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Gratitude and Credit Unions. Can they Coexist? 

By: Austin Rigby
November 20, 2014

I LOVE THANKSGIVING! Let me paint a picture for you…The morning starts off with my dad, sisters, and I driving into town for the annual Turkey Bowl. After touchdowns, missed tackles, and injury close calls, we drive home and kerplop on the couch. While we try to be lazy and watch football, my mom tries to rouse us kids to help with the Thanksgiving meal. Eventually this tug-of-war ends, when the meal begins. There is nothing like sitting down to a meal with your parents, sisters, crazy uncles, loving aunts, cousins, and neighbors. Then there is the feast. It is filled with turkey, stuffing, hot rolls, mashed potatoes, sweet potatoes, cranberry salad, and did I mention the mashed potatoes? FYI, I LOVE MASHED POTATOES! After dinner, we end up trickling back in front of the TV to watch the next football game. Then, to the displeasure of our bodies, we return to the kitchen for pie. I think I could survive on a diet of just mashed potatoes and pie! Games, football, sleeping, and picking at food continues for the rest of the evening. There is nothing like Thanksgiving!

But there is one part that I look forward to the most about Thanksgiving. More than football. More than sleep. Even more than pie and mashed potatoes. It is the gratitude shared. As we are sitting there ready to dig into the feast, my dad expresses some of the things for which he is grateful. Then slowly, one-by-one, we go around sharing with our loved ones the things that matter most to us. While we are waiting to feed our faces, we take a few moments to feed our souls. Now we aren’t perfect, someone always tries to “sample” some of the food while we share what we are thankful for, but this can’t outdo the effect on us, how this brings us closer together as a family.

Gratitude is a gift, especially when we share it with loved ones. As G.K. Chesterton said, “I would maintain that thanks are the highest form of thought; and that gratitude is happiness doubled by wonder.” So for this Thanksgiving, I want to share with you some of the things that I am grateful for. I am grateful for car heaters (mine is nonexistent), getting my college degree, my family, smiles, raspberry pie, and credit unions. There I said it: credit unions. It might seem kind of self-promoting if I am talking about how I’m grateful for credit unions on a credit union Web site, but let me explain.

When I was a kid, I came home from school one day and saw boxes sitting on the dining room table. My parents came into the room and went on to declare that my dad had decided to walk away from his job…“but don’t worry,” they said. “He will have a new one in the max of six months.” My new worries vanished, and my sisters and I decided to carry on with life. Time passed, and soon we hit the six-month mark and still my dad had no job. Then we hit the 10-month, then a year, then a year and a half, and THEN two years. I couldn’t believe it; my parents promised that Dad would have a job by now. A few weeks latter, I came home from school to hear some good news: my dad had a job interview with a credit union. When he told us kids this, I wondered what in the world is a credit union? To our delight, my dad got the job and blessings have followed. One blessing is that with a job, my dad could buy food for us to eat, clothes to wear, and supplies to go to school. Secondly, because my dad worked at a credit union, I have had an opportunity to see how they worked, first-hand. You may have heard that credit unions value their financial participants. If you are a part of a credit union, you become a member, and instantly part of a big family. At the credit union my dad works at, I have seen countless people coming in and developing friendships with the tellers, loan officers, and administrative staff. Credit unions have that family feel, which mirrors what I love about my own family. I am grateful that credit unions have helped my family and given them a financial institution that treats them like family.

Henry David Thoreau said, “I am grateful for what I am and have. 
My thanksgiving is perpetual... O how I laugh when I think of my vague indefinite riches. 
No run on my bank can drain it for my wealth is not possession but enjoyment.” This Thanksgiving season I invite you to think about the things for which you are grateful. We learn from Mr. Thoreau that gratitude is one account you can’t over-take from. As you think about the things for which you are grateful, write them down, and share them with those you love or with us here at Banking You Can Trust. Looking at the things for which you are grateful will give you an opportunity to reflect on the good things in life before attacking the problems. G. B. Stern said, “Silent gratitude isn’t much use to anyone.” So, share.

Actually, the Research Shows! 

By: Austin Rigby
November 18, 2014

American Customer Satisfaction Index Ranks Credit Unions as No. 1 in Financial Services

When I was in college, I had a sociology professor who told us students about his experiences whenever he interacted with colleges, neighbors, and friends. He was surprised to hear people proclaim “facts” about different subjects, when these “facts” were based off of their opinions or misguided “common sense.” Whenever my professor heard such an outlandish remark, he would reply “actually, the research shows,” and then go on from there with legitimate research to support such claims. Many times after my professor got done rebuking the audience with actual research, they would be stunned and walk away.

While many people have different opinions when it comes to comparing banks with credit unions, lets follow my professor’s advice and “actually see what the research shows.” The American Customer Satisfaction Index (ACSI) released this month included findings about customer satisfaction amongst different financial institutions. To quote the Credit Union National Association, “ACSI is the only national cross-industry measure of customer satisfaction in the United States. The Index measures the satisfaction of U.S. household consumers with the quality of products and services offered by both foreign and domestic firms with significant share in U.S. markets.”

And in this research, credit unions ranked first in customer satisfaction with a score of 85 out of 100, while the average bank score was at 76.

So what measures was ACSI using in their research? Some aspects were expectations, quality, value, loyalty, and lower complaint rates. Guess who had better scores on each component? Yes you got it; it was credit unions!

Claes Fornell, ACSI Chairman and founder had this to say: “A growing number of consumers are finding that the best way to avoid bank fees may be to avoid banks altogether. Credit union membership growth broke records in 2014, and their customers are far more satisfied. The structure of credit unions means they can charge lower and fewer fees, but they still manage to provide superior service in nearly every area, from tellers to websites. Banks can’t easily give up the revenue that fees generate, but clearly the pressure is on to improve service.” Is this opinion? No! It’s fact!

The research from ACSI continues to support credit unions. ACSI found credit unions were first in five categories within financial institutions. They were first in the availability of products and services, the ease of making account changes, interest rate competitiveness, in understanding account information, and in courtesy and helpful staff.

Still don’t believe the research? Well, two independent sources measured consumer trust between credit unions and banks. In August, the Chicago Booth and Kellogg School Financial Trust found that credit unions received a trustworthy score of 60% in comparison with banks who had a score of 30%. Just last month, a Harris poll found that credit unions have more trust than banks. Trust in credit unions is even staying steady, while banks’ trust is declining.

Why are customers finding credit unions to be more useful in their financial needs? The research shows a couple of reasons. One reason is because at credit unions, people aren’t seen as customers but as members. By being a member, people have their own voice about the direction the financial institution goes. Also every member of a credit union has an equal share of ownership. This means the members of the board have an equal percent of ownership as the new guy who just opened an account.

The second reason why customers members are finding credit unions more useful is that they have higher expectations out of their financial institution. The members want it better, so the staff members at the credit unions do all they can to provide this. The past two years, member expectations have increased with a byproduct of increased satisfaction scores for credit unions.

Third, people are far more loyal to credit unions than banks. In the ACSI survey it was found that people would continue to do business with credit unions is higher (nearly 20%) than all other measured financial institutions.

So take your newly acquired knowledge and whenever someone brings up how banks are better than credit unions, you can proudly proclaim, “Actually, the research shows!”

Halloween: How Do You Stash Your Earnings?...I Mean Candy? 

By: Austin Rigby
October 31, 2014 Categories: halloween halloween saving

Kids have Halloween. What holiday do we have?

Once a year thousands of kids dress up as witches, princesses, Captain Americas, and anything else you can imagine. They can be whatever and whoever they want. After taking on these new identities, they walk door-to-door seeking a treasure haul of a lifetime: armfuls and armfuls of candy.

Think back to those days when you’d don makeup, wigs, masks and witch’s brooms…you were dressing up as something you’re not, maybe even something you aspire to be (not a ghost or goblin, per say, but maybe Babe Ruth or a pop star) and you were getting “paid” under the All Hallows Eve moon, no matter who and what you were dressed as, in sugar and chocolate. 

How did you consume your candy? Did you gobble it all up in one night, leaving you sick with a belly ache? Did you divvy up and make piles of the different types, saving the best for last? Did you stow away some pieces in a drawer or closet so you can enjoy some after the Halloween hoopla is over?

Halloween is kids’ treasure trove holiday, where is the one for us adults?

Here is the solution, its called “Salary Day.” Just like the kids, we also would go through the process of changing our identities for a day! While kids dress like ghosts, pro football players, and pirates on Halloween, our costumes would be slightly different. We would dress in different occupations than our own such as doctors, lawyers, engineers, maybe even Bill Gates. Instead of walking from home to home, we would instead walk to banks, colleges, law firms, Wall Street, etc., and receive from each a weeks worth of pay within the respected professions in which we dressed up as. When we returned home, within our arms WE would have a treasure trove of a lifetime. Unlike candy, we could use this to pay off car loans, take ballet lessons, finally take that family vacation to visit Aunt Marge, or even BUY a lifetime supply of candy.

Sounds a little bit like real-life condensed in a day, right? Now that you’re all grown up, you don’t just get “dressed up” for a “job” only one day a year. Or get paid in candy. And, no, work usually isn’t as much fun as running amuck with all your friends, a pillowcase of goodies in your hand.

But you’re still earning something priceless. Now, as an adult, how do you stow away your candy….or shall I say earnings? Do you spend it all in one night feeling somewhat sick the next morning? Do you split it between accounts, spending a little here and there? Do you stow some away for a rainy day?

Unless something crazy happens, I don’t think my genius idea of “Salary Day” is going to happen anytime soon.

But we can learn a little something by looking back at the habits of our Halloween youth and apply those lessons to our adult selves. Whether we’re “dressed up” as a doctor, astronaut or pro baseball player, or something a little less exciting like a manager or student…we must make sure that we hold back on the urge to splurge and keep a little something sweet stowed away for a rainy (or spooky) day.

And because this is a blog dedicated to the benefits of credit unions, what’s the harm in shamelessly plugging the benefits of storing your cash someplace a little less scary than a traditional bank. Credit unions are non-profit organizations run by their own members that pool their resources for the benefit of those members. Because their profits aren’t going into the pockets of shareholders, credit unions can offer many benefits to members, such as lower rates on loans and higher rates on savings accounts. Also, credit unions don’t care what your occupation is, all they care about is that you’re a MEMBER, which means you are also an OWNER. Being a member means YOU have a voice within the financial institution, and that the employees will do whatever is possible to take care of you.

I will submit my “Salary Day” idea to congress so we can get it passed as a holiday, but in the meantime grab your own money by joining a credit union today!

4 Rules to Live By When Making an Offer on a House 

August 06, 2014

Buying a house is a little like asking someone to marry you (scary, right?). In both cases, you make your offer believing there's a good chance you'll get a yes, but you know you could get a no. If the answer is yes in either situation, your fates will be linked for many years to come—possibly until “death do you part”. But if you don't get an immediate answer, the wait can be excruciating. A recent article by U.S. News & World Report may not be able to help you with your love life, but if you want your house offer to be greeted with a yes—and a quick one—here are four rules U.S. News & World Report recommends you follow when putting yourself out there to get the right “yes”.

1. Be likable. The old saying is true: money talks. But so do you. And you don't want to say anything that could turn off a seller. Besides, even though they’re selling their house, it’s still their home until it sells.

"You're most likely buying someone's home that they have memories and a lot of emotional ties to," says Marc Takacs, a real estate agent with Keller Williams Realty in Atlanta. So if the seller is present when you see the house, keep quiet about your grand plans for landscaping or knocking down a wall in the living room.

"Don't tell someone how bad, ugly, stupid, et cetera, that someone's house is, and then try to buy it. That doesn't work," Takacs says.

Well, it might, if the homeowner is desperate and primed to sell, but if there are other buyers circling, you've given the seller an excuse—and a personal one at that—to reject your offer and accept someone else’s.

Another no-no, according to Takacs, is being high-maintenance. "Don't overstay your welcome," he advises. "I don’t think anything irritates a seller more than when a buyer visits a house too much or stays for too long."

He also suggests that when you submit your offer, avoid making unreasonable demands such as a lightning-fast closing date. "Try to be considerate of the fact people are trying to carry on with their lives, move, and all the other stuff that goes along with that. Being pushed out of your house can be very unsettling," Takacs says.

2. Don't be stingy with your offer, but don’t go overboard. If you offer exactly what the seller is asking, you will get his or her attention and probably their respect and appreciation. In many cases, your offer will be accepted. Offer a tad bit more, and you may chase other buyers away whose offers are at or below the list price.

At the other end of the spectrum, a lowball offer may insult the homeowner. In some instances, it may be shrewd to offer significantly less than the list price, but first consult your real estate agent, who will probably have the best read on what your seller is likely to accept.

A VERY important rule of thumb: If you’re looking to make the strongest offer possible, make sure it’s not so high that you can’t afford it, warns Kelly Long, a Chicago-based money coach and member of the National CPA Financial Literacy Commission. "Don't offer more than you can practically afford, even if you're approved for more," she says, adding that this can easily happen if you're looking at a house that's out of your price range.

"If you buy it for more than you can afford, you'll end up hating the house and yourself in the long run," she says.

That’s because the more expensive your house is, the higher your monthly payments will likely be. Long points to the rule of thumb that a monthly payment shouldn't exceed more than 28% of your gross income. That includes taxes and insurance, she adds. Stay within budget.

3. Be ready for a yes. Yeses can be just as daunting as nos. If the seller says no, the next steps are clear enough: You make a better offer, or continue house hunting. But even if the seller accepts the offer, you don't have those front door keys yet.

"You may be preapproved based on your credit report and supplying your W-2, but the [mortgage] application process is much more involved and requires extensive documentation in a short window of time," Long says. "Make sure you have some time set aside to gather all the necessary information in the week following the offer’s acceptance. You’ll also need to schedule, attend and pay for an inspection in that first week, so make sure you have the money on hand to pay for that."

4. Don't sabotage yourself to seal the deal. Speaking of that contract, be careful about what you put in it.

Yes, you want the house. You want the sellers to like you. But in an effort to get those keys from the sellers, don't be their doormat.

According to Kent Sisk, an account executive at NexTitle, a title and escrow agency based in Bellevue, Washington, "the market is so hot right now [that] many buyers are waiving the inspection period, sometimes waiving the inspection altogether, in order to get their offer approved."

Not smart, Sisk says.

After all, you don’t want to learn after you buy the house that the roof leaks or there's mold hidden away in the ventilation. Or you may end up berating yourself if you waive the appraisal contingency, which lets you back out of the deal if the lender concludes the appraised value is less the sale price, and later learn that you vastly overpaid for your home.

Ideally, your offer will be one that makes everyone, the seller and you, happy and reassured that everything between now and the closing will go smoothly. If you feel like you need to win this house at all costs and things go badly after your offer is accepted, not only will you lose—it will definitely cost you.

"Out of sight, out of mind" Financial Philosophy. How cookies taught me to be better with my money. 

By: Gabrielle Leach

Cookies are great. My will power is not. The other day I sat down with a roll of Oreos while I was watching late night TV. As Jimmy Fallon was telling his jokes I was sitting comfortably on the couch blissfully eating my cookies, until I sadly realized I had only one left. Unsure how I had managed to eat an entire sleeve of cookies I rationalized with myself about the final one:

If I eat it, I would have no cookies for tomorrow.

But it is only one cookie, and cookies are there to be eaten. After all I will probably get more cookies in the future.

But I know that it is bad for me to eat all of the cookies, and I know I am going to regret this when I wake up tomorrow.

Oh well, YOLO, after all I’m young, and it’s not that big of a deal

I gave into the little devil on my shoulder and of course the next morning I saw the cookies again as I stepped onto the scale. It’s funny how bad decisions tend to remind you that you’ve made them. I wanted to fix this problem so that I would be unlikely to easily give into temptation again. I then went down to the pantry and hid the rest of the Oreos. Out of sight, Out of mind. It was at this moment that I realized I rationalized eating that last cookie the way I rationalize spending my money.

“Out of sight, Out of mind” philosophy can be applied to cookies, as well as finance. If you’re like me, and have moments of impulsive weakness, you may see some irregularities in your monthly spending.  Opening up a second bank account, separate to the one you regularly use, can really help you save up an emergency fund. Sometimes seeing a lot of money in one account can make you feel as though the money is there to spend. By separating the money into two different accounts, you can save money with out realizing it.  

Currently I have an account at a credit union as well as a traditional bank. I use my traditional bank account regularly but I keep my emergency fund with my credit union because they offer better rates and have a very low minimum balance, so I wont get charged if I have to use everything in the account. Each month I automatically put a piece of my paycheck into my second account for my emergency fund. I find that this system gives me the ability to control my money and the peace of mind that comes with financial security.

While eating the last cookie isn’t nearly as dangerous as spending your last dollar, the same philosophy can still be applied to help you manage your will power. Cookies are great. Overindulgence is not. By understanding your financial weaknesses and utilizing different tactics to most effectively manage your money, you can afford to buy your cookies, and eat them too.

The Fitness-Finance Connection 

By: Gabrielle Leach
July 09, 2014 Categories: fitness health

Many people strive for the same goal—to have their scales weigh less and their wallets weigh more. But could improving ones physical fitness provoke positive signs fiscally? Recent studies have shown a connection between living a healthy lifestyle and managing healthy finances.

More Exercise = More Productivity
Increasing your daily exercise can lead to an increased performance at work allowing you better opportunities for raises and promotions. A study, published in the Journal of Occupational and Environmental Medicine (JOEM), illustrates that workers who engage in moderate exercise have higher work-quality and better job performance than those who lead a sedentary lifestyle. According to the study, physically fit employees get along better with coworkers, take fewer sick days, and often perform more work, using less effort. This means that getting in shape could lead to increased productivity and career growth.

Less Doctor Visits
Getting sick can ruin your day and your budget. As healthcare costs increase, it is important to lower your risk by creating a healthy lifestyle and getting daily activity. Dr. Brian Martinson one of the JOEM study's lead investigators, explains that the study showed that increasing physical activity to even moderate levels was associated with declines in annual health care charges of $2,000 on average. Exercise is also a known stress reliever and can reduce your risk of getting diseases that require long-term treatment (and long-term costs), like diabetes. 

Self Discipline is Important
It isn’t news that maintaining a healthy diet and a balanced budget requires serious will power. Some researches hypothesize that by monitoring the intake of food and exercise, one will begin to analyze other areas of their consumption. The same amount of self-discipline that is required to schedule workouts and count calories can be transferred over to limiting impulsive spending and sticking to a monthly budget.

Unhealthy Habits Can Kill…Your Wallet
Costly vices like drinking alcohol and smoking cigarettes can really add up. According a study done by the U.S. Department of Labor in 2009, the average American consumer spends $49,638 each year. Of this total 0.9% is spent on alcohol and 0.7% is used to purchase tobacco products. Today, the average annual amount spent on cigarettes is close to $2,000. Eliminating unnecessary purchases can free up funds to be reallocated or saved for better use. Cutting out junk food and needless snacking can also help save some serious cash.

 

The correlation between being physically and fiscally fit is still being studied, although it’s clear a relationship exists. Leading a healthy lifestyle with moderate daily activity can improve your job performance and prevent illness. By evading sickness you can have more free time and can make better decisions about your future. This is why many employers are starting new fitness incentive programs.

While this does not mean that getting in shape will make you a millionaire, it can help teach you the habits necessary to lead a financially healthy lifestyle.

 

Credit unions are non-profit cooperative financial institutions that believe in fair and honest banking and are dedicated to the financial well-being of their members. They are able to provide superior service because they don’t report to shareholders, making their members their number one priority. To find the right credit union for you and receive more information visit www.bankingyoucantrust.com. To receive other financial articles, tips, or advice, follow our Twitter account @BankingYouTrust and find us on Facebook at www.facebook.com/bankingyoucantrust.

New Jersey credit unions will be represented at the Belmar 5 Mile Run this Saturday, July 12th and supporting the runners with refreshments. Visit our table to grab a bottle of water and information on how a credit union can help you live a well-balanced financial life. 

Lessons I’ve Learned About Being Broke in my 20s 

By: Gabrielle Leach

The fall semester of my junior year in college, I was saving all of my money to afford studying abroad in Barcelona for the spring term. While this was one of the most amazing experiences of my life, it also emptied out my piggy bank.

For the first time, I knew what it was like to be dead broke. I had only two dollars in my savings account and only $34.52 in my checking; $36.52 was all of the money I owned in the world. Thankfully, I am in a much better state financially, however, learning how to save my money maybe one of the greatest life lessons I ever learned.

I made a list of the 10 most important things I’ve learned from being a broke college kid.

1. It is possible to live off of oatmeal, grilled cheese, and leftovers for an entire semester.
While options of a meal plan are preferable to my empty kitchen cabinets, meal plans tend to be really expensive and often overpriced. I decided I would save some money and try on my chef’s hat. I would go grocery shopping with a list to avoid buying unnecessary items. I always opted for the store brand product because it was cheaper, and I would use my store loyalty card at the register to take advantage of the in-store coupons and promotions they offered. Because I lived alone, I would make one big meal and bag the leftovers for the rest of the week. Since many of the pre-made frozen dinners at the grocery store are loaded with fat and sodium, I made both my wallet and my scale happy.

2. Don’t go shopping if you can’t afford to buy anything.
I made this mistake when I first arrived home from Europe. My friend wanted to go to the mall to get a new dress for her graduation. It was months since I last saw her and even though I had no money in my account, I thought it sounded like a good way for us to hangout. As much as I love my friend, being at a store that’s filled with beautiful things, none of which I can afford, was torture. It made me feel so poor, and it tempted me to buy things I didn’t need with money I didn’t have. 

3. Live below your means.
As a waitress, I make a whopping $2.15 an hour, plus tips. Budgeting with an unsteady income is challenging, but it’s not impossible. Evaluate your priorities and prepare an emergency stash in case one week or month is slow and you still have bills. If you can’t afford to go out and drink every night, don’t.

4. Don’t rely on one income stream.
The way I look at it, if you only have one job, you are only one step away from being unemployed. I currently have three jobs. I am a waitress and I have two summer internships. It’s difficult to manage everything and I don’t have very much free time, but I am finally starting to accumulate enough money for a savings account. As much as working can suck, it’s the only way to make money and gain a valuable network for your future.

5. Moving back in with Mom and Dad is not the worst thing in the world.
I always love seeing my parents, but when I am home for an extended time period, I begin to travel back in time to high school where I have a curfew and chores. Living with them again, however, is allowing me to save my money much easier, with the added benefit of a fully stocked fridge and laundry service. I don’t mind vacuuming a few times a week if it allows me to be one step closer to financial independence.

6. Sales are a very beautiful thing.
I have so many clothes already in my closet that spending full price on something seems a little ludicrous. I still love to get new things, but by shopping at outlet stores, and going to stores like Marshalls and TJ Maxx, I can get what I need without spending my entire paycheck for the week. That being said, you are never saving money when you purchase items just because there is a great sale. You are still spending money even if it’s a good discount. Bottom line: if you don’t need it, don’t buy it.

7. A credit card bill will ALWAYS come at the end of the month.
Credit is not free money. Don’t spend anything on a credit card that you can’t afford to pay at the end of the month. Many credit card companies prey off of young college kids and sell low minimum monthly payments. Do not fall into this trap. Pay off all of your debt and avoid the obscene interest charges that follow. Once you lose your credit rating, it is very hard to build it back up.

8. A simple budget can save you a lot of financial heartbreak.
Knowing how much you make compared to how much you spend can be eye opening. I didn’t realize how much everything was actually costing me until I sat down and crunched the numbers. The amount of money I spent a week on “miscellanous” items was twice as much then I had originally planned. I evaluated my purchases and tried to find ways I could reallocate the money I was misusing. Eventually, I came up with a budget that was flexible enough to accommodate my erratic income and my impulsive spending. Any money that I budgeted to spend but didn’t use would be placed in a separate account that I could use for fun purchases. Using apps like Mint.com are a great way to keep track of your personal finances as well as create a personalized budget.

9.The diploma alone won’t get you a job.
It’s a sad fact that you can spend $100,000 on a college education and still graduate with no job. It’s even more unnerving when many entry level positions require two to three years of experience in the industry. Internships are the best way to gain experience and build a professional network. Paid or unpaid, the more internships you have, the more interested employers will be in you when it’s time to graduate. Use all of your resources to find the right internships for you, including asking family and friends and applying online. Something my mother always told me about applying for jobs was, “It’s not about what you know, it’s about who you know.”

10.Only YOU have the power to change your life!
No one likes to work crappy jobs. If you are unhappy with your life, change it. We live in an age where almost all of the information we could ever need is available with the click of a finger. Use it. Learn everything you can. Now is the time that we set our work ethic and behaviors for the rest of our lives. You, and only you, have to decide what you want and go for it. Anything you want to be is possible.

Everyone has a different strategy when it comes to managing his or her money. There is no one way for everyone. If you are looking for a student or automotive loan, explore all your banking options. You may find better rates at credit unions rather than traditional banks, which could help you avoid massive student debt. Having a goal in mind, like becoming debt free, can help steer you on the right path to a promising financial future. 

How to Manage Money in Your 30s 

Make the Right Financial Decisions and Establish Good Habits During this Pivotal Decade
March 20, 2014 Categories: saving savings tips

 

Your 30s can be a pretty significant decade. It’s a transitional point in life in the wake of post-collegiate years where your career starts to take off and you begin to settle down a bit, maybe buying a home, getting married or having kids. Or you might be planning major life adventures, like travelling or writing that novel you always meant to pen. Or, perhaps, all of the above. Whatever your path, you likely face some significant money decisions, and the choices you make can end up impacting your finances for years to come.

A report released from the Pew Research Center earlier this month shows that millennials, the oldest of whom are just entering their 30s now, face higher student debt and unemployment levels along with lower income and wealth levels compared to previous generations at the same age. A tough hill to climb. At the same time, they are optimistic about their economic futures, with most (80%) saying they have enough money now or will one day to “lead the lives they want.”

To increase the chances that such an optimistic outlook comes to fruition, here are seven money moves from U.S. New & World Report that financial experts say you should consider in your third decade:

1. Save when you can.

“If you’ve gotten your salary up to the point where student loan debt is not wreaking havoc in your life anymore, but before you have a lot of responsibilities, that’s a great opportunity to super-charge your savings,” says Jean Chatzky, financial editor of the Today Show and author of “Money Rules: The Simple Path to Lifelong Security.” When parenting responsibilities and mortgage costs take off, for example, it can be hard to save more. “You want to take advantage of the opportunities you have to sock away some money so when the leaner years come around, you don’t beat yourself up,” she adds.

2. Create solid habits.

It’s also time to establish financial habits that will serve you well for the rest of your life. Kerry Hannon, personal finance expert and author of “Great Jobs for Everyone 50+,” says in her 30s, she maxed out her retirement savings accounts and even set aside a portion of her extra freelance income for retirement. “Those funds have served me well over the years as mad money to help pay for vacations and more. I still save outside of retirement accounts religiously in my 50s, too. It's a habit I started back in my 30s,” she says.

3. Plan out your goals and priorities.

“Hopefully you’re starting to become established in your career and can begin to contribute, if you’re not already, to an employer-sponsored retirement plan, and begin to think about other savings goals, too, like a home purchase or college savings,” says Suzanna de Baca, vice president of wealth strategies at Ameriprise Financial.

Trent Hamm, founder of the personal finance Web site The Simple Dollar and a U.S. News My Money blogger, says at age 35, he’s now reflecting on his career goals for the next 30 years. “What would I like to be doing with my time and my life? I don’t want the rest of my life to be a repetition of what I’m doing now and then an abrupt retirement. I have dreams and goals, and right now is the best time to get started on them,” he says.

For many people, a financial advisor helps with that. Bart Astor, author of “AARP Roadmap for the Rest of Your Life,” says your 30s is the ideal time to sit down with a financial advisor and talk, which is what he started doing in his mid-30s. He says he and his advisor met once a year to review savings and other financial goals, especially since he and his wife were meeting their goals. “When I hit 40, the plan showed that we should have about $188,000 in assets based on our salaries, and we had over $200,000, and boy, did that make us feel good,” he says.

4. Talk about money with your partner.

If you have a spouse or partner, then getting on track together and working out any disputes can prevent conflicts later. “People often comingle finances with their partner, and open communication is key. Make sure you talk about your finances and life goals with your partner, and align on how you will get there together,” de Baca urges.

5. Get comfortable with negotiation.

Nancy L. Anderson, 52, a certified financial planner in Park City, Utah, says while she did a lot of things right in her 30s, including investing 20% of her income, buying a home, investing in rental property, and saving for her child’s college education, she also wished she had negotiated her salary more assertively. “If I’d negotiated a higher salary each time I changed companies in my career, I’d be wealthier today,” she says. Since most people change jobs about 11 times in their careers, negotiating those transitions can end up making you more than $600,000 richer over your career, she adds.

6. Be a good role model.

For those 30-somethings who are already parents, Beth Kobliner, author of “Get a Financial Life” and member of the President’s Advisory Council on Financial Capability for Young Americans, says it’s important to model smart financial choices for the little eyes watching you. “You lose all credibility lecturing your little kids about not needing every new toy or tech gadget if you, behind closed doors, have loud arguments with your spouse about not being able to keep up with your credit card bills,” she says. You don’t have to be a money genius, she adds, but it’s important to talk about money—making financial discussions as commonplace as soccer practice or Sunday dinner.

7. Shore up your cash reserves.

While many experts emphasize long-term investing and retirement savings, Tim Maurer, director of personal finance for the BAM Alliance of independent advisors, says he wishes he had kept more money in pure cash savings to give himself a better buffer for unexpected needs and expenses. “Much, maybe too much, financial planning is focused exclusively on the long, long-term," he says, "and while it’s true that real estate can be a great way to build wealth and one should start saving as early as possible for retirement, it’s the unexpected changes in life that often derail 30-something households. Our financial plans should address the short-term, too.”

Maurer points out that your 30s are often a time of “volcanic change” in your personal and professional life, and having a nicely padded bank account can help smooth over some of those transitions.

How Millenials Can Improve their Credit Scores 

Today's young adults carry lower credit balances and are less likely to pay their bills late. So why are their credit scores so low?

Financial editor of NBC’s Today Show and financial expert Jean Chatzky writes about credit cards all the time. Just last week she wrote about varying credit cards, how to know one from the other, and how to move them all in the right direction.

But, she points out in her latest article, choosing credit cards and managing them all is much easier if you “get off on the right credit foot initially”. And unfortunately, that's something many millennials aren't doing right now.

And it’s not because they’re irresponsible young adults still depending on Mommy and Daddy and racking up debt on frivolous things and then forgetting to pay the bill at the end of each month. On the contrary. According to Experian's 2013 State of Credit report, released late last year, baby boomers are actually the ones that tip the high end of the scale. They carry an average balance of $5,347 on their (again average) 2.66 credit cards. Millennials carry $2,682 on their 1.57 cards. Gen Xers and members of the Greatest Generation fall somewhere in between. Millennials aren't even highest when it comes to late payments—that dubious honor goes to the Xers.

And yet, Millennials’ credit scores aren’t reflecting the same fiscal resposibilty. A just 628, millenials’ scores have the lowest average on the list. They're more than 100 points lower, on average, than the Greatest Generation at 735. (Boomers average 700 and Xers 653, for those of you looking to see where you measure up.)

So what's the problem? Utilization. This factor—defined as the percentage of credit you have available to you that you're actually using—is responsible for about one-third of your credit score. Ideally, you want to keep that percentage under 30%. Millennials are at 37%.

Looking at these stats, it's clear that if millennials had more cards in their wallets—but continued to use them sparingly—they'd have substantially better scores. And those better scores would help them get better rates on auto loans, mortgages, insurance, and other credit cards going forward. In other words, they'd save them real money, creating a cycle of funds that will help them a lot in the long-run.

Chatzky has a few suggestions for parents on millenials who want to help them start out on the right foot and/or for millenials themselves to follow as they consider their credit scores:

  • Get a credit card. Or help your child get one. "All the parents who are weaning their kids away from credit and forcing them to use debit cards are [making a mistake]," says Maxine Sweet, vice president of consumer education at Experian. "Just like you need academic credentials you need credit." Under the Card Act, if you're under 21 you're not supposed to be able to get a credit card unless you have the income to prove you can manage it or can get someone over 21, a parent being a likely choice, to co-sign, Chatzky points out. She also points out that she’s not a fan of co-signing, but there is another way: Add a child to one of your own credit cards as an authorized user. Just make sure that the issuer will report on behalf of the child to the credit bureaus.
  • Understand how much you can/can't use the cards you have. As Chatzky points out, 30% is the line when it comes to utilization. If you can see you're going to cross it, either request an increase in your credit limit or—if you've proven to yourself that you can handle having credit—get a second card. (You'll want to use that one, too, but sparingly. Just enough so that the issuer doesn't quit you. Then be sure to pay it off entirely every month.)
  • If the thought of getting another card rubs you the wrong way and you know your utilization is creeping up there over the course of your monthly billing cycle, try this: Pay your bill in-between. Sweet explains that'll reset the clock and help boost that portion of your score. If you're carrying a balance, it'll save you some scratch on interest as well.

CNN Money: Not enough money in America's 401(k)s 

February 25, 2014

Despite the surging stock market bringing balances to record highs, the average Fidelity 401(k) account has less than $100,000 in it. That's just not enough.

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