At 1st Community Credit Union, we understand the importance of planning for the future, especially when it comes to elder care. As we age, the financial aspect of care becomes a crucial consideration, and we're here to guide you through the journey.
Understanding the Financial Implications:
Elder care involves various financial considerations, from healthcare expenses to potential changes in living arrangements. As a financial institution, 1st CCU is committed to providing valuable insights to our community on how to navigate this complex landscape.
Budgeting for Healthcare:
Healthcare costs can be a significant part of elder care expenses. Planning ahead and understanding your insurance coverage is essential. Our financial experts can assist you in creating a budget that accounts for medical expenses, ensuring that you or your loved ones receive the care they deserve without unnecessary financial strain.
Long-Term Care Planning:
As part of elder care, long-term care planning is a crucial aspect of securing a comfortable and worry-free future. 1st CCU offers various financial products and services designed to help you plan for long-term care, including savings accounts, retirement savings options, and personalized financial advice.
Utilizing 1st CCU's Resources:
Our credit union is dedicated to supporting our members at every stage of life. If you're considering elder care, our team can help you explore savings opportunities, ensuring that you have a financial safety net for any unexpected expenses that may arise.
Estate Planning and Inheritance:
Elder care planning is incomplete without addressing estate planning and inheritance matters. 1st CCU can provide guidance on setting up trusts, beneficiaries, power-of-attorney access, and other essential documents to secure your assets for the next generation. We believe in empowering our members to make informed decisions that align with their values and financial goals.
Financial Peace of Mind:
At 1st Community Credit Union, we aim to provide our members with the tools and resources they need to achieve financial peace of mind. Whether you're planning for your own elder care or assisting a loved one, our experienced team is here to help you make sound financial decisions that support your unique situation.
Elder care involves both emotional and financial considerations. With 1st CCU by your side, you can navigate the financial aspects of elder care with confidence. By planning ahead and utilizing our range of financial services, you can ensure a secure and comfortable future for yourself or your loved ones. Contact us today to start your journey toward financial well-being during the elder care phase of life.
Borrowing money is a decision that requires careful consideration. Whether it's for a home, education, or unexpected expenses, understanding the true cost of borrowing is essential to make informed financial choices. At 1st Community Credit Union, we believe in empowering our members with the knowledge needed to navigate borrowing responsibly. Let’s explore how to calculate the true cost of borrowing and discuss the impact that it can have on your credit.
Understanding Interest Rates:
One of the primary factors influencing the cost of borrowing is the interest rate. Whether you're considering a loan from a bank or a credit union like 1st Community Credit Union, the interest rate determines the additional amount you'll pay on top of the borrowed sum.
Credit unions often offer competitive interest rates compared to traditional banks, making them an attractive option for borrowers. When evaluating the true cost of borrowing, consider not only the interest rate but also whether it is fixed or variable. A fixed rate provides stability with consistent monthly payments, while a variable rate may change over time, affecting your overall repayment amount.
Loan Terms and Repayment Plans:
The length of your loan, known as the loan term, is another crucial factor in calculating the true cost of borrowing. While longer terms may result in lower monthly payments, they often lead to higher overall interest payments. Shorter terms, on the other hand, may have higher monthly payments but can save you money in interest over the life of the loan.
At 1st Community Credit Union, we can tailor loan terms and repayment plans that align with your financial goals. Understanding the trade-offs between monthly affordability and long-term interest savings is vital for making an informed borrowing decision.
Impact on Credit:
Borrowing money, when managed responsibly, can positively impact your credit score. Timely payments and responsible credit usage demonstrate to credit bureaus that you are a reliable borrower. On the flip side, missed payments or accumulating too much debt can have a negative effect on your credit score.
At 1st Community Credit Union, we work closely with members to find solutions that suit their financial situation. Responsible borrowing and on-time repayments contribute to building a positive credit history, opening doors to better financial opportunities in the future.
Conclusion:
As you embark on the journey of borrowing money, understanding the true cost is paramount to making sound financial decisions. At 1st Community Credit Union, we are committed to providing our members with the tools and knowledge they need to navigate the borrowing process wisely.
Consider the interest rates, loan terms, and overall impact on your credit when evaluating borrowing options. Our team at 1st Community Credit Union is here to assist you in making informed decisions that align with your financial goals. Contact us today to explore personalized borrowing solutions and embark on a path of financial empowerment.
Budget Your Year
Budgeting is a hard skill to learn. With the pressure to consume it’s difficult to know where to cut back. The new year is a perfect time to reassess your financial habits and set ambitious yet achievable financial goals for a debt-free future. In this blog, we'll dive into three practical and effective budgeting strategies that can help you achieve a debt-free year. Whether you're looking to pay off existing debts, save for significant milestones, or simply gain better control of your finances these strategies are designed to guide you towards success.
Strategy 1: 50/30/20 Budget Rule
The ‘50/30/20 budget’ is a great way to budget if you are struggling to find a balance between your needs, wants, and savings costs. This strategy recommends budgeting 50% of your money towards needs, 30% towards wants, and 20% towards savings. Needs include housing, groceries, bills, health insurance, car payments, and gas/transportation. Wants include costs connected to travel, entertainment, eating out, and shopping. Savings include emergency funds, retirement accounts, debt payments, and investing. This budget strategy is incredibly effective for long-term yearly savings but can be less effective for monthly budgets.
Strategy 2: Pay Yourself First Budget
The ‘pay yourself first budget’ prioritizes your savings before doing anything else with your paycheck. It’s easy to forget or choose not to deposit money from your paycheck into your savings. With this budgeting strategy, you automatically take a specific amount out of your paycheck and invest it in your savings accounts or emergency funds. If you commit to this strategy, future you will be happy that you invested in your future! If you run into an unforeseen expense, emergency funds are a great way to escape debt and give yourself a financial safety net. Further down the line, once you start thinking about retirement, this budget strategy might even allow you to retire early! Overall, this budget strategy is a great short-term and long-term approach for a debt-free future.
Strategy 3: Envelope Budgeting
If you work a job where you get paid mainly in cash, the ‘envelope budgeting strategy’ might be right for you. This budgeting strategy categorizes different expenses and separates them by envelopes. Once you’re out of the money in an envelope, you can’t spend any more money in that category for the month. The great thing about this strategy is that it can easily be personalized. Most people will have these basic envelope categories: rent, gas, groceries, eating out, shopping, and savings—but you can add more specific financial saving goals. For example, if you’re trying to save up for a car you can make an envelope specifically for your car payments. This budgeting strategy is specifically effective for variable expenses like food and shopping since the amounts can vary based on habits but can also be used as a savings strategy. Try it out!
Choosing the Right Budgeting Strategy
Finding the right budgeting strategy that supports your financial goals is the key to budgeting effectively. Your spending habits, monthly income, and goals all affect which strategy will work best for you. To find the right budgeting strategy for you, answer these questions:
1. Spending Habits
A. I spend a lot of extra money in cash every month.
B. I don’t spend a lot of extra money every month.
C. I spend a lot of extra money in credit/debit every month.
2. Monthly Income
A. I get paid mainly in cash.
B. I get paid a yearly salary.
C. I get paid a mix of pay checks and cash.
3. Financial Goals
A. I want to practice general budgeting.
B. I want to prioritize my savings.
C. I want to balance out my spending and saving.
| If you chose mainly A | You should try Envelope Budgeting. |
| If you chose mainly B | You should try the Pay Yourself First Budget. |
| If you chose mainly C | You should try the 50/30/20 Budget Rule. |
Budgeting Made Easy
Empowering yourself with effective budgeting strategies is an essential step towards a debt-free and financially secure future. By implementing these practical strategies, you'll not only regain control of your finances but also pave the way for long-term financial success. At 1st Community Credit Union, we are here to support you on your journey to financial well-being. Look into our savings accounts and other budgeting tools or contact one of our financial experts to help you make a budget plan for a debt-free future.
Auto Loans: Your Path to a New Car
Are you considering getting behind the wheel of a new car in the upcoming year? The start of a new year often brings fresh beginnings and a list of exciting possibilities. If a new car is on your wish list for the year ahead, it's essential to be well-informed about auto loans and the process of financing a new car.
Determine Your Budget: Before you start browsing the latest car models and dreaming about your new ride, take a realistic look at your financial situation. Calculate your monthly income, expenses, and savings. This will help you establish a budget for your new car, ensuring that you don't overextend your finances.
Check Your Credit Score: Your credit score plays a crucial role in the auto loan approval process. Lenders use your credit score to assess your creditworthiness and determine the interest rate you'll be offered. The higher your credit score, the better the terms you can secure. If your credit score needs improvement, consider taking steps to boost it before applying for a loan.
Shop Around for the Best Loan Rates: Don't settle for the first loan offer that comes your way. Shop around and compare auto loan rates from different lenders, including banks, credit unions, and online lenders. By doing so, you can find the best deal that suits your budget and financial goals.
Understand Loan Terms: When evaluating loan offers, pay attention to the loan terms. These terms include the interest rate, loan duration, and monthly payments. A longer loan term may result in lower monthly payments but can end up costing you more in interest over time. Be sure to choose terms that align with your budget and financial objectives.
Down Payment and Trade-In: Consider making a substantial down payment and possibly trading in your current vehicle. A larger down payment can reduce the loan amount, leading to lower monthly payments and less interest paid over the life of the loan. Similarly, trading in your old car can provide additional funds to put toward your new vehicle.
Pre-Qualified Benefits: Getting pre-qualified for an auto loan is a wise step. It not only gives you a clear idea of your budget but also makes you a more attractive buyer to dealerships. Pre-qualification can help streamline the car-buying process and potentially lead to better negotiation opportunities.
Read the Fine Print: Before signing any loan agreement, carefully read and understand all the terms and conditions. Make sure there are no hidden fees or surprises down the road. If you have any questions or concerns, don't hesitate to ask the lender for clarification.
Consider Insurance Costs: Don't forget to factor in the cost of insurance for your new car when budgeting. Insurance premiums can vary depending on the make and model of the vehicle, so it's essential to get quotes and ensure it fits within your budget.
Plan for Ongoing Maintenance: Owning a new car involves ongoing expenses such as fuel, maintenance, and registration. Make sure you have a plan in place to cover these costs in addition to your monthly loan payments.
Drive Off with Confidence: Once you've secured your auto loan, negotiated the price of your new car, and finalized the deal, you can drive off into the new year knowing that you've made an informed and responsible decision.
Shop Smart
A new year brings new opportunities, and if a new car is on your horizon, it's crucial to be well-prepared when it comes to financing. By understanding the ins and outs of auto loans, managing your budget, and making informed choices, you can drive into the new year with a fresh set of wheels, making 2024 a year to remember. At 1st Community Credit Union, we offer a wide range of loan rates and opportunities. When it comes to finding the car of your dreams, check out 1st Community Credit Union’s AutoSmart website to help you shop smart this year!
by Practical Money Skills
If you've got a business idea and you couple that with an entrepreneurial itch, you may find yourself tossing and turning at night trying to figure out a plan for moving it forward – dreaming of the day you'll become your own boss.
I've hung my shingle in the past and know from experience that there are ups and downs to starting and owning a business. The initial years can be especially tricky, but the long-term payoff can also be financially and personally rewarding.
If you're up for the challenge and excited by the prospect of becoming a business owner, there are a few steps you can take to help make sure you'll start your new venture on sound financial footing.
1. Create a business plan. Using a written business plan as a guide for your first few years as a business owner can be very helpful. The process of researching and writing your business plan can also teach you more about the industry and may help you better understand the viability of your idea.
A good place to start could be with either the U.S. Small Business Administration (SBA) or the SCORE Association (a non-profit supported by the SBA), who have free resources and training that you can use to help you create a business plan.
Once it's complete, you can use the business plan to attract partners, investors and employees who share your vision for the future of the business.
2. Research your potential start-up costs. You might already be adding up necessary expenses in your head: a website, office or retail space, payroll if you need to hire employees, etc. However, there are also lesser-known expenses that may surprise first-time business owners.
For example, you could have to pay fees and permitting costs to your city, county or state. And depending on the business, you may need to get licensed and purchase insurance, all of which have costs that can add up.
Knowing your actual start-up costs, which should be factored into your business plan, can be important as you look for funding. And whether you're tapping into personal savings, asking friends or family for investments, crowdfunding or applying for a loan, you should stop to consider the potential pros and cons of each approach.
3. Separate your personal and business finances. Even if you're starting as a sole proprietorship and decide not to form a business entity, it's generally a good idea to separate your business and personal expenses.
One way you might consider doing so is by opening a new bank account that you only use for business-related transactions and putting all your business-related purchases on a debit or credit card linked to that account that you don't use for anything else.
Keeping your accounts separate can save you time when you file your tax return or need to review your expenses. If you incorporate your business, separating your personal and financial accounts can also be an essential step in limiting your personal liability.
4. Consult with experienced professionals. Setting your time aside for research and learning can be important, but paying for professional expertise now can help you protect your business later and lead to long-term savings.
- Attorneys can provide guidance as to how to structure your business and make sure the legal paperwork matches the vision in your head. They may also be able to tell you about relevant local laws that could impact your business.
- Accountants can help you determine which business type (e.g. an LLC versus an S corporation) makes the most financial sense for your business and offers the most tax savings.
- Insurance agents or brokers can tell you about the different types of insurance you can use to limit your liability.
5. Track your income and expenses. Knowing where your money comes from and goes can be important when you're trying to decide where to reinvest within your business and where you may be able to cut costs.
You could start with a simple spreadsheet if you don't have a lot of clients or overhead. As you grow, you'll likely want to use more complex software to manage your finances.
There are a variety of inexpensive cloud-based accounting, invoicing and payroll systems for sale that you can use to help with the administrative tasks. Many let you give limited access to a bookkeeper or accountant if you want to outsource some of the work.
6. Start building your business's credit. New business owners may not realize that there's a difference between personal credit and business credit. Your business can have its own credit reports and scores, and you may be able to use your business' credit to secure financing or get more favorable terms from vendors.
You can start building business credit by working with vendors that report your payments to the business credit bureaus (you can ask them or look online for lists). In some cases, using a business credit card could also build your business's credit.
7. Create a business emergency fund. An emergency fund can help you get through a personal or family crisis without worrying about your finances. Consider building a separate emergency fund for your business, which may offer similar benefits in case you hit a slow season or unexpected setback.
Bottom line:
When you strike out on your own, money isn't always the most important thing – hopefully you've found something you also love to do – but you want to make sure the numbers add up. Putting in the time to make sure your finances are in order, and creating a plan for how you'll grow your business, can be essential to becoming a successful entrepreneur.
by Practical Money Skills
You can break personal finance into three broad categories: income, expenses and savings. Your personal cash flow statement lists your income and expenses and a common goal is to end each month with a positive balance – with money left over to put into savings.
We often tend to focus on how to make the most with what we have, but don't forget the third category. With planning, dedication and an understanding of how your skill set could benefit clients, you could make the transition to a more entrepreneurial role and increase your income.
A friend recently shared her experience. She started working out while looking for a way to release stress. Soon, exercise became her hobby. And then her passion. Several years later, she got the necessary training and certifications to go into business for herself as a fitness instructor and personal trainer.
Others have similar experiences. A photography or coding course sparks intrigue, which leads to exploration as a hobbyist and an eventual career or part-time income source. Or later in life you may decide it's time for something different and start by exploring your interests and then setting off on an entirely new path.
Acknowledge that you may be giving yourself a new job. First, consider whether you really want to turn something you enjoy into a financial pursuit. Some people find that the transition can "ruin" their hobby in a way – it could feel like a chore or job rather than an enjoyable outlet. As long as it doesn't require a substantial upfront financial investment, testing the water before diving in fully could be a good idea.
With the proper clearance, you can stay at your current role and start a small side business or offer your services as a freelancer to see what the experience will be like (and how much money you can make). You might find that a profitable, or cost-covering, hobby is enough.
Identify ways to make your offering uniquely yours. No matter how hard you try, you can't will money into existence. It will take a lot of work to make a business succeed and even with a driven entrepreneur at the helm, many businesses don't make it past the first several years.
But whether you're creating and selling a physical product or offering a service, you bring a unique set of skills and experiences to the table. Try to figure out how these can distinguish your offerings or add a unique twist that will help potential customers meet their goals.
Businesses succeed for a variety of reasons. They might create something entirely new, figure out how to make something less expensive or more luxurious, put their efforts into customer support or figure out a fun and creative way to advertise their product.
Figure out who your target customers are and what they like. If you're going to make money you'll want to identify a target market. Generally, this will be a group of people who want and can afford your offering. Both qualifiers are equally important.
Be brutally honest with yourself. There isn't always a profitable market, and some hobbies don't make great businesses.
Working within a proven market – selling something that people already buy – can be a good thing because you know there's at least some demand. From there, you can figure out the best way to find customers that like the twist or extra touch you've put in.
Drawing on my friend's experience, she has discovered several ways to attract her clients. Some people already have an active lifestyle and don't necessarily need motivation. For them, she emphasizes her knowledge of fitness and health. She can craft a meal plan that aligns with their physical goals and work with them to improve their form and help prevent injuries.
With clients who are struggling to get started, she emphasizes the value of having an accountability partner. She takes the planning and worry out of working out; they just need to show up.
Are you ready to take action? Managing spending and saving are essential elements of any financial life. With some thought and planning you could grow another essential element – your income – while doing something about which you are passionate.
Why You Should Give Back
Charitable giving and donating are powerful ways to positively impact your community and support those in need. The holiday season is known for its abundance of food, gifts, and quality time with friends and family—but not everyone is fortunate enough to have the support system or funds to enjoy this season of celebration. Luckily there are multiple ways to donate this holiday season and all year round to help support your community and those in need while receiving tax benefits. Donating is a selfless and impactful act that is recognized and rewarded with substantial tax benefits. The tax benefits of donating require documentation and proof in order to reward deserving individuals for their charitable donations. Before we get into the tax benefits let’s dive into the most impactful types of charitable contributions you can make this year.
Types of Charitable Contributions
Charitable contributions can be divided into three general categories: cash donations, non-cash donations, and appreciated assets. To receive tax benefits, donations must be donated to verified charity organizations and well documented.
- Cash Donations: Cash donations are one of the most popular types of donations and can be made with cash, checks, or online transactions.
- Non-Cash Donations: Non-cash donations include items like clothing, furniture, food, and so on.
- Appreciated Assets: Most people are unaware that stocks and other assets can be donated as charitable gifts. It not only makes a big impact for charities, but it also helps you avoid capital gain taxes if your stocks or assets have appreciated in value.
Tax Benefits of Charitable Giving
The tax benefits connected to charitable giving rewards deserving individuals for their donations. To see a real difference on your taxes, larger amounts will receive larger benefits. If you’re planning on donating the same amount every year, try donating a larger lump sum this year to receive better tax benefits in the long-term. Here are two types of tax benefits you can receive for donating.
Deducting Charitable Cash Donation
Itemized deductions of charitable cash donations to public charities can be deducted up to 60% of your adjusted gross income (AGI) while private charities can be deducted up to 30%. Each charity has specific deduction limits and guidelines. Check out this contribution deductions & benefits resource from the IRS to better understand the limits and benefits.
Qualified Charitable Distributions (QCDs)
This type of tax benefit is only available to individuals 70 and a half years old or older with a traditional or ROTH IRA. These individuals can donate up to $100,000 from their retirement account directly to a qualified charitable organization without paying any tax on the income.
Give Back to Your Community
Giving back to your community is a selfless way to celebrate the holidays this season. Not only do you help support those in need, but you also get deductions and other benefits on your taxes. When navigating the documents and forms for the tax benefits of donating, seek out professional advice at 1st Community Credit Union with offices in Sparta, West Salem, and Tomah. Put your community first with help from 1st Community Credit Union today!
The Importance of Retirement Planning
Retirement is the finish line of your career when you enjoy the fruits of your labor. Achieving a comfortable and secure retirement requires careful planning and disciplined saving. It's easy to put off retirement or assume that it's a complex process; However, saving for retirement is easier than you think. Whether you're just starting to think about retirement or looking for ways to enhance your current retirement plan, you're in the right place. This 4-step guide shows how saving for retirement can be simpler, more achievable, and more rewarding than you might imagine.
Step 1: Set Clear Retirement Goals
Setting a clear goal is a foundational step in achieving a secure retirement plan. Consider these components of your personal retirement goal.
- Retirement age - What age do you want to retire?
- Retirement expenses - What will you be paying for in retirement? Consider essential expenses like food, housing, healthcare, transportation as well as leisure activities and travel.
- Inflation - While adding up your retirement expenses, it's important to take inflation into account. Try using a free retirement inflation calculator online to help you estimate added expenses.
- Lifestyle - What type of lifestyle do you want to be living when you retire?
- Unexpected expenses - It's important to consider unexpected expenses from things like injuries, health issues, natural disasters, and economic turmoil.
- Social Security & other incomes - While planning for retirement, you not only have to consider your expenses but also the income that will be available.
Step 2: Create a Retirement Budget
After considering the components of your retirement goal, the next step is creating a retirement budget. This step is all about calculating the estimated amounts that you're going to need to save based on your retirement goals. This will help you decipher if your retirement goals are in line with your savings. Creating a retirement budget can be difficult to do on your own. Contact 1st Community Credit Union to help guide you in creating a retirement budget that makes sense for you and your goals.
Step 3: Choose Retirement Account(s)
The types of available retirement accounts depend on your employers and/or banking institutions. Take the time to understand the different options available before making a decision. If you have access to employer-sponsored plans, they often provide valuable benefits including contribution matching (which is essentially free money). If you don't have access to employer-sponsored plans or if you are looking to diversify your retirement savings, look into savings accounts offered at your financial institution. At 1st Community Credit Union, we offer a wide variety of savings accounts including Traditional and Roth IRAs.
Step 4: Automate
Once you have your retirement plan in place, to make it easy to stick to the regime you should automate your savings. Talk with your employer to set up direct deposits so a portion of your salary automatically gets deposited into your retirement account before you can even see the paycheck. You can also talk with your financial institution or retirement provider about automated investment plans that allocate your savings into a diverse portfolio of investments. As you continue to automate your savings, monitor your accounts and increase your contributions over time. As your income grows, so should your allocated retirement savings.
Start Saving Today
You're never too young to start saving for retirement. Planning for retirement may seem complex, but with dedication and the right strategies, you can secure a comfortable and worry-free retirement. Contact us at 1st Community Credit Union and set up a meeting at our Sparta office, West Salem office, or Tomah office. Saving for retirement starts today!