The Best Ways to Use a Few Hundred Dollars

Sometimes it can feel like you need thousands of dollars to move the needle on your finances even a little bit.

So if you find yourself with a few hundred dollars–say from a tax refund or an unexpected windfall–the temptation to spend it can be great. After all, how much difference can $500 make? But used wisely, even a few hundred dollars can put you on the road to a more financially secure future.

Here are some ways to make even a small amount of money count.

    • Start an emergency fund. Ideally you want six months of living expenses stashed to cover unforeseen expenses, but $500 is a good start. And once you have a good start, it can spur you to keep contributing.
    • Take advantage of compound growth. Before spending that money, consider putting it into your IRA (individual retirement account). Not only will compounding increase your balance over time, but increasing your pretax contributions can cut your tax bill.
    • Save for a bigger-ticket expense. Whether it’s for a major house renovation or a dream vacation, put the money in a credit union savings account; whenever you have a little extra money come in, set it aside as well. You could end up with a gift the whole family will cherish for years.
    • Donate to charity. If you itemize deductions on your tax return, consider helping an organization whose works you admire. Not only can you deduct the gift, but it might ultimately mean more to you than spending the money on yourself.

Copyright 2018 Credit Union National Association Inc. Information subject to change without notice. For use with members of a single credit union. All other rights reserved.

Advertisements

The Smartest Way to Use Gift Cards

If you received a gift card over the holidays, chances are you’re happy about it. After all, what’s not to like? Gift cards allow recipients to buy stuff without taking money out of their pocket — at least in theory.

But gift cards can be a mixed blessing. Forget you have one and it can sit in your drawer, unused, for ages. Receive one for a store you don’t care for and you may find yourself buying things you’d really rather not. Or maybe you’ll overspend and find yourself using that $20 Pottery Barn gift card for a $50 lampshade you don’t really need.

Here are ways to make sure your gift cards stay a blessing — not a curse.

Spend it sooner rather than later

If you intend to use your gift card, it’s better to act fast. Stores may go out of business, may not honor outstanding gift cards after filing for bankruptcy or may close their only location near you.

That’s especially true as consumer shopping patterns continue to shift and brick-and-mortar retailers shut their doors — 2017 saw retail giants including J.C. Penney and Macy’s announce the closure of stores nationwide.

And the quicker you use a gift card, the less likely you are to forget about it. Nearly $1 billion in gift cards went unused in 2015, according to consulting company CEB Tower. That’s a significant sum of money left on the table.

Don’t want to spend? Regift, resell or donate

If you receive a gift card for a store with no nearby location, or one that you simply have no interest in visiting, you can get rid of the card by regifting, reselling or donating.

“It’s important to do an honest assessment right from the beginning and think, ‘Am I really going to use this or is this a stretch?’” says Shelley Hunter, spokeswoman for Giftcards.com, a website that sells gift cards.

Find a friend or family member who will appreciate your unwanted present. And if you can’t, sell it to somebody else. Sites like Raise.com or Cardpool.com allow users to resell gift cards online. Though you likely won’t get the full value of the card back — the cash you get can range from 60% to more than 90% of the original amount — Hunter says it’ll be worth it if you weren’t going to spend it anyway. You’re likely to get closer to the full value for stores that have nationwide footprints and sell a wide variety of merchandise, such as Target or Walmart, Hunter says.

Or consider donating your gift card to a local school, after-school program or homeless shelter.

Donations may be eligible to use as a tax deduction.

Avoid overspending — and underspending

A study by payments technology company First Data found that 75% of consumers overspend the value of their gift card by an average of $38. That’s not necessarily a bad thing — a gift card can bring down the amount you spend on something you wanted but couldn’t afford otherwise.

Beware of “gift card creep,” however — spending excessively on something you didn’t really want, just because the card makes it relatively affordable. Plan ahead of time, and ask yourself whether you truly value the item. To get the best deal, you should also look around for coupons and shop when the retailer is having a promotion.

What if you’ve come close to your gift card limit and have a small amount left on your card? Certain states require retailers to exchange the value of the card for cash if it falls below a threshold. Though the threshold is $5 for many states that follow this policy, it ranges from $1 in Vermont and Rhode Island to $10 in California. Some stores may also have policies in place to refund low values for cash, regardless of which state they’re in.

» READ:  6 ways to get free money from the government

Try new things

Gift cards can be a burden if you feel forced to spend money on things you won’t ever use. But they can also push you to try new things.

“You’re not giving a gift, you’re giving the gift of an experience,” Hunter says of presenting somebody with the store vouchers. So go out on a limb — try that new local restaurant, take the cooking class or browse through that clothing store you’ve been meaning to check out. You might find that your gift card brings more value to you than its worth in dollars and cents.

The article The Smartest Way to Use Gift Cards originally appeared on NerdWallet.

Building a Credit Score From Scratch

Young adults starting out on their own often bump into a cold fact of financial life: Having no credit history can limit your options just as much as having bad credit does. Lenders, rental offices and insurance companies use your financial track record to judge how likely you are to pay debts and bills — and if you’re a blank slate, you’re generally considered a risk.

Fortunately, there are some simple steps you can take to quickly establish your credit record.

Start with a credit card

One of the quickest ways to develop a positive credit history is with a credit card, which lets you show that you handle small amounts of debt responsibly month after month. Even if you can’t qualify for a card on your own, there are ways to take advantage of this credit-building tool:

  • Recruit a co-signer. You might be able to get a card if someone with good credit — such as a parent — is willing to co-sign the application with you. You and your co-signer will be equally responsible for the charges you make, along with any late-payment fees or other penalties if you don’t make payments on time. Also, late or missed payments can damage your credit score and your co-signer’s, too. But every time you make a payment on time, it will shore up your credit history.
  • Become an authorized user. Another option is to ask a family member or significant other to add you to their credit account. First, though, make sure their bank reports activity by authorized users to the major credit bureaus — otherwise, this won’t help your credit score. And remember that here, too, your activity with the card can affect someone other than yourself.

Next steps

Once you have a card, your behavior with it will determine how high, and quickly, your credit score rises. To keep moving in the right direction:

  • Make on-time payments. The most common credit-scoring model is the FICO score, and it is based on a combination of factors. The biggest, making up 35% of your score, is your payment history. Pay all of your bills (not just your credit card) on time to keep your score rising.
  • Keep balances low. Try not to use your card up to or near your credit limit; it looks bad to creditors if your cards are maxed out. A good rule of thumb is to keep your balances at or below 30% of your total credit limit.
  • Don’t over-apply for cards. According to a recent NerdWallet study that included an analysis of millennials’ credit scores, many young adults are applying for the wrong credit cards and getting rejected — and that’s hurting their credit, since excessive inquiries can make someone look like a bad credit risk. Apply only for cards you really want, and space out those applications.
  • Check your credit reports. You have the right to get a copy of your credit report from each of the three major reporting agencies — ExperianEquifax and TransUnion — once a year for free. Review yours and report any errors that might hurt your score.

It can be easier to build up good credit if you have a professional helping you. Consider consulting with a financial institution to help figure out the best way to establish credit and make other important financial decisions.

© Copyright 2016 NerdWallet, Inc. All Rights Reserved

America Saves Week: Making Savings Automatic

Americans have a hard time saving money. According to a report from the Pew Charitable Trusts, the typical household cannot replace even one month of income with liquid savings.

If building an emergency savings fund is one of your goals for 2018, join thousands of others during America Saves Week–February 26 through March 3, 2018–and step up your savings.

America Saves Week is coordinated by America Saves and the American Savings Education Council to promote good savings behavior.

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

Set a goal. Make a plan. Save automatically.

Copyright 2018 Credit Union National Association Inc. Information subject to change without notice. For use with members of a single credit union. All other rights reserved.

How to shop for the best deals on groceries

In a time when most Americans are living paycheck to paycheck, many times having to choose between paying a bill and buying food for the week, getting a good deal on groceries is important.

Ohioans are actively strategizing to save money at the grocery store, according to an Ohio Credit Union League Consumer Survey. About 71 percent of shoppers will comparison shop before putting an item in their cart, 68 percent utilize digital coupons, while 60 percent use printed ones. Another 59 percent will stock up on items if the deal is good enough. In fact, deals may dictate whether consumers show up to a store at all. Approximately 44 percent of shoppers said they check store deals before heading out to get their groceries.

Sometimes, those consumers will check more than one store, and they’re switching up where they shop based on what they find. About 38 percent of respondents indicated they research before shopping and hit multiple stores depending on the sales at each. The other 62 percent say they stay loyal to one grocery store or chain.

Historically Americans have remained largely loyal to one main grocery store, but in the age of rapid communication and growing options, that’s been shifting. A 2017 report from the Food Marketing Institute confirmed that trend stating traditional grocery stores have continued a slow and steady decline as a primary store for shoppers, while shoppers with no primary store continue to increase and spread their money across traditional supermarkets, natural and organic stores, ethnic groceries, and online-only retailers.

As the cost of living continues to increase, the desire to save money does as well. Here are some tips to help you shop the aisles and fill your cupboards with the best deals.

  • Plan meals according to what’s on sale. Research the best deals at local stores before you assemble the week’s meal plan. First, scan your potential grocery stores for deals on protein, which is primarily the most expensive part of the meal. Next, be on the lookout for good deals on potential side dishes. Lastly, stock up on pantry staples when they’re on sale.
  • Make a price book. The best way to know when to stock up on a good deal is to know what the item usually coats. Track how much the items you typically buy cost at each store, that way you’ll know which stores have the best prices and will be able to identify a great deal when it comes along.
  • Be loyal to where you get the best value. If you’re shopping at one store because it’s cheapest, you may not be getting the best value. Product quality is also important. It doesn’t matter if you’re paying pennies for produce if it’s not fresh or goes bad quickly. Factor both price and quality into deciding which stores give you the best value.
  • Learn how to maximize your coupons. Use coupons for items you only would have purchased, anyway. Don’t buy something not on your list just because you found a great coupon. Many brands and chain stores offer digital coupons customized from your past purchases. Shoppers can also search sites like com by category to help find the most useful coupons for them.
  • Use technology to compare. Some chain stores show grocery prices on their websites, but this isn’t consistent across the board. However, websites like My Grocery Deals and Deals to Meals allow you to build a grocery list. The sites will use your list to find the best deals across multiple stores. Deals to Meals allows customers to create a weekly meal plan based on local deals, too.

To learn more about how a credit union can help you budget for monthly expenses, visit www.aSmarterChoice.org and find a credit union in your area.

Strategies to Make College More Affordable

With the price of college still on an upward trajectory, families are looking for ways to make higher education affordable.

According to “How America Pays for College,” a report by Sallie Mae, the average American family spent $23,757 on college costs in 2017.

Here are some ways families are reducing their college costs:

• Live at home. The report found 50% of students live with their parents or relatives.

• Cut the pricey top picks. Nearly 70% of families eliminated colleges during the application process due to their high price tags, up from 58% in 2008. About 73% are choosing an in-state school.

• Take a student job. At least 76% the students surveyed reported planned to work while in college, with 55% working year-round.

• Finish quicker. Nearly 26% of students enrolled in accelerated courses while in high school to pay for fewer semesters in college.

• Use grants and scholarships. Families reported covering about 35% of their school bills with grants and scholarships—the biggest portion of their payment sources. About 87% of these scholarships come from the schools.  Visit http://www.hopewellfcu.org to learn about Hopewell & Ohio Credit Union Leagues scholarship opportunities.

• Start a college-savings plan. In 2016-17, 13% of families used the 529 tax-advantaged college-savings plan, with an average amount of $10,031. See Hopewell Federal Credit Union about starting a college-savings plan today.

Copyright 2017 Credit Union National Association Inc. Information subject to change without notice. For use with members of a single credit union. All other rights reserved.

New Year, New You, New Budget

Just like swearing off chocolate and carbs, sticking to a household budget is a New Year’s resolution easier made than accomplished. In fact, last year only two in five U.S. adults said they had a budget and kept close track of their spending throughout the year, according to the National Foundation for Credit Counseling’s 2017 Consumer Financial Literacy Survey.

Everybody knows it’s important to track personal finances and maintain your financial health. So, why do Americans have such a difficult time sustaining a budget?

It likely doesn’t have much to do with a lack of money. According to the U.S. Bureau of Labor Statistics, the average household in America makes $74,664, well above the $18,871 national poverty line for a family of three. It’s also unlikely that consumers are too busy to keep up with their budgets. Budgeting apps such as Wally and Mint can track spending and income with minimal attention from the user.

Financial planning and psychology experts believe the real reason people struggle with budgeting is psychological. According to an article in the Journal of Consumer Psychology, humans only have a finite amount of willpower. We can only restrict ourselves so long before we indulge. Just like dieting, people tend to see budgeting as restrictive; therefore, struggle to preserve the motivation to stick with it.

As you ramp-up your drive for 2018, here are some tips to help you exercise good budgeting habits and overcome a craving to spend.

  • Don’t mindlessly spend: If you don’t feel you have enough money, you could be spending money unnecessarily. Search the corners of your budget for empty spending that isn’t serving you. Many financial blogs offer creative tips to help with this. Check out Lauren Greutman’s list of 13 Things You Should Never Pay For.
  • Make time: If you don’t feel you have enough time to track spending, try finding a simple solution – like an app. Phone apps such as Wally and Mint track spending and income for you. They require minimum attention and time.
  • Start small: It takes weeks to form a new habit, and the same thing applies to tracking your income and expenses. In the beginning, keep it simple. If your spending plan is too complicated or restrictive, you will not stick to it.
  • Budget with a friend: If you don’t feel confident, get some help! Apps, financial blogs, and spreadsheets might help if you’re a little stuck in your budgeting process. But if you don’t even know where to start, consider seeking help from a trusted family member or a financial expert. Your local credit union is dedicated to financial literacy and can offer help and advice for your unique budget.

To learn more about how a credit union can help you be financially fit, visit www.aSmarterChoice.org and find a credit union in your area.