Online banking is currently unavailable. We are working to restore access. We apologize for any inconvenience.
Monthly Archives: January 2018
The worst advice you can get about buying a car
Are you in the market for a new car? Some people love car shopping and like to think they know all the secrets to getting the best deal. Mention that you’re even thinking about buying a car, and they’ll grab your ear for the next hour telling you about every car they’ve bought and sold over the last 20 years. Heck, they might even offer to go to the dealership with you just to show you how it’s done.
Surely they have your best interest in mind, but people are full of advice that sometimes isn’t as wise as you—or they–might think. You can be kind and let them babble all they want, but in the end, this is likely what you’ll hear:
The wealthier you look, the more you’ll pay
Many think that dressing poorly when you enter the dealership leads the salesperson to believe you don’t have a ton of money. To sell a car, they’ll need to give you a bigger discount. Not true. People come in all shapes and sizes…and grooming habits. Regardless of what you’re wearing, the dealership will ultimately run a credit report, the true picture of your financial standing and credit worthiness. Showering and dressing in your normal casual attire is your best bet. That way, no one will be afraid to get too close.
Wait until the last minute to mention your trade-in
It’s the same thing with coupons, right? You’ll jack up the price so when I pull out my discount, you’ll already have a cushion. Wrong. Why do you think some car dealerships will buy your trade-in even if you don’t buy their new car? Trade-ins make money. In fact, your trade-in, depending on popularity, supply, and demand, may be worth more than you think to the dealer. It’s also more likely that you’ll be able to afford that new car, so the dealer has incentive to offer you the best price.
If you spring your trade-in at the last minute, the salesperson will have to go back and rework all the calculations and paperwork he’s completed so far, a complete waste of time. You’ll also know what the dealer is offering for your trade-in, which will help you decide whether to accept the offer or to sell it privately. No matter what, though, be sure to check the Kelly Blue Book value, so you have a ballpark idea of a fair price.
Focus on the monthly payment, not the total price
Yikes! What kind of math is that? Just because you can afford a monthly payment, doesn’t mean it’s a wise purchase. Consider this: Your new car depreciates as soon as you drive it off the lot, but for the next 5 or 6 years, you’ll be paying the same hefty payment each month. Plan to trade it in in a year or two? You might be upside down and owe more money than it’s worth. In addition, you’ll need to consider what will change in your future finances. Will you be buying a home, raising a family, paying for college, or facing unemployment? The financial decisions you make now will impact you in years to come.
Buy it before someone else does
You’ve found your dream car. It has every upgrade you wanted, the perfect color, and it’s the only one on the lot. Grab it and run! No, wait. STOP—and come to your senses. There is more than one dealership and, chances are, there are other cars that will make you feel all warm and fuzzy inside. If not, a dealership can always factory order one. A hasty decision can have tragic financial consequences. If a salesperson uses the “buy it before it’s gone” tactic, it’s only because he’s trying to nail down a sale. Don’t fall prey. Take the time to do your research and price comparisons.
Buying a used car is taking on someone else’s headache
Who says a new car is the only way to go? It’s likely your very vocal co-worker who bought a car from Bob’s used car lot and got stuck with a lemon, or maybe it’s your Uncle Fred who bought his last car in 1975. It happens, but considering your new car loses between $3,000 and $5,000 once you drive down the road, you might want to reconsider.
Pre-owned cars are big business in today’s market, especially with the number of drivers who opt for car leases that expire after three years, on average. Other inventory may be the result of fickle car owners and their desire to have the latest and greatest features and model. There are some advantages to pre-owned cars, especially when you purchase through a reputable dealer. With limited miles and a few years under its belt, all the kinks have been worked out, and the dealership has likely put it through a 100-point check. Some may still be under the manufacturer’s original warranty.
When you’re purchasing a car, you’re in the driver’s seat. Do your homework, take your time, and don’t be pressured into something that doesn’t meet your needs or satisfies your comfort level. Everyone will give you their two cents because, well, they want to help. Take it for what it’s worth, but don’t base your decision on someone else’s experience.
How to Build an Emergency Fund
Everyone needs to save for the unexpected. When you have nothing in reserve, anything unexpected becomes an emergency that has to go on a credit card.
It could be a job loss or medical bill — or something as small as a car repair or a lost phone. A financial buffer can keep you afloat in a time of need and let you recover without going into debt. That’s why an emergency fund is more important when you’re barely scraping by, rather than later on, when you might have more savings, better credit, home equity or a higher income.
“One of the first steps in climbing out of debt is to give yourself a way to not go further into debt,” says Liz Weston, NerdWallet columnist.
To build an emergency fund, consider these questions.
How big should my emergency fund be?
The exact answer to this depends on your financial circumstances and how much insurance you have, but a good rule of thumb is to have enough to cover three to six months’ worth of living expenses. This can give you enough time, for instance, to find a new job or supplement your unemployment benefits until you do.
But anything in the bank is better than nothing — and $500 will get you out of many scrapes that would otherwise put you in the hole.
Start small, Weston says, but start.
Where do I put my emergency fund?
Since an emergency can strike at any time, having quick access to your cash is crucial. Consider a savings account, since the money will be safe and you’ll be able to withdraw it without hassle. This should be a separate account from one you use daily so you’re not tempted to dip into your reserves.
What steps do I take to start an emergency fund?
- Set a monthly savings goal.This will get you into the habit of saving regularly and will make the task less daunting. Contributing a small percentage from each paycheck, for instance, is one way to do this.
- Keep the change.When you get $1 and $5 bills after breaking a $20, drop some in a jar at home. When the jar fills up, move it into your savings account.
- Tidy up your checking account.If there’s money left at the end of a pay period, move some into your emergency fund.
- Save your tax refund. The average refund is in the thousands, which can give a good boost to your emergency savings. (See “9 Smart Ways to Spend Your Tax Refund.”) When you file your taxes, consider having your refund directly deposited into your emergency account. Alternatively, adjust your W-4 tax form so that you have less money withheld, and direct the extra into your emergency fund.
- Cut back on costs.If you’re falling short on saving, see which parts of your monthly spending you can trim. Some ways to do this include carpooling, cooking meals at home, saving leftovers and avoiding small daily purchases like takeout coffee. Put the money in your emergency fund as you “save” it.
- Get supplemental income.If you have the time and willpower, get a second job or sell unused items at home to accumulate more money for your fund. (See “10 Ways to Find Fast Cash, More Savings.”)
- Assess and adjust contributions.Check in after a few months to see how much you’re saving, and adjust if you need to put in more. This is especially important if you go through a major life event such as marriage or a move to a new city.
An emergency fund is for emergencies
What’s an emergency? Something that affects your health or ability to earn money.
What’s not an emergency?
- Holidays, birthdays and mental pick-me-ups for yourself or significant others.
- A car repair if you can hitch a ride or take the bus.
- A great deal on something you don’t need.
- Expenses that aren’t surprises, like car insurance.
Draw a line between savings for emergencies and savings for anything else. In fact, once you’ve hit a reasonable threshold of emergency savings, Weston says, it’s a good idea to begin another account for irregular but inevitable items such as car maintenance, vacations and clothing.
7 Smart Ways to Improve Your Credit Score
Your credit score is likely the most critical, unbiased representation of your financial life, past and present. Apply for a car loan, a mortgage, or a credit card, and the credit bureau sums you up in one unprejudiced number that can make or break you. Heck, you might even get a cheaper auto insurance rate based on your credit score.
It defines your creditworthiness, your ability to manage your finances and how you handle the responsibilities that come with it. There are no opinions, explanations, or excuses. Your credit score doesn’t care that the check got lost in the mail, you were on vacation, you thought your spouse paid it, or that you ran out of stamps and didn’t have internet access. Make sure your score tells the story you want people to know, and if it doesn’t, improve my credit score would be a fantastic New Year’s resolution.
What’s your score?
If you don’t know your credit score, it’s important — and easy — to find out. Consumers are eligible for one free credit report from each of the three major credit bureaus per year. (Bonus – if you’re a Georgia resident, you can get two additional free copies from each credit reporting agency per year.) Simply visit the federally authorized site, annualcreditreport.com, to request your free copies. Review them in detail and dispute any inaccuracies. Yes, the credit agencies make mistakes, so be sure you’re not taking the heat for someone else’s mishandling.
Any score over 750 is generally considered excellent credit. Kudos to you if you’re at the top of the heap — you can probably stop reading now. If your score falls anywhere between 700 and 749, you’re doing well, but there’s always room for improvement. Fair credit is any number between 650 and 699. Poor credit is a score between 600 and 649, and anything less than 600 is viewed as bad credit.
Ready to raise your score? Here are a few ways to do it:
- Pay past due balances. Your payment history accounts for one-third of your credit score, so it’s super important to get those accounts current. Wait too long and they’ll be sent to a collection agency, and that’s something you really want to avoid.
- Stop charging. Each credit purchase you make not only increases your debt, but it also raises your credit utilization. Credit utilization is the amount of your outstanding balance compared to the approved credit limit. Whenever possible, use cash for any necessary purchases.
- Pay down your debt. Find ways to send extra payments to your outstanding credit card accounts. It might take some creativity, so think about your talents and your time and how you might use them more wisely. Consider a part-time job. If you’re handy, offer your services to neighbors. Sell items you no longer need on eBay, Craigslist, or your local garage sale site. Crafty? An Etsy account may be worth a look.
- Don’t open any new credit accounts. When you’re trying to raise your score, every hard inquiry into your credit history counts. When a lender checks your line of credit, especially when it’s done too frequently in a given period of time, it can be damaging. Don’t worry, though — it doesn’t count against you when you request a copy of your own credit report.
- Make your payments on time. Late payments are the killer of credit scores. Make every effort possible to send your payment early or on-time. Build a calendar with your due dates, set reminders on your phone, or set up automated payments. Do whatever it takes.
- Don’t close any accounts. We’re back to credit utilization rates again. If you have a zero balance on an account and a $5,000 credit limit, your combined borrowing power will be higher, which is what the credit score calculator likes to see.
- Call your credit card company or your lender. Let’s face it, we all run into hardships now and then. If you’re having difficulty making your payments, call them before they call you. It shows that you want to work through the tough time you’re having. They’ll be more receptive to a compromise and might even be able to offer some solutions that could help.
Your credit score won’t improve overnight, but these tips will ultimately start moving it in the right direction.
Information about Meltdown and Spectre
You may have heard news reports about Meltdown and Spectre, two computer bugs affecting electronic devices. We want to assure you that the security of our members’ information is our top priority and we have, and will continue to protect it from viruses such as these.
We have a robust Information Security Program to keep our members’ information safe and we have been working closely with our vendors to address these bugs specifically. For more information about Meltdown and Spectre, please click here.