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Graduation gifts that won’t empty your savings account
With your mailbox overflowing with announcements and party invitations, there’s no denying that graduation season has arrived. Whether it’s high school or college, you’ll want to choose a gift that’s both thoughtful and appropriate for your graduate, but also doesn’t break the bank. Here are a few ideas to offer your congratulations:
A share of stock
A share of stock is a gift that can appreciate over time. To make it a little more personal, you may want to put some extra thought into the company you choose. Do you have some great memories of visiting Disney World together? Buy a share of Walt Disney Company. Mac lover? How about a share of Apple, Inc.? Car enthusiast? A combination of the Big Three, General Motors, Ford, and Chrysler would be a fun choice.
A financial planning consult
Planning, budgeting, and having to stretch your last $20 over the next week is always a challenge. Whether they’re college-bound or heading off into the working world, graduates likely have little experience effectively managing their finances. This is the time when they’re most susceptible to making some huge financial mistakes. Why not put an expert in their corner—other than Mom and Dad—who can offer some professional guidance and warn them of the consequences of poor financial management? It may not be the most exciting gift, but it will be one of the most valuable.
An annual subscription
Is your graduating senior an avid reader? An annual subscription to a specific area of study, personal finance or money magazine could be an excellent idea, especially if it’s digital! How about the WSJ or your hometown newspaper? Not only will they think of you each month when it arrives, they might learn something, find another interest, or just be able to ward off a small bout of homesickness.
A gift card
Gift cards are a great way to go if you don’t want to commit to a specific item. Does your graduate need something practical? Choose a Walmart or Target gift card. Are they headed to work? Maybe they need some new interview attire. Want to make sure they eat more than just pizza and french fries seven days a week? Their favorite restaurant gift card would be perfect. The choices are endless!
Money for groceries, books, gas, school supplies, clothes…cash will never go unused and is always appreciated regardless of the amount. It may not seem as personal, but let’s face it, these graduates are entering a new chapter of their lives, and they’re not sure what to expect or how much it will cost. On the bright side, not having to use a credit card will allow them to manage their debt more effectively and will reduce their chance of accumulating astronomical interest charges!
Whether you decide to give a practical gift, something smart, fun or completely off the wall, we’re sure your graduate will absolutely love it. They’ve worked hard to achieve their success and will appreciate just being celebrated. On to a new adventure, they’re going to need all they help and guidance they can get, and your encouragement and support will mean the world to them!
4 reasons to buy a home instead of renting
The financial benefits of buying a home compared with renting have yoyoed over the years, especially of late. If you’re sitting on the fence, here are four circumstances in which it may be a better bet to buy.
If interest rates remain low
From a financing perspective, if this isn’t the best time to buy a house, it’s pretty darn close.
The average interest rate on a 30-year fixed mortgage, the most common variety, has hovered below or near 4% for several months now. For comparison’s sake, if you bought 10 years ago, the average interest rate was 6.41%. In 1996, it was 7.81%, and in 1981 it was a whopping 16.63%.
Although the Federal Reserve has begun to inch rates upward, it is likely that it will do so slowly and that it will be a while before the cost of borrowing to buy a home stops being historically low.
If home prices level off
Home prices rose steadily in the 1970s, ’80s, ’90s and 2000s before plunging around 2007, and in the past few years they have been climbing again. Different markets have seen different trends, of course, but generally what’s at play is supply and demand: More potential buyers than houses available means sellers can dictate terms and get top dollar.
But something interesting is happening: The oft-told story that millennials are renting for longer or living with their parents nowadays is not entirely accurate. No, people in this age group (born between 1981 and 1997) want very much to own a home, but they are putting it off because of real and imagined difficulties in affording it.
That could mean fewer potential buyers and a cooling of the upward surge in home prices. While others wait, you could pounce.
If rental costs continue rising
Real estate researcher Reis Inc. reports that apartment rents rose 4.6% in 2015. In hot housing markets such as California and the Pacific Northwest, rents are going up by about 14% per year. According to Zillow, the median asking price nationwide for a rental was $1,575 per month in early 2016.
The monthly payment on a $200,000 mortgage — about the average in the U.S. — with a 4% interest rate would be just over $950. Even with taxes, insurance and maintenance, it’s tough to make a financial case in favor of renting.
If you want to save money
Home values over the past 70 years have generally tracked with inflation. Yes, you could make more money in the stock market. But we’re talking real life, not investment advice. Consider two things:
- Your rent is locked in for a year or two, then will go up. Your mortgage payment can be the same for 30 years.
- If you are raising a family, it seems all but impossible to save money. But when you sell the house after 30 years (or 20 or 10), someone will hand you hundreds of thousands of dollars, money that could put the kids through college or finance your retirement.
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Is a credit union better than a bank?
Have you ever wondered if a credit union is better than a bank? The choice between the two will ultimately boil down to the different products, services, and fees each one offers and what components are most important to you as a customer. Let’s look at some key differences between banks and credit unions, so you’re able to decide which works best for you.
The fundamental difference between the two institutions is that a credit union is a not-for-profit institution owned by its members. Their mission is to provide their members with affordable financial services. Banks are corporations controlled by board members and owned by shareholders. Credit unions traditionally use their not-for-profit status to offer higher interest rates on savings accounts and CDs and lower interest rates on loan and credit cards.
One of the most noticeable differences is the discounted or absence of fees from many of the products offered by credit unions. At a time when many banks have raised their minimum balance requirements, the large majority of credit union checking accounts still do not require a minimum balance and don’t incur any fees. In fact, credit unions make every effort to keep their fees low, including eliminating products and services instead of adding fees. If you’re familiar with the fees that banks typically charge for direct deposits, transfers, wires, and balance transfers, you’re not likely to find them at a credit union.
It’s of the utmost importance for credit union representatives to establish a relationship with each of its members. If you’re looking for personalized attention, credit unions are less formal and work hard to deliver a superior level of customer service. It’s a people-centric business whose top priority is the best interest of their members.
Online and mobile functionality
For years, credit unions were substantially lacking in online manageability. Given some recent attention, however, many have made great strides in technology and what they’re able to offer. Members should have the ability to view account balances, initiate transfers and make online loan payments, which are the most requested transactions by online users. In addition, many credit unions offer a mobile check deposit feature that allows you to safely and securely deposit your check from your mobile device anywhere, anytime –all without visiting an ATM or a branch office.
The biggest benefit of a credit union membership is likely its loan products. Because of its cooperative structure and genuine concern for the financial well-being of its members, a credit union doesn’t have to charge high-interest rates to turn a profit. Generally, loans offered by a credit union are less expensive. Some even offer the option to skip a month’s payment without incurring a penalty.
A personal choice
Doing business with a bank or a credit union is a personal choice. Is it the financial perks, the online services, the style of service, and the number of branch locations that you value the most? Does the type of ownership, the size of the company and their mission matter to you? Weigh these factors to help you decide which option will work best for you and your hard-earned money.
Tax Tips for First-Timers
Filing your taxes for the first time doesn’t have to be scary – and, in fact, it shouldn’t be. The key to overcoming uncertainty in many situations is educating yourself and being prepared. Following these simple steps will help make filing for the first time a breeze.
Organization is key
Before you can file your taxes, you’ll need to have the proper forms. At the very least, this will include a W-2 from each workplace you earned a salary. You may have more than one W-2 if you worked more than one job, or you may have a Form 1099 if you received income from another source.
You may also receive other tax forms, such as Form 1098-E if you are paying interest on any student loans. Most tax forms arrive by late January or early February, and you must wait to file until you have all of the proper documentation.
Credits and deductions are your friends
Tax credits and deductions are imperative in increasing the amount of your refund (or lowering the amount of taxes you owe). Below are a few credits and deductions you might qualify for. More information for each write-off can be found here.
- Earned-Income Credit: This credit benefits low- to moderate-income earners by reducing or eliminating the taxes paid. There are income limits depending on the number of dependents you have.
- Job Search Expenses: While you can’t deduct job search expenses if you’re searching for your first job, you can deduct some expenses if you are looking for a new job within the same field. Résumé costs, job placement agency fees, travel expenses are some items you may be able to write off.
- Cost of Moving: If you moved due to a job change or started a new job, you may be eligible to deduct some of the expenses associated with relocating.
- Lifetime Learning Credit: If you’re paying out of pocket for your college education, you may be able to deduct some of those expenses.
- Retirement Saver’s Credit: This credit helps low- to moderate-income earners save for retirement.
- Home Office Deduction: If you work from home on a regular basis, you may be able to write-off some of the expenses associated with your home office based on the percentage of your home used for business activities.
- Energy-Saving Credits: Qualified energy-saving additions and improvements, such as appliances or adding energy-efficient windows and doors to your home, may earn you a credit on your taxes.
Online or in-person: how should you file?
For many Americans, filing taxes is free. Online software like TurboTax, H&R Block, and TaxAct are great choices if you feel comfortable taking things into your own hands. These services often guide you through the process step-by-step and can help catch missing information, as well as alert you to credits and deductions you may qualify for based on your individual tax situation.
If you’re hesitant to file on your own, consider taking your tax documents to an accountant or other tax preparation office. However, do your research so you don’t fall victim to tax scams – always be wary of tax preparers who base their fees on the size of the refund they can get you.
Now that you’ve gotten all your documentation organized, researched tax write-offs, and decided whether to file using online software with the help of a professional, it’s time to actually file your taxes. The deadline to file your taxes, which is set by the IRS, is April 18, 2017. You don’t want to wait until the last minute to file (plus, the sooner you file, the sooner you’ll receive your refund!), but if there is a situation that will prevent you from meeting the April deadline, you can file for an extension.
If you do choose to file for an extension, you’ll need to fill out Form 4868, which will give you an additional six months to file. The extended deadline this year is October 16, 2017.
If you’re filing for the first time, don’t wing it. Taxes are a major part of your adult life, and not being prepared could mean losing out on money owed to you or even worse – owing more money to the IRS. Educate yourself and you’ll set yourself up for a healthier financial future.
What it means to have a “friend in the industry”
“I have a friend in the industry.”
It’s safe to say that in the world of mortgage, we have all heard this one before. When someone broadcasts this to you, the real question is, “What does having a friend in the industry mean?” It could mean, “A realtor lives down the street from me.” It could mean, “My son’s basketball coach is an appraiser.” Or it could even mean, “I know someone at church who works for the bank.”
We all have “friends” in the industry – not just the mortgage industry either, but in many industries. And working in the industry doesn’t make them all experts. Having a friend in the industry and having a trusted advisor to help you determine your mortgage options are two completely different things. Just because you have that “friend” in the industry, it doesn’t mean that you’ve shared your financial situation with them. Most people tend to keep their private business…well, private. However, by having a relationship with someone who is a trusted advisor, and who puts your interests above all else, that’s really having a friend in the industry.
If you’re looking for a “friend in the industry”, let us know because we are here to help!
How to make Valentine’s Day inexpensive
Valentine’s Day is tomorrow which means now is the time to start scrambling. If you’re anything like a lot of folks, you probably have yet to make plans for your special someone. The problem with putting it off until the day before is that when you start calling restaurants to get a reservation, the only available times are before 5:00 and after 10:00 pm. So what are you left to do? Luckily, you still have enough time to make Valentine’s Day inexpensive and plan a romantic evening without heading to a fancy restaurant. Here are a few quick ideas:
- Dinner at the house. This can make for a really special evening if you take the time to do it right. Try to pick out a main entrée that you know your significant other will enjoy, then utilize your favorite search engine for a recipe. If you’re not quite sure what you’re doing in the kitchen, there are tons of recipes available online and you can probably even watch a video on how to make it happen.
- Be at their service. Instead of spending lots of cash on expensive gifts, give up your time. Offer to give a massage or do errands that they might otherwise do. Suggest doing the dishes or another one of your partner’s dreaded chores for a month and you’ll really have made them feel special.
- Plan an activity together for a later date. Think about something they would enjoy doing (painting, hiking, watching their favorite show) and plan to do it together. Get a nice card, type out your proposed plan and insert it in the card. Although this activity may not be something you’re super excited about, if you know it will make them happy, it will definitely be worth it.
Valentine’s Day is supposed to be a day about the love and adoration you have for your special someone, so don’t make it stressful or expensive. If you haven’t planned out that special date yet, there’s still time – but not a whole lot.