Does Spring include Graduation? Be Prepared!

Each spring thousands of college graduates leave the safe haven of university life for the real world. From paying off student loans to the shock of auto insurance rates, there’s a host of new financial experiences awaiting these grads, and some situations for which they’re totally unprepared.

A 2012 study published in the International Journal of Business and Social Science found that 70% of undergraduates own credit cards. The report also states that very few students use their card for tuition but that most of the students would use credit cards for school supplies, textbooks, and food. Almost half the respondents say they only use their credit cards during emergencies.

The cost of credit
Perhaps the most unsettling surprise for recent college graduates surrounds the long-term impact that poor credit decisions can have during and after college.

To help avoid getting into credit trouble, college students and recent college grads should get copies of their credit reports to have a clear picture of their financial situations. Credit reports also can show the deep impact debt can have on credit histories, and allows you to spot any inaccurate information. Individuals can obtain a free copy of their credit report from each of the three major credit reporting bureaus–Equifax, Experian, and TransUnion–once a year.

In addition to obtaining a credit report, young grads also will want to regularly check their credit score. A credit score is a number from 300 to 850 and is used by potential lenders to determine the interest rate on loans and whether credit is granted, and at what cost. A credit score also can be obtained from each of the three credit reporting bureaus–but at a cost of around $15.

It’s never too early to start saving for retirement
One of the most serious mistakes young grads can make is to put off saving for retirement. Those in their late teens and early 20s may think that planning for retirement makes little sense, considering that it’s an event that won’t take place for another 40 years. But retirement is a process as well as an event. What occurs in the many years that lead up to retirement has a profound effect on the quality of retirement once it arrives.

Save for a rainy day
Many financial experts recommend you have three to six months of your salary and income put away in case of an emergency or unexpected expense. It’s important that this money be liquid, which means that you can withdraw it without penalty at a moment’s notice. You also will want to earn as much interest on it without incurring risk, which may make a money market account your best option. While you’ll never lose the money deposited into this account, you’re not guaranteed to increase the value either.

Call Hopewell Federal Credit Union today. We’re ready to provide the services and support you need–as you get started and as you move through life

As Banks Boost Fees, Credit Unions Are an Even Better Deal

Tell your friends it’s time to switch to a credit union. Why now?

As national studies report soaring bank fees on checking accounts, ATM use, and overdrafts, the data show many credit unions still offer no- or low-fee checking accounts, with no or low minimum balance requirements. On average, to avoid fees, banks require a $585 minimum balance on noninterest-bearing accounts, and a staggering $5,857 balance on interest-bearing accounts.

The studies also show:

* Credit union overdraft fees are consistently lower–$5 to $10 lower–than bank fees for nonsufficient funds.

* More credit unions than banks offer at least one free ATM transaction outside their networks.

* Credit unions’ ATM fees to nonmembers are commonly $1 lower than bank fees to noncustomers.

* Credit unions offer lower fees on loans and credit cards and higher rates on savings accounts.

* Credit union members saved $6.3 billion last year by not doing business with banks.

* In every service and performance satisfaction category, credit unions ranked higher than banks and, overall, ranked seven points higher than the financial industry average.

As member-owned nonprofit cooperatives, credit unions’ mission is to provide members with affordable financial services, while banks exist to make profits and satisfy shareholders. And credit unions provide members nationwide access. Through national ATM networks and shared branch alliances, credit unions offer nearly 30,000 cash machines and the ability to conduct in-person transactions at almost 4,700 branches.

Your friends are bound to agree. It’s time to switch to a credit union.

Make the Tax Season Less “Taxing”

Are you benefiting from all the tax advantages available to you? Are you sure? Here are a few tax ABC’s that may help.

The Earned Income Credit
The EIC is designed to assist lower-income working people by reducing taxes paid, or giving a credit, even if no tax is owed.

To qualify for the EIC, you (or your spouse) must have a job, have wages below a certain level, and file a federal tax return. If you’re not working now, but you earned income last year, you still may be able to claim the EIC on this year’s tax return. You can find specific guidelines and income thresholds on the IRS website at irs.gov (search for earned income tax credit).

Voluntary Income Tax Assistance
Tax forms can be complicated, and you may want some help completing yours. The IRS’ VITA program offers free help for low- to moderate-income taxpayers, those earning $50,000 or below.

VITA’s trained volunteers can determine whether you qualify for the EIC or other tax credits, prepare your forms, and file your tax return electronically. Most VITA sites are located in community centers, schools, shopping malls, and similar locations. To find the site nearest you, call 800-906-9887.

Refund anticipation loans
If the IRS owes you a refund, it may be tempting to accept a “rapid refund,” or “instant refund.” Several national tax-preparation firms offer this option, which many people don’t realize is actually a high-interest loan, or refund anticipation loan (RAL).

RALs are short-term cash advances through large banks secured by consumers’ expected tax refunds. The interest rates for these loans are astounding, averaging between 70% and 1,700% nationwide. They usually only speed up the refund process by a couple of weeks–then consumers’ tax refunds pay off the loans and fees.

It’s better to wait for your refund, but if you do need cash immediately, talk to a loan officer at Hopewell Federal Credit Union about the possibility of a small loan. Contact us today at 740.522.8311 for more information.

Step Up Your Savings During America Saves Week

Current economic events are making it harder to save, even for high-wage earners, self-employed professionals, and business owners just one paycheck away from disaster. Those who struggled to save before are finding it even harder now.

Join tens of thousands of other Americans during America Saves Week–February 25 through March 2, 2013–and step up your savings. America Saves is a nationwide campaign focusing on the way Americans save money. The program was created in 2001 by the Consumer Federation of America, Washington, D.C., in response to the nation’s negative personal savings rate.

America Saves Week encourages individuals to evaluate their savings progress and take action to save more.

No matter your financial situation or how much you earn, you can save. Even the smallest amount tucked away regularly will accumulate into a nice savings cushion.

Start small. Think big. Make the dream of saving a reality. Visit americasavesweek.org to find out how to join the campaign.