Four To-Do’s for Effective Bill Paying


Angry Couple With Credit Cards And Bills

The Federal Reserve recently estimated that nearly half of US households are unable to pay their credit card bills in full each month, and owe an average of more than $15,000, spread across an average of four credit cards.*  GreenPath is sharing four tips to help you get your bills paid on time.

1. Make a list. Create a master list of your bills, when they are due and the monthly amount. You will need to refer to this list, when you are actually paying the bills. If the bill is automatically deducted from your account, you will want to note that as well.

2. Put it on the calendar. Schedule a time for yourself to pay your bills. It will never to be easier to pay your bills than on the day you get paid. If you are generally the type to pay bills on their due date, this is a break from your routine. If you are paid twice a month, you will pay bills twice a month. Likewise, if you are paid weekly, you will pay your bills weekly.

3. Create a paycheck plan. This is probably the most critical part and where people run into the most trouble. You may notice that more of your bills are due at one time of the month over another. You may need to pay most bills on one check and very few on another. This is critical information. If your cell phone, car payment and rent payment are all due on the first, you may need to pay your car note and cell phone early, so that you only have to cover your rent on the next check.

Once you have this down, bills can go into “cruise control”. For example, you may get into a routine where you always pay certain bills with your first check of the month and the other bills with your second check. There is no more guessing and it becomes routine.

4. Ask for your due date to be changed, if needed. If you do not have the ability to pay bills early, the other option is to call and ask for due dates to be changed. Also, understand which bills have a grace period (common with auto loans and mortgages). Many companies will change their due dates, including many credit card companies, student loan servicers, or utility companies.

*(SOURCE: http://www.forbes.com/sites/moneybuilder/2016/12/30/ this-week-in-credit-card-news-best-way-to-pay-off-credit-card-debtconcerns-about-mobile-wallets/#5cba800e546d)


Struggling to pay your debt? Looking for budgeting or financial advice?

Call GreenPath Financial Services – a partner of Members 1st Federal Credit Union.

(877) 337-3399 or greenpathref.com


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Looking for a convenient way to pay bills?

Sign up for Bill Pay!

Pre-schedule your bills so that they are paid in a timely fashion. Schedule your payments ahead of time, or request same-day payments if they are scheduled before 11 a.m. the same day.

Click here for more information or to sign up.

Or call us at (717) 237-7288.

New Cash Now? Consider a Home Equity Loan


College tuition bills due? Someone getting married? Have unexpected medical bills? Want to renovate or remodel? Looking to consolidate bills?

Home maintenance

Consider a home equity loan. This is the type of loan that allows you to borrow against the value of your home. It is an additional mortgage on your home. The first mortgage is the one you used to actually purchase your home. This second mortgage, i.e., your home equity loan, borrows against the property if you have built up enough equity in it.

So what are the benefits of borrowing against the equity in your home?

  • Home equity loans typically have a lower interest rate (APR) than other types of loans you may need when you need extra cash for something
  • They may be easier to qualify for because your home becomes your collateral
  • The interest on your home equity loan may be a tax deduction, but you should talk to your personal tax advisor for details
  • You may borrow larger sums of money depending upon how much equity you have in your home

To begin, let’s make sure we understand these two important definitions:

Collateral is property that you pledge as a guarantee that you will repay a debt. If you don’t repay the debt, the lender can take your collateral and sell it to get its money back. With a home equity loan or line of credit, you pledge your home as collateral. You can lose the home and be forced to move out if you don’t repay what you’ve borrowed.

Equity is the difference between how much the home is worth and how much you owe on the mortgage (or mortgages, if you have a home equity loan or line of credit).

Example: Your home goes UP in value

Let’s say you buy a house for $150,000. You make a down payment of $20,000 and borrow $130,000. The day you buy the house, your equity is the same as the down payment — $20,000. $150,000 (home’s purchase price) minus $130,000 (amount owed) = $20,000 (equity).

Fast-forward five years. You have been making your monthly payments faithfully, and have paid down $13,000 of the mortgage debt, so you now owe $117,000. During the same time, the value of the house has increased. Now it is worth $200,000. Your equity is $83,000: $200,000 (home’s current appraised value) – $117,000 (amount owed) = $83,000 (equity).

Example: Your home goes DOWN in value

In the housing meltdown that affected many parts of the country, homes lost value. Instead of increasing in value, the value of the house dropped after the home was purchased. In many instances, a home equity loan would not be available.

Using the previous example, let’s say you buy a house for $150,000. You make a down payment of $20,000 and borrow $130,000. During the next five years, you paid down $13,000 of your mortgage debt.  This leaves you with a balance of $117,000.

However, as home prices fell and homes in your neighborhood went into foreclosure, your home’s value dropped by 30 percent, or $45,000, to $105,000. So now your home is worth $105,000, but you still owe $117,000. Because the value of your home is less than the amount you owe, you have negative equity and would not be eligible for a home equity loan.

Types of Home Equity Debt

There are two types of home equity debt — home equity loans and home equity lines of credit, also known as HELOCs. Both are referred to as second mortgages because they are secured by your property, just like the original mortgage. Home equity loans and lines of credit usually are repaid in a shorter period than first mortgages. Most commonly, mortgages are set up to be repaid over 30 years. Equity loans and lines of credit often have a repayment period of 15 years, although it might be as short as five and as long as 30 years.

A home equity loan is a one-time lump sum that is paid off over a set amount of time, with a fixed interest rate and the same payment amounts each month. Once you get the money, you cannot borrow further from the loan.

A home equity line of credit works more like a credit card because it has a revolving balance. A HELOC allows you to borrow up to a set amount for the life of the loan. During that time, you can withdraw money as you need it. As you pay off the principal, you can use the credit again like a credit card. A HELOC gives you more flexibility than a fixed-rate home equity loan. It also is possible to remain in debt with a home equity loan, paying only interest and not paying down principal.

HELOC Terms and Repayment

A line of credit generally has a variable interest rate that fluctuates over the life of the loan. Payments vary depending on the interest rate, the amount owed and whether the credit line is in the draw period or the repayment period. During the equity line’s draw period, you can borrow against it and the minimum monthly payments cover only the interest, although you can elect to pay principal. During the repayment period, you can’t add new debt and must repay the balance over the remaining life of the loan.

The draw period often is five or 10 years, and the repayment period typically is 10 or 15 years. Those are generalizations, and each lender can set its own draw and repayment periods. A line of credit is accessed by check, credit card or electronic transfer requested by the consumer. Lenders often require you to take an initial advance when you set up the loan, withdraw a minimum amount each time you dip into it and keep a minimum amount outstanding.

Finally, with either a home equity loan or a line of credit, you must repay the loan in full anytime you sell the home.


 Come to Members 1st for your

Home Equity Loan!

We have special rates on 10 year fixed and 15 year fixed rate home equity loans.

Click here for more information!

We also have a great HELOC introductory rate!

Click here for HELOC information.

To apply for either loan click here or go to Members 1st Online.

Questions? Call us at (800) 238-2328, ext. 6040.


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Entries now being accepted for our 2018 Calendar Photo Contest


2018 calendar contest main graphic

Do you enjoy taking pictures? Ever consider entering a photo contest? We invite you to enter our 2018 Calendar Photo Contest.

Photo subject may be about anything you see through the lens of your camera.  We’ll take landscapes, animals, favorite vacation spots, landmarks, birds, architecture, blooms, insects, beaches, trains, planes, boats, cars, sunrises,  sunsets, seasons, moons & stars — the list could go on and on, as long as your photo doesn’t contain people.  Photos are not limited to Southcentral PA.

Our contest runs through June 30, 2017. For submission guidelines and contest rules, click here. Winners will be notified by phone and/or email in September. One individual’s entry will be selected for the calendar cover photo and he/she will be awarded a $100 VISA Gift Card. The 12 individuals selected for each calendar month will receive a $50 VISA Gift Card.

Our 2018 Calendar will be available at all Members 1st branch locations on International Credit Union Day, Thursday, October 19, 2017.

No purchase necessary to enter. 

 

Teach Your Little Owls to Fly with Money Talks


The first step to teaching your kids about money is talking about money.

“The most effective way to teach is by having frequent discussions and don’t ever lecture,” said Ted Beck, president and chief executive of the National Endowment for Financial Education, in a recent Wall Street Journal article. “Look for teachable moments and always be willing to answer questions.”

Unfortunately, this can also be the hardest.

A 2015 T. Rowe Price survey found that 72% of parents experienced at least some reluctance to talk to their kids about financial matters, and 18% were either very or extremely reluctant. The most common reasons given were that the parents didn’t want them to worry about financial matters or thought they were too young to understand.

But on his blog, the personal-finance guru and radio host Dave Ramsey encourages parents to be more open with their kids about money, even their failures. Parents’ biggest regrets are often not saving enough or going into too much debt, wrote Ramsey. Being honest about that in an age-appropriate way, he stated, can be a powerful lesson.

So how to start the talk?

  • Ask questions. If you’re going out to eat, talk about the price difference between the options, and ask them which they would choose. If they select the more expensive, talk through what you might have to give up later in the week.
  • Make them part of your budgeting. If you’re doing any kind of financial planning for the year, solicit input from your kids. Enlist them in your saving goals—no one watches you more closely than your kids, so they’re natural accountability partners! If you’re uncomfortable revealing too much of your financial picture, you can keep the discussions high level, but involving them makes money less abstract.
  • Open a youth savings account at Members 1st Federal Credit Union. This is the best way to help them to learn to save for what they find meaningful in life. A lifetime of good savings habits can start now! Click below to learn about Youth Month activities during the month of April at Members 1st!

 

Youth Month at Members 1st

Does Minimum Coverage Mean Minimum Protection?



In the event you cause an accident, you can become responsible to others for their injuries and/or for property damage. This is where your auto insurance liability limits come into play. Most states, including Pennsylvania, require that you purchase a minimum amount of bodily injury and property damage coverage. However, purchasing only state minimum limits may not be enough. Having adequate liability coverage can be the difference between being well protected and potential financial disaster.

woman-auto accident-2

Q. Pennsylvania requires minimum insurance coverage of 15/30/5. What does that mean?

A. Minimum liability limits of 15/30/5 means the insurance company will provide bodily injury liability coverage up to $15,000 per person injured in any one accident, and $30,000 for all persons injured in any one accident, and up to $5,000 for property damages in any one accident.

Q. If I have minimum limits, what happens if I have an accident and damages exceed my policy limits?

A. Your insurance company will only pay up to the amount of your policy limits. So, if you’ve chosen Pennsylvania’s minimum property damage limits of $5,000 and cause an accident which results in $25,000 in property damage, the insurance company will only pay $5,000, and you will be responsible for the remaining payment $20,000.

Q. Why would I want to buy more insurance than state law requires?

A. Auto insurance is your safety net, and works best if it provides proper protection. Carrying state minimum protection may be more affordable in the short term. However, because you could be personally liable for damages or injuries to others which exceed your policy limits, you should seriously consider purchasing liability insurance with limits higher than is required by state law.

Q. Is increasing my limits right for me?

A. Increasing coverage limits may not be as costly as you think. If you’re interested in protecting you and your family’s present well-being and financial future, and securing a little more peace of mind, as your independent insurance agent, we’re here to help answer any questions and help you review your available options.

The bottom line – if you’re legally responsible for damages or injuries to others which exceed your coverage limits, you’ll be responsible for the difference. The time to discover you don’t have adequate insurance/coverage is BEFORE you’re involved in an accident, not AFTER.


 

Call Members 1st Insurance Services today

for a FREE quote!*

Personal Insurance: 

(800) 283-2328, ext. 5245

Medicare, Long-Term Care, or Group Health Insurance:

(800) 283-2328, ext. 6269

Petplan Pet Insurance:

(866) 467-3875

For an instant quote, visit members1st.org » Products & Services » Insurance Services or ask at a branch for our Insurance Services brochure!

*Insurance services available to PA and MD residents only.

Financial Tips by Age Group – Decade by Decade


Mixed GenerationsThere are two “golden rules” in personal finance that apply, regardless of how old you are: 1) live within your means, and 2) look forward to the future and save for it.

These are two very simple concepts, but very powerful. If actually applied to your everyday life, they can mean the difference between being constantly stressed about your finances, and feeling secure and in control. Below are some more specific suggestions by decade.

20’s

Tip #1: Establish a positive credit history. A good way to establish good credit is to get a credit card, use it often, and pay off the ENTIRE balance ON-TIME, every month. Paying before the due date and avoiding interest charges is critical to your financial health.

Tip #2: Don’t be in a rush to move out of mom and dad’s house. If you have landed a job, take the time to get a strong financial foundation and establishing savings, before you move out on your own. Stay focused on paying down any student loan debt you may have.

30’s

Tip #1: The 30’s are when you may become established in a career and ready to purchase a home or finance a wedding. Before taking the next step, review your credit and current debt load.

Tip #2: If you are ready to purchase a home, determine how much you can afford to spend. This might be very different from the amount you are approved for by a lender. This is a big commitment. Make sure you take your future lifestyle into consideration, so that you do not feel cash strapped.

40’s

Tip #1: Be careful with the upgrades. You may be advancing in your career and ready to buy a bigger house, or nicer car, because things are going well. This is a slippery slope, so be careful!

Tip #2: Review your emergency savings. You may be socking away some money, but is it enough? There are plenty of “rules of thumb” for how much you should have in savings. Three months of expenses? Six months?  This is a personal decision with no right or wrong answer.

50’s

Tip #1: As retirement gets closer, review your debt load and retirement savings. Most of us do not want to enter our retirement years with debt. This is the decade to avoid getting further into debt, paying off existing debt, and increasing retirement savings.

Tip #2: Don’t overextend yourself helping others. You may have kids in college and aging parents, but you should never lend money that you need yourself.

60’s

Tip #1: This is the decade when most people decide to retire. Before retiring, be sure to find out exactly what your income will be and review your budget. The Social Security Administration has a retirement benefits estimator available at ssa.gov that can be used to estimate income.

Tip #2: For most of us, housing is the biggest expense in our budget. If you are a homeowner, even if your home is paid in full, there are property taxes, upkeep costs, and utilities. Consider if the home you are living in is the right fit for you as you age.

Written by Katie Bossler, GreenPath personal finance counselor

Information courtesy of GreenPath Financial Wellness


 

Visit our website at members1st.org for more educational articles and information about our low-cost products & services!

How to fund those spring home repairs


Home maintenance
Do you watch all of those home shows on the home and garden channel? We bet you have a home repair or remodeling list that’s a mile long and a price tag that will require three jobs to pay for.

Home repair and remodeling doesn’t have to break your budget. It’s often financially impossible and overwhelming and maybe even impractical to do all of the things you want to do to your home all at once. Take a step back and take a good, long and hard look at your home inside and out and prioritize the “must do’s”, “would like to do’s”, and the “this can wait.”  The last thing you want is for your home to become a major cash and emotional drain.

Here are some tips to help you figure out how to pay for it all:

Establish a home emergency fund for small repairs and appliance replacement

While every home repair store offers its own credit card, that may not be the best option for you, especially because the interest rates may be high. Establishing a home emergency fund for small repairs such as a new faucet, shutters, replacing boards on your deck or fence, landscaping needs and appliance repairs is worth the sacrifice.

Anyone who is a homeowner knows this – appliances have a buddy system. When one goes, others tend to follow. Could you afford to replace the washer, the refrigerator, and the freezer at the same time? How would you pay for those?

What if the repair is beyond what cash you have on hand?

This is where you may have to get a loan. Larger home repairs such as heating & air conditioning systems, electrical and plumbing, additions, new roofs, painting, new siding, and so on may require you to tap your home’s equity.

A home equity loan is a loan in which you borrow against the equity you have in your home. These loans are typically five to 20 year terms.  Essentially, your home is lending you money. With a  home equity loan, you get a fixed amount of money, at a fixed interest rate, for a certain amount of time.  Interest is generally tax deductible.

A home equity line of credit is a variable rate type of loan and works similar to a credit card. You have an established credit limit based on the equity in your home and you may borrow up to that limit. Your interest rate can change over the life of the loan but you are only charged interest on the amount you have outstanding. As you make payments on your line of credit, that opens up how much you can continue to borrow against your line. And, like a home equity loan, the interest is generally tax deductible.

In either case, you will need to have your home appraised to determine your home’s value. Once the value has been established, there’s a calculation that’s used to determine how much of your equity you can borrow. The calculation is simple – once the appraisal is available, multiply the value of your home by the loan to value limit set by the financial institution. Lenders typically allow you to borrow 80%, 90%, and even up to 100% of your home’s available equity. Then, subtract the first mortgage balance to determine the maximum amount you can borrow on a home equity loan or line of credit.

Example:
Home value based on appraisal: $200,000
Current first mortgage balance: $100,000
Calculation: $200,000 (home value) x 90% (loan to value allowed by lender) = $180,000
$180,000 – $100,000 (balance owed on first mortgage) = $80,000 (maximum loan or line you can get)

Whether it’s a small repair, major kitchen renovation, hardwood floors throughout the house, a yard overhaul or a painting project, we can help you finance your home repair needs throughout every season of the year.

NOTE: Members 1st Federal Credit Union offers a variety of options to help you finance any home repairs or improvements you may need. In addition to our home equity products, we also offer a signature loan and VISA Platinum Rewards Credit Card

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