Tag Archives: First Financial Federal Credit Union

3 Totally Common Financial Tips You Should Probably Ignore

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Mature man taking data off the computer for doing income taxesWhether you get your financial tips by asking friends and family, checking out library books, attending seminars or searching online, impractical pieces of advice sometimes abound.

Too many personal finance experts tend to populate their cable appearances, books, columns and blogs with the same simple tidbits. But some of that common advice is also not applicable to everyone. For each of these three clichéd tips, let’s look at some other alternatives:

1. In Debt? Cut Up Your Credit Cards

Certain financial gurus advise people in debt to cut up all their plastic and consider using credit cards as the eighth deadly sin.  Here’s some advice: don’t cut up your cards.

People land in debt for various reasons, and some – like student loans, don’t have anything to do with credit cards.

If being unable to pass up a sale or discount clothing bin is your trigger for getting into massive amounts of debt, then put your cards in a lock box and back away. If you fell into some bad luck and used your credit card for an emergency, consider a balance transfer.

But just because someone is in debt and wants to get out of it doesn’t mean they’re going to stop spending money entirely. People still need to eat, fill the car with gas, and deal with the occasional unexpected expense.

Some may counter that it’s best to use a debit card, but consider the ramifications of debit card fraud.  A compromised debit card gives thieves direct access to your checking account. While most financial institutions will cover the majority of money taken from your account, it can be an extreme hassle to deal with. When a credit card is compromised, the issuer typically reacts quickly – possibly even before the customer notices, and usually offers fraud protection.

It also helps to have a low-interest rate credit card for emergencies. Think of it as a fire extinguisher housed in a glass case. You don’t want to break that glass unless you really, really need it. But you do want the fire extinguisher to be there.

2. Have a 20% Buffer in Checking

Undoubtedly, it’s preferable to have a buffer in your checking account to avoid overdraft fees, but two types of situations typically cause overdraft fees.

  • Person A is forgetful, forgets a recurring charge or neglects to check his or her balance before making a purchase.
  • Person B uses overdrafts as a form of short-term borrowing because he or she does not have enough money to get by without going into overdraft.

About 38 million American households spend all of their paycheck, with more than 2/3 being part of the middle class, according to a study by Brookings Institution.

It’s simple for personal finance experts to recommend tightening up the purse strings, doubling down on paying off debt, and moving out of the paycheck-to-paycheck lifestyle – but those who don’t have assets and who struggle each month to make ends meet don’t need to hear people harping about avoiding overdraft fees by “just saving a little bit.” Every little bit counts for them.

Instead, let’s offer some practical advice: Those looking to avoid overdraft fees should evaluate their banking products.

Americans who use overdraft fees as a form of short-term lending may want to set up a line of credit with a credit union or have a low-interest credit card for emergencies.

3. Skip That Latte!

Many years ago, David Bach created a unifying mantra for personal finance enthusiasts. The “latte factor” was that you could save big by cutting back on small things.

Bach’s deeper concept – that each individual needs to identify his or her latte factor – got lost in the battle cries, with many people crusading specifically against your daily cup of coffee.

Yes, people should be aware of leaks in their budget. But everyone’s budget looks different. If “Person A” buys a coffee each day, but rarely buys new clothing, and trims the budget by cutting cable and brown-bagging it to work, then leave them alone about their caffeine habit.

People are allowed to live a little when it comes to their personal finances. It’s important to save for the future, but it’s also important to enjoy life in the present. Personal finance shouldn’t be a culture of constant denial either. Create a budget, figure out if you can work in an indulgence or two, and don’t live in complete deprivation. For those working to dig out of seemingly insurmountable debt, then yes, it may be time to identify and limit your latte factor or make an appointment with a financial counselor.

Decide What’s Right for You

Keep in mind, personal finance is indeed personal.  A generic piece of advice, like keep a 20% buffer in your checking account to avoid overdrafts, may not be helpful in your personal situation.  You need to figure out what works for you, and ask for help along the way if you need it.

How To Talk Money With Your College Student

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SavingMoneyYour child is a college student, and you’ve successfully packed them up, moved them in, made several trips to Bed Bath & Beyond, and they’ve settled into their class schedule for the new year – you can finally breathe a sigh of relief, you’ve covered it all.  Or have you?  How about the skills necessary not to blow whatever budgetary limits that have been set for the first semester?

It’s not an easy maneuver to accomplish. The skills your child probably has to manage their own money are most likely the ones you’ve (hopefully) taught them.  And they may not have picked up as much as you think.  75% of parents say they’re having regular conversations with their kids about money, but only about 60% of kids say the same.

With that in mind, here’s a quick checklist of items to discuss with your son or daughter living at the college dorm:

  • Spending Limits

Some colleges will provide you with guidelines of how much spending money to give your kids. Northwestern University, for example, says about $2,000 will be sufficient for the 2014-2015 academic year, while the University of Arizona says $1,800 (not including books). Stretching those dollars, however, will be hard for kids who aren’t used to paying for their own pizza, let alone laundry and shampoo. It’s important to develop a basic list of what money will likely be used for – and how much those things cost,  to make sure actual expenditures fall in line with these estimates. Richard Barrington, senior financial analyst for MoneyRates.com, also suggests doling the money out slowly – say a month at a time — and for specific purposes.

  • The ID Card

The student ID card gets you into the library and the dining hall. And it’s essentially a prepaid debit card, as well. Parents can put money on an account and students use that money for food, copies or whatever other campus services they need. What’s good about these cards is that you (and your student) have the ability to check what the balance is at any time. And, because the amount on tap is capped, there’s not the same risk you’d have if you handed your child a credit card (more on that in a moment). Talk about the card with your child so they can prevent spending all the money on the card right away.

  • Picking the Right Financial Institution

Although it may seem more convenient to have your child bank at the same institution you do – so that you can transfer funds into his or her account in the event of a shortfall – it may also prove to be more expensive. The Achilles heel of the college student when it comes to banking is the $3 a pop (or more) ATM fee at the campus or other local ATM. Unless your child has an account and card with one of those, these ATM charges can add up.  Be sure to investigate the banking situation – does your current institution offer Online Banking with a mobile app and remote deposit?  This may be another great, easy alternative for your student at college.

First Financial’s has a great Student Checking Account available for 14 to 23 year old students, which includes:

  1. A free first box of checks, and an allowance of the first mistake being free+.
  2. Free phone transfers to the account by parents.
  3. No per-check charges – unlimited check writing without getting charged after writing a certain amount of checks.
  4. No minimum balance requirements.
  5. No monthly service charge for having the account.
  6. A personalized Debit Card issued instantly in one of our Monmouth or Ocean County branches.
  7. Free Online Banking with Bill Pay++.
  8. Unlimited in-branch transactions.
  • A Credit Card for Emergencies

Since the passage of The Credit CARD Act in 2009, kids under 21 are not supposed to be issued credit cards of their own unless they have either income to support their spending or a co-signer. But the credit scores of millennials have also suffered as a result.  If you want your child to have credit on hand for either emergencies or regular usage and/or build a credit history while in college, the best way to go about it is to add your child to one of your accounts as an authorized user. Make sure the card you choose actually will report on the child’s behalf to the credit bureaus. Nearly 25% of college students now also have prepaid cards in their wallets. This might solve the budgeting/emergency problem, but not the credit score issue – as prepaid card history isn’t reported to the credit bureaus.

  • Talk to Your Child About Getting a Part-Time Job

The money they’re undoubtedly going to spend on a college campus – like anywhere else – looks far more valuable when they’ve actually earned it.  If there’s room in your child’s schedule, it might be a good idea to investigate a part-time job that’s manageable.

*Article Source Courtesy of Fortune.com by Jean Chatzky

*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 Bronze Tier. Click here to view full Rewards First program details, and here to view the Tier Level Comparison Chart. Accounts for children age 13 and under are excluded from this program.

Is There Such a Thing as Good Debt?

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3d man sitting sad with text 'debt'.Most of the time, the word “debt” has negative connotations. Debt costs you money and therefore takes money away from financial goals like saving and investing.
So could there ever be good debt? That’s no easy answer. How you use debt has a big impact on whether or not you can consider it “good.” If you have too much of a “good” thing — that’s when it can turn into bad debt. So let’s consider 3 types of debt: investing in a college education, buying a home, and starting a business.

1. Are Student Loans Always Good Debt?
Student loans aren’t always good debt, because most people don’t consider how long they’ll be paying back their student loans when they take them out. But that doesn’t make them bad. If you take them out to obtain a job that you could have only secured with a college education and earn enough to make your student loan repayments manageable, your student loan debt was a good debt.

Here are some tips for student loans:

  • Keep your total loans under your projected starting salary when you graduate. If you’re able to do that, you should be able to pay them off with the standard 10-year plan.
  • Cut down on the loan amount. Get college credits while you’re in high school, go to a community college for your first two years, stick to a state school, and apply for scholarships.
  • Get a job to pay for your living expenses while you’re in school so you don’t take out loans for living expenses.
  • Keep in mind that private student loans don’t offer the flexibility of federal loans, so try to apply for federal student loans first.

2. How Much Should I Borrow for a Mortgage?
Owning a home used to be considered the American dream, and for many people it still is. Most people need to take out a mortgage for their purchase. If you think you’ll be in the same area for several years and can put a 20% down payment on a home, a mortgage could be a good long-term investment. Interest rates on mortgages are historically low, and owning a home can also provide tax benefits. The nice thing about a home is that it’s an investment you can live in.

However, many people end up buying a home without thinking about how it will affect their lifestyle or how they’ll pay their mortgage if an emergency came up. To avoid this, here are a few rules of thumb:

  • Make a 20% down payment so you can avoid paying private mortgage insurance.
  • Don’t use your entire savings account for a down payment. Homes are a hotbed for dipping into your emergency savings, as there are far more unexpected expenses that come up than when you’re living in an apartment.
  • Boost your credit score before you buy. Make sure you have a score above 700 so you can qualify for the best mortgage rates available. This can save you thousands of dollars in interest over the life of the loan.
  • If you think you might move in the next five years, you might want to rent so you don’t have to move during a down market and possibly sell your home for a loss.
  • In figuring out your monthly housing costs, the principal and interest on the mortgage loom large. But don’t forget property taxes, insurance, utilities, repairs, landscaping, snow removal and other factors. Make sure that your monthly housing expenses leave room for other expenses too.

We offer a number of great mortgage options, including refinancing – click here to learn about our 10, 15, 20, and 30 year mortgage features and see what a good fit for your home is!*

First Financial also offers a Mortgage Rate Text Messaging Service so you can receive updates on our low Mortgage Rates straight to your mobile phone. You can subscribe to our Mortgage rate text message service by signing up for text alerts, and receive instant notification when our mortgage rates change.**

3. What About Using a Loan to Start a New Business?
Entrepreneurship seems to be the new job security for many people in this generation. Incurring debt to start a business can be good debt if the funds help you to build a sustainable livelihood that allows you to repay any money borrowed and improve your financial situation. Just be cautious of how much debt you’re taking on.

Follow these tips to be financially smart and successful in your business:

  • Self-fund your business venture with savings first.
  • The smaller the investment, the quicker you can make money.
  • Do your research and get experience in the field before your launch. Some business opportunities require much bigger up-front investments, which may lead to a small business loan.

Did you know First Financial offers Business accounts, loans, and services? We understand that not every business is the same and, therefore, not every loan need can be the same.  This is exactly why we look at each individual business and create a customized lending solution to meet your specific needs. Please contact us at business@firstffcu.com and we’ll be happy to provide you with more information on business loans and services.

Debt Costs Money, So Use it Wisely
Debt can be good, but only if it helps you leverage your assets to build wealth. Every good debt has the potential to turn bad, so do your research first. The fewer monthly obligations you have, the more money you have to fund a lifestyle that you love.

Don’t forget about our free, online debt management tool, Debt in Focus. In just minutes, you will receive a thorough analysis of your financial situation, including powerful tips by leading financial experts to help you control your debt, build a budget, and start living the life you want to live.

* 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.

**You must check the Text Message Signup box when registering in order to receive rate change text messages.+ If you do not receive an automated confirmation message after enrolling, please text “Yes” to (201) 808-1038

+The Text Message Signup box must be checked in order to receive text messages. Standard text messaging and data rates may apply.

Down to Business: What to Consider When Writing a Business Plan

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Remember writing term papers in high school or college? You had to prove a point using evidence provided by your research of the topic. In many ways, a business plan is proving the following thesis: “I can successfully operate a sustainable business.” So what research do you need to prove this idea?

  • Market Research – Who are your competitors in the area? What are their prices for comparable services? How will you differentiate your product/service from theirs?
  • Financials – Create realistic projections for the money you will make and lose over the next 3 years. Explain how you came up with these figures, and how they will figure in to the growth of your company. Also include the amount of money you, your partners, and your investors (if applicable) are contributing to the start up.
  • Biographies – Who’s who in the organization? What skills, experience, and talent does each of the business owners/partners bring to the proverbial table? Understand how each person will make the business successful.
    • What are the duties of each person employed by the company?
    • Each person should provide a personal financial statement
    • How will matters be resolved if the partners cannot agree on an issue?
  • Marketing Plan – How will your potential patrons know about your business? How much of your budget is devoted to marketing? Depending on the type of business, will you do traditional advertising, or organic word of mouth marketing?
  • The Company Itself – What product or service are you providing, and how will you be doing this? How did you originally get involved in the industry? What makes this industry a worthwhile use of your time, energy, and money?

These are only a few of the aspects to consider when creating a business plan. You can find many seminars on how to write a business plan for little to no cost at local libraries, local community colleges – particularly Brookdale Community College, and of course at First Financial Federal Credit Union. Formal templates can be found at www.SBA.gov or www.SCORE.org. Use these questions provided, along with one of their templates, to prove your thesis – you can, in fact, operate a successful business…once you have the right plan!

For more information about any of First Financial’s business accounts and services, you can contact Business Development by emailing business@firstffcu.com 

How to Assess a Neighborhood When House Hunting

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House-HuntingWhen you buy a house, you aren’t just buying a house. In a way, you’re buying a neighborhood. After all, you’ll likely choose a home partly because it’s close to work, the schools are great, or it’s walking distance to restaurants and stores.

In fact, you could argue that picking the right neighborhood is more important than picking the right house. The last thing you want is to buy property in a place where everyone is trying to leave. So if you’re looking for a home for your house, here are some things to consider.

1. What to look for. If you’ve been focused on your dream house and not your dream neighborhood, the most popular areas tend to be ones that offer an instant sense of community to those relocating there. If living in the right community is important to you, then it’s important to think about these five factors:

  1. Aesthetics. An attractive neighborhood indicates the residents care about it.
  2. Affordability. Sure, you want an inexpensive house, but you also want to be able to afford the cost of living in the neighborhood.
  3. Safe environment. Nobody wants a criminal as a neighbor.
  4. Easy access to goods and services. Can you make a quick run to the bank or grocery store, or will every day be a headache behind the wheel due to traffic congestion or construction?
  5. Walking distance to goods and services. If exercise and a sense of community are important to you, find a house near the establishments you’ll be frequenting that is accessible by foot.

2. Online research. You probably use websites like Zillow.com, Realtor.com, Trulia.com, or Homes.com to search for a new house. But there are neighborhood-related websites and apps as well. Here’s a sampling of what’s available:

  • HomeFacts.com. This website contains mostly neighborhood statistics and information, but it also has data on more than 100 million U.S. homes (type in the street address of your prospective house to get the scoop on the whole area). Wondering how many foreclosures are in the area or if there are any environmental concerns? This is your site.
  • NeighborhoodScout.com. Read up on crime, school, and real estate reports for the neighborhood you’re considering.
  • Greatschools.org. Here, you can find reviews written by parents and students of schools in the neighborhood you’re considering. You can also find test scores and other data that may help you decide if this is a school you want your kids to attend.
  • CommuteInfo.org. This site offers a commuting calculator. Plug in information like miles driven and how many miles per gallon your car averages, and the calculator will give you an average cost of what your commute costs may look like in a month and in a year.

3. Red flags. As you’d expect, spotting a neighborhood on the decline isn’t rocket science. For example, pay attention to the property maintenance – overgrown lawns and shrubs, toys left outside, garbage bins not taken in – often reflect that the area is not well cared for and it can negatively affect the property value.

Though things are subject to change, selecting the right neighborhood is important. Your neighborhood’s character will likely shape your family’s character.

If you’re looking to purchase or refinance a home, First Financial has a variety of options available to you, including 10, 15, 20, and 30 year mortgages. We offer great low rates, no pre-payment penalties, easy application process, financing on your primary residence, vacation home or investment property, plus so much more! For rates and more information, call us at 732.312.1500, Option 4 for the Lending Department.*

First Financial also offers a Mortgage Rate Text Messaging Service so you can receive updates on our low Mortgage Rates straight to your mobile phone. You can subscribe to our Mortgage rate text message service by signing up for text alerts, and receive instant notification when our mortgage rates change.**

* 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.

**You must check the Text Message Signup box when registering in order to receive rate change text messages.+ If you do not receive an automated confirmation message after enrolling, please text “Yes” to (201) 808-1038

+The Text Message Signup box must be checked in order to receive text messages. Standard text messaging and data rates may apply.

Article courtesy of US News Online by Geoff Williams.

ID Theft Risks That Lurk in Your Child’s Backpack

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Girl walking away from School Bus while texting on her phoneWhile you’re out searching for the perfect back-to-school backpack for your child, the more important consideration other than style, size, and color should be — what can happen if a dishonest person gets a hold of it? The things your child carries in his or her backpack can become a huge financial headache if they fall into the wrong hands.

With identity-related crimes at historic levels, the odds are better than ever that a dishonest person will know the basics of taking advantage of the kinds of personally identifiable information, sensitive data (like passwords and credit card numbers), and the many other keys to your household economy that can lurk in your child’s backpack.

Here’s a short list of what a relatively creative thief might find in your child’s backpack, and what you can do to prevent the worst from happening.

1. A Smartphone

While obvious to you (hopefully), does your child understand the serious potential for disaster that a walk-about smartphone can bring to your doorstep?

It can be as simple as a scammer dialing 611 and ordering new services. Chances are good that there’s enough information in your child’s backpack for a motivated thief to get your name and thus the keys to your telephonic kingdom.

But there are other identity indignities that can be done. Many people store user name and password information on the Notes app of their phones. The Notes may contain other informational cracks and crevices as well and open up unsuspecting third parties — relatives and friends — to scams. Email scams, grandparent scams, an iTunes or apps shopping spree, malware installation — so many tidbits to exploit.

What to do: Talk to your kids about the dangers of an unsecured phone and discuss basic data storage details with them — like what information shouldn’t be on their phones. Is the phone locked with a passcode? It should be! Also have them set strong (think creatively alpha-numeric) passwords, and a Find Me app to erase the contents should the device fall into the wrong hands.

2. Their Laptop

You don’t need to be a movie buff to know that a computer is a dangerous thing in the wrong hands. Most issues associated with a lost phone come to bear here as well. Emails can be sent to relatives or strangers in the service of stealing money or wreaking havoc.

Beyond the irresistible cornucopia of files that may well be saved on the device, email is a treasure trove of personally identifiable information — everything from credit card numbers to more data like name, address, email addresses and birthdays — pieces of a puzzle that can be assembled to present a believable story to a customer service representative and then steal valuable goods and services, or used as a fly trap to accumulate even more personally identifiable information.

Does your child have access to your Netflix account? How about Amazon or iTunes? Where else have they gone in cyberspace that might have their information — or yours? Open social media sites that are set to login automatically afford a wide vista of scamming opportunities too.

What to do: Make sure your child gets into the habit of logging out of all their online accounts, and that they don’t store sensitive information on their laptops. Talk to them about the wisdom of not saving user ID and password information, and how to make a good one. Finally, have your child set a password — shared with you — to protect their device against the wrong person accessing it.

3. Keys and Name Tags

So, this is pretty straightforward: If your child uses a karabiner to attach his or her keys to their backpack, you’ve got a potential robbery waiting to happen.

Additionally, there are apps that can allow a fraudster (as well as a person who might want to use the app to avoid unnecessary inconvenience) to make a copy of a key that a locksmith can duplicate.

What to do: Tell your child to keep the keys to your home in their pocket rather than on their back.

4. Gaming Device

Playstation Vita is a popular gaming device — and not the only device that could cause you a world of woe should it fall into the wrong hands — but we’ll single it out for the sake of illustration.

The good news: Your personally identifiable information is safe even if someone grabs the device, because it’s password-protected and associated with your gamer’s access to the network.

That doesn’t mean that a bad player can’t do some damage. First, they can play games and wreck your child’s sterling reputation in the community. Worse: Whoever has that device can buy games and run up a hefty bill. One-click purchased games are something any malicious third party can rack up in the way of a very expensive just-because crime.

What to do: Have your child set a passcode for access to the device and make sure they share it with you.

When it comes to data security, best practices are universal. It’s your job to pass on what your kids need to know to stay safe and keep your family out of the crosshairs of ID theft.

Article Source: Adam Levin for Credit.com, http://www.today.com/parents/identity-theft-risks-lurk-your-kids-backpack-1D80042370