Practicing Healthy Habits As A Young Adult


university students on a work placement .Making the transformation from being a carefree young person to a financially healthy adult can seem overwhelming and scary.  Most young adults starting out their careers can attest to the challenges of managing an entry-level salary while still striving for the financial stability they desire. But there are ways to create a path to financial independence early in your career.

Though your salary may be minimal now it’s vital to implement a realistic plan designed to save, budget, and maximize your cash flow.  If you find yourself in need of help reaching your financial independence, consider implementing these habits.

Write down what you spend:                                              

Budgeting is the foundation of personal finances at any stage of your life, not just for those starting to “adult”.  So if you’re new to budgeting, the first step is to write down all of what you spend: it could be the coffee you get each morning, the sofa you purchased for your apartment or house, or the monthly charge for the streaming video service you use.

The idea behind a budget is not to limit what you do with your money, but more importantly to maximize the money you work hard for each and every day.   It is a huge eye opener when you start to add up everything. It also becomes clear where you are wasting money and could cut back.  Cutting out even small things, such as that coffee or a pop purchase each day could save you over $100 per month.

Best of all, technology has made it easier to connect you with your finances and spending habits from the comforts of your own mobile phone or tablet. There are a variety of free budgeting apps available to you that will basically do all the tracking of your spending so it’s there each and every day to review as needed.

Create clear financial boundaries:

Ignoring the “Joneses” can be one of the biggest battles when making practical decisions regarding your finances.  You will soon realize that spending outside of what your budget can handle could push you further away from saving money and much further into debt.  “Can I do without this?” is one of the questions you should be asking when making a sizable purchase such as a new automobile, or buying/renting in the new trendy neighborhood. For example, it may be a difficult decision to stick with a used car that is already paid off instead of buying a brand new vehicle after college – but it was a smart one.

One thing you could consider is the “50-20-30 rule.”  Experts state that we should spend 50% of our monthly income on necessities, which would include utilities, food, and rent.   The next 20% would be allotted to savings and debt, such as paying off any loans or student debt.  The last 30% of your income would be for personal purchases, things like your mobile phone plan, internet/cable/streaming services, etc.  Staying within these guidelines can set forth financial boundaries that will cultivate a healthy financial future.  Forget the noise of the Joneses and stay within your means.  Eventually, you’ll build up your finances and leave others in your financial dust.

Paying yourself is priority #1:

When it comes to managing your finances and becoming more independent, you have permission to be a bit selfish.  To clarify, prioritizing paying yourself above and before you pay anything else is highly important when it comes to having a successful financial future.  No one can avoid unexpected expenses or financial emergencies, but like a Boy/Girl Scout, you should “be prepared.”

Having a savings plan will also keep you from accumulating debt with credit cards and loans.  It will help you learn to live and be content on a smaller budget.  A suggestion would be to start putting a small amount into your savings each month.  Maybe you can’t do 10% of your paycheck, but even 5% is better than nothing and it provides you with the opportunity to make saving a financial habit.

Many employers have made it easier for their employees to streamline their savings by offering direct deposit options, where a portion of your paycheck is put into your savings or a money market account each time you get paid.  You can also set up a process to transfer from a core bank account to a long-term savings or investment account so your financial future is automatically being handled.

Keep in mind that as you achieve your savings goals, you can increase the amount based on what you can afford.  It’s also smart to contribute as much as you can to your employer’s 403b or 401k retirement savings plan.  This money can be taken out of your check even before you get paid so it’s likely that you won’t even miss it. You will likely experience long-term tax benefits as well.

Information courtesy of GreenPath financial wellness.

Need additional help? 

We offer our members access to money management and financial education services through GreenPath Financial Wellness.  As a member, you can receive assistance with:

  • Personal and family budgeting
  • Understanding your personal credit report and how to improve your score
  • Personal money management
  • Debt repayment
  • Avoiding bankruptcy, foreclosure, and repossession

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How to get out from under student loans


graduate smallerIf you’re a recent college graduate who took out student loans, you likely owe about $35,000. As eye-popping as that average debt figure is, you’re certainly not the only one wondering how you’ll possibly get out from under your loans. As with any difficult assignment, though, research and a well-thought-out plan will help you tackle even the most challenging of debt situations.

Making use of the following strategies will help you dig your way out of student debt. Here’s a look at where to get started.

KNOW WHAT YOU OWE

First things first: Figure out what your monthly payments should be. To do that, use one of a handful of repayment calculators. These tools let you plug in the total amount that you owe along with your loans’ interest rates and term lengths. You’ll get a better sense of how much you should be paying each month if you want to take care of your debt within a certain amount of time.

ADJUST YOUR MONTHLY BUDGET ACCORDINGLY

Knowing how much money you’ll need to put toward eliminating your student debt each month will help you adjust your budget. That may mean making tough decisions like cutting back on nonessential expenses.

Remember: Every extra dollar you put toward your debt reduces the total amount of interest you’ll end up paying over the life of your loan, so it’s well worth the effort.

CONSIDER AUTOMATIC PAYMENTS

To ensure that you make your monthly payments on time, set up automatic deductions from your checking account. The way it works is easy: Your student loan servicer simply subtracts what you owe from your account whenever your payment is due. Your lender may even offer you a discount if you choose this option, which can be much more convenient than writing and sending a check every month. Just be sure that there’s enough money in your checking account so that you aren’t hit with overdraft fees.

SWITCH UP YOUR REPAYMENT PLAN

If you’re still struggling to put money toward your student debt, consider changing your repayment plan on federal loans, which you can do whenever you want. You may, for example, opt to switch from standard repayments —which have you contributing a set amount each month over a period of about 10 years — to graduated repayment, which is when your payments start out lower and increase over time.

Extended repayments, on the other hand, give you additional time to pay back your loans, sometimes up to 25 years, if your debt is more than $30,000 and you meet certain other requirements. Other plans, aimed at borrowers whose federal student loan debt is high relative to their income and family size, are income-based. If you qualify, the payments you owe are based on how much you earn every year. Although any of these plans can ease your monthly payment, you’ll end up paying more for your loan over time than you would if you had stuck with the standard 10-year plan.

Private lenders typically have stricter policies, but it’s still worth checking to see whether there’s any way to adjust your repayment plan with them.

FINAL WORD

If you’re a teacher or a public servant, you may qualify for student loan forgiveness. Otherwise, your last resort may be opting for forbearance, which means you can stop or reduce payments for a month or two. However, because interest continues to accrue, this course of action is better avoided.

With all that said, what you definitely don’t want to do is default on your loans. When you do that, the entire unpaid balance of your loan is due immediately, and you also lose the right to defer or change your repayment plan.

Breaking down the repayment process into smaller steps will make your student debt feel less overwhelming. Although it may take several years to wipe it out completely, a carefully crafted plan will set you up for success down the road.

© Copyright 2018 NerdWallet, Inc. All Rights Reserved


Members 1st can help with refinancing your current student loans.

Visit members1st.org or contact out 24-hour call center at (800) 369-4980 with questions or to apply!


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Getting hitched doesn’t need to mean marrying finances


Marriage generally implies that two homes and lives become one. Should it also involvebride & groom a complete merging of earnings, assets and expenses? With money arguments being one of the leading causes of failed marriages, combining finances can be scary. For some couples it’s the right approach, but there are several other options.

THE TRADITIONAL APPROACH

Just a few generations ago, one spouse was generally the breadwinner who paid all the bills. Although today most marriages involve two people who work, the traditional approach isn’t entirely obsolete. It can be effective when one partner is a stay at home parent or full-time student, or one spouse earns much more than the other. It’s also appropriate for couples choosing to bank one income to save for shared goals, such as a down payment for a home. Single breadwinner couples may merge assets or maintain separate accounts.

This type of arrangement works best when both partners have similar financial styles so that no one ends up feeling like a child having to ask for spending money or resenting the other for spending too much.

THE SHARE-EVERYTHING APPROACH

With this option, couples completely merge financial assets and responsibilities. All investments and debts are in both names and bills are typically paid from one joint account. Sharing everything works particularly well for couples that enter marriage with similar incomes and limited assets. As with the traditional approach, it’s vital that spouses have compatible styles to avoid feelings of resentment or deprivation.

THE FOUR-ACCOUNTS APPROACH

Sharing is beautiful but sometimes it’s also nice to have a little something of your own. With this arrangement, both partners contribute equally to a joint checking account used to handle household expenses and joint savings to reach shared goals. Their remaining income is deposited to individual accounts to be saved or spent at each partner’s discretion. This approach makes sense for couples with comparable incomes and debts, or when one partner is much more frugal than the other, since it lets both manage money as they see fit without straining the relationship. In cases where one spouse earns substantially more than the other, couples may want to contribute a percentage of their income as opposed to a fixed monthly amount to the joint accounts.

THE WHAT’S-MINE-IS-MINE APPROACH

Some couples may simply be more comfortable maintaining totally separate assets and liabilities. With this approach responsibility for household expenses may be split equally, divided according to ability to pay, or each spouse may pick which bills to cover. Keeping finances separate may make sense if one partner has a much larger income, net worth or debt than the other. When entering into marriage with vastly different financial positions, it’s also a good idea to consider a prenuptial agreement, whether or not separate or joint accounts are maintained.

WHICH WAY IS BEST?

Whether and how completely to merge finances is ultimately a matter of individual style. With honest communication and trust, any of these vastly different approaches can work, giving those who choose what feels right a good chance at avoiding the bitter money conflicts that plague so many married couples.

© Copyright 2018 NerdWallet, Inc. All Rights Reserved


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Happy Father’s Day


FathersDay

Get to Snapping!


TIME IS RUNNING OUT!

Now is a good time to be snapping those photos or digging through your digital files so that YOU can submit your entry for consideration for publication in our 2019 Calendar. We don’t want you to be among the “I wish I woulda” group when your chance to enter passes you by. We are accepting entries now through June 29, 2018.

If your photo is selected you could win a $150 Visa® Gift Card! That’s not too shabby!

Guidelines: Photos must not contain people and should be horizontal orientation; JPEG or PNG; the higher the resolution, the better the photo quality!

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For a more details, click here.

 

Submit your entryclick here.

Make The Most of Your Vacation Budget


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Vacationing within a budget is becoming easier every day. Even impromptu planning can lead to big money savings.

With websites like Groupon, Priceline and Airbnb you can have a lot of control over where, when and how much your vacation will cost. Each avenue of vacationing comes with its own set of pros and cons:

Airbnb This is a great place to look if you want to vacation like a local. You can rent out a bed, a room, or even a whole house! You get the comforts of a home and don’t have to worry about room service waking you up too early. Just be sure to read the house rules and check out the cancelation policies before booking. Some Airbnbs even allow you to bring your pet along and you can chat with the host before hand so you feel more like a local.

Travel Deal Sites There are many websites out there trying to help you find the best deal for your money. Some even let you name your own price! If you enjoy the unknown, you can potentially stay at a 5-star hotel for a more affordable price by utilizing offers like Priceline’s Express Deals. You book a hotel without knowing which hotel it is until after you’ve booked. Be on the look out for non-refundable pre-payments and other details in the fine print.

Groupon Getaways If you are unsure of what you want for vacation this is a good place to start because you can look at options based on location or interests. Some of the Groupon Getaways are all-inclusive with airfare and even vehicle rental! Make sure to read the fine print because there are often strict booking timelines and limited airport locations.

These are just a few tips on how to make the most of your vacation budget. Regardless of how you vacation don’t forget to let us know so that you can enjoy your vacation without the headache of interrupted card experience. For more information on how to put a Travel Notification on your Members 1st Visa Credit Card or Debit Card click here!

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How to Help Aging Parents Without Going Broke


elderly coupleThe stress involved in being a care provider for your parents is twofold: You want to make sure they’re not in pain, while making sure that you don’t hurt yourself financially. The balance is a delicate one.

Almost a third of adults ages 40 to 59 have provided financial support to a parent in the previous year, according to a recent Pew Research report. If you’re in that situation, see what you can do to help without burning through your savings or going into debt.

Understand your parents’ finances 

If you’re not used to asking your parents about their money situation, this can be a hard topic to broach. But it’s necessary. You want to know upfront about how far their funds will take them, including retirement savings, pensions and Social Security payments. A more important question is: Can they afford assisted living or a nursing home, should that become necessary, and for how long? Also check their insurance coverage should they need expensive drugs or extended hospital care.

Evaluate health coverage

Make sure your parents will have a way to handle future health costs. Although Medicare can cover hospital, medical and prescription drug costs, there are limits, and some expenses may need to be paid out of pocket. Look into options like the Medicare Savings Program for your state, and also use the National Council on Aging’s free service, BenefitsCheckUp.org, to see what other help may be available to your parents.

Get professional advice

Once it’s clear that your parents will need more help soon, get a geriatric care manager to assess the situation. These professionals work with families to determine the best course of action for quality of life in terms of housing, legal services, home care and other assistance. Who is best fit to hold a power of attorney for your parents, for instance, is an issue they can help you sort out.

Get family involved

If you’re not an only child or if you have family members who can help, don’t try to do it all on your own. It can burn you out, and sharing the financial costs with other relatives can help ensure that it’s a family effort.

Consider hospice care

Sending your parents to a nursing home might not be the best option. If a parent has a terminal illness, hospice can be a good alternative, and Medicare or Medicaid may cover all the costs, including care, medicine and other supplies. You’ll have to make sure the arrangement is approved through your parent’s health coverage. Also note that any conditions unrelated to a covered illness may not come under hospice benefits.

By checking on programs and services that can help your parents, you can make supporting them financially a last resort instead of your first.

© Copyright 2016 NerdWallet, Inc. All Rights Reserved


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To learn more, contact a licensed representative at (800) 283-2328, ext. 5245.

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