Taking Steps Towards Financial Improvement For The New Year

New Years Resolutions

The start of a New Year is a wonderful time to make important changes in your financial life. And you don’t have to go it alone. Here are some tips on financial improvements you can make starting now. And know that Freedom Federal Credit Union will be here with you every step of the way.

We’ve broken down some of the most popular financial resolutions into concrete steps and outlined the ways Freedom can help you implement each change into your life.

Build a Budget

Why it’s crucial: Creating and sticking to a monthly budget will force you to be accountable for your spending while giving you a clear idea of your financial reality.

In 3 steps:

  • Track your spending over three months.
  • Using a spreadsheet, or a personal finance app like Mint, divide your expenses into categories, such as mortgage, auto, groceries, entertainment, etc. Use an average of the last three months to set a reasonable spending limit for each category.
  • Going forward, track your spending and be sure to stick to your preset limits for each category.

If your budget reveals your monthly income doesn’t cover your expenses, or you find you’re overspending in any area, look for ways to cut back.

How Freedom can help: Stop in at any time to speak to a Financial Service Representative for help with managing your money. We also offer our members great online budgeting software and financial educations tools, absolutely free.

Get Out of Debt

Why it’s crucial: Carrying long-term debt can often mean paying extremely high amounts of interest for years on end. It can also devastate your credit score.

In 3 steps:

  • Make a complete list of all your outstanding debts, in order, from smallest balance to largest.
  • Review your monthly budget and look for ways to cut back. Alternatively, you can look for ways to increase your monthly income.
  • Work on paying off your smallest debt with the money you trimmed from your budget. Once you’ve paid off that debt, move on to the second-smallest. Repeat until you’re completely debt-free.

How Freedom can help: If you’re carrying multiple high-interest rate debts, consider taking out a debt consolidation loan to simply things. This way, you’ll only have one low-interest loan payment each month. It may even reduce the total amount you’ll pay each month. If you prefer to pay off your debt more quickly without accumulating additional interest, consider a Balance Transfer.  More information on these options can be found here.

Start (or Increase) Savings

Why it’s crucial: According to the Federal Reserve, 50% of Americans would have difficulty covering a $400 expense, with 19% of Americans simply incapable of paying, or 1 in 5 Americans. Living without a safety net means a relatively small, unexpected expense can throw off your finances and force you into debt. Aside for paying for emergencies, savings can help fund your long-term plans, goals and dreams.

In 3 steps:

  • Review your monthly budget to identify your biggest spending traps. Then, find ways to cut back, such as shopping with cash only, cancelling subscriptions you never use or initiating a “financial fast” one weekend each month, in which you spend no money.
  • Use all money saved to open an emergency fund and a long-term savings fund at Freedom Federal Credit Union. It’s best to focus primarily on your emergency fund until you have 3-6 months’ worth of living expenses stashed away.
  • Set up an automatic monthly transfer from your Freedom Checking account to your Freedom Savings account(s) so you can focus on your savings without thinking about it.

How Freedom can help: Freedom offers several options for Savings and Checking Accounts that provide excellent opportunities for growth. You can open an account today with an initial deposit as low as $1.00.

Maximize Your Retirement Contributions

Why it’s crucial: Many workplaces offer to match 401(k) contributions. These contributions aren’t taxed and they come off your paycheck, which is taxed, making participation an excellent decision.

In 3 steps:

  • Speak to an HR representative at your workplace to find out about your current 401(k) contributions.
  • Identify how to best maximize your 401(k) contributions going forward.
  • If you have any other retirement funds, such as an IRA or a Roth IRA, also review your contributions to determine if you are making the maximum funding allowed.

How Freedom FCU can help: Our Financial Service Representatives will be happy to help you determine the best course of action for planning your retirement. Let Freedom help you meet your financial goals this year.

On behalf of everyone at Freedom, we wish you a very Joyous and Happy New Year.

 

About Freedom Federal Credit Union

Freedom serves and is open to anyone who lives, works, worships, attends school, volunteers, or has family in Harford or Baltimore County, MD. As a credit union, we are committed to putting you first, not shareholders, and helping you achieve your financial goals. Learn more at freedomfcu.org or call us 800-440-4120 to see how we can help.

Is Inflation Here to Stay?

Is Inflation Here to Stay?

Q: It seems like I have to take out a second mortgage just to fill up the gas tank and restock the pantry. Are these inflated prices a forever thing?

A: According to the most recent report by the Bureau of Labor Statistics, U.S. inflation is currently running at a 30-year high of 6.2%, and it’s showing no signs of slowing.

Inflation is not going anywhere soon

Rising prices in just about every sector is the new norm. The inflation rate fell at the start of the coronavirus pandemic, and during the nationwide lockdown. In March 2021, though, when the impact of halted manufacturing began hitting the market and crude oil prices started climbing, the inflation rate increased to 2.6% before hitting its current high of 6.2% in October. Experts, like the Trading Economics information technology company, had predicted that number would be around 5.5%, but even that prediction fell short.

Unfortunately for the average consumer who’s struggling to cover expenses amid rising costs, this means inflation isn’t going anywhere soon.

Why are prices so high?

There are several factors for the inflation bubble. First, suppliers are still catching up on production shortages that were caused by factory shutdowns during the pandemic. Second, climate disasters, like California wildfires and a drought in Brazil, are responsible for driving up prices in the food industry. The demand for higher wages, partially caused by the 11 million job openings in the U.S., and the rising cost of gas, are contributing to inflation as well.

What can consumers expect in 2022?

While no one can accurately predict the future, economists are expecting inflation levels to taper off by the middle of 2022. According to a survey conducted by the Wall Street Journal, many are expecting inflation to drop to 3.4% by June 2022 and to continue falling until it hits 1.8% by the end of the year.

 

Your Turn: When do you think the inflation rate will fall? Tell us about it on Facebook, LinkedIn,Twitter, or Instagram @FreedomFedCU.

 

About Freedom Federal Credit Union

Freedom Federal Credit Union is a community-chartered federal credit union offering consumer financial services to those who live, work, volunteer, worship, attend school, or have family in Harford and Baltimore Counties. Additionally, Freedom offers a full-line of banking services for all businesses, associations, and other organizations that are based in Harford or Baltimore County.  Freedom has been in business since 1953 and has six locations throughout Harford and Baltimore County. To learn more, visit freedomfcu.org.

 

4 Scams to Watch Out for this Black Friday

Black Friday ScamsBlack Friday has traditionally been the day that ignites the holiday shopping season, sending masses of crowds through retailers across the nation. Unfortunately, it’s also a day that spawns a season of shopping scams.

Here are four scams to watch out for on Black Friday and throughout the holiday shopping season:

  1. The Amazon Prime service fraud scam

In this ruse, a scammer posing as an Amazon representative, will call to notify a target about an alleged problem with their Prime account. The victim is prompted to download a tool onto their computer or mobile device so the caller can gain remote access for “helping them resolve the problem” at hand. They’ll then be instructed to log onto their banking account so the caller can be compensated for their time. Unfortunately, this will give the scammer free reign over the victim’s accounts.

  1. Phishing emails

In these scams, the victim receives an email allegedly sent by Amazon or another large retailer, asking them to verify or update their account. Or, it might be to supposedly confirm an order. By using the link dropped into the email, the user will give their personal information directly to the scammer.

  1. Delivery issues

Delivery scams generally take the form of a message appearing to be from UPS or another delivery service, informing the victim of a “delivery issue” with an order. They’ll be asked to confirm or update their info using a provided link. Doing so gives the scammer access to their financial information and opens the door to identity theft and more.

  1. Non-delivery scam

This scam involves a purchased gift that never arrives. Unfortunately, the seller disappears after payment, leaving the victim with no way of notifying them about the no-show or for requesting a refund.

Avoid Black Friday scams

  • Never grant a stranger access to your device and/or accounts.
  • Don’t open links sent in emails from unverified contacts.
  • Never share sensitive information with an unknown contact.
  • Keep the privacy and spam settings on your devices at their strongest settings.
  • If you have an issue with an ordered item, contact the retailer directly through their site.
  • When shopping on a new site, look for a physical address, a customer service number and copy that’s free of spelling errors.

Stay safe!

If you receive something suspicious via text, email, or mail, related to your financial accounts please don’t hesitate to reach out if you are unsure.  

Your Turn: Have you encountered a scam like this before? Tell us about it on Facebook, LinkedIn,Twitter, or Instagram @FreedomFedCU.