7 Signs You’re Living Beyond Your Means And How To Fix Them

In the age of plastic spending and mobile payments, it’s easier than ever to buy stuff you couple looking at billscan’t pay for right away while supporting a lifestyle you can’t really afford.

Let’s take a look at seven red flags that might mean you’re living beyond your means and the steps you can take to get back on track.

1. You’re carrying a credit card balance from month to month

Credit cards are a great way to earn rewards, pay for emergency purchases when things are extra-tight and build a strong credit history. Unfortunately, though, they also make it far too easy to fall into the spending trap. It’s a lot harder to feel like you’re spending money when all that stands between you and a purchase is a plastic card.

If you have an outstanding balance on one or more credit cards and you’re only paying the minimum payment each month, you can end up carrying this balance for years while paying hundreds of dollars (or more!) in interest. You might also be tempted to make more purchases on this card since you already have an open balance.

The fix:  Try to double down on your monthly payments and/or make one extra payment each month instead of paying just the minimum amount. Stop using your card until the debt is paid off.

2. You stress about paying your bills

No one likes paying bills, but if you’re losing sleep over your bills, you need to take a step back to review your monthly budget and spending habits. Bills should be fixed into your budget and you should be able to pay them easily without any stress or nail-biting involved.

The fix: Take a long look at your monthly budget to find ways at cutting back. Cancel a subscription you never use, trim impulse purchases, start brown-bagging it at work more often or tighten the belt in any other way possible.

3. You can’t save 5% of your monthly income

Financial experts recommend putting 20% of your monthly income into savings, or even more if you can swing it. At the very least, you’ll want to sock away 5% of your monthly take-home pay to fund your retirement and any other expensive purchases or events you might need to pay for in the future. If you can’t possibly do that now, and you’re left with little or no money at the end of the month, you’re living beyond your means. Savings aren’t an extra; they are a necessity that should be a fixed part of every budget.

The fix: Again, you’ll need to trim your expenses and restructure your budget to include a minimum of 5% for savings.

4. You don’t have emergency and rainy-day funds

Unexpected expenses, like a household repair or extra tutoring for your child, can disrupt your monthly budget and really set you back-unless you have some way to pay for them. Ideally, you’ll want to have an emergency fund to cover major unexpected expenses, like a job loss or a medical emergency, and a rainy-day fund for small expenses you can anticipate, like replacing an aging appliance and sending your child to summer camp.

The fix: Start building your funds now by putting away as much as you possibly can each month.

5. Your mortgage payment eats up more than 30% of your monthly income

Most financial experts agree that your monthly mortgage payments should not exceed 30% of your take-home pay (that’s after taxes). Take a few minutes to do the math. If your mortgage is more than 30% of your income, you’re in over your hea

The fix: You have two choices here:

  1. Find ways to boost your income. You can seek a raise or promotion at your current job, freelance for hire or find another side hustle to bring home extra cash.
  2. Scale back your mortgage payments by considering a refinance. [Speak to a home loan counselor at (credit union) to see if this is the right choice for you.] If your mortgage is really crippling your budget, you might want to consider downsizing to a smaller and cheaper place.

6. You lease a car you can’t afford to buy or finance

Leasing lets you live the life of a high-roller without the huge bills. The problem is that many people can’t really afford their leases either. You might be covering your monthly payments, but if you can’t do that while also putting money into savings and meeting your other expenses, your car is too expensive.

Can you afford to pay for or finance your car? If the answer is no, you’re in financial trouble.

The fix: Downgrade your vehicle to one you can actually afford.

7. Your financial decisions are influenced by your friends’ spending habits

Thanks to social media and the hyper-sharing culture it introduced, the pressure to keep up with the Joneses is stronger than ever. If you find yourself making financial decisions-from what kind of footwear to buy to where you vacation-based on your friends’ choices, you’re likely spending more money than you can afford.

The fix: Stop looking over your shoulder and keep your eyes on your own life and your own wallet. If your friends have expensive tastes, try to be the budget-conscious influence in the group. You may just start a new, financially responsible trend!

If you’re in over your head, Destinations Credit Union can help! Stop by today. Our HOPE Inside Financial Wellbeing Counselor will be happy to help.

Your Turn: What’s your personal red flag that your spending has gotten out of control? Share it with us in the comments.

SOURCES:
https://www.google.com/amp/s/www.hermoney.com/invest/financial-planning/warning-signs-of-living-beyond-your-means/amp/

https://www.investopedia.com/articles/pf/08/in-over-your-head.asp
https://rockstarfinance.com/7-signs-that-you-might-be-living-well-beyond-your-means/

Are P2P Payment Systems Safe?

P2P payment services, like Venmo, Zelle and Square’s Cash App, are aiming to make cash4 sets of hands holding phones obsolete – and some would contend they’re succeeding! Just a few quick swipes, and you can transfer funds to a friend, pay for an item you bought online or collect money that’s owed to you.

Convenient as they are, P2P payment systems have unfortunately become a breeding ground for scams and hacks. From compromised accounts to fraudulent transactions, using a P2P service opens you to some risk of losing your money to a scammer.

Read on to learn how to better protect yourself from a P2P payment scam.

How do P2P payment scams happen?

There are lots of ways using a P2P payment system can put you at risk, but the following two vulnerabilities are most common:

1.) The bogus buyer

In most cash-transfer apps, when you receive a payment, the money goes into your P2P system balance and stays there until you transfer it to an external account or use it to pay for another transaction. This transfer usually takes one to three business days to clear. Crooked scammers are taking advantage of that “float” in the transfer process to con you out of your money.

Here’s how it works:

A scammer will contact you about an item you’ve put up for sale or tickets to an event. Together, you’ll arrange for an exchange of funds and goods. You may even take precautions against a possible scam by insisting on an in-person meeting for the exchange or refusing to send out the item until you see the money in your P2P account. Things proceed according to plan. You’re notified that the money has been sent to your account and you hand over your item. Sadly, you won’t realize you’ve been ripped off until a few days later when the money transfer does not clear and the contact has disappeared with your goods. Unfortunately, there’s no way you can get your money back, because most P2P providers will not offer compensation for a fraudulent sale. Similarly, your linked financial institution bears no responsibility for the scam and can’t help you recoup the loss.

2.) Publicized payments

PayPal’s Venmo is the only P2P app with a built-in social networking component. This feature has led to a host of privacy issues that have been brought to the attention of the Federal Trade Commission (FTC).

In short, every Venmo transaction you make is up for public scrutiny. No one can access the payment amounts, but anyone who is interested can track the restaurants where you like to eat, the clothing stores you most frequent and check out when you last filled your gas tank. Creepiness factor aside, all that information going public makes Venmo users super-vulnerable to scammers and identity thieves.

Venmo allows you to tweak your privacy settings to keep your information from going public, but most people are unaware of the issue and/or neglect to take this measure. Recently, the FTC ruled that Venmo must make this detail clearer to users. Venmo has since created a popup tutorial for all new users demonstrating how to adjust your privacy settings to keep your transactions from going public. If you choose to use Venmo, check your settings to be sure your money habits aren’t being broadcast for the world to see.

Protecting yourself

You can keep your money safe and still enjoy the convenience of cash-transfer apps with these simple steps:

  • Only send money to people you know and trust.
  • Never use a P2P service for business-related transactions.
  • When using Venmo, adjust your privacy settings and opt-out of public tracking.
  • Carefully read the terms and conditions of a P2P service before using.
  • Always choose two-factor identification and use a PIN when possible. If your app and phone allows, choose fingerprint recognition and/or touch ID for added protection.
  • Accept any security updates offered by the P2P app you use.
  • Check your recipient’s information carefully before completing a money transfer.
  • Choose to be notified about every transaction.
  • Link an external account instead of keeping your funds in the P2P account.

Your Turn: Do you think P2P systems are safe? Why, or why not? Share your take with us in the comments.

SOURCES:
https://triblive.com/business/technology/13358843-74/peer-to-peer-apps-come-with-risks-ftc-warns

https://www.consumer.ftc.gov/blog/2018/02/tips-using-peer-peer-payment-systems-and-apps
https://paymentweek.com/2018-3-30-problems-p2p-mobile-payments/
https://www.ftc.gov/news-events/events-calendar/2016/10/fintech-series-crowdfunding-peer-peer-payments
https://www.lexology.com/library/detail.aspx?g=9efa141a-40d2-4773-b930-bb395111d226
https://www.consumerreports.org/scams-fraud/how-to-protect-yourself-from-p2p-payment-scams/

Student Loan Scams

College students, take note! If keeping up with your coursework, acing your exams andPiggy bank with the words student loan written on it scrambling to hand in every term paper before the deadline weren’t enough, you now have something else to worry about: Student loan scams are on the rise. Scammers know you hate owing tens of thousands of dollars, so they’re quick to offer you an easy — but completely bogus — way to free yourself from that debt. Or, they might falsely claim you owe the feds taxes on your debt. If you’re already stressed about your student loans, that makes you an easy target.

Don’t get scammed! All it takes is a lack of knowledge and a small blunder to be out thousands of dollars.

Here’s what you need to know about the three most popular student loan scams.

1.) Student loan forgiveness scam

In this scam, a student loan debt company will reach out to you and offer to completely forgive your student loan for a relatively small fee.

Your student loan, gone? Sounds like a dream! Unfortunately, it’s more like a nightmare. No student loan company would completely forgive your loan, even for a fee. The company is likely bogus and you’ve been targeted for a scam.

This scam attempts authenticity by sounding like Public Service Loan Forgiveness, a legitimate federal government program for public servants with federal student loans. They may even claim to be connected to the U.S. Department of Education, but that is also false. If you fall for the scam, you’ll still need to pay off your loan, plus you’ll lose the money you just shelled out.

If you’re looking for student loan debt relief for your federal student loan, consider enrolling in a no-cost student loan repayment plan through the federal government. This plan might offer student loan forgiveness after 20-25 years. Unfortunately, there is no other way for a student loan to be dismissed.

2.) Student loan consolidation scam

In a scenario similar to the above scam, a student loan company will contact you promising to consolidate your loan and lower your monthly payments, all for a modest fee.

Right off the bat, you can peg this as a scam. While many institutions can refinance student loan debt, the federal government is the only entity with the power to consolidate it. And they won’t charge a fee for this service.

If you’re looking to consolidate your student loans, check out Studentloans.gov or call 1-800-557-7394.

3.) Student loan tax scam

Those tax scammers will try everything to hook a victim! In this con, a scammer will spoof the IRS’s toll-free number and call a college student, claiming they owe thousands of dollars for a “federal student loan tax.” The scammer will demand immediate payment upon threat of arrest or a lawsuit. They’ll also claim to only accept specific forms of payment, like a wire transfer or prepaid debit card.

If you’re on the receiving end of a phone call like this and you’re starting to panic, here’s a newsflash for you: the “federal student loan tax” does not exist. It is nothing more than a not-so-clever trick dreamed up by a crooked scammer.

Also, the IRS will never reach out to you by phone without first notifying you via snail mail. Nor will they demand payment over the phone or insist on a specific payment method – especially a prepaid gift card.

If you’re targeted

If you’re targeted by a student loan scam, it’s crucial that you don’t engage with the scammer. Hang up as soon as you recognize a scam and delete any suspicious emails about your student loan that land in your inbox.

It’s equally important for you to bring the scam to the attention of the authorities to help them capture those scammers. You can file a complaint with the FTC at ftc.gov, alert the local law enforcement agencies, and report any tax-related scams to the IRS at 1-800-829-1040 or at IRS.gov. Finally, be sure to warn your friends about a circulating scam so they know to be super-careful.

Practicing caution and knowing what to expect will protect you from scammers who are out to make a buck off anyone they can bamboozle. You work hard in school; you deserve to keep your money and your sanity, too!

Your Turn: Have you been targeted by a student loan scam? Share the pointers you picked up from your experience with us in the comments.

SOURCES:
https://typicalstudent.org/hot/your-money/3-popular-student-loan-scams-2019

https://thecollegeinvestor.com/317/top-student-loan-scams/
https://www.google.com/amp/s/www.forbes.com/sites/zackfriedman/2019/01/21/student-loans-scams/amp/

Buying A Home In The Winter

Q:  I’m ready to buy a new home and I’d rather not wait until spring. What do I need to house for sale with snow on the groundknow about buying a house during the winter?

A:  Spring and summer are, by far, the most popular seasons for house-hunting. But, that shouldn’t stop you from looking for your dream home in middle of winter. Though icy driveways and snowed-out open houses can be less than thrilling, there are surprising benefits to purchasing a home during the coldest time of year.

Let’s explore the various aspects of buying a home in the winter.

The challenges

House-hunting during the winter months has lots of obvious disadvantages, and some less obvious ones as well.

First, it can be difficult to check out a property that is covered in snow or ice. A lush yard of trees, bushes and blossoming flowers can look stark and bare during cold winter months. There will also be some structural elements, like the septic tank, roof and AC system, that can be difficult or impossible to inspect during the season. With fewer hours of daylight, it can also be harder to get a good look at the home, especially if your schedule isn’t flexible.

Home-shopping during the winter also means working with fewer options on the market. Sellers know that spring is peak season for house-hunting, so most will wait until the weather warms up to list their house for sale.

Finally, if you decide to go through with a sale during the winter, you can expect delays throughout the home-buying process. Inclement weather can push off the scheduling of important events, like the inspection, appraisal and even the final walk-through or closing.

The advantages

You might be working with slimmer pickings in winter, but you’ll also be dealing with more motivated sellers. Homeowners who choose to list their properties for sale during the winter are likely quite eager to sell. You’ll also find some homes that have been on the market since the previous spring with an equally motivated seller. Plus, the smaller pool of buyers during the winter puts you at an immediate advantage. These factors will make it easier for you to negotiate for a lower price. In fact, according to research by Zillow, homes that are listed for sale in December generally sell for $3,100 less than average.

You can also use your favorable position to ask the seller to throw in extras, like window treatments, light fixtures, appliances and furniture.

Buying a home in the winter can also mean enjoying better service from all the professionals you work with during the process. Your Realtor, inspector, lender and mover will have fewer clients during the winter and will be able to provide you with optimal service, as well as be more available to promptly answer your questions.

Finally, inspecting a home during harsh weather will enable you to see how the house handles the cold, snow and ice. You’ll also be able to check out the heating system so there are no surprises after moving in.

Tips and tricks

If you’ve decided to go house-hunting during the winter, keep these tips in mind:

  • Ask to see photos of the home during warmer seasons. To get a picture of the property in its prime, ask the seller to provide pictures showcasing the yard, pool, patio, flowerbeds and more during the spring or summer months.
  • Take full advantage of the buyer’s market and offer a starting bid that is well below the listed price.
  • Ask for documentation for home features that are difficult or impossible to check out because of weather. Have the seller provide proof of the last roof inspection or replacement, the most recent day of service for the septic tank and the age of the A/C units. If something needs fixing, ask for a credit toward its repair or renegotiate the home’s selling price.
  • Don’t rush your decision. A narrow selection of houses doesn’t mean you need to compromise on the home of your dreams. If you can’t find a house that checks off all or most of the features on your list, wait it out a bit. Next season’s sellers will start listing their homes right after the Super Bowl, so be patient and hang tight until you find what you’re seeking.

The real estate market may cool down during winter, but if you know how to overcome the challenges and optimize the advantages, you can walk away with a hot deal on a home during the coldest time of year.

Are you in the market for a new home? Stop by Destinations Credit Union to ask about our home mortgage options! We’ll help you move into your dream home with the most favorable terms.

Your Turn: Did you close on a home during the winter? Share your best tips with us in the comments.

SOURCES:
http://www.freddiemac.com/blog/homeownership/20170129_pros_cons_buying_home_in_winter.page

https://realestate.usnews.com/real-estate/articles/should-you-consider-buying-a-home-during-the-winter
https://easymortgagecompany.com/5-advantages-buying-home-winter/
https://www.trulia.com/blog/what-you-need-to-know-about-buying-a-home-this-winter/
https://www.fortunebuilders.com/buying-a-home-in-winter/

 

Don’t Get Caught In A Crowdfunding Scam

The days of handouts and begging loans off wealthy relatives are fast becoming extinct.Woman sitting on sofa with a laptop Today, if you need boatloads of money-whether it’s to help you cover an expensive emergency or to fund a new business idea-you only need to appeal to the vast audience of the internet and wait for the money to start rolling in.

Crowdfunding platforms like GoFundMe, Kickstarter and IndieGoGo are packed with eager would-be entrepreneurs and desperately needy individuals alike.

But, they’re also packed with scammers.

For instance, an Iowa woman raised thousands of dollars on GoFundMe for her daughter’s terminal cancer-which would be heartwarming were it not for the fact that her daughter is perfectly healthy.

In a second example, an American company called Triton claimed to have created a device enabling people to breathe underwater. The IndieGoGo page they set up to raise funds for production pulled in $850,000 in just a few days. Sounds inspiring until you realize their supposed invention is more like something out of a sci-fi movie. In reality, Triton fooled many people with an invention that only existed in their imagination.

In yet another incident that garnered national attention, a New Jersey couple teamed up with a homeless veteran from Philadelphia to start a bogus GoFundMe page. The couple claimed the veteran had used his last $20 to buy gas for the wife when she was stranded on Interstate 95. It was the perfect feel-good story, with just enough pathos and emotion to get people to part with their money-to the tune of $400,000, in fact.

Later, when the veteran accused the couple of withholding his money, the case went to court. Proceedings are currently ongoing, but authorities believe the campaign was a scam and that the couple allegedly burned through a whopping $350,000 of donated funds in just a few months.

While some crowdfunding platforms will refund your money if a cause turns out to be a scam, most of them will keep a portion of it for themselves, so don’t plan to get back every penny if you get caught up in a scam. There’s also the possibilityof a crowdfunding scam remaining undetected, allowing the scammers to live it up on everyone else’s dimes. Even if your money does land back in your wallet, it’s never a good feeling to know you’ve been conned.

So, don’t let the scammers out there ruin it for everyone else! You should be able to share your money with any cause you believe in. Here are some tips to help ensure you’re chipping in for something genuine.

How to check a campaign for legitimacy

Whether it’s a heartbreaking story or a brilliant business venture you want to support, you’ll first want to research the campaign’s creator. Google their name to see what the internet has to say about them. Also, look up their street address and phone number to verify they’re using their real name, and check whether they’ve started any crowdfunding campaigns in the past.

If you’re looking at a charity campaign, your next step is to take emotion out of the picture. Charity crowdfunding scams succeed by playing with people’s heartstrings. Take the time to study the campaign with pure logic. Does the story really make sense? If you still think it’s legitimate and everything seems to check out, you can choose to donate. Or, you can take your caution one step further by contacting the campaign’s creator and asking for verification of their cause. If they’re genuinely in need, they’ll gladly supply you with names of doctors or references. But if they sound hesitant, or refuse to answer your questions, opt out.

If you’re looking at a crowdfunding campaign for a new business idea, ask yourself if the project is realistic. There are currently several GoFundMe pages set up by individuals with the goal of fighting ISIS. Sounds good until you realize how impossible it is for a single person to achieve such a goal. Lots of inventions or other business ideas also sound incredible until you realize they’re only possible in a fantasy world. Don’t help a business venture get off the ground until you can verify that it’s actually legitimate.

Do your due diligence with crowdfunding campaigns, and you can donate with confidence.

Your Turn: Do you have a crowdfunding horror story? Tell us all about it in the comments.

SOURCES:
https://www.google.com/amp/s/www.nj.com/news/2019/01/inspired-by-viral-gofundme-fraud-this-nj-bill-would-mean-harsher-punishment-for-scammers.html%3FoutputType%3Damp

https://www.daveramsey.com/blog/how-to-avoid-crowdfunding-scams
https://www.google.com/amp/s/www.nbcnews.com/news/amp/ncna936941
http://www.cracked.com/blog/6-incredibly-obvious-crowdfunding-scams-people-fell-for/

How Do Minimum Wage Hikes Affect The Economy?

The United States has one of the lowest minimum wages of any modern country in the Two people working in a bakeryworld. Our modest salary floor impacts our economy on every level, from the rising underemployment rates to a bloated welfare program that chiefly rests on the backs of the struggling middle class.

But all of this is subject to change: The arrival of 2019 has brought a wave of minimum wage hikes at many state and local levels along with a push to bring the national minimum wage up to $15 by the year 2024. In total, 21 states and Washington DC have increased their minimum wages, with the biggest jump of $1.00 per hour more being passed in California, Maine and Massachusetts. There are now a total of 29 states with a minimum wage that surpasses the federal level, which has remained stagnant at $7.25 for more than a decade.

The recent wage increases impact 5.2 million workers across the country. While at first glance this might seem like fantastic news for the economy, financial experts are dubious about how recent hikes and the proposed increase in the federal wage will impact the national economy.

The push to boost the federal minimum wage to $15 an hour is more dramatic than any wage hike this country has ever seen. This factor makes it impossible for economists to draw on studies and actual history for conclusions about the effects of the proposed hike. However, based on market trends and the fundamental laws of economics, they’re predicting several negative fallouts from the hikes.

Let’s explore what happens when minimum wages increase.

How do wage increases affect the job market?

Economists are predicting the proposed hike in the federal minimum wage, along with the local and state increases that have already passed, will have two negative effects on the job market:

1.) A surge in move-outs to the suburbs

An increase in local and state government minimum wages will likely push employers to move across borders to avoid paying higher wages, particularly from central cities to suburbs.

For example, Washington, D.C. has raised its minimum wage to $14 an hour. This may lead to a mass exodus of Washington businesses as they move toward locations with lower minimum wages in surrounding areas. A move to a suburb like Arlington, Virginia, where business owners can pay their workers almost half the hourly wage they’d need to cover in Washington, will help them remain profitable.

2.) Businesses cutting corners

Businesses forced to double their workers’ pay or even to modestly increase it will need to find a way to continue turning a profit. They will likely attempt to cut corners any way they can. This may translate into letting workers go, replacing humans with robots where possible, or even cutting down on their level of service to reduce the need for human resources. For example, fast food joints might start using machines instead of human workers and hotel chains may start skimping on their cleanups between guests to compensate for increased payroll.

Regardless of the way that businesses choose to cut corners, it will likely lead to an increase in unemployment rates and underemployment rates across the country. It may also trigger a surge of illegal work among workers who suddenly find themselves out of a job.

How do wage increases affect the consumer?

When all the dust settles, it is the average consumer who will likely bear the brunt of the minimum wage hike.

Most companies hiring minimum-wage employees are small businesses with profit margins that are too thin to absorb a serious hike. These businesses will be forced to pass on their higher expenses to consumers. Grocery prices will shoot up, labor costs for services and repair persons of any kind will rise, and fast food meals will see a noticeable price increase.

Predictably, the consumers most likely to be affected by the hike are the poor and middle class, who tend to frequent businesses that hire minimum-wage workers. Ironically, the same workers rejoicing over the proposed hike will likely be those who have to pay for it most.

How do wage increases affect federal taxes?

One positive impact of a minimum wage hike is the hope that an increase in wages will reduce the number of workers who are dependent upon government assistance programs, thus reducing the average taxpayer’s burden. Of course, this is pure speculation and is not based upon any studies of similar increases.

Also, when low-wage workers are pushed over the qualifying threshold for government assistance, they may be coming home with less pay after a wage hike.

While no one can say for sure how a minimum wage hike will affect the economy on a national and individual level, economists predict it is far more likely to have a negative effect than a positive impact.

Your Turn:

Do you support a dramatic minimum wage hike? Why, or why not? Share your opinion with us in the comments, below.

SOURCES:
https://www.google.com/amp/s/www.washingtonpost.com/amphtml/news/wonk/wp/2018/01/11/what-does-a-15-minimum-wage-do-to-the-economy-economists-are-starting-to-find-out/

https://www.google.com/amp/s/www.forbes.com/sites/adammillsap/2018/09/28/how-higher-minimum-wages-impact-employment/amp/
https://www.google.com/amp/s/www.brookings.edu/opinions/a-15-hour-minimum-wage-could-harm-americas-poorest-workers/amp/
https://www.heritage.org/jobs-and-labor/report/15-minimum-wages-will-substantially-raise-prices
http://econweb.ucsd.edu/~mwither/pdfs/Effects%20of%20Min%20Wage%20on%20Wages%20Employment%20and%20Earnings.pdf
https://www.google.com/amp/s/www.usnews.com/news/best-states/articles/2018-12-31/minimum-wage-increases-in-20-states-in-2019%3Fcontext%3Damp
https://www.google.com/amp/s/amp.businessinsider.com/minimum-wage-2019-state-map-2018-12

7 Steps Toward Purchasing An Auto Insurance Policy

Are you in the market for a new auto insurance policy? Look no further thanman at computer Destinations Credit Union! We’ll help you get the maximum protection for your investment at the best possible price.

Read on for your guide to purchasing auto insurance in 7 easy steps.

Step 1: Choose a way to purchase your policy

You can choose to buy a policy directly from an insurance company or through an independent insurance broker.

If you already have homeowners or renters insurance, you likely also have the option of purchasing an auto policy through your current insurer. Choosing to bundle policies may give you a discount of as much as 15% off the usual cost of the policy.

If you’re working with insurance companies, contact each one individually to get your quotes. This is likely to be the best approach if you’re only choosing between two insurance companies or between several policies from the same company.

If you’re open to purchasing a policy from any company, and you’d rather not spend the next month getting quotes, you’re best off using an independent broker. You’ll only need to fill out one application and the broker will do the research for you, pulling up several quotes for you to compare and consider.

Step 2: Decide how much coverage you need

When choosing a policy, you can opt for maximum coverage, the minimum required by state law or any amount in between.

Here are the primary categories of auto insurance coverage:

  • Liability coverage. This includes coverage for bodily injuries, property damages or auto damages to another motorist if you’re at fault.
  • Comprehensive coverage. This will pay for any damage and losses to your car that were not caused by another vehicle, including damage from inclement weather, theft, floods and more.
  • Personal injury protection. This covers medical bills for you and your passengers in the event of an accident.
  • Collision insurance. This covers the damages to your car if it’s involved in an accident.
  • Uninsured/underinsured motorist protection. This pays for damages caused by another motorist who does not have sufficient insurance coverage.
  • Gap insurance. This coverage is exclusively for financed or leased cars. It pays the difference between what you owe and what the car is valued at if there were a total loss of the vehicle.

There are several coverage add-ons you may be interested in as well, including roadside assistance, rental car insurance and rideshare insurance for those employed by a rideshare company, like Uber or Lyft.

Step 3: Determine your risk

Ask yourself these questions to assess your risk of being in an accident or of your vehicle incurring damages:

  • How many hours do you drive each week? If you drive an excessive amount, you may want to opt for more coverage.
  • Are you financing or leasing your car? If you are, consider gap insurance.
  • Do you drive in high-traffic areas and/or park in an area that has lots of break-ins? Both factors increase your car’s risk of damage and are reasons for increased coverage.
  • Do you spend many hours driving for business-related reasons? If so, you may need a commercial policy.
  • Will any of your children be driving your car? If you have a teenager who will be using your car, it’s a good idea to increase your coverage cap.

Step 4: Fill out an application(s)

No matter how you choose to apply for car insurance, be prepared to supply the following information:

  • The year, make and model of your car
  • Your driving history
  • Your marital status
  • Your education
  • Your employment status, details and history
  • The names and birthdates of everyone who drives your vehicle
  • The ownership history of your car

Step 5: Get your quotes

You’ll get your quotes within a few hours of submitting your application, and sometimes as quickly as within a few minutes.

Your quotes will include several options for the deductible and the premium amounts. In general, a higher deductible, which means paying more out of pocket when you file a claim, will give you a lower premium. While this option might mean there’s more money in your wallet each month, it can spell catastrophe for your finances if your vehicle is involved in a theft or accident requiring expensive repairs. Your best option is to take the middle road and find a plan that offers the maximum deductible you can easily afford along with the lowest premiums.

Step 6: See if you qualify for a discount

Before signing on a quote, check if you qualify for a discount. Any of the following factors may make you eligible for a cheaper plan:

  • Your vehicle has safety features or an alarm system.
  • You’re a military veteran.
  • You’re a full-time student with a decent academic record.
  • You have an excellent driving record.
  • You’ve completed a defensive driving or safety course.
  • Destinations Credit Union members get discounts on auto and homeowner’s insurance.

Step 7: Choose your policy

When you have all the details ironed out and you’ve compared several plans, you’re ready to choose an auto insurance policy that best suits your needs.

Once you’ve made a decision, be sure to pay your premiums in a timely manner and to keep your insurance identification card in your vehicle at all times. If you are involved in an accident or are the victim of theft, contact your insurance provider through the number provided on your insurance identification card as soon as possible. It’s also a good idea to try shopping for a cheaper policy once a year.

Your Turn: What’s your best auto insurance tip? Share it with us in the comments!

SOURCES:
https://www.google.com/amp/s/www.cbsnews.com/amp/news/a-beginners-guide-to-buying-car-insurance/

https://consumerist.com/2014/03/19/15-things-you-need-to-know-about-buying-auto-insurance/
https://www.policygenius.com/auto-insurance/how-to-buy-car-insurance/

5 Ways To Pay Off A Loan Early

If you’re like most Americans, you owe money toward a large loan. Whether that meanscouple working on computer carrying thousands of dollars in credit card debt, having a hefty mortgage in your name or making car loan payments each month, loan debt is part of your life. This means you’re looking at hundreds of dollars in interest payments over the life of the loan(s). There’s also the mental load of knowing you owe perhaps tens of thousands of dollars and that you’ll be paying back the loan for years to come.

It can all get kind of depressing-but it doesn’t have to be that way.

Did you know there are simple, but brilliant, tricks you can employ to lighten the load? With a carefully applied technique, you can pay off your mortgage, auto loan, credit card debt and any other debt you’re carrying quicker than you thought possible. These tricks won’t hurt your finances in any dramatic way, but they can make a big difference to the total interest you’ll pay over the life of the loan and help you become debt-free faster.

You can free up more of your money each month, use your hard-earned cash for the things you want instead of forking it over in interest and live completely debt-free sooner than you’d dreamed. It’s all possible!

A note of caution before we explore these tricks: Check with your lender before employing any approach, as some loan types have penalties for making extra or early payments (we don’t at Destinations Credit Union!).

1. Make bi-weekly payments

Instead of making monthly payments toward your loan, submit half-payments every two weeks.

The benefits to this approach are two-fold:

  • Your payments will be applied more often, so less interest can accrue.
  • You’ll make 26 half-payments each year, which translates into an extra full payment on the year, thereby shortening the life of the loan by several months or even years. If you choose this method with a 30-year mortgage, you can shorten it to 26 years!

2. Round up your monthly payments

Round up your monthly payments to the nearest $50 for an effortless way to shorten your loan. For example, if your auto loan costs you $220 each month, bring that number up to $250. The difference is too small to make a tangible dent in your budget, but large enough to knock a few months off the life of your loan and save you a significant amount in interest.

For a potentially even bigger impact, consider bumping up your payments to the nearest $100.

3. Make one extra payment each year

If the thought of bi-weekly payments seems daunting but you like the idea of making an additional payment each year, you can accomplish the same goal by committing to just one extra payment a year. This way, you’ll only feel the squeeze once a year and you’ll still shorten the life of your loan by several months, or even years. Use a work bonus, tax refund, or another windfall to make that once-a-year payment.

Another easy way to make that extra payment is to spread it out throughout the year. Divide your monthly payment by 12 and then add that cost to your monthly payments all year long. You’ll be making a full extra payment over the course of the year while hardly feeling the pinch.

4. Refinance

One of the best ways to pay off your loan early is to refinance. If interest rates have dropped since you took out your loan or your credit has improved dramatically, this can be a smart choice for you. Contact Destinations Credit Union to ask about refinancing.

It’s important to note that refinancing makes the most sense if it can help you pay down the loan sooner. You can accomplish this by shortening the life of the loan, an option you may be able to afford easily with your lower interest rate. Another means to the same goal is keeping the life of your loan unchanged and with your lower monthly payments, employing one of the methods mentioned above to shorten the overall life of your loan.

5. Boost your income and put all extra money toward the loan

A great way to cut the life of your loan is to work on earning more money with the intention of making extra payments on your loan. Consider selling stuff on Amazon or eBay, cutting your impulse purchases and putting saved money toward your loan, or taking on a side hustle on weekends or holidays for extra cash. Even a job that nets you an extra $200 a month can make a big difference in your loan.

Triumph over your loans by using one or more of these tricks to make them shorter and pay less interest. You deserve to keep more of your money!

Your Turn: Have you used any of these methods or a different approach for paying off a loan early? Tell us about it in the comments.

SOURCES:
https://www.thebalance.com/how-to-pay-off-debt-early-315571

https://www.google.com/amp/s/www.huffpost.com/entry/top-6-ways-to-pay-off-any-loan-faster_b_1624242/amp
https://www.payoff.com/life/money/6-ways-to-pay-off-your-car-loan-early/

Tax Code Changes 2019

The tax code gets a bit of an overhaul each year, and with the changes, it can getblocks with 2019 on them topping a tax form confusing. No worries, though; we’ll walk you through everything you need to know for 2019.

Most amendments to the tax code will only begin to affect taxpayers in April 2019. However, some of the changes can impact the financial choices you make this year. Learning about these changes early in the year will help you to make the best decisions possible.

Read on to learn about the most important changes to the tax code for 2019.

1.)   Changes to the amounts taxed for each income bracket

The 7 tax income brackets are unchanged at 10%, 12%, 22%, 24%, 32%, 35% and 37%. However, the amount each bracket is taxed has changed.

Here are the new rates for taxpayers filing as individuals.

Taxable Income Bracket                  Tax Due

10%     $0-$9,700                               10% of taxable income

12%     $9,701 -$39,475                     $970 +12% of income over $9,700

22%     $39,476 – $84,200                  $4,543+22% of income over $39,475

24%     $84,201 – $160,725                $14,382.50+24% of income over $84,200

32%     $160,726- $204,100               $32,748.50+32% of income over $160,725

35%     $204,101- $510,300               $46,628.50+35% of income over $204,100

37%     $510,301 and up                     $153,798.50+37% of income over $510,300

Taxable income rates vary for couples filing jointly and for individuals filing as heads of households. You can check out the changes to each bracket here.

2.)   Changes in standard deduction amounts

The standard deduction amounts will see slight increases over the deductions of 2018. The standard deduction in 2019 will be $12,200 for individuals, $18,350 for heads of household or $24,400 for married couples filing jointly and surviving spouses.

3.)   Elimination of personal exemptions

The personal exemption amount was set to 0 for 2019 under the Tax Cuts and Jobs Act, and is therefore no longer in effect.

4.)   Changes to itemized deductions on Schedule A

There have been several changes to itemized deductions for 2019 taxes. These include:

  • Medical and dental expenses. There is a new floor of 10% for medical and dental expenses. This means you can only deduct medical and dental expenses that exceed 10% of your adjusted gross income (AGI.)
  • State and local taxes (SALT). The new maximum for SALT deductions is a combined total of $10,000 for taxpayers filing jointly, and $5,000 for married taxpayers filing separately.
  • Home mortgage interest. In 2019, interest paid for acquisition purposes, like buying, building or improving your home, will be maxed at $750,000 for married couples filing jointly, and $375,000 for married couples filing separately.
  • Casualty and theft losses. The deduction for personal casualty and theft losses has been eliminated with the exception of losses incurred in a federal disaster area.
  • Job expenses and miscellaneous. All miscellaneous work-related expenses will be subject to a 2% floor, which means you can only claim deductions that are less than 2% of your AGI.

5.)   Changes to tax credits

There have been several welcome adjustments to various tax credits for 2019, including the following:

  • Child Tax Credit. The child tax credit has increased to $2,000 per child and is refundable up to $1,400. There is also a $500 nonrefundable credit for other qualifying dependents.
  • Earned Income Tax Credit (EITC). The maximum EITC amount for 2019 is $6,557 for married taxpayers filing jointly who have three or more children.
  • Adoption Credit. The maximum adoption credit in 2019 for a child with special needs is $14,080. The ceiling for other adoptions is $13,810.
  • Lifetime Learning Credit. For 2019, the AGI used by joint filers to determine the reduction in the Lifetime Learning Credit is increasing by $2,000 to $116,000.

6.)   Increases for contributions to retirement accounts

Retirement accounts do more than help you plan for a financially sound future; some of them can also significantly lower your taxable income.

Traditional IRAs and 401(k)s allow you to contribute pre-tax income, which decreases your taxable income. The new ceilings for contributions to these accounts can lower that number even more.

For 2019, you can contribute a total of $6,000 to one or more traditional or Roth IRA(s) if you’re under age 50, and $7,000 if you’re older than 50. For 401(k)s, the new maximum contribution amount is $19,000, and $25,000 for those aged 50+.

7.)   Health Savings Account contributions

Health Savings Accounts (HSA) are similar to traditional retirement accounts; they’re funded with pre-tax money and can lower your tax bill. You use the money in your HSA to pay for qualified medical expenses. When you turn 64, you can withdraw the money in your HSA and use it for any purpose. However, these withdrawals are subject to income tax.

In 2019, the maximum contributions for HSAs will increase to $3,500 for individuals and $7,000 for families. Taxpayers aged 55+ can contribute an additional $1,000.

The U.S. tax code can get confusing at times, but ultimately the amendments and adjustments to the code are to our benefit. Learning about the changes to the code will help you to take full advantage of any relevant credits and deductions.

Your Turn: Which tax credit or deduction helps your finances most? Tell us all about it in the comments.

SOURCES:
https://www.google.com/amp/s/www.forbes.com/sites/kellyphillipserb/2018/11/15/irs-announces-2019-tax-rates-standard-deduction-amounts-and-more/amp/

https://www.google.com/amp/s/www.marketwatch.com/amp/story/guid/18A0A5AE-E9DD-11E8-8F27-5C6847258365
https://www.google.com/amp/s/www.fool.com/amp/retirement/2018/12/23/the-6-best-tax-deductions-for-2019.aspx
https://www.google.com/amp/s/amp.usatoday.com/amp/2207406002

Should I Sign Up For Budget Billing?

Q: My steep utility bills in the winter and summer months always throw my budget for awoman looking at bill loop. Should I sign up for budget billing?

A: Budget billing can simplify your utility payments by making each month the same fixed amount, but it’s important to understand all the facets before signing up.

Read on for all your questions on budget billing, answered.

What is budget billing?

When you sign up for budget billing, the utility company will add up the total amount you paid for their service over the last year, include a small percentage for inflation and then divide that number by 12. This value becomes the amount due for your monthly bill. This way, you pay the same amount of money for your gas or electric bill whether you’ve had freezing weather that month or you’ve had the central air running full blast for days.

What happens if I use more or less energy than the company estimated?

If your energy usage exceeds the company’s estimate, you’ll need to pay the difference at the end of the year.

If you’re careful about conserving energy and use less this year than was estimated, most companies will give you a credit toward next year’s bills. Some will offer you a lower monthly budget based on your most recent usage for next year, and others will actually issue you a refund at the end of the 12 months (think, no amount due for the next 1-2 months!).

Do I have to pay for this service?

Fees for budget billing vary by company, so be sure to read the contract carefully before you sign up for this service. Some companies offer this service free of charge. Many will collect a small fee for budget billing, which shouldn’t be enough to deter you from signing up. However, if a company is asking for $3 or more a month just to work out a budget for you, it’s probably not worth the price.

What are some pros of budget billing?

The most obvious benefit of budget billing is a fixed monthly utility bill. Without that, you’re facing super-high bills during months of extreme weather. And that can make it difficult to stick to your monthly budget. The more fixed expenses you have each month, the easier it is to work out a budget and actually keep it.

Budget billing also helps offset the high costs of summer and winter bills. Lots of people, such as those who live in places that see extreme weather, can find it difficult to pay the doubled or tripled bills these times of year. Averaging the energy costs of the entire year and spreading it over 12 months makes it a lot more manageable.

What are some cons of budget billing?

Many people who sign up for budget billing end up using a lot more energy than they did when they paid for each month’s actual energy usage. When you know your bill will be the same no matter how high you crank that thermostat, it’s harder to be disciplined enough to keep it down. Of course, this means a higher bill at the end of the year.

Also, while budget billing may make it easier to pay your monthly bills, it can be hard to cover the balloon payment at the end of the year.

Is there a way to create a budget-billing plan myself?

If you don’t want the hassle, fees or restrictions of a budgeting plan, you can easily do it on your own.

It’s best to start your own budget during off-peak seasons, like autumn or spring, when bills are typically lower. To find your magic monthly number, simply total up your utility bills of the last year, add .03% for inflation and divide the amount by 12. Work this fixed amount into your monthly budget. During the cheaper months, you’ll need to set aside the extra money to cover your higher bills during the more expensive times of year.

If your numbers are right and you’re mindful about your energy usage, your budget can work perfectly and serve you well throughout the year. If you’re super-careful, you may even end up with some extra cash at year’s end.

How can I save on my energy bills?

Whether you choose to sign up for budget billing, work out your own plan or deal with fluctuating bills each month, it’s always a good idea to cut down on your energy usage.

Here are some tips to get you started:

  • Only use LED bulbs. You’ll need to spend more on each bulb when you make the change, but the payoff is 75% less energy usage than a traditional bulb and a lifespan that is 25 times longer than their counterparts.
  • Get rid of air leaks. Don’t let the cold air into your home! Seal all drafty areas and hang curtains on your windows for an extra layer of warmth.
  • Adjust your thermostat. Changing your “comfortable” thermostat number by just a couple degrees can save you 1-3% off your heating and cooling bills each month. Dress warmly in the winter instead of turning the thermostat higher. During the summer, use your outdoor grill on blazing hot days to keep the house a little cooler without turning down the A/C.
  • Keep your units well-maintained. If your HVAC system is not functioning optimally, you can be paying more money just to keep it going. Replace your filters as necessary, keep your units clean and consider calling in an expert at the start of each season to determine if everything is in proper working order.

Don’t let soaring utility bills get you down this winter! Consider signing up for budget billing or creating a billing budget on your own and do all you can to lower those bills.

Your Turn: Are you signed up for budget billing with your utilities? How is it working out for you? Tell us all about it in the comments, below.

SOURCES:
https://clark.com/personal-finance-credit/should-you-use-budget-billing-for-your-utilities/

https://www.google.com/amp/s/m.huffpost.com/us/entry/9578004/amp
https://www.thebalance.com/what-is-budget-billing-2385943