Most Common Budgeting Mistakes

It’s no wonder that January is the number one month for people to begin new financial endeavors, and nearly a third of people surveyed by GoBankingRate said their 2016 goals include “saving more and spending less.” At Honor Credit Union, this is music to our ears, as we love helping members save their money! BUT the big question is HOW are these people going to stick to their budget and be financially successful? By having a fail-proof budget in place, and knowing what the most common budgeting mistakes are and how to avoid them!

Here are the top five mistakes (and how to avoid them!):

1.      Failing to set a realistic budget- Many times, people feel overwhelmed by how long it takes to tack expenses and set a budget. Make time to sit down and tackle this project, as it will only help you in the long run.

2.      Using the exact same budget every month- This is a big mistake, as expenses differ each month, depending on holidays, birthdays, vacations, energy costs during warmer or cooler months, or unexpected home or auto repairs. Plan each month one month ahead, so you can make be sure to allot money for these particular expenses that aren’t recurring.

3.      Never allowing for wiggle room-  If your budget is too set, as in every penny is set aside for some specific expense, you won’t have anything left to pay for that unexpected car repair or other surprise expense. Be sure to set aside some money for these extra expenses.

4.      Relying on credit cards- If you’re relying on credit cards to make payments on necessary expenses, but then failing to make payments towards the cards themselves, you’re just digging yourself a huge debt hole that you may not be able to get out of. To avoid this, use cash only for the first few months of your budget so you can see where the money is going.

5.      Quitting your budget too soon- Many times, people will stick to their budget for a couple of months, then quit. Don’t do this! Successful budgeting takes time. You need to mess up a little in order to figure out what you really need each month.

Remember- if you stick to your budget as closely as possible and make budgeting a part of life and a long-term commitment, you’ll ultimately end up financially successful!

Don’t forget to follow us on twitter @honorcu and let us know what you want to hear about next week using #askhonorcu! 

To hear 97.5 Y-Country's Mark Durocher and Honor's Kaylee Williams talk about New Year's Financial Resolutions, click on the Mason Jar Monday episode below!

 

Swipe, Sign, & Done!

It’s Holiday Shopping Season! And while some Bah Humbug at the thought, if you’re like me, you’re excited! The holiday decorations, the lights, the smells, the yummy holiday treats- I can’t wait! But there’s one little thing you should keep in mind when heading to the shops for gifts and sales- debit vs credit when swiping your plastic.

 

The Facts–

·         When you swipe your debit card and choose Debit, this means the machine will ask you to enter your PIN (Personal Identification Number). Then the money will automatically come out of your checking account right then and there. However, if you choose Credit, this means you are requesting to conduct a signature-based transaction, which requires just your signature--not your PIN--to complete.

·          You can also conduct signature-based transactions over the Internet or telephone, where you don’t have to have a physical signature  

·         Not only is swiping and signing better than swiping and punching in your super-secret number, there are other benefits to signing off instead!

·         Signing instead of using your PIN greatly reduces the risk of exposing your PIN number to identity thieves.

 

  For signature transactions –

·         Make shopping easier by just swiping your card and signing for your purchase. At Honor, we recommend you sign and run your Debit card as “credit” when you are given the option

·         You can even up the security of your card by registering your MasterCard Secure Code.

·         Honor’s Debit MasterCard Prewards allow you to save at your favorite stores instantly via text, email, or online! Sign up online at Honorcu.com

 

Tips for signing-

·         With most store signature pads, selecting Credit allows you to sign your name instead of punching in your PIN

·         Even if you have already selected Credit, you may be asked to enter your PIN.  Ask the cashier to run the purchase as Credit.

·         Many times, this means hitting the “red” button or the “cancel” button

 

·         For smaller transaction amounts, a signature may not even be needed.

 

 

Don’t forget to follow Honor on Twitter @honorcu!  Tweet us and let us know what you want to hear us talk about on Mason Jar Monday next week using #askhonorcu!

Living A Simple, Frugal Life

Living a simple and frugal life has a different meaning for every individual. A common understanding of the phrase “living simply” translates to eliminating everything except the essentials in life. However, adopting a simple lifestyle isn’t as easy as it seems. Here are a few tips to get you started if you’ve decided to simplify your life and live more frugally:

1.    Identify what is important to you. Figure out what is most important to you in life, and what is essential to living. Food? Shelter? Yes. Cable TV? 12 different social media sites? Not so much. Figure out what you need to have, and devote most of your money and time to those particular things. Eliminate everything else.

2.    Evaluate your commitments. What do you have going on in your life? Lunch out with co-workers on Mondays? Girls’/guys night every Wednesday? Figure out what you just can’t give up and what those commitments cost. Then allot yourself an allowance and curfew for these particular commitments and stick to them! Drop everything else that doesn’t give you value.

3.    Evaluate your time. How do you spend your day? As in, what do you do the moment you wake up until the moment your head hits the pillow? Figure out your priorities, and see if what you do every day is in line with those priorities. If it’s not, eliminate the things that aren’t and focus on what’s important. Then, redesign your life!

4.    Spend on what you need, not what you want. Sure, once in a while it’s fun to treat yourself. But do you really need that new pair of shoes? You have plenty of perfectly good pairs sitting at home. Do you need to eat out again, or could you go home and make a delicious meal from what’s already sitting in your fridge? Learn the differences between want and need.

Remember- simplicity and frugality in life is a journey, not a destination. It takes time and commitment. So make sure you’re ready to take the steps necessary. It’s better to take one step forward than two steps back!

Don’t forget to follow Honor on Twitter @honorcu!  Tweet us and let us know what you want to hear us talk about on Mason Jar Monday next week using #askhonorcu!

The Rising Tide of Consumer Debt

Written by Honor CU Guest – Greg Hildebrand, Honor Financial Group Financial Representative

We’ve talked a lot the last couple of weeks about ways to save money this time of year from back to school expenses to cutting costs in the kitchen.  The fact of the matter is, though, that this time of the year can be an expensive one for many families.  Consumers are borrowing again, making a big economic splash.  Spending does help the economy, but too much debt can harm you!  Here are four common areas of debt and some tips to manage them:

1.     Mortgage Debt: $8.05 TRILLION in debt nationwide!  Owning your own home is a huge accomplishment and is something you should be proud of.  Keep an eye on interest rates and consider refinancing at lower rates.

2.     Student Loan Debt: Over $1.08 TRILLION! As of a study completed by the Federal Reserve Bank of New York, this area of debt was the biggest percentage increase with over a 5% increase in the year prior.  If you have student loans try making payments sooner than your loans become due and try to pay more than the minimum amount to save on some interest.

3.     Auto Loan Debt: $863 BILLION!  Spending on items like a new vehicle helps you get from A to B and also helps the economy rise.  As you incur this debt, though, determine if you can make additional payments towards your principal amount to pay off your loan faster.

4.     Credit Card Debt: $683 BILLION!  Consumers are spending again using credit cards, but the good news is they are doing it more mindfully.  Make sure you are mindful of the debt you accumulate on your credit card and try to pay off higher interest rate cards first.  Consider consolidating credit card debt if you have more than one credit card to make your payments more manageable.     

 

If you have questions and would like to meet with a financial advisor, Honor Financial Group is a great first step.  Give us a call to set up an appointment today.  And, don’t forget to follow Honor on Twitter @honorcu!  Tweet us and let us know what you want to hear us talk about on Mason Jar Monday next week using #askhonorcu!

Securities offered through LPL Financial, member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates.

Not NCUA Insured -Not Credit Union Guaranteed -May Lose Value
As it pertains to the portion of the broker/dealer disclosure above, when read you should say, "Investments are not NCUA Insured, not credit union guaranteed and may lose value

Pinchin’ in the Kitchen- Save Money In Your House’s Hotspot

For many, cutting back in the kitchen sounds scary. But, it doesn’t have to be. Pinching pennies while cooking is simple, and will save you a ton of dough in the long and short run. Check out these quick tips and put them to the test!

1)      Cook frugally – Don’t make too much, unless you KNOW you and your family will actually eat leftovers. Too often my mother cooks very large meals for only a few people. Then, she’ll put all of the leftovers in Tupperware for everyone to take to lunch the next day, or to make a meal out of later. The trouble? This never actually happens. Either the dogs get a tasty meal a week later (consisting of congealing gravy, old meat, etc) or it all goes into the trash because it isn’t safe to eat anymore. A ton of money, thrown into the trash. You know your family, and you know how much they eat. If Dad eats two portions of everything, measure that out. If you eat one portion, measure that. If the kids eat ½ the recommended adult serving, measure that out, too. Then no one overeats, and there aren’t tons of plastic tubs in your fridge that will sit there for a week then go bad.

2)      Splurge on utensils–Basic kitchen utensils (forks, spoons, knives, spatulas, etc.) are obviously essential for cooking. However, if you tend to buy the cheapest version of each, they will wear down quickly, and you’ll make another trip to the Dollar Store to purchase the same ones again. It’s a vicious cycle, and money wasted. Instead, find good, sturdy, lasting utensils, and take good care of them. You’ll probably never have to buy any ever again, and the “good ones” are worth every penny.

3)      Always keep food staples at hand- I’m talking flour, sugar, oil, your favorite spices,… you get the idea. Ingredients that you can make practically any meal out of every day. Another tip- buy these in bulk. They are much cheaper that way, and since you use them a lot, it’s worth it.

Don’t forget to follow Honor on Twitter @honorcu!  Tweet us and let us know what you want to hear us talk about on Mason Jar Monday next week using #askhonorcu!

Baby Steps: Planning For Your Child’s Financial Future

Guest Writer: Greg Hildebrand – Honor Financial Group Financial Representative

With a new school year right around the corner, the success of the community’s youth is on the top of our minds.  Whether you are expecting or have a child in school, planning for their future is important.  But where do you start?  Here are four steps to start your child on the right path from Day 1:

 

·         Open A Savings Account – Most credit unions, like Honor, make it easy to transfer money into a savings account on a regular basis – you can even start before our baby arrives.  Think of it as your go-to fund for supplies and surprises.

·         Modify Insurance Coverage – First, add your newborn to your health plan.  Then, make sure your life insurance policy includes a growing family.  Next, update beneficiary designations on 401(k)s and IRAs.

·         Create An Estate Plan – No matter how old you are, plan to protect your family and assets.  Update your will and trusts, and put in writing who will take care of your child if you’re not around.

·         Start A College Fund – Yes, college may be 18 years away, but starting to save early is the key.  Take a look at tax-advantaged investment options – such s a 529 plan – and make regular contributions.

If you have questions and would like to meet with a financial advisor, Honor Financial Group is a great first step.  Give us a call to set up an appointment today.  And, don’t forget to follow Honor on Twitter @honorcu!  Tweet us and let us know what you want to hear us talk about on Mason Jar Monday next week using #askhonorcu!

Securities offered through LPL Financial, member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates.

Not NCUA Insured -Not Credit Union Guaranteed -May Lose Value
As it pertains to the portion of the broker/dealer disclosure above, when read you should say, "Investments are not NCUA Insured, not credit union guaranteed and may lose value

Financial Lessons Millennials Should Be Thankful For

Millennials (those born between 1980 and 2000) make up one of the highest unemployment rates in the country.* As a result, all of the classic milestones of adulthood-marriage, kids, mortgage-are happening later in life.  However, growing up as Generation Y has its advantages- hard money lessons! These economic clouds that hang over the heads of Gen Y actually have a silver lining.

1.      Lesson 1-Hard Financial Lessons Have Been Learned Early  Those of us described as Millennials learned (and understood) at a very young age how money works, and why it’s important to live within one’s budget. Our parents were frugal (for the most part) because of the downturn of the economy. Not overextending on loans, saving pennies, and not spending more than you earn were lessons we were forced to reckon with.

2.      Lesson 2-Expectations Have Been Revised  Gone are the days of the traditional American Dream of an 18 bed 12 bath mansion on a hill with a butler named Jeeves and a Ferrari in the five car garage. Many young adults are realizing early on how utterly unrealistic these expectations are. More and more, Millennials are choosing to drive around their old beater car until it dies, and to bunk with their parents past graduation and well into their twenties. This used to be a major social stigma, but now it’s seen as the smarter choice.

3.      Lesson 3-Historic Collapses Are Also When Fortunes Are Made  When would you rather get off your butt and start a career- during an economic boom, or bust? The answer is a no-brainer. According to a recent study by T. Rowe Price, those who began systematically investing in equities in the past severe bear markets (or an economic downturn) were significantly better off 30 years later than investors who began in bull markets (when the stock market is thriving).

So yes, millennials have had it rough so far, being thrust into the workforce during uniquely volatile times. But the past is the past, and the future has yet to be determined. The full life story of Generation Y isn’t done!

Don’t forget to follow Honor on Twitter @honorcu!  Tweet us and let us know what you want to hear us talk about on Mason Jar Monday next week using #askhonorcu!

*According to The Fiscal Times

Things Your Credit Union And Your Mom Have In Common

It’s hard to believe, and a little weird to think about, but your credit union and your mom have a lot more in common than you think! Check out these strange (but true!) similarities.

1.      They both care about you (a lot!) Your mother is your mother and will always love and adore you, no matter what. So does your credit union! Credit unions care about their members, and want them to succeed, especially financially.

2.      They give great advice! Just like your mom always tells you the truth and backs it up with great advice she earned from living and learning, your credit union does, too! Credit unions have been around for quite some time (Honor Credit Union has been around since 1934!) and the unique collections of professionals know their stuff. Walk into any credit union, and I’ll bet you can find someone within minutes that can help you with whatever financial situation you’re in.

3.      They both always have your back  Your mom would never leave you hanging in any situation- just like your credit union! If you’re in need of a personal loan, mortgage, or anything else financially related, your credit union can help, and quickly! Credit unions value their members (just like your mom values you!) and want to make sure you’re comfortable financially. If you aren’t, they want to assist you in getting on the right track. Take advantage of that help (but don’t forget to let them know- and mom-how much they’re appreciated)!

So go ahead, give mom (and your credit union) a call or a visit. They both would love to hear from you, and are ready to lend a helping hand whenever you need.

Don’t forget to follow Honor on Twitter @honorcu!  Tweet us and let us know what you want to hear us talk about on Mason Jar Monday next week using #askhonorcu!

Staying Financially Fit

Sticking to a budget is HARD. Just as hard as sticking to a fitness plan! But both are equally important to living a healthy lifestyle. To make sure you keep to your plan on each level, here are some tips to take into consideration.

1.      Make A Debt Diet Plan, And Stick To It  This first one sounds like a no-brainer, but it’s often the start-all, end-all for both keeping your weight and wallet in check. First step, you’ll have to tighten up your belt on other expenses, whether by reducing or eliminating them. Then, start paying off that debt!

2.      Resist Splurging  Every diet and weight loss plan you’ve come across has ultimately come down to one thing;  Eat less, exercise more. In financial speak, it’s spend less, save more!  Your chances of financial success will increase if you are aware of (and get rid of!) unnecessary spending. Do you really need that ice cream cone? Do you have to get that second pair of shoes? Keep your spending top of mind.

3.      It’s A Marathon, Not A Sprint  Those “get rich quick” and “lose 20lbs in two days” schemes are just that-unrealistic. It takes time, energy, and willpower to reach health and wealth goals. Buddying up for a fitness program increases your chances of following through- and having a financial friend help you stick to your money goals increases your chances of building your savings! Walk instead of shop, make dinner instead of eating out, and catch a good show on Netflix instead of dropping cash at the theater. You’ll probably have more fun that way, anyways!

No matter how you choose to start and continue with your fitness and financial programs to reach your goals, getting started is the first step. Just like a gym is there for you in your time of need, so is your local credit union! Stop in and see what credit union professionals can help you with to get your financials in check.

Don’t forget to follow Honor on Twitter @honorcu!  Tweet us and let us know what you want to hear us talk about on Mason Jar Monday next week using #askhonorcu!

To listen to 97.5 Y-Country’s Wild Bill and Honor’s Kaylee Williams talk about financial fitness, listen to the Mason Jar Monday episode below.

 

Tips For A Fun And Frugal Fourth

No matter how you spend Independence Day weekend, it’s likely to cost money. Whether you will be traveling, entertaining or simply staying home with family, the Fourth of July is a time of celebration, and celebrations can be pricey.  But it doesn’t have to be! Here are some tips to cut costs without trimming the fun!

1. Keep The Guest List Small OR Go Potluck Style! Planning to have a barbecue? One simple way to keep your costs in check is to avoid inviting too many people. The more people you have over, the more food you need to buy, the more drinks you’ll need, etc. A smaller gathering might be more fun anyway, because it will give everyone more of a chance to talk and really enjoy one another’s company. But if you are a social butterfly and just can’t choose between friends, go the potluck route and have everyone attending pitch in!

2. Borrow Items You Need Short on punch bowls, dishes, tables, chairs, glasses or other party staples? Rather than rushing out and buying a whole bunch of stuff that could clutter your home, ask some of your guests to let you borrow those items for that evening.  Disposable plates and silverware can be convenient, but it can be pricey and fill up the landfill.  Borrowing these items will save your pocketbook and the environment…a win/win!

3. Stay Safe Don’t bother to spend money on potentially dangerous – and in some cases, illegal – fireworks. Even if the fireworks themselves don’t set you back too much, an unexpected trip to the emergency room could cost you hundreds if not thousands of dollars. Attend a free fireworks show in your area instead, or splurge on a few boxes of inexpensive sparklers for the kids. They’re just as much fun, anyway!

No matter how you celebrate Independence Day, having a safe, fun and festive holiday experience can be done on a budget. There is no need to go overboard! At the end of the day, the real fun is more about being with family and friends.

Don’t forget to follow Honor on Twitter @honorcu!  Tweet us and let us know what you want to hear us talk about on Mason Jar Monday next week using #askhonorcu!

To listen to 97.5 Y-Country’s Wild Bill and Honor’s Scott McFarland talk about frugality on the Fourth, listen to the Mason Jar Monday episode below.

 

Three Tips For First Time Home Buyers

So you’ve decided to go for it. You’re ready to take the plunge into home-ownership! But before you start searching for the perfect home, here are a couple of things to get you started:

1.      Crunch Your Numbers - No one knows the ins and outs of your financial situation like you do.  So start paying more attention to what you are paying for and bringing in each month.  Are all of those expenses things you plan on keeping when you make the big purchase of a house?  Do you expect your income to stay about the same?  Make a budget given those numbers so that you have a grasp on what mortgage payment you would be comfortable with.  Having that knowledge in your back pocket when you come chat with your local credit union about getting pre-approved for a mortgage will make the process much easier.

2.      Debt To Income – Your debt to income ratio, among other factors, contributes to the mortgage pre-approval process.  What does this even mean?  Well, it’s simple.  Grab a piece of paper and write down all of your debt.  This would be credit cards, student loans, car payment…basically anything you are required to make a minimum payment on.  Then add up what all of those minimum payments equal.  That is your debt.  Your income is easy – just write down what you bring home in a given month.  The debt divided by the income gives you your debt to income.  But if math isn’t your thing – just bring all those numbers you wrote down into your local credit union and we can do the work for you and let you know exactly what your debt to income is. 

3.      Down Payments – The amount of down payment that you put down is dependent on your financial situation and how much you have stocked away in that trusty savings account over the years.  It is in your best interest to have at least some money down when you do decide to apply for a mortgage, but how much that is depends on you and the price of the house you have your eye on.  When you come in to your local credit union to get pre-approved for a mortgage, we can give you the nitty gritty on your unique situation and what that would mean for a monthly mortgage payment.

You may have noticed a trend in all three of those tips – talk to your local credit union!  Credit unions, like Honor CU, have mortgage experts just waiting to help you and get you into the best financial position for your unique situation in life! 

Don’t forget to follow Honor on Twitter @honorcu!  Tweet us and let us know what you want to hear us talk about on Mason Jar Monday next week using #askhonorcu!

To listen to 97.5 Y-Country’s Wild Bill and Honor’s Kaylee Williams talk about buying your first home, listen to the Mason Jar Monday episode below.