Tuesday, September 18, 2018

Navigating Life’s Financial Stages

With each life stage, our needs, wants, and dreams change. So do our financial needs.

Where your money goes when you’re 20 probably won’t be the same places as when you’re 50. That’s why planning for each new life stage is a crucial step to having a healthy financial life.

Some years bring major money shifts, however, some goals span many decades, like saving for retirement. Consider these steps as you navigate new stages. And remember, we’re always here to help.



Post-Secondary and Early Career

Whether you’re furthering your education or jumping into the workforce, your 20’s are a critical time in your life. Building a firm financial foundation is key to success down the road.

  1. Make a Budget. Know how much money you’re making and where exactly your money is going. Many people spend more than they make in these early years – try to do the opposite.
  2. Save for Emergencies. A good rule of thumb is to save 3 to 6 months worth of your necessary expenses in an easily accessible account.
  3. Pay Down Debt. Interest builds quickly, so avoid shucking out extra cash by paying down debt on time, or faster if possible.
  4. Save for Retirement. If your employer offers a 401(k), 403(b), or another retirement account with a match, save at least the amount required to get that – think of it as free money. Retirement might seem light years away, but the sooner you save, the better off you’ll be.
  5. Get Disability Insurance. When you’re young and healthy, you may shrug off disability insurance and think, “I’ll get to it later.” Experts think otherwise. Disability insurance is often extremely affordable and easily accessible. Everyone – no matter his or her age – should have it.
  6. Designate Beneficiaries. When you do this, you’re designating who receives your assets in the event of your death. Since you’re probably not married at this stage, it’d most likely be your parents or siblings.


Building a Family and Advancing Your Career

These are exciting times! You may be getting married, starting a family, looking to buy a home, or jumping further into your career. Typically, your income is rising, which means there are a few new things to think about.

  1. Negotiate Your Salary. If you’re switching employers, or even sticking with the same one, never be afraid to ask for what you’re worth. If you’re nervous, read this article on how to negotiate your salary.
  2. Bring Your Money With You. If you do switch employers, don’t leave your retirement account behind. Either roll it into your account with your new employer, or move it into an IRA you control at a brokerage firm.
  3. Find a Financial Planner. Now that you’re making more money and your responsibilities are growing, it’s important to seek advice from a professional. A financial planner can help you see the bigger picture and guide you down a successful path.
  4. Update Beneficiaries, Will, Power of Attorney, and Other Important Documents. If you find yourself getting married, you’ll probably want to add your spouse’s name. If you’re single, you may want to update based on life events.
  5. Purchase Life Insurance. Picking the right life insurance policy for you, your family, and your unique situation can be complicated. Here’s a good place to start.
  6. Purchase a Home. When buying a home, it’s important to evaluate your current financial situation (including debts) and make a decision that won’t put too much stress on your finances.
  7. Start Saving for Your Child’s Future. If you have children, or plan to in the future, opening a 529 account for them is a great way to start saving for their education. Set up automatic monthly payments to make saving seamless.

Pre-Retirement

At this point, you’re probably making the most you ever have in your career. You most likely own a home, a car, and have been paying down debt while saving as much as you can. Now’s the time to look ahead to retirement.

  1. Max Out Retirement Contributions. Save as much as you can both in your employer-sponsored account and in your own Roth IRA or traditional IRA.
  2. Reduce Taxes. Meet with a CPA to maximize your deductions. Consider opening up a Health Savings Account.
  3. Pay Off Your Mortgage and Remaining Debt. If you’re still paying off debt from a home, car, or education, now is the time to pay that off.
  4. Consider Your Family Members. If you’re going to be the caretaker for your parents, it’s important to consider those expenses when mapping out your own financial priorities. Health care is expensive and can cause familial strain. Talk with your siblings to come up with a plan that works best for each of you.
  5. Begin Planning Your Retirement. You’ve spent all those years focused on saving money for retirement that you haven’t stopped to think about what you’ll do once you get there. Meet with your financial planner to discuss how to turn your retirement savings into income.

Retirement

Whether you’re spending your retired years on a porch swing or wrangling grandkids in the backyard, it’s an exciting time that you’ve worked hard to achieve. You’ve come this far, don’t lose track of your finances now!
  1. Reevaluate Your Budget. Now is the time to sit down with your spouse and financial planner to decide how much money you’ll need monthly, how to make a steady income, and when to start taking Social Security.
  2. Downsize. Buying a smaller home can save you money on utilities, property taxes, and other expenses.
  3. Make Changes to Your Will and Estate Plan. By this time in life, plenty has changed. Make sure your legal documents are up to date and reflect your current choices.
  4. Consider Moving to a Retirement Community. The benefits go far beyond financial. Moving to a new community brings new friends, new opportunities, and far less stress than owning and caring for your own home.
  5. Enjoy! Travel. Take up a new hobby. Whatever new adventure you’d like to take – take it! You’ve earned it!

Friday, June 22, 2018

Save on Road Trips This Summer!

Summer is here, and for many, this means summer vacations are calling. But with airlines’ increasing fees and charges, you may find yourself opting to hit the open road instead of the sky.


Slow down speed racer; if you’re not careful, road trips can get pricey, too! Since we all deserve a break and some fun in the sun, we’re giving you our best tips to pinch every penny and make the most out of your next road trip.

Budget First

Make travel a piece of your monthly budget. Determine how much your ideal trip will cost and how much you can reasonably set aside. Start saving months in advance. This way, when trip time rolls around, you aren’t scrounging through the couch cushions digging for nickels.

Plan, Plan, Plan

Once you’ve got the cash, the real fun begins. Start researching your destination(s) and planning activities and restaurants you’d like to visit while there. Often tickets to parks, events, concerts, etc. are cheaper in advance. A simple Google search of “destination and date and events” will let you know what’s going on.

You’ll also want to set up accommodations before you go. Booking sites like Hotels.com and Booking.com search for the best deals, so you don’t have to. There’s also Airbnb and campsites if you’re going the nontraditional route.

Mapping out your route not only saves you time, but can save you money by helping you avoid tolls, travel the least amount of miles, and drive through more affordable areas. Apps like Waze can help you find the best route and automatically change routes if something pops up – like construction or car accidents.

Guzzle Less Gas

Gas isn’t cheap, with the average price sitting somewhere around $3 per gallon. Use GasBuddy.com to calculate how much you’ll be spending, and make sure this number finds its way into your budget.

Use less fuel and save more money by:
  • Packing the vehicle as lightly as possible
  • Following the speed limit
  • Avoiding aggressive driving
  • Filling tires to the correct pressure and making sure tire tread is sufficient
  • Renting a fuel-efficient vehicle

Pack Snacks

Driving for hours can really get the tummy rumbling, but constantly stopping at convenience stores to grab food can put a major dent in your wallet. Pack a cooler with the essentials like granola bars, fruit, cheese sticks, crackers, chips, bottled water, and other drinks. Pro tip: buy in bulk and separate into individual bags – or go family style and dig right in.

Packing “picnic lunches” can also save you lots while on the road. Toss some bread, peanut butter, and jelly in the cooler for a quick lunchtime meal that costs you pennies.

Dine In

If dinnertime rolls around and you’re absolutely famished, skip the drive-thru and opt for a mom-and-pop shop instead. These places are often tastier and have better deals than big name restaurants. Plus, they allow you to get a little flavor of the area you’re in.

Check for Coupons

Coupon clipping isn’t just for Moms on TLC. If there are specific stops you’d like to make or attractions you’d like to see, check online for any coupons. Do this simply by typing, “destination and coupon” into Google.

You can also use GroupOn before heading out to get deals on food and fun.

Get Going!

Now all that’s left to do is jump in the car and go! Don’t forget to call your bank and let them know you’ll be on the move. Oh, and don’t forget your chargers either – a good road trip calls for lots of photos!

Monday, May 21, 2018

Factors to Consider Before Buying A New Boat


The open water and sunny days are calling, but what are the actual costs of purchasing a boat, and is it worth it? Part of advising our members on financial decisions is revealing some of the hidden costs you need to be aware of before you take the plunge into a life on the water.

The Purchase Price

Whether you’re shopping used boats or new, sailboats or speed boats, obviously the biggest part of your overall price is the ticket price.

Insurance

Boat insurance generally covers collision, property damage, theft, and/or bodily injury liability. Your cost will vary by state, the type of motor and boat, and whether you’re boating on freshwater or open ocean.

Boat License

Watercraft licenses are required in most states for boats over a certain length. In Minnesota, boat dealers will help you apply for title and registration, and are good for three years.

Trailer

If you plan on visiting other lakes or taking your boat on the move, you’ll need a trailer, not to mention a vehicle that can tow something as heavy as a boat.

Storage in Winter

With many local options for winter rack storage, these storage facilities make sure to prep your boat, wrap it, and store it for a monthly or annual fee. Some boat owners choose to store their boats on their own property over the winter, which still requires winterizing and boat wrap.

Dock and/or Marina Space

Now that you have your boat, where will you dock it? You may be purchasing a dock for your own property or renting marina or dock space on a nearby lake, both additional costs to take into consideration.

Maintenance

Last, don’t forget the costs for cleaning, repairs, and maintenance to the boat, sail, or motor.


For additional advice on making a boat purchase, or questions about recreational vehicle loans, contact us at Financial One.

Friday, March 23, 2018

Navigating Home Loan Options and Rates



With the Spring Home buying season around the corner, there may be some confusion over the different types of home loans available for those making the big purchase.

Financial One Credit Union is here to help – both with providing answers and with financing your new home.

Types of Home Loans: 

1. Adjustable Rate Mortgage

ARMs give you a fixed interest rate for a certain number of years (the “adjustment period”) at a very reasonable rate. Following that period, your mortgage then becomes what is called a variable rate mortgage, where the rate adjusts on an annual basis based on market conditions, usually +/-1%.

2. Fixed Rate Mortgage

With these loans, the interest rate is fixed for the term of the loan – usually for 15 or 30-year terms. Fixed rate mortgages are more stable over the long-term even though you may see a higher interest rate than you’d get at the beginning adjustment period of an ARM.

3. Home Equity Loans

These loans take advantage of the equity you have in your home and are available if you owe less on your home than it is worth. Home Equity loans give you large amounts of funds to use for a variety of reasons and are available through Financial One Credit Union as lump sum loans (up to 100% loan to value) or as a Home Equity Line of Credit (up to 80% loan to value variable rate).

Interest Rates

Interest rates fluctuate daily based on changes in financial markets. Your individual interest rate will be determined based on your credit score, your income vs. debt ratio, down payment amount, the amount being borrowed, and the term of the loan. If you have any questions about how interest rates are calculated or why they fluctuate, please don’t hesitate to contact us.

Rates at Credit Unions are Often Better than Banks

According to Investopedia, Credit Unions are able to turn income into savings for their members. “Since profits to stockholders aren't a part of the company vision, credit unions are free to pass surplus money on to members.” In addition, Credit Unions don’t need to answer to stockholders; we are member-owned and are concerned with benefiting members over anything else.

Apply now for a Home Mortgage Loan from Financial One Credit Union, or view our current rates here.

Friday, January 5, 2018

How to Set a Personal Budget for 2018



In a season known for indulging and overspending, the holidays can be the last time you want to think about a budget.

However, the start of a new year is the perfect time to revamp the way you think about your money. It’s a way to set yourself up for 2018 to make your budget work for you, instead of working for your budget.

With that attitude in mind, take these three steps as you begin budgeting for 2018:

1. Start with the Basics

You might feel tempted to go way into detail when you first set out to budget, but that’s not necessary. Divide your budget into simple categories in a program such as Microsoft Excel so you’ll easily be able to make edits and be realistic with the amounts you set for each category. Don’t be too hard on yourself.

Think about how much you’re already spending in each area and visualize what you could cut back on. Draw your budget as such.

Be honest about the best way to keep your budget. If you like math, it could be pen and paper. If you’d like to be more hands-off, try a budgeting program such as Mint, which categorizes your purchases as you make them.

2. Save for the Worst

Build an emergency fund into your budget. This type of savings account will give you a financial buffer in the case that illness or injury, hospital bills, or other times of need make money tight. Putting money into the fund can be as easy as the change from your lunch, cutting unnecessary expenses, or saving your tax return.

Build the fund with the requirement that it be used strictly for emergencies, and not as general savings. Don’t use the fund for holidays or planned expenses. This way, when the unexpected happens, your money will be ready.

3. Don’t be Afraid to Make Changes

Your budget shouldn’t be set in stone. As you start spending in 2018, see where your estimates and actual spending don’t match up and take a look at why that is.

If money is tight, it’s tempting to underestimate costs as you set your budget. Don’t set yourself up for failure. Allow room for fun and an occasional splurge. Get too restrictive too soon, and it will be harder to follow the budget as the year goes on.

If things still don’t add up, think about adding to your income instead of cutting from your expenses. An extra part-time job, some freelance work or selling something you’re not using can free up some space in the budget.


No matter your budgeting goal for 2018, Financial One Credit Union is here to help.

Wednesday, November 29, 2017

5 Tax Season Tips You Need To Know Before 2018

It’s never too early to start thinking about tax season.

There are many things to consider for a quick and seamless tax return this year. If you keep these 10 tips in mind, you will be less likely to experience a tax refund delay.


1. The First Day to File Taxes

There have been rumors about the first day to file taxes in 2018. According to some websites out there, the first day you can file taxes in 2018 will be January 21st. However, according to the IRS, an official date hasn’t yet been decided. It is likely to be the third week of January, based on past tax seasons. Be sure to always check the IRS website to see when the official date will be.


2. Check If Your ITIN Will Expire

An ITIN is an Individual Taxpayer Identification Number, which is a tax processing number for the IRS. On December 31st, 2017, any ITINs that haven’t been used for the last three years will expire. On top of those, according to the IRS, they will be expiring ITINs issued before 2013 and have middle digits 70, 71, 72 or 80. If your ITIN is due to expire, send an application to renew it before the end of the year. This will help ensure there won’t be a delay in your tax refund. Note: If you use a Social Security Number for filing taxes, this does not apply to you.



3. Start Gathering Your Documents

You’ll want to ensure you have all necessary documents for your tax return. This includes your previous tax return, W-2, 1099, and any other forms required for taxes. These typically come from your employer and banks in January. Once you receive them, double-check that all your information is correct. Use TurboTax’s preparation checklist to help know which documents you need.

4. EITC and ACTC Refunds Will be Held

For those filing with Earned Income Tax Credit or Additional Child Tax Credit, your refund will be held until late-February. This is required by law. Ensure you aware of this timing when filing these credits and making plans for your return.

5. Choose E-file and use Direct Deposit

Using these options during your tax return will help you get your refund fastest. The IRS states, “Electronically filing a tax return is the most accurate way to prepare and file. Errors delay refunds and the easiest way to avoid them is to e-file.” Along with e-file, direct deposit is the quickest way to receive your refund. It also saves taxpayer money if you choose direct deposit instead of a paper check.



Now that you have the top 5 tips for tax season, start preparing by gathering your documents and applying for a new ITIN before the end of the year. This will make it much easier for you and/or your accountant when it comes time to file your tax return.

For advice on what to do with the extra funds from your return, contact the specialists at Financial One Credit Union. We have partnered with Ameriprise Financial and can help you invest, pay off debts, plan for retirement and manage your money for the future.

 

Wednesday, November 22, 2017

The Best Ways to Give Back This Season

It is the season of giving and there is a multitude of ways you can make the holidays a little happier for those around you. Here are the best ways you can give back and spread cheer!

Volunteer Opportunities

Great places to volunteer this time of year are food shelves and homeless shelters. As the cold weather sets in, these places experience higher volumes. They also have an influx of donations around the season of giving so they need extra volunteers to sort and manage these items.

If you are looking for the right opportunity to volunteer, you can get matched with local organizations at volunteermatch.org.

Local Love

If you feel like giving back in a more personal way, consider helping locals in your area that are struggling. If you know a family with young kids struggling financially, consider giving them toys to gift their children when they can not afford to buy them. Adopt a family through a charitable or religious organization to give something that specific family needs, usually clothing. Consider small acts of kindness to spread joy like shoveling a neighbor's driveway, making your coworkers cookies unexpectedly, or inviting someone lonely for dinner.


Bank With Financial One

To give back on a larger scale, consider banking with Financial One. We are committed to serving our community's needs, which is why we stick to our Social Promise.

When you choose Financial One for your home loan, we provide 1 night of housing for someone homeless. When you open a checking line-of-credit, a veteran in need receives one coat. Lastly, when you open an auto loan with Financial One, we donate 100 lbs of food to the local food shelf. This program has allowed our credit union and members to give back in a big way!


The best ways to give back during the holidays are easy to find when you know where to look. The best thing about giving back is that you aren’t limited to the holiday season. Commit to giving back to your community all year round.

How will you be celebrating the season of giving this year?