Saving Money Now to Help Plan Your Future Retirement

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Retirement. It seems like a lifetime away, right? It’s probably something you plan to worry about when you’re a little closer to your retirement date as well. However, financial experts suggest that the best time to start planning is in your 20s when you typically start earning a steady paycheck.

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? Many full-time employers 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 between 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 often come with high-interest rates, which may only hurt you as you get older. Educate yourself on interest rates before taking out one of these types of loans (especially for credit card usage).

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 areas within 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 may need to be refinanced? You never know what your options are until you ask! Check with your local branch to see if we can save you some money each month to put toward your retirement.*

To take it a step further, did you know First Financial has an Investment and Retirement Center which offers complimentary retirement consultations to our members?**

Stop in or call to make an appointment with one of our Financial Advisors today!

The 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, and we are here to answer any questions you might have and get you started!

*Not all applicants will qualify, subject to credit approval. Additional terms & conditions may apply. Actual rate may vary based on credit worthiness and term. Current loans financed with First Financial FCU are not eligible for review or refinance. A First Financial membership is required to obtain a First Financial auto loan and is available to anyone who lives, works, worships, volunteers or attends school in Monmouth or Ocean Counties. See credit union for details. A $5 deposit in a base savings account is required for credit union membership prior to opening any other account/loan. Federally insured by NCUA.

*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 The Investment & Retirement Center are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using The 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 The Investment & Retirement Center.

Securities and insurance offered through LPL or its affiliates are:

The Rising Cost of Healthcare

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It’s open enrollment season, and most of us are thinking about the best healthcare option for us going into the new year. 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. 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 your financial needs. Factors include:

  • Co-payment (the flat dollar amount you pay when you need care)
  • Deductible (the amount you must pay before the insurance begins to pay)
  • Co-insurance (the percentage of permitted charges for covered services that you’re required to pay)
  • Maximum out-of-pocket costs (the maximum amount you will pay for healthcare services).

Take your previous health history into account. 

You can’t predict the exact amount of insurance you or your family will need. However, 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 a ballpark idea of the amount of coverage you’ll need, barring no serious medical emergencies.

Choose wisely. 

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 as marriage, having a baby, or losing your other healthcare coverage. If you experience one of those situations, you can typically 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.

Plan ahead.

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.

First Financial is here to help. Talk to one of our Member Service Representatives today about setting up a special savings account and be prepared for the unexpected.**
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 only, and not written by a healthcare professional. This article should not be taken as medical advice.

**A $5 deposit in a base savings account is required for credit union membership prior to opening any other account. All personal memberships are part of the Rewards First program and a $5 per month non-participation fee is charged to the base savings account for memberships not meeting the minimum requirements of the program. Click here to view full Rewards First program details. 

First Financial Foundation Awards Classroom Grant to Cedar Drive Middle School

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Press Release

(Pictured above L to R: First Financial’s President/CEO and VP of Marketing and Business Development, Grant recipient Mrs. Sara Campbell, Middle school student Harry Strack, and Mrs. Lori Press).

FREEHOLD, N.J. – Colts Neck’s Cedar Drive Middle School handicap teacher, Sara Campbell, was recently surprised by members of the First Financial Foundation with a $416.77 Erma Dorrer classroom grant for the 2019-2020 school year. Mrs. Campbell has been an elementary school teacher for 14 years, and recently began teaching students with developmental and intellectual disabilities at the middle school level.

Campbell submitted a grant application to purchase equipment for the school’s Colts Cafe. The grant money will be used to continue to change the culture of the school – one snack at a time, through service and vocational skills. Using an old technology cart, a small group of Mrs. Campbell and Mrs. Lori Press’ students started selling snacks and coffee to teachers at the school. This went over so well with the teachers, the idea was suggested to also begin selling snacks to students at the school. The classroom grant awarded will go toward purchasing commercial quality popcorn machines, popcorn, scoops, popcorn seasoning, and popcorn distribution bags.

“When we began to sell coffee and treats to the teachers, our students gained self-confidence and found a place in a community where they had been living on the outskirts,” said Campbell. “They became of service, they found a purpose. And a community found something they didn’t know they were missing.”

(Pictured above L to R: Cedar Drive Middle School Principal Mr. Colin Rigby, Mrs. Sara Campbell, student Harry Strack, and Mrs. Lori Press).

Since First Financial began with a group of Asbury Park schoolteachers back in 1936, the credit union has not forgotten its educational roots. That is why its Foundation offered current Monmouth and Ocean County educators seven (7) classroom grants to use at their schools for the 2019-2020 school year.

“Education has and always will be a pivotal piece of our organization, and we’re delighted to be able to help our local educators enhance their classroom experience,” said First Financial President & CEO, Issa Stephan.

Stephan also noted that the Foundation committee had a tough job of choosing just seven winning teachers out of the numerous applications received this year. “We received double the amount of classroom grant entries this year, which included heartwarming essays and videos from educators hoping to use the grant money to implement or maintain a variety of creative programs within their schools,” said Stephan. “We wish we were able to reward each and every one of our participants, and after extremely careful consideration we selected the seven initiatives in which we felt the grant money would have the largest impact.”

Last Minute Halloween Costumes on a Budget

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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 child 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. You’ll need:

  • 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 friends and relies heavily on denim (also known as: the Canadian tuxedo). 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. Costume supplies:

  • 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 probably hiding in your closet, you just have to find it. This one’s easy – you’ll need:

  • Willingness to relive past fashion mistakes (and have fun with it!)

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. Happy Halloween!

3 Steps to Reduce Your Impulse Spending

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It can be tough to resist spending money. When you see something you want, especially when it’s at a price you like – it can be difficult to keep from making the purchase. With the way the internet and our smartphone apps have made it so easy to shop, the solution isn’t as simple as just avoiding the stores. If you’ve got an itch for shopping, here are three steps you can take to help you get back in control of your finances.

Take your time: During an impulse buy, for the most part – the whole process from finding the item to paying for it only takes a few minutes. Next time you’re about to hit the “buy now” button, slow down. Put the item in your online shopping cart, but wait before completing the transaction. Try not to buy anything the day you add it to your online cart. Let it sit and think – do you really need this item?

Think it over: If you’re still thinking about that item after sleeping on it, go back into your online shopping cart. In your cart you’ll be able to see the total price (including taxes and shipping), and decide for yourself if the item is really worth that total cost. At this point, look around some more online and try to find a better deal, but still – don’t buy the item (yet). After you’ve done all your research, put the item on your wish list or save it for later.

Be ready: You’ve thought about your purchase for days now, and you know you’re going to buy the item. You’ve done the research and you’ve found the lowest price. Do you have the money to make the purchase in your checking account? If the answer is yes, then go ahead and complete the transaction. If you don’t have the money now, save and start the process over when you’ve saved up enough to buy it without going into debt.

These same steps work for in store impulse purchases too. If you see something you’d like to buy when physically in the store – think about it for a day. The next day do some comparison shopping to make sure you are getting the best price. Still want the item on the 3rd day and you have shopped around and have the money to buy it? Head back to the store and make your purchase.

It pays (literally), to be a savvy shopper and reduce your impulse purchases!

Article Source: John Pettit for CUInsight.com

3 Tips to Keep Debt Away

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Sometimes we build up debt due to emergencies or situations that are beyond our control. Sometimes we just buy too many things we don’t really need. Here are three things to think about when it comes to your finances and how you can avoid debt as much as possible.

Set financial goals: Goal-setting is very important when it comes to your money. Your budget should be an easily attainable financial goal for you. If you’re having trouble staying within a budget, it’s probably a good idea to take a closer look at it. When it comes to saving money, have a defined purpose. Every time you get paid, set up your direct deposit to put money into retirement and an emergency fund automatically. This way you won’t physically be transferring the money and convincing yourself that you can do without putting anything into savings this month. If there is a large purchase you want to make or a vacation you want to go on, open a savings account for that wish list.

Have more self-control: It’s easy to buy something impulsively (especially when it’s inexpensive), but those small purchases can really add up if you’re making them all the time. You need to start saying no to yourself and be really disciplined if you want to be free of debt. Having new things is great and exciting, but are those items worth going into debt over?

Ignore pay raises: If you budget your paycheck as if you’re making less than you do, it’ll be easier to save for the things you want in the future. Plus, you won’t have to put yourself in debt to get them. It may not always be easy to cut back, especially if you have a big family, but every little bit helps. And when pay raises come, redirect those additional funds to your savings account and forget all about them!

Article Source: John Pettit for CUInsight.com