Category: Finance

Step 12 of 12 Steps to Financial Wellness – Review and Tweak

Congratulations! You’ve reached the 12th and final step of the 12 steps to financial wellness. Here, we’ll review the previous steps and adjust this part of your financial health plan as necessary. 

Step 1: Track your spending

Are you regularly tracking your spending? Knowing where your money is going will help you make more responsible spending decisions in the future. 

Step 2: Create and stick to a budget

Budgets need to be reviewed and tweaked every few months or so to ensure they still work for present life circumstances. If your budget no longer works for you, tweak until it does.

Step 3: Pay down debt

Have you made as much progress in your debt-paying journey as you’d hoped to by this point? Can you beef up any payments to make debt disappear sooner?

Step 4: Talk money with your partner

Have you had the big money talk with your partner? Need to revisit any of the topics you’ve discussed, such as sharing accounts, dividing expenses and saving up for a shared dream?

Step 5: Spend mindfully

Review some of your recent purchases. Are you blowing money on stuff you don’t need instead of relieving stress in a healthier manner? If so, look for better ways to de-stress. Spending mindfully is one of the most important steps to financial wellness.

Step 6: Pay it forward

Are you remembering to pay it forward? The money, time and smiles we share are the only moments that are truly ours.

Step 7: Pay yourself first

Are you remembering to feed your savings? At this time, you may want to consider increasing the amount you’re regularly putting into savings by trimming some discretionary expenses.

Step 8: Know when and how to indulge

Are you remembering to work your just-for-fun expenses into your budget so you can indulge without guilt? Now is a good time to look back at your indulgences to figure out if they were really good uses for your money.

Step 9: Check your credit score

If you’ve been following the rules for boosting and maintaining a high credit score, like paying your bills on time, having several active cards, and keeping your credit utilization low, your score should have improved during these last few months.

Step 10: Think about retirement

Review your retirement accounts and assess whether your funds have reached the place you’d hoped they would by now. 

Step 11: Start investing

Make sure your investments are performing well and that your assets are optimally diversified.

Step 12: Review your overall financial health

In this final step, you’ll review your steps to financial wellness on a regular basis, just as you’ve done here. 

Reviewing your financial health on a regular basis is an important part of staying financially fit. 

How to Budget in Times of Inflation

Sticking to a budget during times of inflation is challenging – but not impossible. Here are five ways to help make it happen:

1.      Plan your grocery purchases

First, shop your pantry and fridge before hitting the store. You may not remember what you have at home, so a quick scan can help you stick to purchasing only what you need. 

Next, plan your week’s dinner menu before shopping so you can pick up what you need for the week in one go. The fewer trips to the grocery, the less you’ll spend on impulse buys. 

Finally, don’t forget to shop the sales!. Use apps like Checkout 51, Flipp and Grocery IQ to stay in the know of what’s on sale in each store.

2.      Consider an energy audit

With winter approaching and the cost of energy sources still climbing, this can be a good time to have an energy audit performed on your home. An audit will help identify energy drains, such as air leaks near your windows and doors, so you can fix them and make your home more energy efficient. 

3.      Choose your indulgence

Everyone needs to treat themselves to something special every now and then, but with costs rising on restaurant meals, movie tickets and clothing, something’s gotta give. Take a closer look at your just-for-me purchases, and try to narrow them down to just one or two treats. 

You can also find ways to trim the cost of your indulgences. For example, if you love dining out but restaurant meals are destroying your budget, you can eat out but skip desserts and wines, or split an entrĂ©e with your dining partner. 

4.      Switch your auto insurance plan

If you’ve had your auto insurance policy for a while and you’ve maintained a good driving record, you might save a bundle by switching to a new policy and/or provider. Reach out to your current insurer to discuss your options. Ask about raising your deductible in exchange for a lower premium, reducing overall coverage or negotiating for a safe driving discount. After obtaining a quote, call several other providers to get competing quotes. Go with your lowest offer, or call back your present provider and ask them to match it for your continued business.  

5.      Pad your income

If your paycheck is suddenly not enough to support your lifestyle, consider asking for a cost-of-living raise. You can also look for other ways to pad your income, such as driving for a ride-share company or consulting for hire on weekends. Every extra dollar earned counts!

Yes, you can get through times of inflation and keep your budget intact! Use the tips shared here to get started. 

How Can I Help My Elderly Parents Manage their Finances?

Q: My parents are aging, and I believe they can use help in managing their everyday expenses, and may eventually need a proxy. How can I best help my parents with their finances?

A: Your parents are fortunate to have a child who’s proactively willing to help with this challenging task. Here are some ways you can help your elderly parents manage their finances. 

Determine whether they need help

If you notice any of the following, it may be a sign that your parents need assistance with money management:

  • Unusual and unnecessary purchases. 
  • Piles of unopened mail. 
  • Physical setbacks. 
  • Cognitive impairment and/or memory failure.

Communicate openly

Before you take steps toward managing, or assisting with, your parents’ finances, have an open conversation with them about your current and future intentions. You can share that you are only there to help and that you will not take any actions without their permission, whether before or at the time of need.

Gather information

Next, sit down with your parents and ask these questions about their finances: 

  1. Have you named a durable power of attorney (POA) for finances?
  2. Where do you keep your financial records and assets?
  3. What is the name of your mortgage lender? 
  4. What are your monthly expenses?
  5. How do you pay your bills?
  6. How much is your annual income?
  7. What kind of health insurance do you have?
  8. Have you written a will or a trust?  

Establish a plan

Now you’re ready to establish a plan for managing, or assisting with, your parents’ finances. Be sure to honor their dignity as much as possible. Ask them if they’d like you to take responsibility for one or more of their monthly financial-related tasks. For example, you can pay their mortgage and car payments each month, or make decisions relating to their investments. 

At this time, consider simplifying their finances in any way you can. For example, if your parents have multiple credit card balances, you may want to consolidate this debt into an unsecured loan, and then only have to pay back the one loan payment each month. You can also automate as many bills as possible. 

Alternatively, you can talk about the future only, and have your parents agree to let you manage their money if one or both of them become incapacitated in any manner. 

If your parents find it difficult to relinquish this bit of independence, start assuming responsibilities for their finances gradually; just one bill at a time. 

Taking over the finances of elderly parents can be a delicate and daunting task, but it is often necessary. Use the tips outlined here to navigate this situation smoothly.

Financial Lessons You Can Learn from Fantasy Football

With summer winding down and autumn creeping in, are you ready for some fantasy football? Drafting the best team and guiding them toward the championship takes knowledge, dedication, skill and talent. But fantasy football is much more than just a super-absorbing hobby. You can actually learn a lot about money management and growing your wealth from the game. Here are five financial lessons you can learn from fantasy football.

1.      Do your research

Knowing which NFL players to “draft” to your team on your league’s draft day is crucial. If you sail into this uber-important day unprepared, you’re essentially setting yourself up for a miserable season. During the weeks leading up to draft day, the true fantasy football pro is listening to podcasts from training camps, researching potential trades and learning about past performances of many players. 

In personal finance, the rules are similar. When choosing a place or company to sink your money into, you’ll want to do as much research as possible and ask lots of questions to ensure success and alignment with your values. 

2.      Diversify

In fantasy football, it’s important to diversify your team and to draft players who excel at various positions in real life. This helps to ensure as many wins as possible. In finance, diversification is even more important. You’ll want to spread your investments over a mix of whole-market funds, securities and savings accounts. The more exposure your portfolio has among various asset classes and markets, the more protection it has against market volatility and inflation.

3.      Keep your investments private

To a true fantasy football addict, there’s no conversation topic as exciting as the team they’ve drafted and the wins they’re racking up. But to the uninitiated, there’s no conversation topic that will put them to sleep faster than your fantasy football league. Find like-minded fans to talk shop with, but otherwise, you’re best off keeping your observations and insight on the game to yourself.

Investments are similar. You don’t want to be the drag of the party, the office or the block. Talk about your stock performance with your partner, your financial advisor and maybe your mother. Otherwise, keep it to yourself.

4.      Assess your financial health throughout the year

A real fantasy football pro will monitor the performance of their players in real life. There will always be players getting injured, teams that change their strategies and players who have down seasons. You’ll need to keep an eye on what’s happening so you can make the best decisions about adding potential players on the waiver wire going forward. 

To achieve and maintain true financial wellness, you’ll also need to monitor your budget, savings, spending habits and more throughout the year. Review and assess your money management every few weeks for the best results. 

Fantasy football is so much more than an addictive hobby! Fantasy football can teach you financial lessons for life. 

4 Ways to Stay Financially Fit this Summer

Ahh… summer! The season of flip-flops and sunscreen, of lemonade and baseball. What’s not to love?

Unfortunately, summer can also be the season of overspending for some of us. When the sun is blazing across a cloudless sky and the day stretches on with endless possibilities, purse strings are looser and cards are swiped with abandon. But nothing kills summer fun like a busted budget and a mountain of debt. So how can you stay financially fit this summer?

Keeping your finances intact throughout the summer is possible if you’re ready to plan ahead and make responsible choices. Here are four tips for a financially fit summer. 

1.      Prepare for a possible change in income

If you’re a freelancer, business owner or get paid per diem, expect to see a drop in income during the summer. Business is notoriously slower across many industries at this time, so it’s best to be prepared for this reality. To avoid dipping into savings or going into debt, trim your discretionary spending and use the extra funds to cover non-discretionary expenses. You can also choose to find a side hustle for the summer to cover the gap in your income. 

2.      Get your budget summer-ready

Your budget will see some changes in the summertime, and it’s wise to prepare it in advance instead of being caught unaware. Here are some changes you might expect:

  • Higher utility bills 
  • Increase in fuel prices 
  • Travel expenses
  • Increased activities for kids

3.      Create a vacation budget 

Build a workable budget for your summer getaway to avoid overspending. Attach a dollar amount for your hotel stay, car rental, food costs, transportation, entertainment and outings as well as any other costs you expect to encounter during vacation. 

4.      Review and adjust as necessary

Blowing a budget is never an excuse to go all out and overspend without considering the consequences. To avoid falling into this trap, review your budget and your overall spending on a regular basis throughout the summer. Being aware of the state of your finances will make it easier to make responsible choices going forward. 

Follow these tips to keep your finances intact throughout the summer. 

Your Complete Year-End Financial Checklist

As 2021 draws to a close, take a moment to go through this year-end financial checklist to ensure your finances are in order before the start of the New Year.

1.     Review your budget

Is your current monthly budget working for you? Are you stretching some spending categories or finishing each month in the red? Take some time to review your budget and make any necessary changes.

2.     Top off your retirement plan

Check to see that you are taking full advantage of your employer’s matching contributions for your 401(k). If you haven’t contributed as much as you can, you have until the end of the year to catch up, to a limit of $19,500. If you have an IRA, you have until April 15 to scrape together the maximum contribution of $6,000, with an additional $1,000 if you are 50 years or older. 

3.     Check your progress on paying down debt

Review your outstanding debts from one year ago and hold up the amounts against what you now owe. Have you shed any debt from one year ago, or is your debt growing? If you’ve made no progress, or your debt has deepened, consider taking bigger steps toward paying it down in 2022.

4.     Get a free copy of your annual credit report 

The end of the year is a great time for an annual credit checkup. You can only request a free copy of your credit report from all three credit reporting agencies once a year. Get your annual credit report here, and look for fraudulent charges and other signs of possible identity theft.

5.     Review your investments and asset allocation

You may need to make some adjustments to your mix of stocks, bonds, cash and other investments to better reflect your personal financial goals and/or the current state of the economy and market.  

6.     Review your beneficiaries

Has your family situation changed during the past year? If it has, be sure to switch the beneficiaries on your accounts and life insurance policies to accommodate these changes. 

7.     Review your tax withholdings

Review your W-4 to see if the amount of tax withheld from each paycheck needs to be adjusted. If you’re not a numbers person, ask your accountant for help.

Use this checklist to make sure your money matters are in order before the start of 2022.

Is Inflation Here to Stay?

According to the most recent report by the Bureau of Labor Statistics, U.S. inflation is currently running at a 13-year high of 5.4%, and it’s showing no signs of slowing. Here’s what to know about the current state of the U.S. economy and what you can likely expect in the coming months.

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 as people hunkered down at home. 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 5.4% in June and July. Although the rate started falling in August to 5.3%, it went back up to 5.4% in September. Experts, like the Trading Economics information technology company, now expect that number to continue rising, probably hitting 5.5% in the coming months. 

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 10.4 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. 

PLEASE NOTE: The statistics and estimates supplied in this article were sourced via the hyperlinked references throughout the blog, and not by Olean Area Federal Credit Union.

What to Expect for Holiday Shopping 2021

The holidays are coming and it’s time to hit the shops! Unfortunately, suppliers are cautioning us to expect supply shortages, shipping delays, and higher price tags. 

Here’s what to expect this holiday shopping season.

Supply shortages

Seen any empty store shelves recently?

Suppliers are struggling to stay ahead of shopper demands while catching up on the manufacturing lag experienced during the lockdown. They’re also dealing with a labor shortage, which makes it challenging to meet manufacturing quotas. Finally, many manufacturers rely on other suppliers for the materials they need for developing their products — shipping delays and worldwide supply chain bottlenecks are slowing down their production processes even further.

Shipping delays

Even when manufacturers manage to keep the supply of their products ahead of the demand, there can be significant delays when the goods land in the U.S. For example, in mid-September, 70 cargo ships were waiting to dock in the LA and Long Beach ports, which handle about 40% of the country’s imported goods. The logjam is caused by a scarcity in available storage containers, as well as uneven deliveries of shipped goods as suppliers race to meet demand. The backup will likely continue to be a kink in the delivery chain deep into 2022.

Understaffed shops

Salespeople will likely be even more overworked than usual this time of year, due to massive staff shortages, resulting in extra worker responsibilities and overtime hours. The harried salespeople you encounter may be doing the jobs of several workers.

Higher prices

Don’t count on finding that last-minute bargain gift this year. The prices you’ll find on toys, clothing, electronics and other items will likely be higher than usual, thanks to inflation, the rising cost of fuel and supply that falls well below demand.

Shop early

Suppliers and retailers are urging consumers to start on their holiday shopping as soon as possible for the best selection at the best prices. If you’re the kind of shopper who doesn’t think about gift shopping until mid-December, this may be the year to rethink your approach. 

Plan ahead and start shopping early this holiday season to avoid empty shelves and sky-high prices. Make sure you have the funds you need by taking advantage of the Holiday Loan Special at Olean Area Federal Credit Union!

Happy shopping!

How do I Raise my Kids to be Financially Independent Adults?

Q: How do I help my kids become financially independent grown-ups?

A: Teaching your kids how to be financially independent will help smooth the transition into adulthood. It will also give them what they need to stay financially stable throughout life.

Here are some tips for raising kids to be financially independent adults.

Start with basic budgeting

Introduce your children to the concept of earning money and spending mindfully when they’re young, and build upon that as they grow up. Preteens can watch you work on an actual budget, and teens can even assist you in creating a budget for a large expense, like a family vacation. You can also help kids create a budget for how they plan to spend their own money.

Split the costs of “must-have” items

If your children are like most kids, they’re asking you for trending items they claim they must have; from a pair of designer jeans to the latest fad toy they insist everyone else already has.

A great compromise is to have your child pay half the cost of expensive trending items. They’ll likely quickly see that a “must-have” really isn’t when you’re footing half the bill.

Teach them about credit cards

If your child sees you using a credit or debit card often, teach them what’s behind that card. Show them your credit card bill when it arrives and talk about how you need to pay for all those expenses during the month, plus the possible interest. Teach them about debit cards, too, explaining how money is withdrawn from your checking account each time you swipe the card. You can also give older kids a quick rundown on credit scores, how they work and why they’re so important.

Talk openly about what they can expect in terms of support for the future

When your child is mature enough to talk about the future, discuss how much financial support you plan to offer while they attend college, immediately after graduation and into their adult years. Ask about their plans as well, paying attention to when they anticipate being financially independent.

You can bring up the topic of career paths, too. Help your child determine a basic budget for the lifestyle they plan to lead and assist them in narrowing down their career choices until they have just a few that will support their future life. Talk about student loans, too, and explain how crippling debt can be.

If you haven’t already, consider opening a Youth Savings Account for your child at Olean Area Federal Credit Union. This way they can get hands on experience with a financial account and understand the importance of putting money away. If they get an allowance, or are gifted money at some point, you can encourage them to put a certain percentage in their account. Stop by one of our branch locations, contact us,  or call 800.854.6052 to discuss opening a Youth Savings Account.

Use the tips outlined above to help raise your child to be a financially independent adult.

Buying Your First Motorcycle

If you’re ready to get your first motorcycle, we’re here to help! Here’s all you need to know about buying your first bike.

Secure financing

It’s always best to have the financial details of a large purchase squared away before you start shopping so you can avoid disappointment later. You can save up for your bike, charge it to a low-interest credit card or apply for an auto loan from Olean Area Federal Credit Union for affordable interest rates and payback terms to best fit your budget.

Brush up on your motorcycle safety

Before you shop for a bike, it’s a good idea to complete a Motorcycle Safety Foundation (MSF) course. This is similar to driver’s training, and it will help ensure you can ride your bike in better safety. Depending on your state, you may also need to obtain a special motorcycle license.

Procure insurance

In some states, motorcycle insurance is required by law, but even if your state does not mandate it, consider purchasing it anyway. If you finance the transaction, it will likely be required you carry full coverage.  As is the case with auto insurance, you’ll have the freedom to choose how much coverage you’ll have, with more robust coverage directly increasing the cost of your policy.

Choose between a new and used bike

A used motorcycle can save you thousands of dollars, but finding one in decent condition can be challenging. Avoid bikes that have mileage exceeding 20,000 miles, and are difficult to start-up, run and/or stop. It’s also a good idea to get a VIN check on your potential new bike and to have it professionally inspected.

A new bike, on the other hand, will be in perfect condition but is a lot pricier. It’s a good idea to run the numbers before setting your heart on a particular motorcycle.

Choose a motorcycle type

  • Sport bikes-equipped with a leaning design, these bikes can be a good choice for thrill-seekers, but an uncomfortable option for riders planning to take long trips.
  • Standard bikes-an an upright riding posture and lack of accessories make these perfect for beginners and the budget-conscious.
  • Cruisers-tend to be heavy, but offer a relaxed riding position, making them an excellent choice for tall riders seeking a stylish ride.
  • Touring bikes-these motorcycles are loaded with extra features for long trips, including saddlebags to accommodate luggage and large fuel tanks.

Once you’ve chosen your ride type, research models from popular brands and check out ratings and reviews from current owners. When you’ve narrowed down your choice, you’re ready to visit dealerships and private sellers.

Important features to consider

A motorcycle’s seat, handlebars, and foot pegs are not adjustable, so it’s important to choose one that fits comfortably. Consider the weight of your bike, too, since a heavier bike can be difficult to maneuver.

Are you ready to buy your first bike? Contact us, apply online, or call 800.854.6052 to learn more about financing your motorcycle with Olean Area Federal Credit Union!

7 Reasons to Buy an RV or Campervan

If you’re thinking of road-tripping your summer getaway, think RVs. Recreational vehicles and their close cousin, campervans, are growing increasingly popular as more families hit the road for a true American adventure that’s easier on the wallet and heavy on unique fun. Here are six reasons to buy an RV or a campervan:

1. Save money

With a means of transportation and a place to stay all rolled into one, an RV helps you save significantly on your vacation costs. Plus, when you travel with an on-the-go kitchen, you can cut down on the money you’d spend feeding your family while on the road.  

2. Privacy and comfort

Why fight for legroom on a crowded airplane when you can travel in a vehicle that gives you tons of space? Move around as much as you’d like, enjoy a private bathroom and catch a few winks in the sleeping area, all while heading toward your destination.

3. Increased flexibility

When you travel using your own means of transportation, you’re in control. That means there’s no getting locked into specific dates for your getaway. Come and go as you please and vacation on the schedule that works best for you and your family.

4. Explore more

Traveling by RV will give you the opportunity to take in the sights and sounds of each place you pass through. You can even stop on the roadside to watch a glorious sunset or a passing herd of deer.

5. Bring your pets along

No need to arrange pet-sitters or to keep your furry friend in a carrier under an airline seat. When you buy an RV, you can bring your pets along and keep them nearly as comfortable as they’d be at home.

6. Tax benefits

In many states, owning an RV can mean enjoying significant tax benefits, which can include the homeowner’s deduction, a sales tax deduction and/or deducting the interest payments of your RV loan. Check with your accountant or tax pro to see which of these tax benefits apply to you.

If you’re ready to purchase an RV or a campervan, look no further than Olean Area Federal Credit Union! Our RV loans have affordable interest rates, reasonable payback terms and easy eligibility requirements for qualifying members. Call, click or stop by Olean Area Federal Credit Union to get started!

Why You Need to Be Financially Fit

You give your abs a daily workout, but are you neglecting those money muscles? Here’s why being financially fit is super-important and how you can overcome common barriers to financial wellness.

Financial wellness: a ripple effect

Managing money responsibly will affect many aspects of your life:

  • According to a recent study by AARP, financial problems are the second leading cause of U.S. divorces.
  • Mental health. Money stress can severely affect your mental health, causing depression, restlessness, anxiety and more.
  • Physical health. Stressing over finances can directly impact your physical health, leading to recurring symptoms like headaches, fatigue, insomnia, high blood pressure and an increased risk of heart disease and stroke.
  • Work life. Money worries can make it difficult to focus at work, which can also bring down productivity levels and hamper career growth.

What are the leading causes of money stress?

According to a survey by Credit Wise®, 73% of Americans rank money issues as the top stressor in their lives. Here are the top causes for financial stress:

Barriers to financial wellness and how to overcome them

Unfortunately, there can be barriers that make it difficult to get and keep financial wellness. First, because it hasn’t been taught in school until recently, many people lack basic financial knowledge necessary to manage money responsibly. Second, many mistakenly believe that budgeting and saving are time-consuming and tedious. Finally, some consumers have fallen so deeply into debt they’ve lost hope of ever pulling themselves out.

Here are simple steps you can take to get financially fit:

  • Get educated. Check out financial literacy blogs, personal finance books, podcasts or online classes to learn about money.
  • Have the money talk with your partner. It’s important to be on the same financial page as your partner. Talk openly and honestly, being careful not to be judgmental, and discuss your individual and shared money goals. Then, come up with a plan to reach them together.
  • Pay all bills on time. If you can’t take aggressive steps toward getting out of debt just yet, be sure you’re making at least the minimum payment on each credit card bill.
  • Create a budget. Giving every dollar a destination makes it easier to spend mindfully and cut down on extraneous expenses.
  • Start saving. Every dollar counts, and once you get the ball rolling, you’ll be motivated to pack on the savings until they really grow.

Let’s get those money muscles into shape! Follow the tips outlined above to stay financially fit at all times.

7 Reasons Not to Skip A Home Inspection

If you’re in the market for a new home, don’t forget to include an inspection contingency in your contract. A professional home inspection can save you a ton of aggravation and thousands of dollars in the long run. The inspector will carefully examine the entire house, checking its systems, structure and equipment for functionality and potential problems.

Here are 7 reasons to not skip a home inspection:

1.       Find deal-breakers

A house may look fantastic, yet have major issues with wiring, roof, HVAC, plumbing and more. A quality home inspection will give you the inside scoop. If the inspection reveals any large problems that may take heavy work or expensive repairs, you might want to back out of the deal.

2.       Safety concerns

An inspection can reveal the presence of harmful substances like radon, carbon monoxide and mold. Look for these hazards before it’s officially yours. You don’t want any unpleasant surprises when it’s too late to back out.

3.       Anticipate future costly repairs

A home’s systems and equipment may appear to be working fine when they’re actually on their last legs. A professional inspector can determine the age and condition of the systems and equipment, and then forecast when they’ll need to be repaired or replaced. This can help you budget for a major repair several years down the line.

4.       Reveal illegal additions

The awesome rec room you love in your potential new home might have been illegally built. An inspection will check for rooms, garages and basements that were added or finished without following legal codes or obtaining the proper permits. Having an illegal addition in your home means owning property that does not officially exist. This can get you into big trouble with home insurance and property taxes.

If a home inspection reveals any illegal additions, you can ask the seller to obtain the proper permits now, use this information as a bargaining chip or choose to back out of the deal.

5.       Obtain insurance easily

Lots of home insurance companies will not insure a home if it has not undergone a certified inspection.

6.       Learn how to protect your investment

The inspector will be an invaluable source of information for you, providing tips and knowledge on how best to maintain your home. Knowing how to properly care for your home can save you thousands of dollars over the years.

7.       Negotiate

Most home inspections will reveal problems. If they are minor enough to keep you interested in buying the house in its present condition, use them as bargaining tools and renegotiate the purchase price of the home.

Are you in the market for a new home? Call, click or stop by Olean Area Federal Credit Union today to ask about our fantastic home loan options!

What Do I Need to Know About the Advance Child Tax Credit Payments?

Q: What do I need to know about the advance Child Tax Credit payments of 2021?

A: The advance Child Tax Credits of 2021 will be distributed monthly to eligible families, beginning on July 15. Here’s what you need to know about these payments.

What are the changes to the Child Tax Credits for 2021?

The Child Tax Credit (CTC) for 2021 will be greatly expanded:

  • Eligible families will get $3,000 per qualifying child between ages 6 and 17 at the end of 2021.
  • Eligible families will get $3,600 per qualifying child under age 6 at the end of 2021.
  • The credit is fully refundable.
  • Advance payments of up to 50% of the total CTC per family will be distributed once a month, from July 15 through Dec. 15, 2021.

Who’s eligible for the Child Tax Credits?

Taxpayers who have a primary residence in the U.S. and live in it at least half of the year are eligible for the child tax credits.

Payments will begin to be phased out for married taxpayers filing a joint return who earn more than $150,000 a year, for heads of household earning more than $112,500 a year and for all other taxpayers earning more than $75,000 a year. Income eligibility will be based on 2020’s tax return.

How much will I receive per month through the advance Child Tax Credits?

The advance payments being sent to qualifying families will be equal to up to 50% of each family’s total CTC. The payments will be based upon the income information found in taxpayers’ 2020 tax returns, or, if these are not yet filed, in the 2019 tax returns.

Families eligible for the full CTC will receive half of the total across a six-month time span. From July to December, eligible families will receive $300 a month per child under age 6, and $250 a month per child ages 6-17.

Can I decline the advance payments of the 2021 Child Tax Credits?

Eligible taxpayers who do not want advance payments of the 2021 Child Tax Credit can choose not to receive them. This may apply to taxpayers who anticipate earning more in 2021 than in 2020, or who have primary custody of the child(ren) receiving the credit in 2020, but not in 2021. The IRS has not yet provided instructions for how to officially decline the advanced payments, but has promised to update its website when they are available.

The advance CTC payments will be a boon for families struggling with the financial fallout of the pandemic, but it may not be in every taxpayer’s best interest to accept these payments now. Use our guide to brush up on the details of these payments so you can make an informed decision.

SOURCES:

https://www.irs.gov/credits-deductions/advance-child-tax-credit-payments-in-2021

https://www.cnbc.com/2021/05/17/new-monthly-child-tax-credit-payments-start-july-15-what-to-know-.html

5 Steps to Take Before Making a Large Purchase

Bitten by the gotta-have-it bug? It could be a Peloton bike that’s caught your eye, or maybe you want to spring for a new entertainment system? Before you go ahead with the purchase, though, it’s wise to take a step back and follow these steps.

Step 1: Wait it out

Often, a want can seem like a must-have, but that urgency fades when you wait it out. Take a break for a few days before finalizing a big purchase to see if you really want it. For an extra large purchase, you can wait a full week, or even a month. After some time has passed, you may find that you don’t want the item after all.

Step 2: Consider your emotions

Before going ahead with your purchase, take a moment to identify the emotions driving the decision. Is this purchase being used as a means to fix a troubled relationship? Or maybe you’re going through a hard time and you’re using this purchase to help numb the pain. Be honest with yourself and take note of what’s really driving the purchase. Is it really in your best interest?

Step 3: Review your upcoming expenses

What large expenses are you anticipating in the near future? Even if you have the cash in your account to cover this purchase, you may need that money soon for an upcoming expense. Don’t spend money today that you’ll need tomorrow.

Step 4: Find the cheapest source for this item

If you’ve decided you don’t want to go ahead with the purchase, there are still ways to save money. In today’s online world of commerce, comparison-shopping is as easy as a few clicks. You can use apps like ShopSavvy to help you find the retailer selling the item at the best price.

Step 5: Choose your payment method carefully

Cash can be your go-to choice if you have the funds on hand now. A low-interest credit card may offer purchase protection, just make sure you can meet your monthly payments. Finally, a buy now, pay later program can be just what you need if you have 25% of the purchase price saved up and you can afford to pay off the rest in fixed installments.

If you’re ready to make a large purchase and need a loan, contact Olean Area Federal Credit Union to explore your options!

Feeling Stuck in Your Car Loan? Might Be Time to Shop Around!

Some bills can’t be changed. For other bills, though, a little legwork can make a big difference in your monthly payment. Your car payment is a great example. Refinancing your vehicle loan can lead to a lower monthly payment, a shorter payment term or both! It depends on various factors, including the value of your vehicle, how much you owe and your credit standing.

Read on for three common life changes that might mean it’s a good time to refinance your vehicle.

1.       Your credit rating improves

One of the biggest factor determining your auto loan status is your credit score. When your lender builds a loan package, they pull a credit report as a central part of that process. That number can determine your interest rate, whether you’ll pay an insurance premium and what other fees your lender might charge.

Keep a copy of the documents your lender provided regarding your credit score. That can allow you to revisit what it was to see if your credit score has improved. Nine months of steady repayment can boost your credit score, resulting in a less costly loan.

If you didn’t have much credit history when you purchased, refinancing could do you a world of good. Interest rates as high as 18% are common for new borrowers. Just a few months of solid payments may cut that rate in half.

2.       You didn’t shop around initially

Many people feel railroaded throughout the car-buying process. They choose a car, and then are told the price, the monthly payment and everything else. It’s almost like the lender for your car loan is predetermined.

Dealers usually have a smaller range of lenders with whom they exclusively work. Those lenders have limited exposure to competition, so they can charge higher fees and rates. Do your own comparison shopping. Dealer rates can be 1 to 1.5% higher than those offered at smaller lenders, like credit unions.

If you’ve never shopped around for a car loan, it’s worth doing now. Do your shopping inside a 15-day period, though; multiple checks on your credit could negatively impact your credit score.

3.       You need to change your monthly payment

Your financial situation may have improved since you bought the car and you can now afford to pay more per month. You’ll save money in the long term by doing just that. Shorter-term loans usually have lower interest rates. Also, you’ll pay off the overall balance on your car faster.

If money is tight, consider refinancing for a longer term. Although you’ll pay more in interest, you’ll reduce your monthly payment and save the money you need now. You may also be able to reduce the monthly payment if your credit score has improved, interest rates have dropped or if you’re getting a better rate from another lender.

Contact Olean Area Federal Credit Union to find out how refinancing can improve your financial life!

Top 10 Do’s and Don’ts for Personal Loans

1.       Do use it to consolidate debt.

Put all high-interest credit card debt and payday loans into one loan with a fixed rate, a fixed monthly payment and a closed-end term. You’ll save money and make debt management a lot simpler. Be sure to close any credit cards you pay off so you don’t rack up another large bill.

2.       Don’t use it to pay for your college tuition.

Instead, take out an education loan with the help of Olean Area Federal Credit Union.  Educational loans could potentially offer you alternative payment options, such as forbearances or income-based repayment terms.  Additionally, you could receive other benefits when filing your annual tax returns.

3.       Do use it to finance renovations on your home.

Be smart about your renovations, though, and only choose those that will increase your home’s value.

4.       Do use it for moving expenses.

Whether you’re moving cross-country for a job opportunity or another reason, a personal loan can help pay to transport your car, to move your belongings and to buy furniture for your new residence.  Be prepared to show proof of your new employment though, if applicable. 

5.       Do use it to pay for hefty expenses.

This would include large, unexpected expenses, like a funeral or adoption costs.

6.       Do use it to foot medical bills.

Especially for things that are not covered by most insurances such as fertility treatments, large dental treatments and cosmetic surgery.

7.       Don’t use it to pay for everyday expenses.

If you find yourself doing this, you may be in financial trouble and adding an additional monthly obligation may be more harmful than helpful. Speak to an Olean Area Federal Credit Union representative for help with debt management and general financial guidance.

8.       Do use it to purchase a car or recreational vehicle.

This could include an older boat or RV that may not qualify for vehicle financing due to the age of the item.

9.       Do use it to take a dream vacation.

Don’t do it twice a year, but a personal loan can help you finance your trip for a milestone anniversary or another special occasion that warrants an extravagant vacation.

10.   Do use it to pay for a wedding.

A personal loan would allow you to finance some or all the costs associated with getting married. 

Are you ready to apply for a personal loan? Contact us today!

Should I Refinance to a 15-year Mortgage

With mortgage rates falling, many homeowners are rushing to refinance their 30-year mortgages into 15-year loans. Borrowers may be wondering if this is a financially sound move to make for their own mortgage.

We’ve researched it and worked out the numbers for you so you can make a responsible, informed choice.

When refinancing can be a good idea

The primary attraction of a shorter mortgage term is paying off your home loan sooner, typically at a lower interest rate. Refinancing to a shorter-term loan makes the most sense when interest rates are falling.

How much money can I save?

Let’s assume you have a fixed 30-year, $300,000 mortgage with an interest rate of 4.5 percent.

If you kept your existing mortgage unchanged for 30 years, you’d be making 360 payments of $1,520.06 a month, not including taxes, insurance and other fees. Over the life of your loan, you will have paid $247,220.13 in interest.

Now let’s explore what these payments would look like if you refinance to a 15-year fixed-rate loan at a 3.5 percent interest rate.

Over 15 years, you would make 180 payments of $2,144.65. Over the life of the loan, you’d be paying $86,036.57 in interest payments, affording you savings of $161,183.56.

Remember: These numbers may or may not translate to your own situation. These savings are calculated over 30 years, but you may be nearing the halfway point of your mortgage. Refinancing at a lower rate may still be a good idea, but your interest savings will be much less than described above. Second, your rate may not be a full point lower after a refinance, as it is in our example. This, too, will bring less savings.

What will a refinance cost?

Expect to pay a minimum of 2.5 percent of your new loan in closing costs and other fees. Before you get started on the refinance process, it’s best to tally up these expenses and see what it would cost you to refinance.

Also, your existing mortgage may have prepayment penalties. Find out about these fees before you set the refinance process in motion.

When refinancing is not a good idea

If you’re convinced that a 15-year refinance is right for you, first consider this crucial factor: Your monthly mortgage payments will increase significantly after a 15-year refinance.

If you’re financially responsible, you won’t consider this move unless you are confident you can afford this increased mortgage payment each month. However, you may not realize that tying up your spare cash in your home’s equity can be risky. It can make more financial sense to build an emergency fund, increase your retirement contributions and pay off high-interest debt before refinancing.

If you’re ready to make the move to a shorter-term loan, speak to a representative at Olean Area Federal Credit Union to learn about our fantastic home loan options.

Are you looking to refinance? Check out current mortgage rates at Olean Area Federal Credit Union!

Financing a Home Renovation with a Home Equity Loan

Q: I’m doing some home renovations this spring and I’m not sure how to finance this expense. There are so many options! Which one makes the most sense?

A: As a member of Olean Area Federal Credit Union, you have several options for funding a home renovation. You can open a HELOC, or a Home Equity Line Of Credit, which is an open credit line that’s secured by your home’s value for up to 10 years. You can also fund your renovations with an unsecured loan or use your credit cards.

One of the best ways to fund a home renovation, though, is by taking out a HEL, or a Home Equity Loan. Let’s take a closer look at this popular loan option.

What is a home equity loan? 

A home equity loan is a loan secured by a home’s value. When homeowners open a HEL, they will receive a fixed amount of cash in one lump sum. Most home equity loans have a fixed interest rate, a fixed term and a fixed monthly payment.

What are the advantages of a home equity loan? 

The primary benefit a HEL has over other loans is its fixed interest rate. This means the loan will not be subject to increasing interest rates and borrowers know exactly how much their monthly payment will be for the entire term of the loan. Also, the interest paid on a home equity loan is often 100% tax-deductible (consult your tax adviser for details).

Another benefit of the HEL is its repayment plan. Borrowers will be making payments toward the loan’s principal and interest throughout the term. At the end of the loan term, the entire balance will be paid in full.

Are there any disadvantages to taking out a home equity loan?

While a home equity loan offers the funds needed to cover a home improvement project with an affordable repayment plan, it’s important to know about every aspect of a HEL before applying.

Obtaining a HEL could potentially include closing costs. It’s best to find out if there are any fees and, if so, how much these fees will amount to before applying for the loan.

Also, when taking out a home equity loan, borrowers will receive their funds in one shot. This makes a HEL a great option for homeowners who know exactly what kind of work they will do on their homes. However, if they only have a vague idea about the renovations they want to do and how much they’ll cost, they may end up borrowing an insufficient amount.

Finally, borrowers will need to make a monthly payment on their loan throughout its life. Before taking out a HEL, be sure you can afford the payments.

Call, click, or stop by Olean Area Federal Credit Union to learn more about home equity loans and to start applying for your loan today.

How Do I Give Myself an End-of-Year Financial Review

Q: With 2020 drawing to a close, I’d love to give myself an end-of-year financial review.  Where do I begin?

A: Giving yourself an end-of-year financial review is a great way to start the new year with your finances in top shape. Here’s all you need to know about this end-of-year ritual.

Step 1: Review all your debts and create a payoff plan

List all of your debts and their interest rates. Have you made any real progress toward paying them off this year?

If your debt needs some help, you have two primary options for how to proceed:

  • The avalanche method. Focus on paying off the debt with the highest interest rate first. When it is paid off, continue onto the debt with the second-highest interest rate. Move through the list until you’ve paid off all debts.
  • The snowball method. Work your way through your debts, starting with the lowest-balance debt, and then move to the next, applying what you would have paid to the previous debt. Repeat until all are paid off.

Step 2: Automate your savings

Make savings easy by making it automatic. Give us a call at to set up an automatic monthly transfer from your checking account to your savings account. This way, you’ll never forget to put money into savings again.

Step 3: Review the progress you have (or haven’t) made on financial goals

Have you made measurable progress toward your financial goals in 2020?

Take a few minutes to review your goals, taking note of your progress and determining how you can move toward better achieving those you didn’t quite achieve.

Step 4: Review your retirement account(s) and investments

As you work through this crucial step, be sure to review the following variables:

  • Your employer’s matching contributions. Are you leaving money on the table?
  • The maximum IRA contribution limits for 2021. You will likely need to make adjustments.
  • Management fees and expense ratios for your investments. Fees should ideally be less than 0.1%.
  • Your stock/bond ratio and investing style. Do you want to make any changes?

Step 5: Set new financial goals for 2021

As you finish reviewing your financial progress for the past year, look forward to accomplishing greater financial goals in the coming year.

Set goals that are SMART:

Specific

Measurable

Attainable

Realistic

Timely

Wishing you a financially healthy New Year!

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