5 Ways To Prepare For Your College Graduation

After four years of late-night cramming sessions, a grueling class schedule, too many term papers to count and lots of hard-core partying, the big day is finally within sight. Graduation! You can hardly wait to toss your cap into the air and start making your mark in the big wide world.

As you count down toward graduation, don’t forget to check off these important tasks you’ll need to tend to before you can get your diploma.

1. Put your papers in order    

Don’t celebrate the end of college paperwork just yet! Before graduation, you’ll need to submit an application to graduate. You may also need to officially confer your degree. These steps can differ in each school, so find out what your particular requirements are before the end-of-term rush.

2. Polish your resume, cover letter and portfolio

Hopefully, at this point, you’ll have already written up your resume and cover letter and organized your portfolio. During these last few months in college, take the time to perfect these gateways to the working world. Ask a few friends to read through your resume and cover letter and check them for typos and inconsistencies.  You can also show these documents and your portfolio to a career counselor at your school to ask for professional tips on making them shine.

3. Find a summer job or a paid internship

It isn’t easy to find that first post-college job. But, whether you’ve landed the perfect position for next year or you’re still hunting for a job, the clock starts ticking on that student loan debt as soon as you graduate. If you won’t be starting your new job until fall, or you haven’t found one yet, it’s best to accept a temporary summer job or a paid internship so you have some kind of income to put towards payments.

4. Find a place to live

In the rush to find a job for next year, you may have forgotten about another crucial decision you need to make: Where are you going to live? If you plan on moving back in with mom and dad, you’re good to go. Otherwise, start apartment hunting as early as possible to get the best picks. You can look up rentals in the area on sites like Rent.com, and ApartmentGuide.com.

5. Spend time with your friends

As you tie up the loose ends of your life in college, don’t forget about the people who matter most to you in school. The relationships you form in college can last a lifetime. Make sure you get a few good late nights in with your best buddies before graduation.

Use these last few months of college wisely by making sure you’ve got your post-college life in order, and taking the time to live it up just a little bit more before adulting for real.

Your Turn: How did you prepare for your college graduation? Share your best tips with us in the comments.

Can Halloween be Celebrated Safely This Year?

Q: With COVID-19 still disrupting all kinds of plans, I’m wondering about Halloween celebrations this year. Is there any way to safely celebrate Halloween in 2020?

A: How to safely celebrate this year is a question that’s frightening Halloween lovers all over the globe. Fortunately, the answer is not all that scary. With some flexibility and wise precautions, Halloween can still be a frightfully fun day for the entire family.

Here’s all you need to know about celebrating Halloween safely in the era of COVID-19.

Should I take my family trick-or-treating this year? 

According to many medical health professionals, the answer depends largely on where you live.

“In an area where there’s still ongoing community spread [and circumstances] haven’t gotten to the point where things are opening up again, I don’t think trick-or-treating is a great idea,” says Dr. Sandra Kesh, an infectious disease specialist and the deputy medical director at New York’s Westmed Medical Group. “In areas where the community prevalence is lower, I think it’s OK to plan to trick-or-treat, but it’s going to be a different experience than it was last year.”

What safety precautions do I need to take when trick-or-treating?

If you plan on taking your kids trick-or-treating this year, or making the rounds yourself, here’s how you can keep safe from infection:

  • Stick with family: The risk of transmission grows exponentially when people spend extended time with members of another household. It’s best to keep your trick-or-treat group to family only this year.
  • Keep it small: If your child insists on trick-or-treating with neighbors or friends, keep the group as small as possible. Kesh recommends limiting groups to three or four members and, preferably, sticking with families that are also careful about social distancing.
  • Mask up: Halloween costumes make following this coronavirus precaution super-easy.
  • Keep face-to-face exposure to a minimum: If possible, trick-or-treat from a distance. Knock on doors and then retreat down the steps. The homeowner can toss you your treats instead of handing them over. The less close interaction you have with others, the lower your risk of infection.
  • Sanitize often: Keep some hand sanitizer with you at all times and soap up after touching germy surfaces, like doorknobs or communal treat baskets. It’s equally important for everyone to wash up once you get home, especially before digging into any treats.

How can I safely invite trick-or-treaters to my home?

The thought of hordes of kids traipsing through your doors and reaching grubby hands into a communal basket of candy might scare you, but that doesn’t mean you have to lock your doors on Halloween night and be the neighborhood party-pooper.

“The best thing you can do to reduce your risk is to limit your interaction with others as much as possible,” says Molly Hyde, an infection control practitioner. “If you are going to hand out candy in person, make sure you are wearing a face covering over your nose and mouth when giving out candy.”

If you’d like to be extra cautious, you can avoid face-to-face interaction with trick-or-treaters by setting up a bowl of candy outside and letting your visitors help themselves. Keep a bottle of sanitizer nearby, or a box of disposable gloves, with a helpful sign to remind kids to keep their germs to themselves. You can also choose to ditch the bowl and space individual treats out on your front porch with a sign instructing kids to take one.

At the end of the night, it’s best to disinfect doorknobs, doorbells, buzzers, outdoor railings and any other surfaces that might have been touched by dozens of trick-or-treaters.

Can I throw a Halloween party this year?

Crowded indoor parties are out, but with a bit of creativity, you can still celebrate Halloween with friends. Here’s how:

Choose an outdoor venue, such as a local park, and invite your friends to your Quarant-een bash.

Have everyone bring along their Halloween costumes, comfortable lawn chairs, hot autumn beverages and individual party bags, or packaged treats, in their trunks.

At the party, have everyone park so the trunk of every car is in full view. Set up the chairs at safe distances and let everyone show off their costumes.
Pop open the trunks for “trunk-or-treating,” corona-style!

Don’t let COVID-19 scare all the fun out of Halloween this year. With the proper precautions, you can spook the entire neighborhood this Halloween and still keep it safe.

Your Turn: How are you celebrating Halloween safely this year? Share your best tips with us in the comments.

Sources:
https://www.washingtonpost.com/opinions/2020/09/09/will-halloween-2020-be-canceled-coronavirus/
https://www.goodhousekeeping.com/holidays/halloween-ideas/a33826132/halloween-trick-or-treating-health-safety/
https://www.jsonline.com/story/life/wisconsin-family/2020/09/10/halloween-2020-trick-treat-wisconsin-during-coronavirus/3458109001/

The Importance of Being Financially Fit

Are you ready to stretch those financial fitness muscles? We hope so, because it’s time to get financially fit!

Being financially fit means living a life of complete financial responsibility. The Center for Financial Services Innovation (CFSI), also known as the Financial Health Network, defines four basic components of financial health: Spend, Save, Borrow and Plan. These components reference everyday financial activities. As such, every choice you make in terms of these four activities either builds or detracts from your financial fitness. Like physical fitness, you can beef up those fitness muscles a little bit more each day.

Being financially fit is crucial for a well-balanced, stress-free life. Here’s why (and how):

Expand your financial knowledge

A financially fit person is constantly broadening their money knowledge. They read personal finance books and blogs, attend financial education seminars and are aware of the evolving state of the economy. This enables them to make monetary decisions from a position of knowledge and power, leaving much less up to chance or luck.

Stick to a budget

A financially fit person knows that tracking monthly expenses is key to financial health. They are careful to set aside money from their monthly income for all fixed and discretionary expenses and to stay within budget for each spending category.

Minimize debt

A financially fit person is committed to paying down debts and seeks to live debt-free. Constant budgeting, ongoing financial education and planning ahead enables them to make it through the month, and through unexpected expenses, without spiraling into debt.

Maximize savings 

A financially fit person prioritizes savings. In fact, savings is a fixed item on their monthly budget instead of something that only happens if there’s money left over. This allows them to think ahead and build a comfortable nest egg or emergency fund. In turn, having a robust safety net means sleeping better at night knowing there’s money available to cover unexpected expenses or a change in life circumstances.

Maintain complete awareness of the state of your finances

A financially fit person knows exactly how much money they owe, the accumulated value of their assets and the complete sum of their fixed and fluctuating expenses. This awareness takes the stress out of money management, allowing them to make better financial choices.

Maintain a healthy credit score

A financially fit person knows that an excellent credit history and score is a crucial component to long-term financial health. They are careful to pay all bills on time, hold onto their credit cards for a while and to keep their credit utilization low. This enables them to qualify for long-term loans with favorable interest rates, which saves them money for years to come.

Help your money go further

A financially fit person does not waste large sums of money on interest charges for purchases made using borrowed funds via credit cards or loans. They live within their means and only use these resources for purchases they can actually afford, or for large, long-term assets, like a car or a house. This means they have more funds at their disposal to help build their wealth through savings and investments.

Create concrete financial goals

A financially fit person has long-term and short-term financial goals. This enables them to keep their focus on the big picture when making everyday money choices, empowering them to actually realize their financial dreams.

Achieve financial independence

A financially fit person is independent. They don’t rely on loans from friends or family members to get by, and they don’t need to pay with plastic at the end of the month because they ran out of money. Their well-padded emergency fund means they don’t depend on their monthly income to put bread on the table, either. By sticking to a budget, prioritizing savings and maintaining an awareness of their finances, they are strong, secure and completely independent.

Being financially fit means living a life without battling anxiety about getting through the month or stressing about the future. You can achieve financial fitness by committing to making choices in each of the four components of financial health (spend, save, borrow, plan) that are forward-thinking and help to build your financial wellness.

If you’re not sure where to start in your journey to get your finances in shape, contact Destinations Credit Union’s HOPE Inside financial well-being coach and get started! It’s free and with the investment of a little time and effort, you get get on solid financial footing in a relatively short period of time.

Your Turn: Why is financial fitness so important? Share your reasons with us in the comments.

His And Her Money

When two people with opposite money views marry, it’s the ultimate in “He said, she said.”

He wants to save every penny so they can afford their dream house within the next five years, and she would rather live it up today while pushing off their dream a little longer.

She wants to budget every dollar to track everything they buy, and he thinks they can trust themselves to keep within their spending limit without accounting for every single purchase.

He thinks golf clubs with a four-digit price tag are a reasonable want, and she thinks they’re a ridiculous luxury reserved for the very wealthy.

And on and on it goes.

For Talaat and Tai McNeely, a pair of high school sweethearts ready to take their relationship further, the money differences were more than just an occasional spat — they were an obstruction standing between the couple and marriage.

As the McNeelys share on their blog, hisandhermoney.com, here’s a sampling of some of the financial issues they were dealing with before they married:

  • Do we let our credit scores dictate if we are compatible for marriage?
  • How will our previous money habits play a role in our marriage?
  • Do we merge our finances?
  • How can we work together to become better at life and win with money?
  • Am I a loser because I have now made my debt problems my future spouse’s problems?
  • Can I change, or is my past really who I am?
  • Should I have a secret account just in case our money situation gets worse?
  • How will we purchase a home? Do we put it in both of our names and risk not having a low interest rate due to the lower credit score?
  • Do I have to take full responsibility for our finances simply because I’m better at it?
  • Will we have to rely on two incomes to run our home?
  • What will our lives look like five years from now?

Despite one partner being debt-free and the other carrying $30,000 in debt, the McNeelys decided to get married. They knew the financial road ahead could be bumpy, but they were prepared to weather the storms together for the sake of their relationship.

Today, after years of struggling to chart their own joint money path, the McNeelys are completely debt-free, have paid off their mortgage and run a 6-figure business online. They have learned enormous life lessons on their journey toward financial wellness, and they generously share these lessons on their blog, podcasts, videos and through their private community of couples seeking financial guidance.

The couple is passionate about helping others overcome their financial differences and build a better relationship and a better future together. Check out hisandhermoney.com to learn their secrets.

Your Turn: How do you and your partner deal with money differences? Tell us about it in the comments.

Sources:
https://paychecksandbalances.com/influencers-in-personal-finance/
https://www.hisandhermoney.com/

What’s the Best Way to Use a Home Equity Line of Credit?

Q: With interest rates falling and home prices rising, it seems like a great time to tap into my home’s equity using a home equity line of credit. What’s the best way to use these funds?

A: A home equity line of credit, or a HELOC, can be a fantastic way to source extra funds during a falling-rates environment. Tapping into your home’s equity, or the positive difference between what is owed on a home and its current value, will give you the funds you need for a large expense with no additional strings attached.

With low interest rates on a Destinations Credit Union‘s Home Equity Line of Credit, the repayment plan is always affordable. If approved, you can take an advance from the available line at any time. There are no restrictions on how to use these funds, but since you’re essentially risking the loss of your home with this loan, it’s important to choose wisely when deciding how to use the funds.

Here are four forward-thinking uses for a home equity line of credit:

1. Home improvements

One of the most popular uses for home equity is for home renovations and improvements. These can be as major as adding a 1,000-square-foot extension to your home, as minor as replacing old carpet with new hardwood flooring or anything in between.

Using your home’s equity for home improvement projects is a smart choice for multiple reasons. For one, the money you put into the renovations acts as an investment. If you choose improvements that increase your home’s value, you can make back the money you spent or even see a return when you sell your home. Also, if you use the funds from a home equity loan to increase your home’s value, you may be able to deduct the interest paid on the loan from your taxes (be sure to consult with your tax adviser if you plan to go this route).

If you plan to use your home equity funds for home improvements, be sure to choose wisely. It’s best to go for improvements that add lasting value to your home instead of blowing big bucks on superficial remodeling projects that may look dated just a few years down the line.

2. Debt consolidation

Another popular use for a home equity loan is to consolidate high-interest debt. Paying off multiple debts at high interest rates can be cumbersome and difficult to manage. Worse, the heavy interest rates mean more of the borrower’s money goes toward the lender and less goes toward paying down the principal of the debts. Using you home equity to consolidate debt to a single, low-interest loan can slash a pile of debt by several thousands of dollars and help shorten repayment time by several years.

3. College education

When interest rates are falling, funding a college education through home equity instead of a high-interest student loan can be a smart choice. Similarly, homeowners struggling to meet their student debt payments without defaulting on the loan might want to use their home’s equity to pay off the debt quickly and replace it with a more manageable low-interest loan. It’s important to note that paying off a federal student loan with home equity might not be the best choice, as these loans are sometimes eligible for partial or complete forgiveness.

4. Emergency fund

Most of us know that financial experts recommend having three to six months’ worth of living expenses stashed in an emergency fund to be used if the need arises. But reality keeps this magical-sounding fund a distant dream for too many people. If you’ve been struggling to get your own emergency fund off the ground, tapping into your home’s equity can be a great way to get that boost you need. You’ll have a large stash of cash to build your fund, and the manageable payment plan will help ensure you put money into savings each month. As a bonus, if you experience a financial emergency of any kind after taking out your home equity line, you’ll already have the funds on hand to help pull you through.

Before you take out a home equity line of credit

A home equity line of credit can provide homeowners with the funds they need for a home improvement project, to get their debt under control, pay for their college education or to build an emergency fund. However, before making any of these moves, it’s important to run the numbers so you are sure you can easily meet the regular loan payments. Otherwise, you risk defaulting on the loan and losing your home.

If you’re ready to take out a home equity loan, look no further than Destinations Credit Union. Our rates and terms are always competitive. Give us a call at 410-663-2500 or stop by Destinations Credit Union to get started on your loan application today.

Your Turn: How did you use the funds from your home equity loan? Tell us about it in the comments.

Sources:
https://www.bankrate.com/home-equity/
https://www.cnbc.com/2020/06/11/mortgage-rates-set-new-record-low-fall-below-3percent-on-coronavirus-fears.html
https://www.nytimes.com/2020/06/05/your-money/houses-prices-coronavirus.html
https://www.huffpost.com/entry/best-home-equity-loan-ways-to-use_l_5d5af341e4b036065b6abf17
https://www.bankrate.com/home-equity/reasons-to-use-home-equity/
https://www.discover.com/home-loans/articles/should-i-use-a-home-equity-loan-to-refinance-my-student-loans/

Millennials Hit Hardest by Coronavirus Recession

Man on scooter with mask

The coronavirus recession hasn’t been easy on anyone, but millennials may have been hit hardest.

According to many economic experts, the 73 million millennials in the U.S. could experience financial setbacks from COVID-19 that have a longer-reaching impact than those experienced by any other age group.

Here’s why the coronavirus pandemic has been especially hard for those in 25- to 39-year-old age bracket.

Another recession for millennials

Economic recessions are nothing new for this demographic. They already lived through the Great Recession of 2008, and for many, the impact of the last recession is still being felt today.

The Great Recession hit millennials when they were still in college or just starting out on their career paths. For some, it meant the choices for their first post-college job were very slim. For others, it meant dropping out of college when there was no longer a guarantee of a degree netting them a higher-paying job. Regardless of how they were impacted, many millennials are still playing catch-up from the recession of 2008.

“For this cohort, already indebted and a step behind on the career ladder, this second pummeling could keep them from accruing the wealth of older generations,” says Gray Kimbrough, Washington, D.C. economist and American University professor.

Job losses across the board

More than 40 million workers in the U.S. have filed for unemployment since the beginning of the pandemic, but this is another area where millennials have been hit harder than most.

According to a recent report by Data for Progress, 52% of respondents under age 45 have lost jobs, been furloughed or had their work hours cut due to COVID-19. In contrast, just 26% of respondents over age 45 have suffered a job loss of some kind during the coronavirus pandemic.

Millions of millennials have lost jobs that are impossible to do while adhering to social distancing mandates. At the height of the economic lockdowns in April, the economy shed a staggering 20.5 million jobs. Of these jobs, 7.7 million were in the leisure and hospitality sector — a sector that is dominated by millennials. An additional 1.4 million lost jobs were in health care, primarily in ambulatory services — another field that employs a disproportionately large number of millennials.

No nest egg

Many millennials who are still on the rebound from the Great Recession are carrying piles of debt and have minimal savings — or none at all.

According to surveys conducted in 2018 by the Federal Reserve, 1 in 4 millennial families have a negative net worth, or debts that outweigh their assets. One in six millennials would not be able to find the funds to cover a $400 emergency. For these young employees, a relatively mild setback from the coronavirus can be devastating to their finances.

Millennials also tend to neglect their retirements. A recent report by the National Institute on Retirement Security found that 66% of millennials in the workforce have nothing put away for their retirement.

Can millennials recover?

Millennials had still not fully recovered from the Great Recession when the coronavirus pummeled the economy. They have shouldered a large share of job losses and have little or no savings to fall back on.

But there is hope. Millennials may not be as young as they were during the Great Recession, but they still have time to bounce back. They can use the unique challenges presented by the coronavirus pandemic as an opportunity to reevaluate their career track and move onward toward a brighter future.

This age group, also known as Gen Y, is famous for its resilience and can-do attitude. They’ve gotten through the Great Recession of 2008 and they’ll beat the coronavirus recession, too. With hard work, perseverance and small steps toward a better future, millennials can pull themselves up and regain their financial health.

If you’re experiencing financial difficulties, we can help. Call, click or stop by Destinations Credit Union to speak to a member service representative today.

Your Turn: Are you a millennial who has been impacted by the coronavirus recession? Tell us about it in the comments.

Sources:
https://politicalwire.com/2020/08/10/millennials-slammed-by-second-financial-crisis/
https://www.wsj.com/articles/millennials-just-cant-catch-a-break-11597085135
https://www.npr.org/2020/06/08/871042916/d-j-vu-for-millennials-staring-at-the-2nd-recession-of-their-adult-lives
https://www.investopedia.com/insights/how-financial-crisis-affected-millennials/
https://www.foxnews.com/us/millennials-coronavirus-financial-crisis
https://www.wsj.com/articles/millennials-covid-financial-crisis-fall-behind-jobless-11596811470
https://www.cnbc.com/2020/05/26/here-are-3-reasons-why-millennials-are-being-hit-especially-hard-economically-by-the-coronavirus.html
https://www.businessinsider.com/millennials-gen-z-laid-off-furloughed-coronavirus-job-market-2020-4

How to Negotiate Salary for Your First Job

Man and woman sitting across a desk in discussion.

Things are falling into place, and after months of researching your options, polishing your resume and sitting through awkward interviews, you think you may have found your dream job.

You’ve already gone for a follow-up interview and the position is as good as yours. The only obstacle to cross before joining the ranks of the officially employed is salary negotiation.

If you’ve done your homework well, you’ll know the job you’re considering pays in the ballpark of your financial needs; however, the exact salary package you’ll be starting with depends on how the negotiations play out.

Here’s where things can get sticky. You may have your salary requirements and wish list in mind, but the company representative in charge of hiring has a lot more experience in negotiating salary than you do. It’s also easy to feel intimidated when you’re new to the workforce and desperate to find a good job.

You may not have the upper hand here, but you can still come out ahead.

Here are some tips to help you negotiate like a pro:

Choose the right time to negotiate 

Only bring up your salary requirements when you have an actual offer in hand. Don’t jump the gun and assume you’re being offered the job because you’ve had a follow-up interview and you’re getting positive vibes from the company. Talking salary before you’ve officially been offered the position can jeopardize your chances of landing the job.

Do your homework

Before you walk into that room, make sure you know the average going rate for the position in question. You can find this information through a quick online search of sites like Payscale.comGlassdoor.com and Salary.com, or by asking friends who are work in similar positions.

Once you have this number, hold it up against your own income requirements and ask for a starting salary that is slightly above your needs. You don’t want to walk away with less than you deserve, but you don’t want to overreach and come off sounding too greedy, either.

Research the company

Another crucial preparatory step for opening up the salary negotiations is to find out all you can about the company and its top challenges. Talk about ways you can help solve the company’s most pressing problems and you’ll prove you will be an employee worth hiring—at almost any price.

Understand the offer

If the company representative gives you a salary quote that is less than you expected, ask how they’ve reached this number. It’s possible that some of your skills and/or work experience were not considered when the offer was made. For example, you may have already mastered the entry-level skills for this kind of work during an internship for a similar position. This puts you at an advantage, as you won’t need to waste the company’s time and resources on basic training. Consequently, you deserve to start at a higher salary point. A simple question like this can save lots of aggravation on both sides of the desk.

Consider the full scope of the offer

When considering a position, don’t forget that job offers are about more than just salary. Look at the entire package, including all benefits, time off, retirement account contributions, etc. Sometimes, a job may have so many advantageous things attached it’s worth accepting a lower starting salary than you anticipated, as long as your paycheck will still cover your budget.

Similarly, if this job is one that offers tremendous room for growth and the ability to acquire a specific skill-set plus valuable experience, it may be worthwhile to accept it as a stepping stone for a more lucrative position in the future.

Role-play in advance

When negotiating salary, it’s important to find that sweet spot between insecurity and arrogance. It can be super-helpful to practice negotiating in advance by role-playing with a friend.

Remember not to sell yourself short. You’ve worked hard to acquire the skills and experience you have today, and you deserve to earn your true worth. Best of luck with your new job!

Your Turn: Have you successfully negotiated your starting salary at a new job? Share your best tips with us in the comments.

Sources:
https://www.monster.com/career-advice/article/negotiating-salary-first-time
https://www.thebalancecareers.com/negotiating-salary-in-your-first-job-after-college-1986755

What’s A Recession Anyway?

Unless you’ve been living in a bunker for the last several months, you’ve likely caught graph on computer screenthe term “recession” thrown around on the news more than once. Hearing this word being used to describe the state of the U.S. economy can trigger a range of reactions from mild anxiety to a full-blown stuffing-money-under-the-mattress panic.

For many people, though, part of their angst surrounding the state of the economy is the vast amount of unknown: What is the exact definition of a recession? How is it different from a depression? How long do recessions usually last? What causes a recession?

So many questions — but we’ve got answers! Here’s what you need to know about recessions, the current state of the U.S. economy and what all of this means to you as a private consumer.

What is a recession? 

A recession is a widespread economic decline in a designated region that lasts for several months or longer. In a recession, the gross domestic product (GDP), or the total value of all goods and services produced in the region, decreases for two consecutive quarters. A healthy economy is continually expanding, so a contracting GDP suggests that problems are brewing within the economy. In most recessions, the GDP growth will slow for several quarters before it turns negative.

What’s the difference between a recession and a depression?

A depression has criteria similar to that of a recession, but is much more severe. For example, in both a recession and a depression the unemployment rate rises; however, during the Great Recession of 2008, the worst recession in U.S. history to date, unemployment peaked at 10%, while during the Great Depression, unemployment levels soared to 25%. Similarly, during the Great Recession, the GDP contracted by 4.2%, while during the Great Depression it shrank by 30%.

Depressions also last a lot longer than recessions. The Great Depression officially lasted for four years but continued to impact the economy for more than a decade. In contrast, recessions generally last only 11 months, according to data from the National Bureau of Economic Research (NBER).

There have been 47 recessions in U.S. history, and a total of 13 recessions since the Great Depression. There has only been a single recorded depression in our country’s history.

What causes a recession? 

A recession can be triggered by a variety of factors:

  • A sudden economic shock that causes severe financial damage.
  • Excessive debt carried by consumers and businesses, leading to debt defaults and bankruptcies.
  • Asset bubbles, or when investors’ make irrational decisions, overbuy stocks and then rush to sell, causing a market crash.
  • Excessive inflation and rising interest rates, which triggers a decline in economic activity.
  • Excessive deflation, which sparks a decrease in wages, further depressing prices.
  • Technological changes, including outsourcing jobs to machines or other technological breakthroughs that alter the way entire industries operate.

Why the COVID-19 recession is unlike any other?

In June 2020, the NBER  announced that the U.S. economy had been in recession since February.

The COVID-19 recession, also known as the coronavirus recession, the Great Shutdown, the Great Lockdown or the Coronavirus Crash, is unique because it was sparked by an unforeseen pandemic and not by any inherent problem within the economy.

Another anomaly of the coronavirus recession is the super-healthy state of the economy before it hit. In February, unemployment levels were at a 50-year low, stock markets were at a record high and the U.S. economy had enjoyed 126 months of growth,  its longest period of uninterrupted expansion in history.

The unusual triggers and the explosive start of the current recession may be good news for its eventual end. Economists initially were hopeful that the recession could reverse itself quickly with a V-shaped recovery. Unfortunately, due to prolonged lockdowns and the nationwide failure to keep infection rates down, they have since declared that a rapid rebound is unlikely. There is still hope for a relatively fast recovery. An April Reuters poll  found that nearly half of 45 economists believed the U.S. recovery would be U-shaped: slower and more gradual than a V-shaped recovery, but still fairly quick.

How will this recession affect me?

The coronavirus recession can impact the average consumer in multiple ways.

First, many are struggling with sudden unemployment or will be facing joblessness in the coming months. The most recent data from the Bureau of Labor Statistics show the unemployment rate at a staggering 10.2%.

Second, the economic uncertainty has triggered record-low interest rates, which in turn sparked a rush to refinance. If you are currently paying high interest rates on a long-term loan, you may want to consider refinancing and enjoying a lower monthly payment.

Finally, investments in stocks, bonds and real estate may lose value during a recession.

The good news is there’s no need to start stuffing money under your mattress. As a member of Destinations Credit Union, your funds are always safe. Destinations CU is federally insured up to $250,000 by the National Credit Union Administration and independently insured up to $250,000 by Excess Share Insurance. If you are experiencing financial difficulties of any kind, feel free to reach out to us at 410-663-2500 or to drop us a line at info@destinationscu.org to see how we can help.

Your Turn: What do you think will be most impacted by the coronavirus recession? Share your thoughts in the comments.

Sources:
https://www.investopedia.com/terms/g/gdp.asp
https://www.forbes.com/advisor/investing/what-is-a-recession/
https://www.bbc.com/news/av/53736958/coronavirus-what-is-a-recession
https://www.cnbc.com/2020/06/09/us-officially-in-a-recession-but-its-different-than-2008.html
https://www.npr.org/sections/coronavirus-live-updates/2020/06/08/872336272/its-official-scorekeepers-say-u-s-economy-is-in-a-recession
https://www.nber.org/cycles/jan08bcdc_memo.html
https://www.cnn.com/2020/07/30/economy/us-economy-2020-second-quarter/index.html
https://fraser.stlouisfed.org/timeline/covid-19-pandemic
https://www.cnbc.com/2020/04/08/coronavirus-recession-is-unlike-any-economic-downturn-in-us-history.html

What You Need To Know About TikTok

With more than 2 billion downloads around the world and 165 million downloads in the U.S. alone, TikTok is wildly popular.tiktok logo

The coronavirus lockdown only increased its fandom as millions of bored kids, teens and influencers used the short video app to turn themselves into instant stars. The app is hip, fun and addictive. But is it safe?

Let’s take a look at the way TikTok operates and the security concerns surrounding the app.

How does TikTok work?

TikTok is a free social media platform letting users watch, create and share videos — often with a music soundtrack and other fun embellishments — right from their phones. Users can lip-sync to their favorite music hits, share their best dance moves on the app or show off their pet’s latest trick; all while connecting with friends through likes, comments and duets.

TikTok is owned by the Chinese tech company, ByteDance.

What are the safety concerns with TikTok? 

Like all social media platforms, TikTok encourages users to share slivers of their personal life. The app also captures user data by tracking likes, dislikes, friends, consumer patterns of behavior, locations and more. While other major platforms, like Facebook, do the same thing, TikTok is the first Chinese-owned app to gain such broad popularity in the United States, raising privacy concerns that Americans have never grappled with before.

There have been some claims that TikTok is a cover for Chinese spyware that steals users’ information and sends it back to China, but these allegations have been mostly unfounded. If TikTok is actually being used to scrape information on the lifestyle and habits of millions of Americans, that data could turn into a national security risk.

Another concern with the safety of TikTok is the app’s occasional release of new software with security vulnerabilities needing to be urgently fixed. While these issues are relatively common with apps, and they’ve all been patched quickly, the small window of time between the release of the software and the security patch-up can pose a serious risk to TikTok users.

Will TikTok be banned in the U.S.? 

The United States is not the first country to raise concerns over the safety of TikTok. The app has already been threatened with bans in several countries, including Indonesia, Pakistan and Japan.

More recently, President Donald Trump has signed an executive order to ban TikTok in the United States. Trump is pressuring ByteDance to sell the app to an American company before the ban goes into effect on Sept. 15. Microsoft is currently under negotiations with ByteDance to purchase 30% of the app, but the administration is pushing for complete ownership by an American company. As the deadline for a deal approaches, TikTok continues to insist that its platform is completely secure.

“TikTok is led by an American CEO, with hundreds of employees and key leaders across safety, security, product, and public policy here in the U.S.,” the company said in a statement. “We have no higher priority than promoting a safe and secure app experience for our users. We have never provided user data to the Chinese government, nor would we do so if asked.”

Should users delete the app?

With negotiations still underway, and the future of TikTok in the U.S. still unknown, many users are unsure of how to proceed. Is the app safe to use?

There’s no black-and-white answer to this critical question. While every social media platform poses a safety risk, as the only Chinese-owned app to dominate the American scene, TikTok is a bigger concern. You may want to delete the app just to be on the safe side.

If you decide to keep TikTok on your device, be sure to exercise caution when using the app:

  • Don’t assume your data is private. Keep all potentially vulnerable information off the app and videos you share.\
  • Keep the app’s setting private.
  • Beware of what you share. If you aren’t comfortable with the video going viral, don’t share it.

TikTok is a super-fun app that may pose a potential risk to user security. It’s best to practice caution when using the app to keep your information safe.

Your Turn: Are you concerned about the safety of TikTok? Tell us about it in the comments.

Sources:
https://www.axios.com/tiktok-bans-worldwide-china-6e77a3a8-f4c7-4600-94bf-df89af0a8e5f.html
https://www.forbes.com/sites/zakdoffman/2020/07/11/tiktok-seriously-dangerous-warning-delete-app-trump-ban/#761d8e932b0e
https://www.theatlantic.com/international/archive/2020/07/tiktok-ban-china-america/614725/
https://www.wsj.com/articles/whos-afraid-of-tiktok-11595373247
https://www.commonsensemedia.org/blog/parents-ultimate-guide-to-tiktok

What You Need To Know About Selling Your Home During COVID-19

Selling a home is a move people generally plan years in advance, and 2020 was no couple closing on a mortgage loandifferent. For many homeowners, the hot real estate market of spring and summer of 2020 was going to be the season they put their homes up for sale. And then came the coronavirus — and the world turned upside down. With people struggling just to get by financially, and health and safety paramount, selling a home seemed like a dream from another lifetime. Records of home sales in the U.S. from the beginning of the outbreak reflect these feelings, with a sharp decline of 21% in total homes sold in March, and another decrease of 17.8% in April, according to data from the National Association of Realtors (NAR) .

Now, though, the U.S. real estate market is looking very different. As the economy limps toward a recovery, many buyers are searching for a new place to call home and the housing market is thriving. In fact, national home sales climbed a record 20.7 percent in June compared with home sales from a year ago, global pandemic notwithstanding

One crucial factor driving the surge in home sales is the declining mortgage rates. In the beginning of March, mortgage rates plunged to a record low of 3.13 percent. Since then, the market has seen several smaller increases and decreases. On Aug. 6, history was made when the national average mortgage rate hit 2.88%, the lowest rate on record of all time.

Despite the flourishing housing market, many homeowners who’ve planned to sell their homes this year are still reluctant to take that leap. And it’s no wonder, with restrictions still in place and so much uncertainty still surrounding the economy.

If you’ve been thinking of selling your home, you still can. Here’s all you need to know about selling your house during the COVID-19 crisis.

Are you really ready to sell?

Before putting your home on the market, it’s important to consider all the variables involved in this step, and be sure it’s a financially responsible move. With the pandemic causing a slowdown of the economy and a likely recession, life circumstances you may have relied on, such as a steady job and salary, may not be dependable anymore. Before calling a real estate agent, it’s a good idea to review all the relevant numbers to be sure that selling your home now is in your best interest.

Stage your home to sell

Anyone selling their home knows they need to showcase it in the best possible light, and never has this been truer than now. With restrictions still in place in many states and lots of people stuck home in quarantine, many buyers will be doing their touring virtually. For sellers, this means that staging and photographing a home well is more important than ever.

Consider hiring a professional home-staging and photography service to truly present your home in the best way possible. If your furniture is shabby or your home is too cluttered to be attractively displayed, you can also invest in virtual staging software or hire a team of professional virtual stagers to help you update the furniture and clean out the clutter with just a few clicks. Either option can cost you upward of $75 an image, but the NAR report from 2019 shows that on average, sellers see about a 5% return on this investment.

Here are some general tips to follow when staging and photographing your home, as shared by Buddy Mountcastle,  a real estate photographer based in Fort Lauderdale, Fla.:

  • Clean up the outside. Curb appeal is the first selling point for any home. Make sure there are no weeds, overgrown grass or kids’ toys ruining the first impression of your home.
  • Let the sunshine in. Aim to shoot mid-day. Scrub your windows clean, open the curtains and let the natural sunshine brighten up every room.
  • Undo the lived-in look. Remove all personal effects from your home before going camera-crazy. This includes stray shoes, family photos, piles of magazines, small kitchen appliances and more.
  • Shoot from the right spot. When capturing a room on camera, try to get as much of the space in the frame. Aim to include three walls, which can mean shooting from the corner or doorway. It’s also important to shoot straight and from chest height so as not to distort the room.

To make it easier for buyers to view your home, you can post a virtual tour on your online listing, and offer the option of scheduling a live tour with an agent through FaceTime or Zoom.

Play it safe

If you will be allowing potential buyers into your home, don’t forget to play it safe. Set up a box of disposable masks, shoe covers and sanitizing wipes at the door for all visitors who will be tramping through your home. If you will be hosting an open house, it’s best to allow a limited number of people inside at a time to make social distancing possible.

Price it right

Fewer homeowners are putting their houses up for sale this year, but the pool of buyers is also smaller than usual. This means you won’t be able to jack up the price of your home for way more than it’s worth. Work with an agent to look at comparable home sales in the area and to determine a fair asking price. Also, as always, list a selling price a bit higher than your actual desired price to allow for negotiations.

Closing during COVID-19

The coronavirus pandemic will likely affect every aspect of selling your home, up until the closing. With many workers in the home-selling industry, from professional home inspectors, to mortgage lenders, to movers working with a smaller team now, be prepared for various steps of the home-selling process to be delayed. It’s best to be patient and to anticipate that things may take longer than usual. This is especially true with lenders, as low mortgage rates are triggering a spike in refinance applications across the country and lenders are busier than ever.

COVID-19 has wrecked all sorts of plans, but selling your home does not have to be one of them. With some adjustments and altered expectations, you can successfully sell your home during the coronavirus pandemic.

If you plan to buy a new home, don’t forget to check the great rates and options for a first mortgage through Destinations Credit Union!

Your Turn: Have you sold your home during COVID-19? Share your tips with us in the comments.