Why Do I Need To Get Preapproved For A Loan?

 
Q: I’m in the market for a new home, and everyone I talk to, from friends to financial advisors, suggests I get preapproved for a mortgage before I start house hunting. Why is this so important?
house with sold sign

Photo Credit: http://ow.ly/MP2m30gxTCA

 

A: You’re actually on the receiving end of great advice. When looking to take out a large loan, whether it’s for purchasing a home or buying a car, having that preapproval in hand before you start your search is crucial.

Depending upon the type of loan, the process of getting preapproved for a loan can take time. The lender will begin by asking for your financial history and other personal information. If you have a co-borrower, the lender will need this information about them as well.
 
You’ll be asked to provide your Social Security Number (SSN) and for permission to allow the lender to access your credit report. If the information you provide is satisfactory, as is your credit report, the lender will begin constructing the details of your loan. When they have determined how large of a loan you will be eligible for, they will grant you a preapproval letter. The letter will also detail your estimated interest rate on the loan, though that will sometimes also depend upon the specifics of your purchase, such as the year and condition of a car or appraisal on a home.
 
Having your preapproval letter will shorten the loan process significantly when you’re actually ready to take out the loan. However, that is only a small benefit of getting preapproved before you start “shopping.”
Here are some other advantages of getting preapproved for a loan:

1.) You’ll know what you can afford

Your preapproval will tell you exactly what you can afford. This way, you’ll avoid being disappointed later when you have your heart set on a certain home only to be told you can’t swing it financially. Knowing how large a loan you’ll qualify for will simplify your search and get you into your new home or car sooner.
Be sure to calculate other monthly costs, such as property taxes, home insurance and increased auto insurance rates when determining the actual amount of money you’ll need to shell out each month.

2.) Don’t get taken for a ride

Picture this scene at a car dealership:
 
Salesperson: So, you’re here to buy a new car! What are you looking for?
You: Well, I want something with a smooth ride and –
Salesperson: Got it. And how much of a monthly payment can you afford?
You: Weeelll, I think I can swing up to $200 a month, but I’d rather something closer to $150 if you —
Salesperson: Step right this way please! Let me show our new line of Camrys at just $205 a month! They have the most luxurious feel and the ride is smooth as butter!
 
What happened here is, quite simply, a salesperson looking to make the most money out of a customer. When you’re unsure about how much you can spend, the dealer will capitalize on your uncertainty and try to sell you a car that just barely skims the maximum amount you’ve decided you can afford.
 
Also, when you name a monthly payment you can manage, the dealer will work with that number instead of talking about the price of the car. They may try to inflate the payment with charges and fees just because they fit within your named payment amount.
 
In contrast, when you show up at the dealer with a preapproval in hand, the salesman will have to show you cars with price tags that fit within your loan amount.
 
Don’t get taken for a ride; get your preapproval before you set foot in the dealer shop!

3.) Be taken seriously

A car dealer will take you a lot more seriously when you wave that preapproval in their face, since having that information in hand shows you’re ready to buy.
 
When purchasing a home, the same rule holds true. A realtor will be able to assist you more efficiently when you know exactly how much house you can afford. They may also give you better service since you’re showing that you’re serious about buying a home. In fact, many realtors refuse to show homes to buyers who don’t have a preapproval in hand.

4.) Know you have financing you can trust

When you show up at the car dealership with a preapproval from your credit union, you know the deal is in your best interest. Many auto shops have access to several financing options and they’re almost always going to put customers into financing options that are in their own wallet’s best interests.

5.) Purchase your dream home

A preapproval makes you a valuable customer. It also helps you stand out from the pack. If you’re looking to buy a home in a competitive market, you may be competing with several other buyers for the same house. Having your preapproval will give you a leg up on bidding wars. A seller will be more eager to work with someone who’s already started the mortgage process. You can end your search sooner with a preapproval!
 
In the market for a new home or car? Don’t forget to call, click, or stop by Section 705 Federal Credit Union to hear about our fantastic rates on mortgage and auto loans!

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A Different Breed Of Diversification: What Multiple Certificates Can Do For You

Earn More with a Share Certificate!

Coins

Photo Credit: https://pixabay.com/en/money-home-coin-investment-2724241/

For planned savings, share certificates (aka “savings certificates” or “certificates”) are a great option. They allow you to earn a pretty good return on your money while keeping it accessible enough to use for major expenses. If you’re planning on buying a house or a car, keeping your down payment money in a certificate can help it grow toward your goal a little faster.

 
What if, though, you’re saving for both of those things? It’s difficult to make partial withdrawals from a certificate, and doing so can hurt your earnings. Let’s take a look at three ways to solve this problem, and consider the pros and cons of each.

1.) Lump it all together

One option would be to put all your savings goals into one certificate. You’d take your house down payment, your car funds, your vacation savings and your rainy day money and put them all in a single certificate. This strategy is simple and straightforward.
 
The good
 
First, there’s only one statement to keep track of each month. At tax time, you’ll only have one document that shows the dividends you’ve earned, and you won’t have to track down multiple pieces of paper to figure out how much you’ve got saved. You can make withdrawals when it comes time to achieve your savings goals, and put the remainder into a new certificate at that time. Sometimes, larger sums of money earn better rates, so lumping all your money together can improve your return over the long haul.
 
The bad
 
Because all the money is in one pot, it can be difficult to determine how close you are to each goal. You’re also stuck on the time frame of your shortest-term goal. If you want to buy a car in a year from now, you can only get a one-year term to save for everything, including the house you want to put a down payment on in five years. That short-term rate may not be as good as you could get otherwise.
 
The bottom line
 
If all your savings goals are on a similar time frame, or if simplifying your financial life is your foremost priority, a single certificate for all your savings is a good idea.

2.) Different certificates for different goals

In this slightly more complicated approach, you would open one certificate for your car down payment, one for your house savings and one for your emergency fund. These would all be held in different certificate accounts, and would earn interest separately.
 
The good
 
Since each of your savings goals are in individual accounts, you can get better rates by locking long-term goals into long-term certificates. Instead of keeping all your money tied to the term of your shortest goal, you can stagger your terms to meet the individual needs of all your goals. This will allow you to lock in better rates and make more strategic withdrawals at the time you need the money. Dividend rates change over time, so multiple certificates allow you to avoid the risk of missing better rates, since you have more opportunities to re-lock rates.
 
The bad
 
The variable interest rates can make figuring your earnings difficult, and the multiple accounts can create some confusion when tax filing time arrives. Having multiple accounts also might keep you from getting the best dividend rates, which are reserved for larger balances. So-called “jumbo” certificates can magnify returns if your savings exceeds a certain amount. You may also have an emergency that requires you to dip into savings; in these instances, you may have difficulty accessing a significant portion of your money.
 
The bottom line
 
Multiple certificate accounts offer a combination of flexibility and security that would be helpful for those with a diverse range of goals.

3.) The ladder

A certificate “ladder” is a strategy that uses multiple long-term certificates opened at regular intervals. The objective of a ladder is to secure the best rates possible while ensuring some money is still available at regular intervals. For example, a five-year ladder involves buying a series of certificates so a five-year account is maturing each year.
 
The good
 
A ladder is very flexible and it helps to lock in the best available rates. Long-term certificates have the best rates, regardless of size, and a certificate ladder lets you take advantage of them. It also protects you against the usual problem of long-term certificates. When rates change, you have the flexibility to reinvest and secure those rates.
 
The bad
 
Setting up a certificate ladder can require some very careful planning, and the minimum investment is much higher. Instead of needing the minimum deposit for one certificate, you need the minimum deposit for five of them. Additionally, only one-fifth of your savings are available at any one time. If you’re saving for a large single goal, this can complicate matters considerably.
 
The bottom line
 
Ladders are a complex strategy that can maximize returns for those who are saving for flexible goals like vacations, home renovations and vehicles.
 
Whatever your financial plan, certificates have an important role to play. They make saving for your goals, near and distant, easier. If you want to discuss how certificates can fit into your savings portfolio, call, click or stop by Section 705 FCU today!

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Sources:

International Credit Union Day: Dreams Thrive Here

Are you as excited as we are to celebrate International Credit Union Day?

Dreams Thrive HereICU Day – celebrated on the third Thursday of every October since 1948 – will be on October 19, 2017. The day has been designated as an occasion for credit unions all over their world to recognize the history behind the credit union movement, its spirit and its philosophy. It’s a day to share your experiences as a member and to reflect upon all the benefits you enjoy by being a part of your credit union.

It’s also a day to have fun! Credit unions vary in how they commemorate the day, with celebrations that may include parades, picnics, contests, fundraisers or free promotional materials at the credit union’s local branch. At our credit union, we’re planning to a whole day of fun!

Each year, CUNA and the World Council of Credit Unions chooses a theme for ICU Day. The theme for 2017, selected via an online poll of credit union professionals, is “Dreams Thrive Here.” As a credit union member, you can testify to the absolute truth of this statement. Credit unions do help your dreams thrive, because they make them possible.

You already know how wonderful it is to be part of a credit union, but in the spirit of ICU Day, let’s take a quick look at four factors that make a credit union outstanding and allow your dreams to thrive.

1.) Members first

As a member of a credit union, you own a piece of the organization. Credit unions are not stuck answering to Wall Street – we only want what’s best for you. This keeps our focus in the right place. Instead of working on earning the biggest profits, we can focus on offering superior member service and policies that are as member-friendly as possible. You’ll have a say in the way your credit union runs, and if you find yourself in a difficult situation, you’ll find representatives who are willing and happy to help you.

2.) Lower fees

Banks earn a significant portion of their profits through their fees. While a credit union will also have fees attached to certain products and services, these tend to be lower than similar fees you’ll find in a bank. What all this means for you is lots of money saved just by choosing to trust the credit union with your money.

3.) We’ve got your back

Everyone has their ups and downs. If you’re going through a rough patch, a credit union is willing to work with you through that challenging time. While a bank is more likely to turn down a borrower with a poor credit history, a credit union member representative wants to help you out. Loan officers will be happy to meet with you and work to find a loan that best suits your needs. If necessary, representatives are also here to help you learn the basics of budgeting and money management, often offering programs to help you gain control over your budget and cover unexpected expenses.

4.) Better interest rates

When you open a savings account or a CD, one of your biggest concerns is the interest rate. You want your money to grow as much as possible.

Lucky for you, credit unions offer higher interest rates on savings accounts and lower interest rates on loans. You read that right – remember, they want what’s best for you! Since they’re not focused on making a profit, they only need to cover operating costs. All the money they save by focusing on what matters to you is passed down to the member via these favorable interest rates. This means you can save on any loans you may need and that the money in your savings accounts will be earning at a higher rate, just because you chose Section 705 Federal Credit Union.

As you can see, we’ve got lots to celebrate!

Here at Section 705 Federal Credit Union we’re gearing up for a fun-filled, memorable day. Join us on Oct. 19 for a gift basket drawing, wheel of prizes, contents and refreshments as together we celebrate everything that makes a credit union special. Can’t wait to see you there!

SOURCES:
https://www.woccu.org/networking_education/icuday
https://www.woccu.org/newsroom/releases/2017_International_Credit_Union_Day_Theme_Announced
https://www.cuna.org/Marketing-And-Member-Education/Member-Events-And-Promotions/International-Credit-Union-Day/International-Credit-Union-Day/
https://www.cuinsight.com/press-release/2017-international-credit-union-day-theme-announced

The Dos And Don’ts Of Credit Repair

Need a financial counselor? We have two!

Starting the Credit Repair Process

If you’ve recently been rejected from a loan application of any kind, you may be looking at a poor credit score for any number of reasons. You might have been late with your credit card payments, have an outstanding judgment against you or have even been victimized by identity theft. This is just the article to begin credit repair step-by-step.
 
Whatever the cause of the fall in your score, you’re probably looking for ways to get it back on track. Tread carefully! There are lots of dishonest opportunists looking to make a quick buck off your pressing need. Don’t become the next victim of a credit repair scam. In fact, there’s nothing a credit repair company can do for you that you can’t do yourself.
 
This probably has you wondering how to untangle the legitimate steps you should be taking now from the pointless and costly actions. Look no further! Our handy guide of credit repair dos and don’ts will help get you on the road to improving your credit score.

Do: Determine your actual credit score

If a recent credit application of yours has been denied, don’t take it at face value – find out why it happened. The three major credit reporting agencies – Equifax, Experian, and TransUnion – are each required to provide you with a complimentary copy of your credit report once a year, upon request. To order yours, visit annualcreditreport.com, or call 1-877-322-8228.
 
If you’ve already requested a report from each of the agencies in the last 12 months, you can still get one free of charge; you are entitled to a free report whenever a company takes adverse action against you, such as denying your application for credit, insurance or employment. To qualify, just request a report within 60 days of receiving notice of the action.

Do: Review your report and dispute any errors

Once you receive your report, review it for inaccuracies. If you spot any fraudulent purchases or erroneous information, you’ll need to dispute them in writing. In your letter, identify every item you are disputing and the reasoning behind your claim. Include copies of documents that support your stance and ask that the errors be removed or corrected. It’s best to send your letter by certified mail so you can ensure the credit reporting company actually received it if that is necessary. Also, keep a personal copy of your letter and all supporting documents for your own records.
 
You’ll also need to dispute the charge with your actual creditor, taking the same steps you did above.

Don’t: Expect any quick fixes

Anxious as you may be to improve your score, know that there is no “quick fix” for creditworthiness. Enhancing your score takes time, lots of hard work and creating and sticking to a realistic debt repayment plan.
 
If your credit score is poor, you may be bombarded with promotional material from credit repair companies that promise to increase your score by 100 points in less than a month. If you think these claims sound too good to be true, you’re absolutely right. There are some legitimate credit repair companies out there, but as mentioned, there’s nothing they can do for you that you can’t do on your own – and without paying their hefty fee.

Do: Take steps toward fixing your credit

If you’ve determined that your credit report is accurate, you’ll want to take a careful look at the habits that may be leading to your unfavorable score.
Are you timely with your credit card payments? If you’re consistently late, consider setting up an automatic bill-pay system so you never forget to make a payment. Are you making headway on your debt? If you’re paying your bills on time but your debt is not going anywhere, it’s time to rethink your spending habits. Don’t shop with credit cards; use only debit or cash. Look for ways to trim your expenses, like couponing wherever possible, planning dinner menus around sale items, and finding cost-free ways to relax instead of blowing money at a restaurant or on retail therapy.
 
Are your monthly bills unmanageable? If you can’t make it through the month and still meet all of your minimum payments, your debt may need an overhaul. Consider debt consolidation, in which your debt is transferred to one low-interest account, or a balance transfer to a card that has an interest-free period. Be aware, though, that lots of open credit is not considered favorable by creditors; close as many accounts as you open – but leave your oldest one open as it shows a longer period of credibility.
 
Also, no card is interest-free forever. When the introductory period ends, you may be hit with higher than usual interest rates. Alternatively, you can contact your creditors and work out a more reasonable payment plan.
 
If these options don’t sound feasible, try finding ways to increase your income instead, using all extra cash exclusively for paying down your debt.
 

Don’t: Expect to see any changes immediately

Don’t fret if you’ve made strides toward fixing your credit and haven’t yet seen an increase in your score. Creditors will only report to the credit reporting agencies on a periodic basis, usually once a month. It may take upward of 30 days or more for your account to be updated and your score to improve.

Do: Ask us for help

Here at Section 705 FCU, we’re all about helping you manage your finances. If you’re in financial trouble of any kind, we can help! Stop by today to ask about our credit counseling services and assistance with creating and sticking to a budget. [We even offer debt consolidation loans, providing you with the opportunity to transfer your debt to one low-interest loan, making the prospect of paying down your debt a lot more manageable. Email a loan officer to learn more!]
 

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How To Shop For Fall On A Budget

Fall Savings Tips

fall leaves

Photo Credit Union: http://ow.ly/QpzC30j5hAr

That long-anticipated day has finally come and gone. Your kids looked sharp and neat sporting spiffy backpacks and dressed in their spanking new back-to-school clothing. You watched them board that bus and waved them off from your perch at the bus stop until your arm hurt.

 
Then you breathed a great sigh of relief, grateful that the busy back-to-school shopping season is behind you.
 
Unfortunately, though, the fun is just beginning!
 
While your child may be outfitted for the new school year, you might need some warmer autumn clothing for yourself. And of course, if the leaves are starting to change colors, it can only mean that winter isn’t far behind. That brings with it a whole slew of wardrobe necessities and accessories you’ll need to purchase, both for yourself and the rest of your family.
 
If the dollar signs dancing before your eyes are starting to look frighteningly large, you can relax! As always, Section 705 Federal Credit Union is here to help you navigate this potentially expensive task and show you creative ways to save, even as you bundle up your family for the fall and winter seasons.
 
Read on for six timely money-saving tips this shopping season.

1.) Layer up

Don’t pack away your summer clothing just yet! The temperatures may be dropping, but you can still find many uses for those tank tops and summer dresses; save them for layering up in colder weather. You can stick a long-sleeved T-shirt under a dress and add leggings and boots to make it warmer. If you’re a genuine fashion guru and will wear any trend, you can even wear shorts in the winter and stick a pair of leggings or warm tights underneath.

2.) Take inventory

You check your pantry before heading to the supermarket; shouldn’t you also take stock of your closets before hitting the mall? This is especially important when shopping for a new season. It’s easy to forget pieces you’ve got hidden in the back of your closet or buried deep in a drawer from last winter. Take a careful inventory of what each family member has and what they still need and write it down. This way, you won’t come home to find that you already have what you’ve purchased.

3.) Shop the sales

Fall has a few observed holidays that bring awesome sales – so take advantage! There’s Columbus Day, Veterans Day and then the markdown day of the year, Black Friday. There’s also Cyber Monday and Small Business Saturday. It’s worth waiting for the next holiday to buy what you need. You’ll save a lot just by being patient!

4.) Shop online – without paying shipping

Online shopping can be significantly cheaper than retail stores – until you need to chalk up $6.99 for shipping, that is.
Beat the system by looking for free shipping on sites like Freeshipping.com, or by taking advantage of the free in-store pickup available at many retailers. Many stores also offer coupons to first-time online shoppers. If you’ve already shopped a store online, you can sign in using another email address and still snag the deal.
 
Even if you prefer live shopping and like to try on your clothing before you buy, it pays to check out a store’s online inventory before going to the brick and mortar shop. This way, you’ll know what they have and what you like instead of wasting time browsing racks and finding the perfect top with the perfect price several hours later.

5.) Time it right

There’s a season for every purchase. If you wait until a specific item goes on sale, you’ll save big. For example, jeans always get marked down in October and last winter’s boots will show up on the sales racks at the end of September. It’s worth it to wait until these times to buy these items.
 
Also, winter coats hit the sales racks as soon as Christmas is over. Depending on the climate in your area, you may be able to hold off on buying a coat until after the holidays to await a super deal. Alternatively, if your old coat is in fairly good condition but you’d like a more updated look, consider making do with last year’s coat for now, and buying a new one when they go on sale.

6.) Shop the overstock

Stores that specialize in deeply discounted merchandise, like DSW, T.J. Maxx, and Marshalls, can be a terrific source for name brand clothing at generic prices. You may have to sift through rows of racks until you land a real bargain, but it’ll be well worth your time. These stores are especially beneficial for stocking up on basics.
 
On a similar note, be sure to check out secondhand stores and sites like Overstock.com for incredible deals on stuff you need.
Don’t break the budget this shopping season. With a bit of planning and strategic shopping, you can outfit your family for warmer weather.

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SOURCES:
 

Everything You Need To Know About The Equifax Breach

Proactive Steps after the Equifax Data Breach

 a lock

Photo Credit: http://ow.ly/cjx530f5RQD

In a recently revealed breach, the scope of which the country has never before seen, 143 million Americans may have had their personal information exposed.

Equifax, one the nation’s three major credit reporting agencies, reported a massive data breach that lasted from mid-May through the end of July. Hackers were able to access people’s names, Social Security numbers, birth dates, addresses and even some driver’s license numbers. They also stole credit card numbers of approximately 209,000 people and dispute documents containing personally identifying information of 182,000 people. It wasn’t just Americans who were targeted – the hackers also got their hands on personal information of some UK and Canadian consumers.

Right now, the situation is still developing and there are many more questions than answers. Researchers are seeking explanations for the site’s outdated security system, an accurate number of those affected and the impact this will have on the future of credit reporting.

Meanwhile, though, people are wondering if they’ve been affected and what they can do about it. If you have any type of credit product such as a credit card, mortgage or auto loan, there’s a chance your personal information may have been compromised. Instead of panicking, though, it’s best to learn all you can about this data breach and then take the proper and practical steps toward protecting yourself against future damage.

If this sounds daunting, take heart – Section 705 FCU is here to help! We’ll walk you through some suggested steps and clear instructions for what you can do now.

1.) Find out if your information was exposed

You can do this by visiting an Equifax created website for sharing information about this issue, equifaxsecurity2017.com. Click on the “Potential Impact” tab and enter your last name along with the last six digits of your Social Security number. The site will tell you if you’ve been affected by the Equifax breach.

Since your SSN is sensitive information, be sure to complete this step only on a secure computer that uses an encrypted network connection. Once you’re visiting the Equifax informational site, you’ll also find easy access to frequently asked questions about the breach. In addition, Equifax has set up a call center to assist consumers. The call center’s hours of operation are 7 a.m. to 1 a.m. daily (weekends included), Eastern Time. That number is (866) 447-7559.

2.) Sign up for free protective services

Whether your information was exposed or not, U.S. consumers are being offered a full year of complimentary credit monitoring and other services through Equifax’s TrustedID product. The site will provide you with a date to return and sign up for these services. Be sure to follow up on the designated date because the last day for enrollment is Nov. 21, 2017.

The protective program includes the following features: Equifax credit report copies; three-bureau credit file monitoring, providing automated alerts of any major changes in your credit reports; Equifax credit report lock, preventing third parties from accessing your Equifax report; Social Security number monitoring, which performs online searches of suspicious websites that may list your Social Security number; and $1 million identity theft insurance, which covers some expenses in the event of a stolen identity.

Be warned, though, that the fine print of this service contains a catch. The terms of service agreement for TrustedID states that enrollees must employ arbitration over civil courts in order to settle any disputes. Critics of the company argue that Equifax is taking advantage of victims by forcing them to sign over their rights. You may, however, decide that the benefits offered by this service far outweigh its negative fallout.

3.) Place a credit freeze or a fraud alert on your files

If your information has been exposed, consider placing a credit freeze on your credit bureaus. This will make it more difficult for someone to open a new account in your name, though it won’t stop a thief from making charges to your existing accounts.

Instead of a credit freeze, you can choose to place a fraud alert on your files. This will warn creditors that you may have been victimized by identity theft, alerting them to verify that anyone seeking credit in your name is really you.

Even if the Equifax site did not tell you you’ve been exposed, it’s always a good idea to closely monitor your credit card and financial accounts for charges you don’t recognize.

4.) File your taxes early

Tax identity theft is more common than you think. If your SSN was accessed in this breach, it’s best to file your taxes as soon as you have all the necessary tax information. Don’t let a scammer use your SSN to get their hands on your tax refund. Also, be sure to respond immediately to any letters you receive from the IRS, though be suspicious of any emails or phone calls claiming to be from the IRS, as the IRS will not initially notify you using such means.

The Equifax breach may be one of the worst the US has ever seen, but by taking the proper steps toward protecting yourself, you can minimize any potential damage.

 

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SOURCES: 
https://www.consumer.ftc.gov/blog/2017/09/equifax-data-breach-what-do
http://thehill.com/policy/cybersecurity/349869-five-questions-about-the-massive-equifax-breach?amp
https://motherboard.vice.com/amp/en_us/article/mbb8vv/want-to-know-if-your-ssn-was-included-in-the-equifax-breach-good-luck
https://aaacreditguide.com/equifax-data-breach/

Can Living Frugally Make You Happier Than When Living Lavishly?

Do you believe money is the key to happiness?

girl blowing bubbles

Photo Credit: http://ow.ly/fZf030eATAm

Somewhere deep inside, we all know that money cannot buy happiness. Many people overspend and rack up thousands of dollars in credit card debt to live a lifestyle they believe will make them happy, only to discover they are living beyond their means. This, in turn, adds stress and worry … causing unhappiness. Believe it or not, living frugally can actually make you happier than living lavishly.

 
Living a frugal lifestyle isn’t necessarily about pinching pennies and denying yourself things you want. It’s about making your life easier and worrying less about money.
 
If you’ve decided it’s time to start living more frugally, ask yourself why you want to do it and establish a goal. Without a reason to change your spending habits and a goal to work toward, it’s easy to fall back into old habits. Maybe you’d like to retire early, or travel the world or buy your dream home. Maybe you’d like to work less and spend more time with your family. Whatever your reason, write it down. Place reminders of your goal where you’ll see them often.
 
Once you’ve started your new frugal lifestyle, you may be pleasantly surprised at your newfound happiness. Below are some benefits of living the frugal lifestyle that can lead to more happiness and better money management.
 
  • You’ll learn to appreciate what you have. You’ll become thankful for your resources and learn to make the most of them. Rather than throwing away old items, you learn to repurpose them and let little go to waste.
  • You’ll tend to choose experiences over objects. Rather than going to the mall and purchasing a new outfit or the newest video games, you’re more apt to go for hike, to the beach or play board games with friends or family. These experiences provide memories and happiness that can last a lifetime. Conversely, that new outfit or video game will provide only temporary happiness.
  • You’ll start to notice your debt diminishing. The burden of debt often ties people to jobs and locations that they hate because they feel they have no other choice. Once your debt disappears, you’ll have the freedom to choose a profession and location that makes you happy.
  • You will have more leisure time. Once you’re able to pay down debt, you won’t need to work as many hours to make ends meet. This will give you more free time to spend on hobbies and other leisurely pursuits.
  • Living frugally may put you on the path to early retirement. Rather than spending your golden years working, you could be gardening, traveling, enjoying your grandchildren or any number of more pleasurable things. Being able to put more funds away for retirement will help you reach a financially comfortable level long before many of your colleagues.
  • You might find joy in helping others. By reducing your own expenses and saving money, you are able to give more to others and support social causes that are important to you.
 
Now, you may be thinking – the frugal lifestyle doesn’t sound all that bad, but how do I get started? The key is to start small. Make a list of what you’d like to accomplish, how much money you’ll need to achieve it, and formulate a plan. Figure out expenses you can live without. Instead of buying high-priced gourmet coffee at a drive-thru in the morning, brew your coffee at home. Brown bag your lunch rather than eating out. Make a weekly meal plan and cook your meals at home. These items alone can potentially save you hundreds of dollars a month.
 
If you’re paying down multiple credit cards, look into consolidating them into one loan or to a single, lower-interest credit card. This can give you significant savings on interest charges. [Check out Section 705’s low interest credit card option and apply here.] Once you’ve consolidated your credit card debt, keep your your oldest credit card, but use it infrequently and close all others. Keeping your oldest card open may positively impact your credit score. Leaving the others open, though, may lead to a temptation to use them again, thus defeating the purpose of paying them off.
 
Learn to stretch your money as far as you can. When purchasing groceries, clip coupons and look for sales. When purchasing clothes or other non-grocery items, check thrift stores, yard sales and clearance racks for the best possible deals.
 
Look for ways to lower your monthly bills. Are you paying a huge bill for cable TV? Could you live without it? Many people pay a large cable bill and only watch a handful of channels. Check to see if there is a cheaper package available. Is your electric bill higher than it should be? Try hanging your clothes outside to dry rather than using your clothes dryer whenever possible. Also, washing your clothes in cold water instead of hot will save your hot water heater from working as hard – and your clothes will still get cleaned. Another good habit to get into is unplugging electronic devices when you’re not using them.

Give living frugally a try! You have nothing to lose but debt and can gain some unexpected happiness along the way.

SOURCES:

http://www.wisebread.com/how-living-on-a-tight-budget-makes-you-happier
https://www.thebalance.com/frugal-living-4074014
https://toughnickel.com/frugal-living/101-Frugal-Living-Tips-You-Need-to-Know
https://www.thepennyhoarder.com/life/frugal-living-rich-life/
https://www.thebalance.com/lower-your-electric-bill-1388743

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Creative Ways To Save On Energy Costs

Cut Energy Costspiggy bank and light bulb

Are your summertime electricity bills astronomical? Check out our list of 10 creative ways to trim your bill in the summer and all year ’round!

1.) Plant trees

If your home has lots of west-facing windows, you’re likely getting loads of sunlight each afternoon, and that’s making your AC unit work harder. Lower your energy consumption by planting trees or large shrubs in front of some of those windows.

2.) Go solar

If you can’t afford to buy solar panels, consider leasing them instead. You’ll be given a set monthly fee which makes budgeting easier year-round. Also, the monthly payment is often 15% less than the local utility rate.

3.) Rethink your roof

Is your roof dressed in black for 90-degree weather? By installing a sunlight-reflecting “cool roof,” you can reduce your roof’s temperature by up to 60 degrees. This will trim your AC use by as much as 20%.

4.) Keep your cool

Large, heat-generating appliances can warm up a room quickly. Consider running your washing machine and dishwasher at night or in the early morning when it’s cooler outside.

5.) Lighten up

Replace your light bulbs! By swapping out just five incandescent light bulbs in a high-traffic area of your home to CFL or LED bulbs, you can save $65 on annual energy costs.

6.) Seal all leaks

If your home isn’t a new build, you likely have leaking windows and doors. Caulking regularly shrinks. Structural walls of houses tend to shift with time. To check for leaks, run the match test. Shut down your AC unit and close all doors and windows. Hold a lit match near the windows and exterior doors of your home. If the flame moves, that will indicate an airflow, which means a leaky seal.

If you’ve got leaks, reseal your windows by weatherstripping the problem areas. A leaky door may need a door sweep replacement. Just peel off the old one and bring it to a home improvement shop so they can help you find a new one that fits your door.

7.) Get smart!

By installing a smart thermostat, your home will be programmed to cool off at exactly the times you need.

8.) Pull out the plug

Up to 75% of energy consumption by home electronics happens when they’re turned off. Save big by pulling out the plugs when you’re done with your electronics.

9.) Fire up the grill

An oven cranked up to the standard 350° makes your AC unit work harder. Use your grill for dinner prep. You’ll keep the heat out and enjoy the sunshine at the same time!

10.) Laundry smarts

About 90% of the energy used when doing laundry comes from heating the water. When possible, choose the cold setting on your washing machine. Hanging your clothes to dry will also trim your bill. If you must use the dryer, stick some tennis balls in there to make it more efficient and finish faster.

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Back-To-School Savings

12 Ways to Save During Back-to-School Season!

Q: Is there any way to get through the back-to-school season without spending a small fortune?
 
Letters spelling "Back to School."
A: Back-to-school time is the second largest shopping season of the year. If all that spending makes your head pound, take heart. Section 705 FCU has your back! We’ll help you navigate it with your budget and sanity intact. Read on for 12 back-to-school saving tips.

1.) Do a house-wide sweep

Before you spend a penny, scour your closets and drawers to see what you have lying around the house. Round up all the supplies and list everything you’ve found. Keep the list handy so that you don’t forget what you have and end up buying things you don’t need.

Also, while digging through your kids’ closets, sort and purge. This way, their closets won’t be cluttered with junk and you’ll know exactly what each child needs.

2.) Get the teacher-approved list

Pay close attention to specifics on the supply list sent home by your child’s teacher or found at major retailers. This will prevent you from being forced to later repurchase supplies that fit the teacher’s criteria.

3.) Spread your purchases

Spreading your back-to-school shopping throughout the summer will allow you to take advantage of weekly sales. Also, by scattering your purchases, you won’t feel the financial squeeze as much as you would if you bought everything at once.

4.) Take advantage of sales-tax holidays

Many states have a sales-tax holiday sometime during the summer. Look up the timing of your state’s tax holiday and do your shopping at that time.

5.) Organize a clothing swap

Organize a clothing swap party with other parents in your area. Choose a date and venue, and instruct all attendants to show up with three or more items of gently used children’s clothing. At the party, parents can exchange their kids’ outgrown clothing and go home with incredible finds – all free of charge!

6. Find the best prices

Hunt for specials in the weekly circulars and look up coupons and deals online, on sites like RetailMeNot and CouponCabin. You can also check out PriceGrabber.com or use the ShopSavvy app to find the lowest possible price on an item.

7.) Use Twitter and Facebook to save

Many companies send coupon links to followers and let them know about upcoming sales. Monitor your favorite stores’ Twitter feeds and Facebook updates to find super deals.

8.) Save through Ebates

When you buy through Ebates, you earn cash back on every purchase. You’ll also find exclusive deals and offers on the site. You can shop major stores like Macy’s, Walmart and Kohl’s on Ebates. It’s like getting paid to shop!

9.) Time it right

Purchase what your child needs for now, and save the rest for later. You’ll find deep discounts on fall clothing just a few weeks into the school year.

10.) Set limits

Every year there’s a must-have school supply or clothing trend that costs a bundle. Set limits. Allow your child to choose one or two pricier items – but that’s it!

11.) Cash or debit card only!

Paying with cash or using your debit card so it draws from your checking account helps you stay within your budget. Resist the urge to charge if you can. This will help ensure you aren’t paying interest long after the pencils have already broken.

12.) Plan ahead

When school supplies and backpacks are ridiculously discounted a few weeks into the school year, stock up for next year.