plenty of books, websites, and podcasts that offer tips and tricks on negotiating more effectively. While most of their ideas have merit, there’s one suggestion that may seem a little too simple and straightforward—ask for a better deal. In most cases, a dealer or salesperson will start negotiations with an offer that benefits them the most. Asking them to do better is part of the game. To give yourself the best chance of success, be polite and be prepared to walk away. Some dealers will play hardball, but when they have an interested buyer (especially one with pre-approved financing), most would rather sell a car for a little less than let it sit on the lot and hope another buyer comes along.
- Choose a used car instead. OK, maybe this tip isn’t exactly a way to “get a new car for less,” but it is an excellent way to save money on your next vehicle purchase. Since most new cars depreciate an average of 20% in the first year and nearly 50% after five years, buying a pre-owned vehicle is a smart way to steer clear of that depreciation. It’s also worth mentioning that in addition to their lower up-front prices, used cars usually cost less to insure. Save now. Save later. That’s a pretty convincing sales pitch, isn’t it?
When you’re ready to start shopping for your next car, we’re confident that you can handle the research portion on your own. But when it comes to the financing and pre-approval, do yourself a favor and contact us here at Welcome Credit Union. In most cases, we can offer lower rates and more flexible terms than traditional banks or lenders. Thanks to our competitive auto financing programs, a simple phone call can save you thousands of dollars over the life of your loan. Give us a call today. You’ve got nothing to lose—except months of unnecessary interest payments!
10 Tips for Selling Your House Fast—and for Top Dollar!
When you’re trying to sell your house, you want to do it as quickly as possible. But did you realize you only have six seconds? Your house may be on the market longer than that, but that’s not what we’re talking about. Homebuyers generally make their purchase decisions based on first impressions, and real estate experts estimate those impressions are formed within the first six seconds—three from the curb and three from the entryway.
If you’re going to win over a prospective buyer, you’ll have to get their attention quickly to convince them that your house is their next home. Yes, location is key. And yes, price matters. But with a few strategic preparations, you can make your property as attractive and inviting as possible. By doing so, you’ll set it up to sell sooner rather than later.
10 Ways to Prepare Your Home to Sell ASAP
- Think like a buyer. It can be tempting to present your home in a way that highlights the aspects you like the most. The problem with this approach is that your favorites are just that—your favorites. Potential buyers won’t be looking at your house through the lens of nostalgia. Help them see your home as a blank slate where they can form their own identity.
- Focus on curb appeal. It’s incredible what a tidy lawn and freshly mulched flower beds can do for a house. Most buyers will drive by your property before deciding whether or not to take a closer look. A house that looks welcoming from the street stands a much better chance of selling quickly.
- Freshen up your front door. If curb appeal is a friendly invitation, a freshly painted front door is a cheery welcome. Every buyer who looks at your home will most likely enter through the front door, so giving it a new coat of paint can cover up any scuffs and dings that have shown up over time. This small step will help the house look livable—not lived in.
- Make basic repairs. If you’ve lived in your home for any amount of time, there are probably a few problems you’ve learned to live with. Chipped paint, missing fence boards, leaky kitchen faucets, flickering lightbulbs…these are just a few of the minor inconveniences that you might overlook on a daily basis. They’re also the little details that could make your house less attractive to a buyer. Make the simple fixes. You’ll be glad you did.
- Stay neutral. If you personalized your house by using vibrant colors in each room, it might be a good idea to repaint. While you might love bold colors, there’s no guarantee the next owner will. Painting the walls in neutral colors will let potential buyers observe the overall house without getting hung up on whether or not they like the colors you chose.
- Make it less “you.” While we’re focused on the interior, make a special effort to remove decorations and knick-knacks that reflect your personal tastes and identity. No matter how friendly and familiar they may be, family photos will make buyers feel like their visiting someone else’s house. You want them to feel like they’re spending time in their own.
- Clean and declutter. You don’t have to channel your inner Marie Kondo, but clearing clutter will not only make the house look cleaner, it will make it feel bigger. And when it comes to cleanliness, there’s no such thing as too clean. When you think things are finally clean enough, go over them once more. Buyers will notice.
- Use some common scents. It goes without saying (or at least it should) that you should do your very best to eliminate offensive smells like pet, laundry, or cooking odors. If you want to increase your chances of selling your house, go a step beyond deodorizing and introduce a pleasant scent. Candles, essential oils, and fresh-baked cookies can do a wonderful job of creating a welcoming environment for house hunters.
- Stage strategically. If you can’t afford to hire a professional real estate stager, you can still arrange each room to highlight your home’s top features. While each room matters, pay particular attention to the living room, the master bedroom, and the kitchen. These are the three rooms where the new owners will spend most of their time, so staging them well is a small task that can make a big difference.
- Hire a real estate agent. If you want to sell your home as quickly as possible, enlisting the help of a professional is a smart way to accomplish your goal. Experienced realtors know the local market, and their expertise can help you sell your house faster and for more money. Selling a home on your own might sound like a good idea, but when you consider that a real estate agent can handle the marketing, negotiations, and legal details, their commission can be money that’s well spent.
Potential home buyers want to walk through a house that feels exciting and new. They also want it to feel like home. Following the tips listed above can help you give them exactly what they’re looking for. And the faster you make that happen, the sooner those buyers will give you what you want—a house with a SOLD sign in the yard!
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 US family can wind up spending more than 40% of their annual income on medical-related expenses. That’s steep.
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. If you haven’t run into medical debt yet, these steps might be able to help you avoid the frustrations so many others have experienced.
3 Ways to Keep Your Medical Expenses in Check
- Review Your Bill When hospital or doctor bills show up, it’s natural to skip right to the “Total Due.” It’s natural, but it’s 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.
- 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, banks, or credit unions, 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.
- 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.
Current medical expenses are astronomical; that’s a fact. And while it will probably take an industry shake-up to make any lasting changes, it doesn’t make sense to worry about things you can’t control. 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. That’s a step in the right direction.
Credit Card Regret: It’s More Common Than You Think
- Frank Sinatra
If you’re the kind of person who prefers to play it safe, there’s a good chance that, like Ol’ Blue Eyes, your list of regrets is mercifully short. But if you’re the adventurous type who’s more likely to yell “YOLO!” than take the time to consider pros and cons, you may have made more unfortunate decisions than you care to admit. Either way, it’s safe to say we all have regrets. And if we’re being honest, some of them are probably related to finances.
Going into credit card debt is one of the most common financial regrets. According to a recent NerdWallet survey, “About 6 in 7 Americans (86%) who have or had credit card debt say they regret it.” With numbers that high, it’s safe to assume most of us would make different credit decisions if given a chance. Have you ever signed up for a new credit card and immediately wished you hadn’t? If so, the following reasons will probably ring a bell. If not, pay close attention. You can learn a lot from others’ mistakes.
Common Reasons for Credit Card Regret
If you’ve ever opened a new credit card account and felt that distinctive twinge that tells you it was a bad decision, there’s a pretty good chance you filled out that credit application for the wrong reason. Bad reasons come in a variety of forms. Here are a few of the most common:
You wanted that sign-up swag. – T-shirts. Koozies. Collapsible drink coolers. It doesn’t matter what it is; we love free stuff. Credit card companies know this, which is why they set up promotional tables on college campuses and inside sports arenas. Sure, free t-shirts are cool, but are they really worth opening a credit card that will charge you 26% interest on your purchases?
You can’t resist that one-time discount.
“Would you like to save 25% on today’s purchase by applying for store credit?” If you’ve ever shopped at a retail store, there’s a good chance you’ve heard this sales pitch at the check-out register. If you took advantage of the offer and suddenly wished you hadn’t, you’re not alone. According to a recent survey, almost 75% of Americans have at least one store credit card. Not surprisingly, nearly half of them regret it.
You’re in a financial pinch.
When your checking account is running low, it can be incredibly tempting to sign up for a credit card just to get some temporary relief. However, credit cards don’t remedy poor financial habits; they tend to make them worse. If you’ve ever signed up for a new credit card “just to cover things until payday,” this regret may feel all too familiar.
OK, you signed up for a credit card and regretted it. Now what?
Before we go any further, it’s important to remember one thing: Just because you have a credit card doesn’t mean you have to use it. Even if your regrettable card carries a 26% interest rate, 26% of $0.00 is still $0.00. However, if you’re worried you won’t be able to resist using your card, you might be tempted to close your account immediately. This could certainly help you avoid charges you can’t afford to repay, but there may be a better approach.
Available credit and length of credit history are two of the main components of your credit score. Having an open, active account you don’t use could actually help you. If you were given a $1,000 credit line with your new card and you don’t make any purchases, you have $1,000 of available credit. If you close the account, you have no available credit. In this case, maintaining the credit line may be beneficial for your credit rating.
As for the length of credit history, that part’s fairly self-explanatory. The longer you maintain a satisfactory account, the more favorably it reflects in your credit score. With this in mind, you might be better off just removing the card from your wallet (and your smartphone’s digital wallet too) instead of closing the account altogether.
Good credit is one of the building blocks of your overall financial health. If you’re trying to find financing options that are right for you, contact your credit union and ask to speak with one of their trained representatives. They’ll be able to help you review your financial situation and recommend the best products and programs for your needs. With their guidance and expertise, you stand a much better chance of managing your credit—and finances in general—with no regrets!
Save Money by Taking Your Spring Cleaning to the Next Level!
Now that March has gone out like a lamb (a waterlogged lamb in many parts of the country), Springtime is here, and that means it’s time for that beloved annual tradition—Spring Cleaning. In surveys conducted by the American Cleaning Institute , responses indicate that as many as 91% of Americans and 96% of Millennials engage in spring cleaning, so it seems safe to say we’re all in this together.
As you open the windows and begin your routine of washing, sweeping, dusting, and decluttering, the goal is to spruce up your home’s interior while eliminating things you no longer need. When done correctly, In spring cleaning can actually make you happier and healthier . So, it makes sense to be as thorough as possible. This year, while you’re busy cleaning your fixtures and furniture, it might be a good idea to update some common household items to more energy-efficient options. A more efficient home is an investment that can save you money all year long, and we’re pretty sure lower utility bills will boost your mood as well!
- Simple Ways to Make Your Home More Energy Efficient This Spring
- Energy-Saving Power Switch By completely cutting off all power when an electronic device isn’t in use, these plug-in adapters reduce the costly effects of “vampire energy.” While the term sounds scarier than it should, vampire energy refers to the power that still flows to a device even when it is turned off. These handy switches can be purchased online or in your local hardware store for $10 or less. And with prices that low, your return on investment can be quite substantial.
- Low-Flow Showerhead According to a research project conducted by the Alliance for Water Efficiency , the average American shower lasts for just over 8 minutes and uses approximately 17 gallons of water. The average flow rate works out to be roughly 2.1 gallons per minute (gpm). By switching to a low-flow shower head that reduces usage to 1.25 gpm, you can save an average of $32 per year per person. For a couple, that means $64 in savings each year—especially impressive considering that most low-flow showerheads can be purchased for $10-15.
- Smart Thermostat The Internet has revolutionized the way we communicate, shop, and even do our banking. Now, thanks to smart products like the Nest Thermostat , it appears that it has also changed the way we save on energy-related expenses. While the initial price of a Nest will set you back approximately $250, the average annual home energy savings of $150 per year means you’ll recoup your investment in less than two years. After that, the savings just continue to add up.
- Energy Audits Not sure where to begin? An energy audit can help! Depending on your location, energy audits can cost anywhere from $250 to $600. And while that might seem like a lot to pay up front, the potential savings can make it worth the investment. During a professional energy audit, efficiency experts utilize specialized tools to identify areas where your home may be using excessive energy, which, in turn, can help you pinpoint which improvements will make the biggest difference. To find an energy auditor and prepare for an audit, check out these helpful tips .
Throughout this article, we’ve talked about a few relatively low-cost ways to improve your home’s energy efficiency. But maybe you’re thinking a little bigger this spring. If you need a little more incentive to make big-ticket improvements like installing new windows, updating your HVAC system, or adding solar panels, federal tax incentives may provide just the push you’re looking for. Usually available in the form of rebates, these incentives are designed to encourage homeowners to update their home systems to be more energy-efficient and sustainable. If you’ve been thinking about making some major energy-saving upgrades around your house, don’t forget to see if they qualify for valuable government incentives. When it comes to saving energy and saving money, every little bit helps!
Should You Keep Separate Checking Accounts When You Get Married?
You found “The One.” You popped the question, and they said “Yes.” You both said, “I do.” Your honeymoon was incredible. Now, you’re back to reality and settling into your new life together. Suddenly, you’re faced with a wave of everyday decisions you hadn’t previously thought about. Who sleeps on which side of the bed? Which toothpaste should you buy? Whose parents will you visit at Thanksgiving? What about Christmas? Some decisions are trivial, but other dilemmas feel far more important. But then, when that first monthly bill shows up and you have to decide who pays it, you come face-to-face with one more crucial decision: Should you combine your finances and get a joint checking account?
For years, financial advisors and relationship gurus have sparred over the potential dangers and benefits of joining two individual bank accounts into one. The most challenging part of this debate is that both sides appear to make valid points, which can leave you and your spouse wondering what to do. Before we go any further, it’s important to remember that just as each person in a marriage is a unique individual, every relationship is different. And while it’s wise to seek counsel and take advice, you’ll ultimately need to figure out what works best for you. In the points to follow, we’ll set out to share a few perspectives that can help you determine the best way for you to build a financial foundation that works for your family.
The Case for Separate Checking Accounts
In an interview with CNBC?, David Back, co-founder of AE Wealth Management, advised, “You should have your own account, both of you. It’s absolutely critical, especially for women, that you keep money in an account that’s yours that you control.” Citing the fact that almost half of marriages end in divorce, Bach and other like-minded financial professionals point to the fact that not only do separate accounts allow each individual to maintain their own financial identity; they also make it easier to divide assets if the relationship dissolves. If both spouses agree, the practice of keeping separate accounts can also serve to reduce the number of disputes over spending decisions. By allowing each person to manage the finances they bring into the relationship, this approach depends on the mutual trust that each person is managing their money in a financially responsible manner. And in a marriage, that kind of trust is essential.
The Case for Joint Checking Accounts
While many agree with the practicality of married couples maintaining separate bank accounts, several studies at the University of California suggest a completely different approach. Though financial independence may be a key factor in maintaining a sense of autonomy, the UC study indicated that marital happiness might be easier to achieve if both partners agree to combine everything—including bank accounts. After reviewing the results of their studies, the school’s researchers shared the following observation, “It is important for couples to perceive their possessions and financial goals as shared, and our research identifies one practical way to facilitate this: merging bank accounts.” While happiness is a subject that extends beyond the bounds of traditional financial advice, it is worth noting that your financial practices as a couple can have a powerful impact on your relational success.
The Case for Compromise
As with most things in marriage, figuring out your finances will probably involve some give and take. While some couples can thrive with separate bank accounts, others will find far greater satisfaction by pooling their resources in a joint account. However, if you’re still not sold on either idea, there’s room for compromise. It’s entirely possible for couples to have separate personal spending accounts and maintain a joint account for shared expenses like rent, insurance, utilities, and such. While this strategy requires a little more leg work and the need for open, consistent communication, that’s not a bad thing. After all, whether it’s in relation to finances or just married life in general, fine-tuning your communication skills is always a great idea!
Check Your Finances Before Changing Jobs
Jobs are funny things. As soon as you get one, there’s a temptation to start thinking a different job could be better . Sometimes people find themselves stuck in a role that doesn’t fit their personality or skill set. Other times they love their job but believe a change would provide the opportunity to earn more money and in turn, more peace of mind. Whatever the reason, if you’ve been part of the workforce for more than a few months, you’ve probably spent more than a few minutes wondering if a new job might be the secret to a better life. And if that’s the case, statistics indicate you’re not the only one.
According to the US Department of Labor, the average American changes jobs 12 times during their career . So, if you haven’t tested the job market yet, the law of averages seems to indicate you will eventually. And while job transitions are relatively common these days, it’s still important to approach each change with careful consideration. Not only will the 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; that’s how.
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 rolling 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 six 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 or do they pay the entire premium? Is the new employer’s PTO plan equivalent to the one you’d be giving up? 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. Fortunately, there are online tools to help with these calculations as well.
- Don’t leave money behind. If your current employer offers 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 at your credit union.
If you’re currently contemplating a job offer or just dreaming about what it would take for you to make a change, spend a little time crunching the numbers. To make your comparisons a little easier, the career planning experts at The Balance Careers offer a variety of helpful resources on their site. Once you’ve completed a thorough assessment of your potential job offer, contact one of the financial representatives at Welcome Federal Credit Union. 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.
5 Ways to Save for Summer in 5 Weeks
Summer vacation. During your elementary, middle, and high school years, those two magical words meant three months of freedom! No school, no waking up early, no early bedtimes. It was your annual reward for grinding through the previous nine months of academic pursuits. Yet somehow, summer always managed to fly by faster than it was supposed to!
Now that you're an adult, your summertime respite has probably shortened considerably. Instead of three months, you might get a week away—maybe two, if you're lucky. But just like when you were young, you always wish your time away could last just a little bit longer. It seems like no matter how old you get, summer vacation still holds a special kind of magic.
There's still time to save for summer vacation!
But even with all the sun-kissed nostalgia that makes summer vacation a lifelong treat, there's one thing that can ruin the fun faster than a thunderstorm at the swimming pool: vacation-related debt. Summertime memories are fun to recall, but it's not nearly as fun to receive monthly reminders that you're still paying the price for that fun—plus interest.
If you're like most people, summer usually sneaks up on you. You start the year with good intentions, but somewhere along the way you forget to set aside money to cover your vacation plans. With summer only a few weeks away, you might be wondering whether it's possible to save enough money to cover this year's vacation. We’re happy to report that it's absolutely possible! It will take some discipline, but you can do it. Here are five tips to help you get started.
Five Quick and Easy Ways to Save for Summer Vacation
- Create a savings plan.
Sometimes, the easiest way to save money is to identify the ways you're currently wasting it. By creating and following a sensible budget, you'll be able to pinpoint the areas where you're spending too much. For the next five weeks, do your best to eliminate frivolous expenses and only spend money on things that are essential. You'll be surprised how quickly your savings add up.
- Find fun for free.
Just because you're saving for summer doesn’t mean that you can't have fun in the meantime. But it does mean you might need to find some different activities. Movies, dining out, and entertainment can add up quickly. The average cost of dinner, drinks, and movie tickets for two comes in at around $100, so, imagine how fast you could pile up the savings if you decided to cook at home, stroll through a park, play some board games, or browse at a bookstore instead!
- Resist the convenience tax.
We're all busy. Sometimes it's just easier to pay for convenience. Whether it's drive-thru coffee on the way to work or take-out food for dinner, shelling out a few extra dollars can save precious minutes throughout the day. But if you're trying to save money for summer, you might want to pause these practices. When you consider that you can save $3 per day just by making your morning cup of coffee at home, the money-saving benefits of this step are ridiculously clear. (And don't worry, we're only talking about five weeks. You'll be back to that extra-hot-triple-skinny-no-foam-half-caff latte in no time.)
- Hang onto that tax refund.
If you're expecting a tax refund this year, well…you've probably filed your taxes already. That means either your refund has arrived already or it's on the way. As tempting as it can be to celebrate your sudden cash infusion with a big purchase, it might make more sense to hang onto that money and use it to pay for your upcoming summer vacation. Yes, that'll require a little discipline, but enjoying a fantastic, debt-free vacation is worth it!
- Cash in on your spare time.
OK, so maybe this tip isn't technically about saving—but it can be. If you figure out how to earn a little extra money, that gives you even more chances to save. (See? Told you it could be about savings.) Once you've maximized your creative saving methods, it never hurts to earn a little extra money. Side jobs are a great way to make quick cash, and thanks to apps like Nextdoor, Taskrabbit, and Gigwalk, finding work is easier than you think.
If you're saving for this summer, it's probably going to feel like an all-out sprint. But with a little advance planning, next year's summer savings won’t have to be quite so stressful. Here at Welcome Federal Credit Union, we offer convenient vacation savings accounts that let you automatically deposit a little money from your paychecks throughout the year and withdraw the funds just in time for your stress-free summer vacation. Call us or visit one of our branches in person to learn more about these specialized savings accounts.
Make Spring Cleaning Pay Off This Year!
People sure do like their stuff. Whether it's the latest tech gadgets or knick-knacks that have been passed down through generations, the things we own hold a special place in our hearts and homes. So, when our possessions pile up, as is their tendency, what's the logical thing to do? That's right—rent a self-storage unit. What? That’s not the answer you were expecting?
According to a report by Sparefoot, one out of every 11 Americans pays for storage space to keep their overflowing belongings. That's right, not only are people finding additional ways to store their things, they're paying good money to do it—$38 billion a year, to be exact. Spending money to stow away various items you don't need and will probably never use—seems silly doesn't it? We agree. In fact, we think springtime is the perfect season to do the exact opposite.
Clean house. Cash in.
Over the past few years, de-cluttering has seen a spike in popularity, thanks in large part to proponents like Joshua Becker and Marie Kondo. While experts like Kondo preach the soul-cleansing benefits of getting rid of anything that doesn't "spark joy," we recommend doing it for an entirely different reason. Cash. Cold, hard cash.
Don't get us wrong, we big fan of the physical and emotional perks that come from cleaning house, but we also believe that making a little extra money would make you feel pretty good too. If you're inspired but unsure where to start, we've compiled a helpful list of everyday items that carry solid resale value and the best ways to sell them.
Maybe you just upgraded to a new laptop, and you're wondering what to do with your old (but not that old) one. Perhaps you switched mobile phone carriers and didn't bother trading in your previous phone. Or maybe you're staring at a CD/DVD/video game collection that has gotten way out of hand. Before you throw your hands up and your electronics out, see if you can sell them online through services like:
Do you have a closet full of outfits you never wear? Have you changed your style but held onto all your old accessories? Did you purchase a new pair of shoes only to realize you already had an identical pair in your collection? Whether you're creating a capsule wardrobe or just freeing up some space in your dresser drawers, you'd be surprised how many people would be willing to buy your gently used items. Millions of people have made some extra money by selling clothes and accessories via apps like the following:
Let's face it; some things just don't fit in neat and tidy categories. But that doesn't mean they're worthless. There's an old saying that suggests "one person's trash is another person's treasure." That doesn't mean your stuff is trash, it just means that things you no longer use may be incredibly valuable to someone else. So, before you throw out that vintage nine iron, that dusty old vinyl collection, or your great aunt's set of decorative collector plates, try listing them for sale on the following sites:
Once you've completed your spring cleaning, minimized your possessions, and made a little money in the process, you might be wondering what to do with your newfound cash. Whatever you do, resist the urge to go right out and buy more stuff! That will just start the problem all over again. Instead, why not contact your credit union and ask them how to make your money work for you? Our team of financial specialists can help you assess your current financial situation and determine how to take smart steps towards a brighter financial future.
Let the Taxpayer Beware: Learn to Spot Six Common Tax Scams
Now that your W2s and miscellaneous tax documents have arrived, tax season is officially in full swing. While it’s easy to get lost in optimistic daydreams about your tax refund and all you’re planning to do with it, it’s important to remember that scam artists are probably dreaming about what they could do with your refund as well.
After reaching an all-time high of more than 700,000 cases in 2015, tax refund fraud has been declining thanks to significant enforcement efforts by federal, state, and private agencies. While these statistics are encouraging, they also highlight the ongoing need for caution and vigilance. So, before you file your 2018 taxes or pay someone to file for you, we want to remind you about six of the most common tax-related scams happening today.
This one is relatively easy to spot. Why’s that, you ask? Because the IRS doesn’t initiate communication with taxpayers via email. So, if you see an email from the IRS pop up in your inbox—even one that looks remarkably official, don’t bother opening it. For good measure, go ahead and mark it as spam before deleting it. Emails of this type have only one goal: to trick you into clicking a fraudulent hyperlink or responding with sensitive personal information.
In 2018, the IRS reported a new twist on traditional phishing scams. In the new approach, fraudsters hacked the systems of legitimate tax professionals, stole tax returns containing personal details, and then deposited funds directly into taxpayer bank accounts. After those deposits hit the bank, the criminals posed as the IRS or collection agencies and contacted account holders demanding a resolution to the error. The goal of these scams is not to simply regain the money deposited “in error,” but to get the victim to share account details that can be used to access the account at another time. If you find yourself with an unexpected deposit in your bank account, the IRS offers helpful instructions here.
Though they come via phone call, these scams are essentially the same as phishing emails. The difference lies in the fact that con artists can spoof IRS phone numbers in an attempt to convince unsuspecting people to answer the call. Once the phone call is underway, the person on the other end claims to be an IRS agent and tries to get the individual to confirm private account details in an attempt to “resolve the situation.” If they don’t get the results they’re hoping for, the fraudsters may even follow-up with phone calls where they impersonate law enforcement officials and threaten legal action. To avoid accidentally divulging personal details, it’s best to ignore these calls completely. Just as the IRS doesn’t initially contact taxpayers by email, they also don’t initiate official communication by phone either.
This type of scam takes place at the intersection of identity theft and financial fraud. Using a variety of tactics, criminals obtain taxpayer social security numbers and file fraudulent tax returns in their name—often claiming substantial refunds. Since this happens without the knowledge of the victim, it only comes to light when their legitimate tax return is rejected due to a previous return already filed under the same social security number. While the IRS is committed to resolving these issues when they happen, the process can be long and tedious. To safeguard yourself against tax refund theft, IRS officials recommend obtaining an Identity Protection PIN, also known as an IP PIN. Instructions for securing a PIN can be found on the official IRS website.
Shady Tax Prep Services
Since an estimated 79 million Americans use paid tax preparation services, there are considerable opportunities for dishonest preparers to abuse the system. One of the most common scams involves a preparer illegally inflating an individual’s refund and collecting a percentage of the taxpayer’s refund instead of a flat fee. Many times, the problem isn’t identified until after the refund has been issued and the preparer’s fee has been collected. In these scams, the preparer is long gone by the time that the problem is identified, and the taxpayer is responsible for handling the audit on their own. While the practice of a tax preparer charging a percentage of refund isn’t technically illegal, you’re better off avoiding this type of arrangement and opting for a flat-fee service instead.
Public Wi-Fi Scammers
It seems like this one should go without saying, but we all use a reminder from time to time. The public Wi-Fi at coffee shops, libraries, and bookstores can be great for hopping online to browse social media, but it’s terrible for filing your taxes. Not only can these unsecured networks be accessed by almost anyone, but dishonest scammers can also set up hot spots that look like the establishment’s Wi-Fi and intercept logins, passwords, and personal information. So, if you’re filing taxes electronically this year (and considering the fact that approximately 90% of taxpayers filed electronically in 2018, you probably are), do yourself a favor: file at home from your personal computer and your secure Internet connection.
As with most financial scams, these can be simple to sidestep as long as you know the signs to look for. If you observe questionable practices or have additional tax-related concerns, you can find helpful instructions here on the official IRS website.
If you are receiving a federal or state tax refund this year and want to make the most of your money, please contact us here at Welcome Federal Credit Union. Our financial specialists can help you assess your financial situation and show you all the beneficial programs and products available to you as a credit union member. Call, email, or stop by a branch today!
Mind the GAP: Understanding the Value of GAP Coverage
Picture the following scenario: After months of research and planning, you take the plunge and buy a new car. Once the financing is secured and your auto insurance is in place, you’re ready to hit the road. You’re so excited about your sparkling ride that you’re not even worried about the fact that most new cars depreciate by as much as 10% the moment you drive them off the lot—and up to 20% in the first year. That’s a financial fact, but you’re too busy enjoying that new car scent to get bogged down with details like that.
Now, imagine that after just a few weeks, you’re involved in an accident that badly damages, or worse yet, totals your car. (Don’t worry—unlike your car, you emerge from this imaginary situation without a scratch.) Fortunately, you did the responsible thing and secured good auto insurance. Once all the proper claims have been filed, you find out that insurance will only cover your car’s market value—which, due to the depreciation, is several thousand dollars less than the amount you owe on your auto loan. If only there were a type of loan protection that would help you make up that difference. Fortunately, there is. It’s called Guaranteed Asset Protection—GAP, for short.
What is GAP?
GAP coverage is an optional protection plan offered with auto loans or leases, and depending on the plan coverage limits, it effectively waives most of, if not all, the remaining balance on your loan. While your auto insurance plan’s comprehensive and collision policies cover your vehicle’s value in the event that it is totaled or stolen, GAP coverage is designed to ensure you don’t get stuck making payments on a car you no longer own.
How do I know if I need GAP coverage?
While the product makes good financial sense for some, not everybody needs to get a GAP policy. According to the financial experts at NerdWallet, there are a few basic guidelines that will help you decide whether GAP coverage is right for you. You should strongly consider adding a GAP policy to your auto loan if you:
- Made a small down payment on a new car, or none at all
- Agreed to a loan term longer than 48 months
- Drive a lot, which reduces a car’s value more quickly
- Lease your car
- Bought a car that depreciates faster than average
Where do you get GAP coverage?
While a variety of companies provide GAP coverage for consumers, it often makes the most sense to obtain the protection plan from the same financial institution that financed your vehicle purchase in the first place. In many cases, a credit union makes the most sense. If you already financed your vehicle through a dealership, keep in mind that many GAP programs are refundable up to a certain number of days. This means that should you decide to refinance your auto loan through a credit union, they may be able to help you get a refund on your original GAP plan and secure a new plan at a lower cost.
Not only are credit union GAP plans traditionally less expensive than those available through finance companies, they can also be added to your loan at any time (vehicle age and mileage limits apply). Securing coverage through the financial institution that services your loan reduces the need to coordinate communication between multiple parties. It also increases the likelihood that you can put the frustrating accident experience behind you sooner rather than later—and that peace of mind is priceless.
If you have questions about Guaranteed Asset Protection or want to know how to add it to your existing auto loan, contact a financial representative at Welcome Federal Credit Union. They can help you review your current financing situation and determine whether GAP coverage is right for you.
Valentine’s Day on a Budget: How to Find Love & Laughs for Less
When it comes to the topic of Valentine’s Day, public opinion seems to be split. Some people love everything about it. Hearts, roses, candy, flowers, Cupid—you name it, they’re here for it! On the other end of the spectrum, you’ll find Valentine Scrooges who consider February 14th a day like any other. They’re convinced the celebration and fanfare are nothing more than Hallmark-sponsored money grabs. To be fair, these positions are extreme.
If you’re like most people, you probably enjoy spending the romantic holiday with your special someone, but you prefer to celebrate without spending a ton of money. Good for you. There’s nothing more attractive than someone who plans a financially responsible Valentine’s date. OK, maybe a few things—but you get the point. If you’re looking to create an inexpensive, fun-loving Valentine’s experience you’ll remember for years to come, we have a few suggestions you might enjoy.
- Dress up and dine in.
- Dress down and hit the town.
- Dollar store gift challenge.
At first, this suggestion may seem like complete nonsense. Why would you go through the trouble of getting dressed up if you’re not going out in public? Because there’s a strange, yet undeniable appeal to doing something that doesn’t make sense to anyone else, that’s why. So, go ahead—go big. Glam it up. Suit and tie. Gown and heels. The more overdressed, the better. Whether you cook for yourself or order your favorite takeout, the food choice isn’t nearly as important as the fact that you’re both ridiculously overdressed for the occasion. And that’s the point.
Like the previous idea, this one involves an unexpected combination of date attire and meal selection—but with a completely different twist. Before the big date, you and your date head to the nearest thrift store (you can shop together or separately) and buy a complete outfit for the other person, spending no more than $10 in the process. The clothing selections can be as tacky and outrageous as you please—the tackier, the better. The only catch is that you both have to wear the outfits to dinner at a nice restaurant, no questions asked. If you play this one right, not only will you save money and enjoy your date, everyone around you will probably get a kick out of it as well.
You and your date can play this one a couple of different ways. The first approach involves heading to the closest dollar store and seeing who can find the single best/craziest/funniest/most ridiculous gift for the other person. The second option involves setting a spending limit and seeing who can rack up the most entertaining gift collection. (No need to go above $10. After all, it’s still a dollar store.) For a little additional fun, take some selfies with your newfound treasures, and share your pics on social media using the hashtag #DollarStoreScore. After your adventure, head out and grab some dessert. Since you did your Valentine shopping at the dollar store, you’ll have plenty left to cover a sweet treat or two.
Whether you use the tips above or come up with a clever idea of your own, being smart about your Valentine’s spending goes a long way towards ensuring your day is filled fun-loving memories instead of expensive mistakes. And when you’re wondering what to do with all your savings, don’t forget to stop by and see us – We’re happy to help you find ways to make that money work for you. And let’s be honest, long-term financial stability is sweeter than a $10 box of chocolates could ever be!
Are Meal Delivery Services Worth the Money?
With almost $5 billion in sales in 2017 alone, it’s safe to say meal delivery services are catching on. If you haven’t sampled the savory selections from companies like Blue Apron, Hello Fresh, or Home Chef already, you’ve probably seen more than a few of their sponsored ads pop up in your social media feeds. You may even know someone who uses the services for themselves. While these chef-designed, pre-packaged meals can be a phenomenal way to try new recipes, are they a solid choice for stretching your grocery budget?
According to a recent Morning Consult poll, 59% of survey respondents listed high costs as their main concerns. But with projections suggesting the meal-delivery industry could become a multi-billion dollar market by 2022, it seems like plenty of consumers are still willing to jump on the meal delivery bandwagon. The widespread appeal appears to be based on a variety of factors other than monetary savings.
Costs can be measured in more than money.
Meal delivery services enjoy the highest popularity among millennials and individuals earning more than $100,000 a year, particularly those living in cities. These results point to the fact that busy people appear to value time savings and food quality as much as, if not more than, financial savings.
There’s no denying that it takes time to plan your meals, create a grocery list, and actually shop for the food. By creating recipes and sending all the ingredients right to your door, companies like Blue Apron and Hello Fresh can save you the time you’d normally spend on planning and shopping. The busier you are, the more value this service becomes.
Quality of Ingredients
If saving money on your groceries is your main goal, it’s easy to reduce costs by buying low-quality food. Unfortunately, this strategy usually leaves you with an abundance of processed foods that lack nutrition and flavor. The most popular meal prep services rely on culinary chefs to design meals that combine high-quality ingredients to create a meal that’s healthy and delicious.
With the most popular 2-person meal plans starting at $60 per week for 3 meal kits, the cost averages $10 per meal. While you can certainly spend less shopping for yourself, these options are considerably less expensive than the average meal at a restaurant. So, if your busy schedule leaves you dining out on a regular basis, meal delivery services may provide financial savings after all.
What kind of savings do these services actually deliver?
There’s no denying the growing demand for meal delivery services like Purple Carrot, Green Chef, and Blue Apron. The fact that retail giants like Amazon and Walmart are scrambling to be part of the meal kit market only serves to confirm the rising popularity. As you try to decide whether one of these services is the right solution for you, the value depends on your expectations. If you’re looking to spend less than you would by planning your own meals and shopping for yourself, you’ll probably be disappointed. But if you view these services as a time-saving bridge between home-cooked meals and going out to eat at restaurants, the value is much easier to see.
Does a Side Hustle with Uber Really Pay Off?
You’ve done the hard work of creating a budget. You’ve cut frivolous expenses. You’ve crafted a financial plan that lets you tell your money where to go instead of wondering where it went. But even with a steady job and a sensible budget, you still find yourself living paycheck to paycheck. It looks like you’re going to have to find a way to earn some extra money, a side hustle.
With more than 44 million Americans working more than one job, the challenge is a familiar one. As job seekers search for flexible work opportunities, many businesses are busy exploring alternate ways to assemble a workforce of independent contractors.
With hundreds of thousands of individuals working under their respective banners, ridesharing services Uber and Lyft seem to have figured out how to recruit effectively. But as more and more people sign up to be drivers, are they seeing a worthwhile financial reward for their work? A recent study set out to answer that question.
Don’t overlook those operating costs.
Conducted by MIT’s Center for Energy and Environmental Policy Research, this study found that when operating costs were factored together with earnings, Uber and Lyft drivers earned an average of $3.37 per hour. In her article detailing the study, Mashable.com writer Monica Chin shared this explanation of how routine maintenance and travel-related costs can impact overall earnings:
“The study found that because of the high costs of insurance, fuel, and car maintenance, 74 percent of ride-share workers make below minimum wage in their respective states, and 30 percent actually lose money on their jobs. Drivers earn a median of 59 cents per mile driven, while incurring a median expense of 30 cents per mile. 40 percent of those costs were attributed to insurance, maintenance, and repairs, 40 percent to gas, and 20 percent to depreciation.”
Success isn’t automatic. But it’s possible.
As you can see from those statistics, there’s more to making money than just signing up to do the job. Success as an Uber or Lyft driver hinges on a combination of factors such as location, public transportation options, work availability, and smart personal business practices.
If you’ve been thinking about driving for Uber or Lyft, the future isn’t all doom and gloom. It’s possible to make money, potentially even a decent full-time income. The secret lies in approaching the opportunity with the mindset of a business owner instead of an employee. Creativity and efficiency are rewarded. Just showing up won’t cut it.
Online Savings: These Aren't Your Mother's Coupons
When they opened their virtual doors in 1994, Amazon.com was merely an upstart online bookstore. Since then, the company’s growth has been nothing short of legendary. After launching its wildly popular Amazon Prime membership program in 2005, the company has cemented its reputation as a leader in the e-commerce marketplace.
But for a company that generated almost $178 billion in revenue in 2017, it seems strange to consider that despite their eye-popping income, much of their success hinges on helping people save money, not just spend it.
All the coupons. None of the clipping.
While Amazon Prime allows members to enjoy exclusive offers and free two-day shipping, one of the company’s lesser-known features, Amazon Coupons, combines the benefits of old-school coupon clipping with the 24/7 convenience of online shopping.
Now, before you smirk at those memories of your mom or dad dutifully leafing through the Sunday paper to save a quarter on toothpaste or 50 cents on laundry detergent, it’s important to remember that today’s coupons are a big deal. How big? According to a recent NCH study, consumers redeemed more than 2.06 billion coupons for more than $3.1 billion (that’s billion, with a “B”) in savings.
While web-based purchases used to be primarily for hard-to-find specialty items, companies like Amazon make it easier than ever to buy everyday products online as well. Sure, you can find incredible savings on big-ticket items like electronics and home furnishings, but since you only purchase these items once every few years, the savings average out over time. Smaller discounts are available on grocery and cleaning supplies, but since you use these more often, the savings can really add up. Whether it’s a huge discount on a big-ticket item or steady savings on everyday items, keeping more of your hard-earned money is a good thing. Saving big is exciting. Saving small is smart.
Saving money is big business.
With more than 44% of all U.S. e-commerce sales in 2017, Amazon has certainly positioned itself as the leader of the online retailer pack. But they’re not the only game in town. There is a staggering array of online coupons and discount codes available. A quick Google search will reveal page after page of potential saving options.
In fact, the savings are so plentiful that companies like RetailMeNot and Coupons.com created their entire business models around compiling online promo codes and coupons in one easy-to-find location. With so many deals available, it’s always a good idea to search services like Amazon Coupons or Coupons.com before you shop online or head to the store.
Save big. Save small. Save often.
The Sunday newspaper may be a thing of the past and coupons may look different than they used to, but saving money remains an essential habit for building a strong financial foundation. And with the mind-boggling multitude of deals and promotions available through services like Amazon Coupons, RetailMeNot, Coupon.com, and others, it’s never been easier to save money on big purchases, small purchases, and every purchase in between.
Should You Be Using Your Home’s Equity?
Maybe you’ve heard of home equity loans and lines of credit, maybe you haven’t. There’s no need to hang your head if the terms are unfamiliar to you. It’s easy to get lost in all the terminology of the financial world.
But when the discussion turns to home equity, it’s important to know more than just the lingo – especially if you’re a homeowner. Whether you just purchased your first house (congratulations!) or you’ve been in your home for decades, it pays to understand the power of your equity.
What is equity? (And why does your home have it?)
With details ranging from fixed rates and loan terms to property appreciation and market value, home equity can be a complex topic. For the sake of conversation, we’ll stick with the basic premise that your home’s equity is the difference between what your home is worth and how much you still owe on it. As your home’s value goes up over time and your monthly payments chip away at your mortgage balance, your equity increases.
It can be reassuring to know that if you ever choose to sell your home, that equity would come back to you as profit. The beauty of home equity loans and lines of credit (HELOC) is that they let you leverage that equity without requiring you to sell your home. If your house is currently worth $250,000 and you have a principal balance of $150,000, you’re sitting on $100,000 in equity. Those funds may be comforting in theory, but they can also be an effective tool for your financial future.
Does it make sense to use your home’s equity?
Since it represents debt you’ve already paid off, you may be wondering why you would ever tap into your home’s equity in the first place. That’s a fair consideration, and it’s always a good idea to discuss the decision with a trusted financial advisor before proceeding. However, there are a few key benefits that make home equity loans and HELOCs a solid financial solution:
- Because they’re considered secured debt, home equity loans traditionally offer lower interest rates than credit cards and other consumer loans.
- A fixed-rate loan lets you lock in a low rate for the duration of the loan, protecting you against market fluctuations.
- If you don’t need the money in one lump sum, a home equity line of credit provides as-needed access to the funds and only requires you to pay interest on the amount you borrow.
After you secure a home equity loan or HELOC, you’re free to spend the money however you please, but some of the top uses for home equity funds include:
- Purchase a Vehicle
- Medical bills
- Wedding expenses
- Emergency fund
- Education costs
A word of caution
It’s important to remember that using equity as a quick fix without considering the budgetary impact is a dangerous proposition. Since you’re using your home as collateral, it’s important to honestly assess your financial situation before rushing into a decision.
GET YOUR FIX ON
Buying the House You Want in a Tight Market
If you haven’t purchased a home in the last few years, you may be surprised to find that buying a house isn’t as easy as it used to be. Gone are the days of cautiously comparing your top 5 choices and engaging in a prolonged volley of offers and counter-offers.
Demand is high, and supply is low.
According to a recent Kiplinger report, existing-home sales were down 3.2% in January 2018. The national inventory of listed homes was down 9.5% overall, continuing a downward trend that spans almost three years. While these statistics may sound discouraging at first, a tight housing market can actually be a good thing if you’re a prospective homebuyer who knows how to play the game.
Fortune favors the bold
Whether you’re shopping for your first home or relocating to a new area, it’s important to know exactly what you want in a house. Bedrooms, bathrooms, lot size, neighborhoods, schools – these are the details that drive the search process. But once you find a house, you need to be ready to move. When asked about how quickly an interested buyer should be ready to make an offer, a Realtor with Keller Williams responded, “In this market, buyers have to be prepared to make an offer immediately!”
When it comes to making a winning offer, speed isn’t the only factor. The strength of your offer plays an important role as well. Drawing on his experience, the Keller Williams Relator shared a few additional tips that will help you submit a strong offer that stands out from the rest. If you’re serious about finding your next home, the following pointers could help you land your new home sooner rather than later:
Pre-approval is key
In a tight housing market, it’s not uncommon for a seller to receive multiple offers. Since anyone can make an offer and then look for financing, you can dramatically improve your chances of acceptance by being pre-approved by a mortgage lender. Highlighting the importance of being prepared, the Keller Williams Realtor points out, “It is important to start with preapproval before looking so that when you walk into the house, you are ready to complete the offer and submit immediately.”
When you’re pre-approved for financing, you give the seller confidence that your offer is solid.
Find out what the seller wants
Every buyer has a list of what they’re looking for in a house, but few consider the fact that the seller has a list of their own. Some sellers are in a hurry, which makes a quick closing date important. Others have had previous contracts fall apart, so they’re in favor of shorter contingency periods. This is an area where it pays to have an experienced buyer’s agent on your side, one who can communicate with the seller’s agent to find out what really matters.
Surprisingly, it's not always money! Over the years, Keller Williams has seen the benefit of uncovering the one thing that’s most important to the seller. “Finding out what that one thing is could be the difference between getting the home or not. I have had sellers accept an offer for less money because it met more of their goals.”
Go big to go home
Everyone loves a bargain, but this may not be the time to hold out for one. While it may seem counterintuitive, Keller Williams suggests being prepared to offer full asking price – or more – on your first offer. “Sometimes you can make a great first impression and skip the multiple offers game with a great first offer! You don't want to spend time fighting for a home you love only to find out that you didn't win because the other offer beat you by $500.”
Additionally, he suggests submitting an offer with as few add-ons as possible. Removing conditions like seller-paid home warranties and seller paying for buyer closing costs can be a game changer.
It’s time to get started
If you’re already house hunting, you owe it to yourself to follow the advice listed above as quickly as possible. If you’re planning a home search in the future, preparing ahead of time is a great way to make the process as stress-free as possible. Either way, getting pre-approved is the first step, and Welcome Federal Credit Union is the perfect place to start.
A basic conversation about your housing goals and financial situation will help our loan specialists determine how much you can afford to pay for a house. Once those details are in place, they can help secure a pre-approval and position you to make the strongest offer possible when you find the home you want.
Should You Pay for Credit Repair Services? Probably Not.
Call it a coincidence. Call it savvy marketing. Whatever you call it, there always seems to be a spike in credit repair advertisements when end-of-year and holiday bills arrive. Maybe you’re staring wide-eyed at a balance that’s higher than you expected, wondering how you’re even going to keep up with the minimum payments. This kind of uncertainty can the stage for bad decisions. So, before you scramble and sign-up for credit repair services, take a deep breath and realize you have more control than you think.
Risk vs. Reward: Is credit repair worth the cost?
It's important to remember that some credit repair services are legitimate businesses, able to follow through on their claims. Unfortunately, the reputable companies reside in a corporate landscape littered with scam artists and opportunists. If you're willing to devote enough time and research, it's possible to separate the upstanding services from the scams, but as NerdWallet columnist Liz Weston points out, "If you’re able to do that kind of research, then you can certainly figure out credit repair and do it yourself."
While the trustworthy credit repair companies aren’t necessarily too good to be true, there’s a good chance they’re too costly to be worth it. When you consider that many of these services charge monthly fees ranging from $30-$100, the boost in your credit rating may not justify the ongoing expense.
Facing credit challenges? Welcome Credit Union can help.
Good credit isn’t the result of tricks and trade secrets. It’s established by applying solid financial habits over time. The same holds true for credit repair. While there may be some additional steps required to clean up your credit report, rebuilding good credit requires a consistent commitment to responsible money management.
Credit unions exist to ensure the financial success of their members. Educating people on proper credit management is part of that mission. If you’re drowning in debt and struggling to regain your financial footing, your credit union could be the lifeline you’re looking for. While they may not advertise it, many credit unions offer free credit counseling for their members. Discussing your current challenges with one of the credit union’s representatives can be the first step towards putting those struggles behind you.
Repairing damaged credit is no walk in the park. But with a little hard work and dedication and the guidance of your credit union’s financial professionals, you can be on the way to reclaiming the good credit you deserve.
Debt and Dating: Can Poor Financial Habits Keep You in the Friend Zone?
Dating is all about discovery. It can be fun to open up and share a few personal details with someone we’re attracted to. In turn, learning more about the other person is a great way to spark conversations that go beyond polite formalities. But while we’re more than happy to show our highlight reels, we all have those things we’d rather not talk about. You know, things like misspelled tattoos. Failed relationships. An affinity for Nickelback. High school, in general. But what about our financial habits?
Is it possible that the way you manage money could have an impact on your relationship prospects? It’s a fair question, and a recent survey of 2,000 millennials uncovered some interesting opinions about debt and its impact on a person’s dating potential.
Does debt matter? Yes. And no.
In short, significant debt is frowned upon, but according to survey responses, it’s not viewed as negatively as being a workaholic. That’s the dating game in a nutshell, isn’t it? Don’t work too little and don’t work too much. Apparently, sensible moderation is attractive. So, what do you do if you’re interested in someone but your finances aren’t as solid as you’d like?
Before you start fumbling for the right words to confess your mountain of debt, don’t get ahead of yourself. Less than 10% of people thought that this kind of information should be shared early on. More than 87% thought it best to wait until the relationship becomes exclusive or moves to the point of sharing household expenses. So, if you’ve just started seeing someone and have more debt than you’d care to admit—relax. You’ve got time.
To share or not to share, that is the question.
Maybe all this talk about debt and dating has you wondering whether you’d be willing to share your most intimate financial details with a potential partner. The survey designers wondered the same and posed an interesting question: Would you rather tell your partner about your large debt or a pre-existing STD? Not surprisingly, the majority of respondents said they’d rather spill the beans about bloated borrowing. But it’s worth noting that more than 39% said they’d find it easier to divulge their most personal medical details.
If almost 40% of people would rather reveal their personal medical history instead of discussing monetary struggles with a potential partner, it’s safe to say debt-related anxiety can impact us emotionally as well as financially. If there’s a takeaway from this survey, maybe it’s the fact that debt and relationships have something in common: Neither improves when ignored.
Three tips for navigating the debt discussion
- Understand your debt. Rather than lumping everything you owe into one negative category, it’s important to remember not all debt is bad. Home mortgages and student loans are traditionally viewed as desirable, while credit card debt and payday loans can be roadblocks to financial success. Knowing the details of your debt is essential to managing it effectively. (It can also help you sound smarter if, and when, the topic comes up on a date.)
- Eliminate bad debt ASAP. High-interest credit cards, auto loans, and title loans can throw you into a tailspin of making minimum payments that never pay down the principle balance. Whether you cut frivolous spending or pick up a side job, find ways to pay off the accounts with the highest rates first.
- Get a good wingman. When it comes to your finances, there’s no shame in admitting you need help. With debt management tools ranging from credit counseling to low-interest consolidation loans, credit unions can play a pivotal role in your financial success. And judging from thousands of survey responses, a solid financial foundation may improve more than just your credit rating.
Do You Have What It Takes to Be an Airbnb Host?
If you’re a homeowner in 2018, there’s a good chance you’ve kicked around the idea of renting out your house through Airbnb. Whether you travel for work or suffer from a perpetual case of wanderlust, you’ve probably thought about opening your house to Airbnb guests while you’re on the road. Maybe you don’t travel, but you’ve considered renting out a spare room to earn some extra money. Either way, you share the same enterprising spirit that helped Airbnb’s founders stumble across a simple idea that changed the way people travel.
Big business with humble beginnings
When a popular design conference led to a sellout of San Francisco hotels in the fall of 2007, Brian Chesky and Joe Gebbia decided to rent out their apartment to Bay Area visitors. After a positive hosting experience, Chesky and Gebbia saw the potential for success on a larger scale. In August of 2008, the roommates teamed up with Nate Blecharczyk and launched Airbnb.
Since then, the company has brokered more than 260 million guest arrivals and amassed more than 4 million listings across 191 countries. While the global scale of Airbnb’s success is impressive, the genius of their business model lies in the fact that it offers average homeowners an opportunity to participate in the $1.6 trillion travel industry.
Make your home work for you
If you travel throughout the year or have a spare guest room, listing your house on Airbnb can be an excellent way to leverage your investment, generate additional income, and accelerate your progress towards your financial goals. But before you get blinded by the prospects of teaming up with a business that reported approximately $1 billion in Q3 revenue, it’s wise to consider what it takes to be a successful Airbnb host.
Creating an inviting home atmosphere is important, but there’s more to it than that. As with any business venture, there are risks and rewards. Before listing your home with Airbnb, here are a few pros and cons to consider:
- Extra income. We can all agree this one belongs in the “pro” category.
- Cultural engagement. Since Airbnb offers global exposure, you have the potential to connect with people from diverse cultures around the world.
- Improved maintenance. When you routinely welcome others into your home, there’s a greater tendency to keep your house in order even when you don’t have guests.
- It’s a business. Operating a quality Airbnb property requires regular attention to business-related details like marketing, customer communication, insurance and property maintenance.
- Digital business still involves real people. If you’re not a people person, extended interactions with customers may prove frustrating.
- Risk of loss or damage. While you’re careful with your things, guests may not always be as considerate. When you rent your home, you assume the risk of accidental property damage and unexpected repairs. (This explains the aforementioned insurance.)
When it comes to business opportunities, it’s always a good idea to count the costs before launching your venture. However, if you’re a homeowner searching for an additional income stream to help you establish an emergency fund, pay off student loans, or set aside retirement savings, Airbnb may be the opportunity you’re looking for.
Financial Quick Fixes Come at a High Cost
Prohibited in 18 states, payday loan companies still manage to offer more than 20,000 locations across the United States, making them more common than McDonald’s restaurants. Banking on consumer desperation, these programs market their services to financially vulnerable customers.
When potential borrowers encounter an unexpected money crunch, the appeal of getting instant cash with minimal qualifications seems too good to pass up. If the borrower is employed and receiving regular paychecks, that’s usually all it takes to get a loan. However, these loans traditionally charge rates of 300% annual interest (APR) or higher, saddling the already-struggling borrower with an even heavier financial burden.
Even though a payday loan is designed to be paid off when the customer receives their next paycheck, the outrageous interest charges often make it incredibly difficult to pay off the full amount. Since the average payday loan payment consumes 25-50% of a borrower’s income, the threat of default is extremely high.
To avoid defaulting on the loan, many customers elect to pay only the interest charges and roll over the loan for another pay period. According to recent CFPB research, almost 4 out of 5 payday loan customers re-borrow within a month. What started as a temporary fix becomes an ongoing cycle of debt.
High-interest consumer loans; spending too much over time
While payday lending companies are traditionally limited to loans of $1,000 or less, there is no shortage of consumer lending companies willing to offer similarly unfavorable terms on higher loan amounts. Like payday lenders, these lenders commonly target individuals with less-than-perfect credit or little to no collateral. But rather than charging outrageous interest rates for short periods, they make their money by charging slightly-less-outrageous rates (59% instead of 300%) over longer periods of time, often 2-3 years.
Consider this example (shown in the graphic above): borrowing $2,100 at an interest rate of 59.39% for 36 months would result in a total payment of $4,644, more than double the original amount borrowed. You don’t need a financial advisor to explain why that’s a bad deal. Fortunately, these lenders aren’t the only game in town.
WFCU offers a convenient, cost-effective alternative
Because they’re structured as not-for-profit, member-owned financial cooperatives, credit unions can reinvest their earnings into programs that benefit their members – instead of paying dividends to shareholders like traditional banks. This distinction allows credit unions to approve personal loans with lower interest rates and higher flexibility than programs offered by payday lenders or banks
Financial Fitness Helps More Than Just Your Money
When you hear the word "fitness," what comes to mind? Gym memberships? Weights and treadmills? Lean, muscular athletes? Credit unions? If that last option seems out of place, it’s probably because your brain automatically equates fitness with optimum physical health. When you consider the global health and wellness industry generated more than $3.4 trillion last year, it’s easy to understand the tendency to think that way.
According to dictionary definitions, fitness refers to the ability to accomplish a specific task or purpose. With this perspective, it’s clear that physical fitness and financial fitness have some commonalities after all. Both types of fitness provide a wide range of personal benefits. Accomplishing goals in either area requires consistent effort, experienced guidance and efficient tools.
- Consistent Effort
Fad diets and miracle cures will never lead to lasting physical fitness. Taking definitive steps toward an established goal is the key. This principle applies to finances as well. From budgeting to saving to investing, following healthy financial habits on a consistent basis leads to long-term success.
- Experienced Guidance
Have you ever gone to a gym for the first time and wondered how to set your goals or structure a quality workout plan? If so, you know how valuable an experienced coach or trainer can be. That’s where Welcome comes in. With our team of experts, it’s easy to find a financial coach who can help you set goals and create a plan to accomplish them. And the best part? We don’t charge for it like the gym does.
- Effective Tools
When you’re working toward a physical goal, the right equipment can make all the difference. If you’re trying to increase your flexibility, a basic yoga mat should be enough. If you’re trying to improve your bench press, you’ll need a barbell and bench.
Depending on your financial situation, your needs might range from budgeting help and savings accounts to investment options. Welcome FCU offers the perfect blend of products and services to help you accomplish your goals.
On the surface, physical fitness and financial fitness may seem like separate subjects. But science has shown that being balanced and healthy in one area affects the other areas of your life. Thanks to this overlap effect, there are benefits to your physical well-being when you are financially healthy. Start enjoying the benefits.
Do Your Resolutions Need a Do-Over?
Believe it or not, it’s July already. You’ve already flipped the calendar page six 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. Welcome FCU 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, Welcome provides members with a wide array of solutions designed to help them win with money.
Not a Welcome FCU member? Your first micro-goal is an easy one: become a Welcome member as soon as possible!
How Can You Steer Clear of Financial Fraud?
With the rising popularity of online banking, mobile apps, and digital payment services like PayPal and Zelle, financial transactions are easier than ever. Bills can be paid online. Recurring payments can be automated. Funds can be transferred with just a click. The convenience of cashless commerce is welcome, but the reduction in physical exchanges can lull us to sleep when it comes to protecting ourselves against potential fraud
Financial fraud is nothing new. In fact, we probably hear the warnings so often that we hardly notice them anymore – and that can be a problem
In a Washington Post article detailing the vulnerability of credit card users, Kate Silver noted, “Last year, analytics firm FICO found there was a 10 percent increase in the United States in payment cards that were compromised at ATMs and merchant card readers – following a 70 percent rise in 2016.”
Statistics like these point to the fact that while security measures are improving, enterprising criminals are stepping up their games as well.
Keep a close eye on your cards
Much has been written about security advances within the financial industry, and rightfully so. EMV chip technology and digital wallet services like Apple Pay and Android Pay are dramatic improvements that go a long way toward foiling information theft. But with all the focus on innovation, old-school credit and debit card activity still leaves many of us at risk.
Card skimmers, hardly more than an urban myth in 2002, have evolved from clunky contraptions to barely perceptible devices that scan and record sensitive card data. If we’re not careful, mundane tasks like buying gas or getting money from an ATM can put our financial information at risk.
Safety can be simple
The good news, according to Silver, is that commonsense precautions can significantly increase financial protection. Shielding the keypad when entering a PIN, making ATM withdrawals on weekdays (when the machines are inspected daily) instead of weekends (when they’re not), and only using gas pumps with security cameras and security tape are just a few practical steps we can take to protect our financial data.
While these steps reduce the chances of theft happening in the first place, Welcome FCU is making impressive strides toward safeguarding our members if their information is compromised. With convenient tools like online banking and our mobile app on the Apple App Store and Google Play Store , we make it easy for members to monitor their account activity – an essential step for early detection of fraudulent activity.
Avoiding financial fraud doesn’t have to be difficult. Implementing personal precautions and teaming up with your friends at Welcome FCU are simple, yet effective ways to ensure maximum protection. Even if it requires us to take additional steps and exercise a little more caution than we’re used to, preventing fraud is always easier than recovering from it.
It Might Be Time to Adjust Your Home Buying Strategy
You’ve done your research, you’ve prepared your budget, and you’re ready to start your housing search. From the number of bedrooms and bathrooms to the optimum square footage and proximity to work – you know what you’re looking for. But did you know that if your search is too narrowly focused on what you want, you’re hurting your chances of finding the right house at the right price?
In a tight housing market, knowing what the seller wants can be a valuable secret to home-buying success.
Apply some high-stakes strategy.
Know what the seller wants. Sounds simple, right? The problem is that most sellers (likely at the advice of their listing agent) rarely tip their hand – at least not on purpose. Like a high-stakes poker game, the winner isn’t always the person holding the best cards. Sometimes a winning housing search requires you to look for a seller’s “tell” – subtle signs that suggest they’re eager to unload the property quickly.
In her Huffington Post article, reporter Ann Brennhoff shares tips for situational house hunting . Based on her suggestions, a discerning eye for detail can help you gauge a seller’s motivation by decoding domestic clues hidden in plain sight. Whether a young family has outgrown their starter home or a retired couple needs to downsize to a more manageable residence, the details of each situation may provide the insights you need to make a successful offer. But if you only focus on your personal checklist, you could walk right by without even noticing.
Flexibility can help you find hidden gems.
To carry the poker analogy a little further, finding a prime deal in a tight housing market can require you to play the cards you’re dealt. Having a list of preferences is fine, but it’s important to stay open to other options. For example: if you’re looking for a home in a popular suburban area but demanding a lot that includes several acres of land, you’re probably going to be disappointed. When it comes to house hunting goals, the old song lyrics ring true: “You’ve got to know when to hold ‘em and know when to fold ‘em.”
- Locking yourself into a restrictive search process often results in frustration, and frustration doesn’t lead to sound decision making. If you’re willing to expand your search horizons and embrace a spirit of adventure, you may wind up uncovering treasure in places you never expected. What are a few ways to start thinking outside the proverbial box?
- Discover the value of sweat equity. If you’re able to find a structurally sound house, foreclosed houses offer incredible upside for a smaller initial investment. But even if you don’t pursue a bank-owned property, you can adjust your search criteria to look for houses priced roughly 20% lower than your target. This adjustment increases the chances of finding a solid home that merely needs a little TLC. If you’re willing to invest the time and effort, you could be rewarded with significant equity for a fraction of the price.
- If you can’t be first, be patient . In a hot housing market, the demand is higher than the supply. The likelihood of you being the first person to make an offer on a property is pretty low. Instead of making a desperate, reactive offer that exceeds your budget, you may benefit from shifting your search to homes that have been on the market for an extended period. The longer a house sits for sale, the more flexible the seller tends to be. This willingness to negotiate can increase your chances of finding more house for your money or purchasing a home below market value.
- Help the odds be ever in your favor. When you approach your home search like an investor, you realize it’s a numbers game . Sure, you’ve heard fantastic stories of buyers falling in love with the first house they see and stumbling across an unbelievable deal in the process. Those scenarios are the exception, not the rule. If you want to increase your chances of finding a home that meets your needs at a price you can comfortably afford, the solution is simple. Look at more houses
Poker players who go all-in on every hand rarely win big. The champions play the long game. Successful homebuyers play by the same rules. If you’re willing to pay attention to sellers’ needs, adjust your search criteria, proceed with patience, and expand your search options, you will increase your odds of success dramatically.
Teach Your Kids to Make a Stand—a Lemonade Stand.
Long before Beyoncé transformed it into a cultural touchpoint, lemonade was the commodity of choice for childhood business ventures. Perhaps you had a lemonade stand of your own, or maybe you just knew someone who did. Either way, the memories of ice-cold refreshment probably ride on a warm wave of nostalgia. If your enterprise was especially successful, you might even hear a faint “cha-ching” as you reminisce.
Fast forward a decade or two, and now you find yourself juggling the demands of family, friends and career. Thanks to the latest technology, it’s easy to let your kids spend their weekends drifting along on a digital stream of Snapchat streaks and Fortnite marathons. You have a perfect opportunity to shake up your child’s routine with a little old school entrepreneurship. It’s time to bring back the lemonade stand.
Let your kids in on the fun.
When you were young, running a lemonade stand didn’t feel like a job – it felt like freedom. So, don’t worry that encouraging your children to work will somehow rob them of their weekend fun. The venture can be fun, and the lessons they learn from operating a small business can last a lifetime. What lessons? Glad you asked!
Believe it or not, this one comes pretty naturally to kids. If you ask them what they want to do with the money they earn, they’ll probably have at least one goal already in mind. It may be a video game, a bike, or new clothes, but whatever it is, their motivation won’t be hard to find. When they finally save up enough to buy what they want, the sense of accomplishment will be something you can build on for the rest of their life.
Operating a lemonade stand is an excellent way to help your children learn that it costs money to create something. After all, lemons and sugar aren’t free. Understanding economic concepts like cost of goods and profit margins will give your kids a valuable perspective with real-world applications. As they plan their drink prices, let them decide what to charge. Positive or negative, the lessons they learn from experience will help them with future planning.
Like many things in life, lemonade stands are super fun at the beginning! But after a few hours sitting in the sun, there’s a pretty good chance your little entrepreneur will want to close up shop. While it may be frustrating (for you and them), this scenario provides an excellent opportunity to teach them that you can't just walk away when you get bored. And let’s be honest, we can all use this reminder from time to time, can’t we?
Challenge your child to think about how to separate themselves from their competition (of course, this may be hypothetical competition since modern-day lemonade stands are few and far between). Depending on their age, your little one may focus on colorful sign design at first. This focus is understandable, since making the sign is half the fun. But beyond that, feel free to offer creative suggestions. Could they provide a sugar-free alternative? Maybe offer an iced coffee alternative to appeal to more customers? How about spreading the word with a social media post? Should they accept payment through Venmo or PayPal? Like a child’s imagination, the options are limitless. So is the fun!
At this point, you may feel like opening up a lemonade stand whether your kids are interested or not! Channel that excitement and energy into helping them see the fun-filled potential of the idea, and don’t be afraid to get in there and help them when they need it. The time spent together will be even more valuable than the money earned and the lessons learned.