What’s Your Number? 5 Financial Figures You Need to Know

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When we talk about personal finance, a lot of terms often get tossed around: APRs, credit scores, mortgage principles … you get the idea. It’s easy to get lost in all of these numbers, so we’re here to break it down for you. These five may be the most important – they’re the difference between a healthy bank account and debt collectors knocking at your door. Expenses.

1. Your credit score. This may be the most important number ever attached to your name. Your credit score decides your approval for a mortgage or auto loan; it also plays a role in what credit card offers you qualify for. It influences your rates on loans too, and much more. Moreover, many employers evaluate an applicant’s score during the hiring process.

To build a high score, you have to be a responsible borrower. That job is a little more complex than it might sound, so we’ll start at the beginning: Pay your credit card bills on time and in full.

Once you’ve got that down, another way to boost your credit score is to take out different types of loans to show you’re creditworthy.

That said, don’t take out all those loans at the same time, as each results in a hard inquiry, which takes a slight hit on your credit score. Your length of credit history has an impact on your score, and too many accounts opened at the same time may not look too good.

2. Your tax rate. When you file your taxes, you’ll find yourself in one of six brackets. Don’t assume, though, that if you fall into the 15 percent bracket, you pay a flat 15 percent to the federal government every year — you’ll pay less. That’s because the 15 percent bracket isn’t your effective rate (the final amount you end up paying); it’s your marginal tax rate, which says how much your last dollar is taxed.

Here’s why this is important: If your employer withholds significantly more than you owe to the federal government, you might ask them to withhold a little less. That way, rather than get the extra cash back as a federal tax return in springtime, you can deposit the money into a savings account or save it for retirement by depositing it into an Individual Retirement Account (IRA).

3. Your personal savings rate. In America, saving a large portion of your earnings may be a thing of the past. The personal saving rate — how much of your disposable income is socked away rather than spent — is at just about 4.6 percent.

While this is much improved, it still represents a major decline from decades past, when Americans overall saved more than 10 percent of their income. According to the Federal Reserve, just 52 percent of Americans spent less than they earned.

If you’re looking to save, check out your local credit union like First Financial! We offer a great variety of options in savings accounts and savings certificates.

4. Your student loan debt. Americans hold more debt in student loans than in credit cards, to the tune of $1 trillion. Although rates on most federal and private loans are less than those for credit cards, the sheer amount of debt — sometimes as much as $100,000 or more — can make it difficult to afford even the minimum payments. Be sure to know your future obligations when taking out student loans, and take advantage of any beneficial repayment programs offered by your lenders.

You need to get a handle on your student debt, as it will affect the loans you take out in the future. The way you treat your student debt, and really any debt, has a bearing on your credit score, which in turn has a bearing on your future rates — or if you’ll be approved for a loan at all.

business finance5. Your net worth. It sounds daunting to try to put a dollar value to your name, but knowing this value will help you set smarter goals and create a sound financial plan. To calculate your net worth, you need to make a list of everything you own, everything you owe, and then subtract to find out the difference.

First, add up your assets, then your liabilities (or your total debts). Your rough net assets equation should be as follows:

Net worth = (cash + properties + investments) – (credit card debt + loans + outstanding payments of any other kind).

If you’re in the positive, ask yourself: “Am I allocating my resources as best I can to my short, medium, and long-term goals?” If all of your money is sitting in a low-yield savings account, consider investing a portion of it to diversify your portfolio. The Investment & Retirement Center located at First Financial, can help you do just that.*

If you’re in the negative, don’t stress – but rather develop a plan. The most important step you can take is to begin paying off your debt as soon as possible, starting with the loans that have the highest rates. Once you know where you stand overall, you can budget better for future expenses, such as preparing to buy a car or saving for retirement.

*Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:

Article Source: http://money.usnews.com/money/blogs/my-money/2013/03/18/whats-your-number-5-financial-figures-you-need-to-know

Home Improvements on a Budget

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At our recent Home Improvement on a Budget and the Mortgage Market Seminar, attendees learned about today’s mortgage market, information on our home improvement loan and home improvement tips on budget. Below are a few home improvement tips that were presented that can help you get the most out of your budget during your home improvement period.

Maximize Your Decorating Budget:

What’s the dirtiest word in decorating? That’s right: budget. Whether you have just a few $100 for a room makeover, or tens of thousands, you’ll need to plan carefully and make tough choices to meet your bottom line.

1. Make a design wish list: Give your imagination free reign. Write down everything you’d like to do and buy – be specific. Although you’re indulging in a bit of fantasy, don’t forget to include the practical stuff that needs to be fixed, upgraded and purchased.

2. Determine your actual budget: Be brutally honest here: Take a look at your monthly inflows and outflows, as well as any funds you’ve set aside for rainy day projects, and see how much you realistically have to spend. If the money just isn’t there, it might make sense to put off your project while you set a savings goal, rather than maxing out your credit card.

3. Familiarize yourself with price tags: Before you draft an itemized budget, hit the stores, catalogs and Internet to research how much the items on your wish list will cost. If it’s been a few years since you’ve decorated — or if this is your first major home project — expect some sticker shock. Couches, for example, can range from a few $100 to $1000+, so price out sofas that meet your style, quality and comfort standards.

4. Prioritize your purchases and labor: Start itemizing with your decorating wish list, real costs and your total budget in front of you. If you have a whole home to decorate, decide if you need to tackle the project by room or category: furniture first, then window treatments, etc.

5. Keep common budget busters in mind: Just as you would with a remodeling budget, tuck away 10 to 15 percent of your total for unexpected expenses. If, you’ve set aside $5,000 to create a bedroom sanctuary, do your best to draft an initial budget that tops out at $4,250. That way, you’ll have money in reserve to pay an electrician when it turns out that hanging the bedroom chandelier isn’t a simple matter. Other common errors and oversights that can break the budget are impulse buys, freight and delivery charges, and supplies.

6. Phase it in: Unless your budget is unlimited, you may not be able to do everything right away. But don’t lose heart — you can spread out the expense by making a long-range plan and implementing your design in phases, as time and money allow. Designers tend to tackle jobs in this order: backgrounds and surfaces (ceilings, walls, floors), buildables (built-in shelving), furniture, fabrics, lighting and accessories – take your time to do it right!

Some Other Home Improvement Tips to Keep in Mind:

  • Re-paint a room: A great way to spruce up a room for cheap with the most dramatic result.
  • Do-It-Yourself: Use Pinterest.com and get some crafty inspiration and don’t be afraid to paint and do flooring yourself – try something new!
  • Call in friends & family: Why pay for workers when you have family & friends (Just don’t forget to feed them lunch)!
  • Shop secondhand stores: Great way to find unique and inexpensive pieces that you can easily fix up or paint.
  • Wait for sales & discounts: Wait to find what you really want at a price you’ll really love.
  • Sew your own linens: Don’t be afraid to get a little “Martha Stewart” and sew your own window treatments and linens.
  • Reuse items you already have: Be imaginative and find ways to reuse décor – slipcovers and new hardware do wonders!

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The Top 10 Things You Need to Know When Buying a Home

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These ten useful tips are crucial to know when looking to purchase a home.  Be sure to read on before you make the purchase! Man, Woman, My House, Couple, Front Door, Happy, Door, Entrance, 1. Don’t buy if you can’t stay put.

If you can’t commit to remaining in one place for at least a few years, then owning is probably not for you, at least not yet. With the transaction costs of buying and selling a home, you may end up losing money if you sell any sooner – even in a rising market. When prices are falling, it’s an even worse proposition.

2. Start by shoring up your credit.

Since you most likely will need to get a mortgage to buy a house, you must make sure your credit history is as clean as possible. A few months before you start house hunting, get copies of your credit report. Make sure the facts are correct, and fix any problems you discover.

3. Aim for a home you can really afford.

The rule of thumb is that you can buy housing that runs about two-and-one-half times your annual salary. But you’ll do better to use one of many calculators available online to get a better handle on how your income, debts, and expenses affect what you can afford. Get started today by using some of our financial calculators, which will tell you how much home you can afford.

4. If you can’t put down the usual 20 percent, you may still qualify for a loan.

There are a variety of public and private lenders who, if you qualify, offer low rate mortgages that require a small down payment.  In fact, First Financial is one of them! Check out our Mortgage resources, and then stop into any branch or give the Loan Department a call at 732.312.1500, Option 4.*

5. Buy in a district with good schools.

In most areas, this advice applies even if you don’t have school-age children. Reason: When it comes time to sell, you’ll learn that strong school districts are a top priority for many home buyers, thus helping to boost property values.

6. Get professional help.

house for sale sign

Even though the Internet gives buyers unprecedented access to home listings, most new buyers (and many more experienced ones) are better off using a professional agent. Look for an exclusive buyer agent, if possible, who will have your interests at heart and can help you with strategies during the bidding process.

7. Choose carefully between points and rate.

When picking a mortgage, you usually have the option of paying additional points — a portion of what you pay at closing — in exchange for a lower rate. If you stay in the house for a long time — say three to five years or more — it’s usually a better deal to take the points. The lower rate will save you more in the long run.

?????????????????????????8. Before house hunting, get pre-approved.

Getting pre-approved will save you the grief of looking at houses you can’t afford and put you in a better position to make a serious offer when you do find the right house. Not to be confused with pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt, and credit history.

9. Do your homework before bidding.

Your opening bid should be based on the sales trend of similar homes in the neighborhood. So before making it, consider sales of similar homes in the last three months. If homes have recently sold at 5 percent less than the asking price, you should make a bid that’s about eight to 10 percent lower than what the seller is asking.

10. Hire a home inspector.

Sure, your lender will require a home appraisal anyway. But, you should hire your own home inspector, preferably an engineer with experience in doing home surveys in the area where you are buying. His or her job will be to point out potential problems that could require costly repairs down the road.

If you have any questions about the home buying process, feel free to ask us!  We know it can be an intimidating process at times, and we’re here for you.  To apply for a First Financial Mortgage – click here.*  You might also want to subscribe to our Mortgage rate text message service, by texting “firstrate” to 866-956-9302.  When our Mortgage rates change, you’ll be the first to know**

* A First Financial membership is required to obtain a mortgage and is open to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties.  Subject to credit approval. See Credit Union for details.

**Standard text messaging and data rates may apply.

Article Source: http://money.cnn.com/magazines/moneymag/money101/lesson8/index.htm

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Smishing – An ID Theft Scam

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Have you been “smished” lately? Be on the alert for text messages with links — they could be an ID theft scam known as smishing.

Similar to phishing (which involves email), smishing uses cell phone text messages to deliver bait that’s intended to get you to divulge personal information. Smishing may involve winning a prize or a message that contains something that requires your immediate attention — the link tells you to “click here.” If you click on the infected link, it downloads malware that allows the bad guys to gain control of your device remotely. They can then use your phone from anywhere in the world to access your banking information, credit card data and the like.

What to do:
If you receive a text message that asks for sensitive information –

  • Do not reply to the message.
  • Do not click on any of the links that may be embedded in the message.
  • Contact your carrier’s privacy or fraud team. If their company name or brand is used in efforts to fraudulently obtain personal information, they may choose to pursue legal action.
  • Contact your financial institution to be sure your accounts have not been compromised.

Visit the FTC Identity Theft website to learn more about how to minimize damage from identity theft. If you believe that you have been a victim of a smishing scam, you can file an online complaint with the Federal Trade Commission’s Report Fraud webpage. You can also call the FTC toll-free at 1.877.FTC.HELP (1.877.382.4357).

Bottom line: Avoid clicking!

Save someone from getting smished:
As technology provides new ways to expose and defend against familiar scams, clever con artists devise new ones. Please share this with loved ones and friends — smish be gone, pass this on!

If you notice any fraudulent activity on any of your First Financial accounts, contact us by calling 732.312.1500, emailing info@firstffcu.com or stopping into any one of our branches.

Article Sources: http://www.andersoncooper.com

When Was the Last Time You Had a Financial Checkup?

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One of the best things you can do for your finances is to periodically check your financial health. It’s always a good idea to evaluate your finances, and recognize where you are in terms of financial health — and figure out where you want to go from here.

Areas of Consideration for a Financial Checkup

As you prepare for your financial checkup, it’s a good idea to consider the following areas, and make adjustments as necessary:

  • Net Worth: It’s not a bad idea to start with your net worth. Your net worth offers a snapshot of where your finances are right at this moment. As a result, it can make a good starting point. Look at your current net worth, and compare it to your net worth from your last checkup. This can give you a general idea of what direction you are headed financially, and can give you a warning that you might need to make some changes.
  • Financial Plan: Next, review your financial plan, and your overall financial goals. Are you on track? Is your financial plan still helping you reach your goals? Or have things changed enough that you need to make tweaks to your financial plan? If you have moved off course from your financial plan, now is a good time to get back on track. Recognize what you need to do to bring your spending and saving back in line with your long-term financial goals.
  • Insurance Coverage: Review your insurance policies. Look at the coverages and the various plans that you have. It’s a good idea to consider what you need to protect your assets. Make sure you have adequate coverage. In some cases, it might make sense to drop some of your coverage, or take steps, like raising the deductible, to lower your premiums. First Financial members are eligible to save money on home and auto insurance through Liberty Mutual.*
  • Investments: Consider your investment accounts. Does your asset allocation still make sense? Has your allocation drifted away from what you want? Review the fees you are paying as well. If you have investments that are racking up the fees for you, consider switching things up. It might also make sense to consolidate your investment accounts in some cases. If you would like to set up a no-cost consultation with the Investment & Retirement Center** located at First Financial to discuss your brokerage, investments, and/or savings goals, contact them at 732.312.1500.
  • Spending and Saving Habits: Don’t forget to consider your spending and saving habits. Have you moved away from your savings goals? What about your spending? Have you stopped following your spending priorities? Re-establish your financial priorities, and make sure your spending is in line with what you prefer.

Now is also a good time to review your tax liability, and look for ways to reduce your taxes before the end of the year. Part of your financial checkup should also include a look at the deductions and credits you might be able to add in before the year ends, whether it’s buying business equipment or donating to charity.

An annual review of your financial situation is a good idea. You can catch problems — or even just see where you might have become lazy with your finances. A financial checkup can help you identify areas for improvement, and you can make a plan to boost your situation.

Here at First Financial, we encourage our members to come in at least once a year to sit down with a representative at any one of our branches to make sure you are currently placed in the correct Rewards First tier for you, and also that you are receiving the best value, products and services based on your financial situation. Give us a call or stop in to see us today!

Article Source: http://moneyning.com/money-management/when-was-the-last-time-you-had-a-financial-checkup/

*Liberty Mutual is an insurance service available to members and is not a product of this credit union.

**Representatives are registered, securities are sold, and investment advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free 800-369-2862. Nondeposit investment and insurance products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the financial institution. CBSI is under contract with the financial institution, through the financial services program, to make securities available to members. CUNA Brokerage Services, Inc., is a registered broker/dealer in all fifty states of the United States of America.

4 Wise Ways to Spend Your Tax Refund

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A vacation would be fun, but you’ll get more bang for your buck if you invest in energy-saving improvements or maybe even a new car.

Americans often wrestle with competing desires to spend, save or invest the cash from their tax refund checks.

Many people say they are being responsible with their refunds: 42% plan to use the money to pay down debt and cover bills and 25% plan to save it, according to a survey by TurboTax.

Others are splurging: 15% of taxpayers plan to treat themselves to a vacation or shopping. But advisors say that even if you’ve done everything right — you have an emergency fund, no debt and are maxing out your retirement account contributions — you might want to reconsider spending the refund on a 70-inch TV or a cruise. Here are some of their suggestions below.

1.       Rebalance your portfolio.

With the stock market hovering near five-year highs, advisors normally would recommend investors rebalance their portfolios by selling stocks and using the proceeds to buy bonds or whatever assets they need to get back to their target allocations. But some investors might be able to rebalance without selling their stocks.

Have questions about investing?  Set-up an appointment with the Financial Advisor located at First Financial Federal Credit Union.* Appointments can be made at any branch location, or by calling 732.312.1500.

2.       Prepay your bills.

Even if you’re not living paycheck to paycheck and can afford to spend your refund on a new iPad without falling behind on your bills, there may be better uses for the cash. Though it’s not nearly as exciting, one can use the money to pay off future bills. Why not use this money to put yourself ahead of the game?

Prepay your car insurance bills or car loan payments. Write the phone company a check, or save the money for the home insurance bill you know is coming up in a few months. But don’t forget to check monthly statements to be sure you aren’t paying for something you didn’t request, experts say.

3.       Make home improvements.    Yellow helmet full of dollars

If you’re going to spend it, take a look at your house.  If your furnace is on its last leg, now may be your chance to replace it. Have you wanted to install new windows? Using the money on your home could lift your property value and prevent future damage, advisors say.  People who make energy-efficient improvements might also qualify for a residential energy tax credits expiring at the end of this year. To get the maximum credit of $500, taxpayers need to make $5,000 in qualifying improvements to their stoves, heating or air conditioning systems, insulation, roofs, water heaters and windows and doors. Learn more here.

Did you know First Financial has a home improvement loan?** This loan is perfect for those who don’t think they have enough equity in their home.  Or maybe you’ve been itching to put in a new deck or pool for the nicer weather.  Stop into any branch to ask us how you can get started with a home improvement loan or give us a call at 732.312.1500, Option 4.

isolated red car back view 014.       Buy a car.

If the list of needed car repairs is piling up, some advisors say it might be best to put your check toward a new ride. A $3,000 refund can cover the typical 10% down payment needed on a $30,000 loan for a new car, or the 20% down payment needed on a $15,000 used car.  Don’t forget that First Financial’s auto loan rates are the same whether you buy new or used!***

Those with existing car loans may also have a greater shot at refinancing to get a lower rate (some saving hundreds of dollars a month) if they use some of their refund cash to reduce the size of their loan.

Article Source: http://money.msn.com/tax-tips/post.aspx?post=9a813b25-fba7-4882-b37b-778710cfa8f1

*Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. First Financial Federal Credit Union (FFFCU) and First Financial Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using First Financial Investment & Retirement Center, and may also be employees of FFFCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of FFFCU or First Financial Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:

**Available on primary residence only, subject to underwriting guidelines. Subject to credit approval. A First Financial membership is required to obtain a home improvement loan and is available to anyone who lives, works, worships or attends school in Monmouth or Ocean Counties, NJ.

***APR = Annual Percentage Rate. Not all applicants will qualify, subject to credit approval. Additional terms and conditions may apply. Actual rate may vary based on credit worthiness and term. First Financial FCU maintains the right to not extend credit, after you respond, if we determine you do not meet our guidelines for creditworthiness. A First Financial membership is required to obtain an Auto Loan and is available to anyone who lives, works, worships, volunteers or attends school in Monmouth or Ocean Counties.