lifestyle

Life on Your Own: Protecting Yourself and Your Finances

/ destinationscreditunion / Leave a comment
By Christopher Haymon, Guest Blogger
Adultingdigest.com
Woman working on laptop

Photo courtesy of Pixabay

Although there are some benefits to living on their own, a study of recent statistics from the Pew Research Center shows that young people are moving out of their parents’ homes later in life. While the reasons for living on your own may vary, there are certain things that you’ll need to pay attention to when living independently.

Choose the Right Place

Once you’ve decided to live on your own, you’ll have to make sure you’ve chosen the right place. According to Tough Nickel, young people have several things to consider when getting their own place, which include setting a rental budget based on your affordability, knowing what questions to ask a prospective landlord, and putting together the documents needed to prove that you can afford the rent. It will also be important to know your credit score and how the rental approval process works. The payment of utilities may be a new responsibility for you, so be sure to factor that into your budget and ask the landlord which utility bills, if any, are included in the rent. A clear idea of the costs involved may limit your housing options, or it could mean you’ll have to consider finding reliable roommates.

Keep Yourself and Your Property Safe

Now that you’re living on your own, you have sole responsibility for your safety. You can do that without spending too much money, such as ensuring you have appropriate lighting on the outside of the property and negotiating with the landlord to get new locks on the doors. It’s also advisable to install deadbolts on the doors. Another suggestion is getting to know your neighbors so it will be easier to identify a stranger. Additionally, if the property doesn’t come with a fire extinguisher, you should consider investing in one, as well as learning some basic fire safety skills.

Buy Life Insurance

It’s always a good idea to prepare for the unexpected. If you plan to have a family, you’ll want to make sure they’re financially secure when you pass away. That’s where life insurance comes in. There are different types of insurance plans, including whole and term policies, but they share the same end result: Financial assistance is given to your family to help pay off debts and funeral costs, as well as make up for lost income. Shopping for insurance can seem overwhelming, but fortunately, online calculators make it simple to choose the right coverage for you. Once you get an idea of rates, you can then buy insurance online instead of in-person.

Make Sound Financial Decisions

While you may have created budgets before, things are likely to be different now. You may have new or increased expenses such as food, travel, rent, and utilities. It’s best to create a new budget that will accurately show what your expenses and assets are. This budget will include monthly and other unscheduled expenses such as utility bills, which are monthly, and insurance payments, which might be quarterly or semi-annual. Your budget should make allowances for an emergency savings fund as well as long-term savings. It’s best if your budget is flexible, as having a rigid budget can affect your ability to adhere to it, and you’re more likely to blow your budget on unplanned fun activities. Above all, you need to make sure the figure you have allocated to each item in the budget is accurate so as not to throw things out of whack. You should manage how you use your credit card and protect your credit score.

Consider Your Next Move

In most cases, the next thing on the to-do list after moving out is to buy your first home. Doing this requires long-term planning, and you’ll need to decide where you’d like to live and the type of housing you’re interested in, as well as investigate your loan options. Many first-time homeowners choose to take out a FHA loan because these types of loans have less stringent credit and income requirements, and you may be able to buy with a down payment as low as 3.5 percent).

Once you have an idea of how much the home will cost, you’ll have to start saving toward the costs associated with buying a home such as the down payment and closing costs. When saving for your down payment, you may need to increase your income; this could include working overtime or taking on a side gig. You can also cut down on expenses by eating out less, carrying lunch, or cutting your cable package. Perhaps consider reverse budgeting, which is an aggressive saving strategy where budgets are built around how much money you need to save monthly to meet your goal.

Living on your own is a brave and exciting experience regardless of when you decide to do it. So, ensure you are making wise decisions that will keep you moving forward on this new path!

Debit Card Safety

/ destinationscreditunion / Leave a comment

“And how are you paying for your purchases today?”Close up of ATM key pad

It’s a question we have to answer almost every day. Will you be using cash, a credit card or a debit card?

It may be instinct for you to pull out any piece of plastic without thinking, but your random card of choice might not be the safest way to pay. Sometimes, you’ll want to use a credit card. And sometimes, its a better idea to pay with a debit card. Still other times, you’re best off using cash.

Let’s explore when and how to use your debit card.

Credit and debit: How are they different?

They’re both plastic, with a series of numbers, a security code and your name embedded on them. So, how are debit and credit cards different?

A better question might be: How are they the same? Appearances aside, your credit and debit cards have very little in common.

Credit cards allow you to choose your purchases now, and pay for them weeks, months or even years later. If you let your balance grow, you’ll be paying for a lot more than it really costs in the way of interest. But, if you make timely payments, you’ll have yourself a small loan that usually costs you1 little to nothing. Credit cards also offer rewards, purchase protection and the ability to back out of a purchase you’ve decided against. You can also contest fraudulent charges on your account, freeze your credit on a compromised card or even close the card completely.

Debit card transactions, on the other hand, take the money right out of your checking account as soon as you swipe. Some point of sale terminals put a freeze on the amount, removing it from your account a few days later. But, either way, you won’t be able to access that money and you won’t have to worry about paying for it later. There’s no interest here, but there also may be no purchase protection, depending upon your financial institution. Finally, in case of fraud you may need to resort to closing your checking account. However, usually a simple issuing of a new debit card is all that’s needed.

Which one’s better? It depends on the purpose. Debit cards are great for helping you stick to your budget and won’t send you into a cycle of debt. However, because they may offer very little recourse in cases of fraud, credit cards are usually the better choice in the most vulnerable situations.

5 purchases you should carefully consider before using your debit card

According to data from FICO, during the first 6 months of 2017, the number of compromised ATMs and point-of-sale devices was 21% higher than it was in the first 6 months of 2016. Don’t let your card be next!

Here’s where you may not want to use your debit card:

1.) At the pump

Card skimmers at gas stations are on the rise. By choosing to use your credit card instead of your debit card at the pump, you’ll have an added layer of protection against fraud. You can also choose to use cash. It’s the safest way to pay (so long as you watch out for pickpockets!).

2.) At an isolated ATM

The ATM at Destinations Credit Union? Definitely safe to use.  We check regularly for signs of tampering.

The one at the crowded pharmacy? Probably OK.

The machine in a secluded corner of an empty convenience store? Very possibly tampered with.

Isolated ATMs in locations with very little security and sparse foot traffic are prime targets for hackers. It’s best to give these machines a wide berth and pick up your cash at Destinations Credit Union.

3.) In an unfamiliar location

When on vacation, it’s important to think before you swipe. You don’t know the area and you can’t be certain which clerks are to be trusted. You’re better off paying with a credit card or with cash so your purchases are protected against fraud.

Also, a large charge in an area you never frequent might cause your purchases to be flagged as fraudulent. Let your credit union know about your trip and be careful how you swipe!

4.) For large purchases

If you’re springing for a new entertainment center or another big-ticket item, you’re best off using your credit card. It’ll offer you dispute rights in case the product doesn’t turn out how you expected, and you might be granted an extended warranty just for using a credit card.

5.) Restaurants

Can you really trust the servers at your favorite restaurant with your personal financial information? When you hand them your debit card at the end of the meal, that’s exactly what you’re doing. The server has more than enough time to clone your card and then use it for any purchases they’d like to make. Unless your restaurant has a tableside payment system, you’re better off using a credit card or cash to pay for your meal.

Look out for skimmers

Always use caution when using your debit or credit card. Check the payment processor for anything that looks out of place, such as a newer keypad on an older machine, or a hard-to-use slot for your card. Don’t forget to cover the keypad with your hand when inputting your PIN.

Stay ahead of hackers by using your debit card with caution!

Your Turn: Was your debit card ever compromised? Share your experience with us in the comments!

SOURCES:
https://budgeting.thenest.com/problems-using-debit-cards-gas-pumps-23710.html
https://www.creditcards.com/credit-card-news/10-places-not-to-use-debit-card-1271.php
https://www.creditcards.com/credit-card-news/gas-pump-atm-skimmers.php
http://news4sanantonio.com/news/local/skimming-devices-found-on-pumps-at-northwest-side-gas-station

Do you and your money care about the same things?

/ destinationscreditunion / Leave a comment

By Heather Marshall, CFPC, MPP; Educator, AAA Fair Credit Foundation/Utah SavesPiggy bank in front of blackboard

As the old adage goes “Actions speak louder than words.” On the topic in question, it is fair to say spending is an action that implies values. Which explains why the nature of finances can be so personal, and challenge us to ask the question, what do we value?

Is it:

  • Family?
  • Friends?
  • Health?
  • Happiness?
  • Travel?
  • Spontaneity?

In asking these questions, spending becomes a means of self-examination shedding light on our actions and our values. Sometimes they don’t add up and when they don’t add up life can get off track. Such as if you value health, and yet find on your bank statement a lot of transactions related to unhealthy fast food. Thus, prompting the questions:

Does your money care about the same things you do?
Is your budget going towards things you really care about?

In which case steps can and should be taken to realign spending with what we value. Such as:

  • Review expenditures and categorize them to see where the money is going. Know where you are now so you can make a plan going forward.
  • Recognize there may be some items in your budget that need adjusting, but will take time to achieve. For example, moving closer to work to cut down on travel and provide more family time will require time and planning.
  • Set goals to getting your money on track.
  • Make your goals visible. When you have the impulse to spend on something you really don’t value, you can stop yourself because you have visual reminders around you. Create visuals with pictures of your goals on the wall, on our computer, on your phone. Keep it readily in front of you.

Remember, money can enable a lifestyle of values and goals that reflect us. Now that you are aware of these tendencies and about what you value in life…go make your money care about what you care about.

Can Living Frugally Make You Happier Than When Living Lavishly?

/ destinationscreditunion / Leave a comment

Do you believe money is the key to happiness?63e01-piggyeducation

Somewhere deep inside, we all know that money cannot buy happiness. Many people overspend and rack up thousands of dollars in credit card debt to live a lifestyle they believe will make them happy, only to discover they are living beyond their means. This, in turn, adds stress and worry … causing unhappiness. Believe it or not, living frugally can actually make you happier than living lavishly.

Living a frugal lifestyle isn’t necessarily about pinching pennies and denying yourself things you want. It’s about making your life easier and worrying less about money.

If you’ve decided it’s time to start living more frugally, ask yourself why you want to do it and establish a goal. Without a reason to change your spending habits and a goal to work toward, it’s easy to fall back into old habits. Maybe you’d like to retire early, or travel the world or buy your dream home. Maybe you’d like to work less and spend more time with your family. Whatever your reason, write it down. Place reminders of your goal where you’ll see them often.

Once you’ve started your new frugal lifestyle, you may be pleasantly surprised at your newfound happiness. Below are some benefits of living the frugal lifestyle that can lead to more happiness and better money management.

  • You’ll learn to appreciate what you have. You’ll become thankful for your resources and learn to make the most of them. Rather than throwing away old items, you learn to repurpose them and let little go to waste.
  • You’ll tend to choose experiences over objects. Rather than going to the mall and purchasing a new outfit or the newest video games, you’re more apt to go for hike, to the beach or play board games with friends or family. These experiences provide memories and happiness that can last a lifetime. Conversely, that new outfit or video game will provide only temporary happiness.
  • You’ll start to notice your debt diminishing. The burden of debt often ties people to jobs and locations that they hate because they feel they have no other choice. Once your debt disappears, you’ll have the freedom to choose a profession and location that makes you happy.
  • You will have more leisure time. Once you’re able to pay down debt, you won’t need to work as many hours to make ends meet. This will give you more free time to spend on hobbies and other leisurely pursuits.
  • Living frugally may put you on the path to early retirement. Rather than spending your golden years working, you could be gardening, traveling, enjoying your grandchildren or any number of more pleasurable things. Being able to put more funds away for retirement will help you reach a financially comfortable level long before many of your colleagues.
  • You might find joy in helping others. By reducing your own expenses and saving money, you are able to give more to others and support social causes that are important to you.

Now, you may be thinking – the frugal lifestyle doesn’t sound all that bad, but how do I get started? The key is to start small. Make a list of what you’d like to accomplish, how much money you’ll need to achieve it, and formulate a plan. Figure out expenses you can live without. Instead of buying high-priced gourmet coffee at a drive-thru in the morning, brew your coffee at home. Brown bag your lunch rather than eating out. Make a weekly meal plan and cook your meals at home. These items alone can potentially save you hundreds of dollars a month.

If you’re paying down multiple credit cards, look into consolidating them into one loan or to a single, lower-interest credit card. This can give you significant savings on interest charges. Check out Destination Credit Union’s low interest credit card options and apply online. Once you’ve consolidated your credit card debt, keep your your oldest credit card, but use it infrequently and close all others. Keeping your oldest card open may positively impact your credit score. Leaving the others open, though, may lead to a temptation to use them again, thus defeating the purpose of paying them off.

Learn to stretch your money as far as you can. When purchasing groceries, clip coupons and look for sales. When purchasing clothes or other non-grocery items, check thrift stores, yard sales and clearance racks for the best possible deals.

Look for ways to lower your monthly bills. Are you paying a huge bill for cable TV? Could you live without it? Many people pay a large cable bill and only watch a handful of channels. Check to see if there is a cheaper package available. Is your electric bill higher than it should be? Try hanging your clothes outside to dry rather than using your clothes dryer whenever possible. Also, washing your clothes in cold water instead of hot will save your hot water heater from working as hard – and your clothes will still get cleaned. Another good habit to get into is unplugging electronic devices when you’re not using them.

Give frugal living a try! You have nothing to lose but debt and can gain some unexpected happiness along the way.

Your Turn: Does saving money make you happy? How do you save – and enjoy the process? Share your thoughts with us in the comments!

SOURCES:
http://www.wisebread.com/how-living-on-a-tight-budget-makes-you-happier  
https://www.thebalance.com/frugal-living-4074014  
https://toughnickel.com/frugal-living/101-Frugal-Living-Tips-You-Need-to-Know  
https://www.thepennyhoarder.com/life/frugal-living-rich-life/  
https://www.thebalance.com/lower-your-electric-bill-1388743