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5 Reasons we Overspend (and How to Overcome Them)

What makes us overspend? Let’s take a look at five common reasons and how we can overcome them.

1.       To keep up with the Joneses

When people who seem to be in the same financial bracket as we are can seemingly afford another pair of designer shoes for each outfit, we should be able to afford them, too, right?

Break the cycle: Learn to ignore how your friends and/or peers choose to spend their money and develop a self-image that is independent of material possessions. Let the Joneses keep up with you!

2.       We don’t have a budget

When all of our spending is just a guessing game, it can be challenging not to overspend.

Break the cycle: Create and stick to a monthly budget that covers all of your needs and some of your wants.

3.       To get a high

Research shows that shopping and spending money releases feel-good dopamine in the brain, just like recreational drugs.

Break the cycle: There’s nothing wrong with spending money to feel good, so long as you don’t go overboard. Try putting some “just for fun” money into your budget so you can make that feel-good purchase when you need to do so without letting it put you into debt.

4.       Misuse of credit

Credit cards offer us incredible convenience, but they also offer us a gateway into deep debt. Research shows that consumers spend up to 18% more when they pay with plastic over cash.

Break the cycle: When shopping in places you tend to overspend, use cash and you’ll be forced to stick to your budget. You can also use a debit card with a careful budget so you know how much you can responsibly spend.

5.       Lack of self-discipline

Sometimes, we just simply lack the discipline not to exchange immediate gratification for long-term benefit.

Break the cycle: Define your long-term financial goals. Create a plan for reaching them through small and measurable steps. Before giving in to an indulgence you can’t really afford, remind yourself of your long-term goals and how much longer your timeframe will need to be if you spend this money now.

Will I Be Getting a Second Stimulus Check?

After months of negotiations, the Senate has finally passed a bipartisan deal on a new coronavirus stimulus plan. The $900 billion economic relief package will deliver emergency aid to a trampled economy and provide struggling Americans with desperately needed funds.

The bill will put $325 billion toward business relief in an effort to revive strained corporations around the country. Specifically, an approximate $275 billion will fund the depleted Paycheck Protection Program, which now includes loans made available from small lenders. Another $20 billion will be directed toward small business grants and $15 billion will go toward live event venues.

Another crucial component of the stimulus bill is the boost in unemployment insurance. The bill adds a $300 federal unemployment supplement and extends pandemic-era programs that expand eligibility for unemployment.

The legislation also designates $82 billion for schools, $45 billion for transportation needs, $25 billion in rental assistance, $20 billion for vaccine distribution and $13 billion for a significant expansion of food assistance benefits.

Most Americans are primarily concerned with just one part of the bill: the second round of stimulus checks, or Economic Impact Payments (EIP).

Here’s all you need to know about the second stimulus checks:

Who qualifies for a stimulus check?

The $600 payments will be distributed to eligible recipients based on their 2019 tax returns as follows:

  • Each adult who earned $75,000 or less will receive a stimulus check of $600.
  • Married individuals filing jointly who earned $150,000 or less will each receive a stimulus check of $600.
  • Heads of households earning up to $112,500 will receive up to $600.
  • Parents and legal guardians will receive a $600 check for each dependent under age 17.
  • Adults who earned more than $75,000, married individuals filing jointly who earned more than $150,000 and heads of households who earned more than $112,500 will have their payout reduced by $5 for every additional $100 of income.

 Who does not qualify for a stimulus check?

  • Adults who earned $87,000 or more, married couples filing jointly who earned $174,000 or more and heads of households who earned $124,500 or more are not eligible for the EIPs.
  • Adults who are claimed as dependents will not be eligible for the EIPs.
  • Undocumented immigrants will not be eligible for a direct payment; however, households in which one parent has legal residency and another does not are eligible to receive the checks.

What if I didn’t file a tax return for 2019?

If you have not filed a tax return for 2019, you’ll need to complete this form to receive the stimulus payment.

When will I get my check?

The distribution of these payments is expected to be a lot quicker than the first EIPs back in the spring. On Monday, Dec. 21, Secretary of the Treasury Steven Mnuchin assured that millions of Americans would begin receiving their payments as early as the following week.

Most individuals and couples who have filed taxes for 2019 will receive their checks first via direct deposit into their accounts. Those who have not yet filed taxes for 2019 will receive their EIP in the mail, via paper check or prepaid debit card. This process may take up to five months.

For those receiving their payments via direct deposit, Olean Area FCU receives deposits by 12:00pm on the day the IRS site indicates that funds will be deposited. We also encourage members to set up E-alerts within E-teller so that you can be informed when the funds are available.

If you’ve filed taxes already but the IRS does not have your account information, you may have to wait a while to receive your payment. If you’d rather get it sooner than later, you can use this link to securely share your account information with the IRS and receive your payment via direct deposit.

For those receiving their EIPs in the mail, expect the first round of payments to go to those earning less than $20,000 a year. The next round will go toward those in the next income bracket, in ascending order until all eligible individuals and couples have received their funds.

Wondering how big your second stimulus check will be? You can use one of the many online calculators to determine your amount by entering details like your income, filing status and the number of dependents you have.

The Importance of being Financially Fit

Being financially fit is crucial for a well-balanced, stress-free life. Here’s why (and how):

Expand your financial knowledge

A financially fit person is constantly broadening their money knowledge. They read personal finance books and blogs, attend seminars and are aware of the evolving state of the economy. This enables them to make money decisions from a position of knowledge and power.

Stick to a budget

A financially healthy person knows that tracking monthly expenses is key to financial health. They are careful to set aside money from their monthly income for all fixed and discretionary expenses, and to stay within budget for each spending category.

Minimize debt

A financially fit person is committed to paying down debts and seeks to live debt-free. Constant budgeting, ongoing financial education and planning ahead enables them to make it through the month, and through unexpected expenses, without spiraling into debt.

Maximize savings

A financially healthy person prioritizes savings. This allows them to think ahead and build a comfortable nest egg or emergency fund. In turn, having a robust safety net means sleeping better at night knowing there’s money available to cover unexpected expenses.

Maintain complete awareness of the state of your finances

A financially fit person knows exactly how much money they owe, the accumulated value of their assets and the complete sum of their fixed and fluctuating expenses. This awareness takes the stress out of money management, allowing them to make better financial choices.

Maintain a healthy credit score

A financially fit person knows that an excellent credit history and score are crucial factors to long-term financial health. They are careful to pay bills on time, hold onto credit cards for a while and to keep credit utilization low. This helps them qualify for long-term loans with favorable interest rates, which saves them money for years to come.

Create concrete financial goals

A financially healthy person has long-term and short-term financial goals. This enables them to keep their focus on the big picture when making everyday money choices and empowers them to realize their financial dreams.

Achieve financial independence

A financially fit person is independent. By sticking to a budget, prioritizing savings and maintaining an awareness of their finances, they are strong, secure and completely independent.

All You Need to Know About Selling Your Home During COVID-19

For many homeowners, the hot real estate market of spring and summer of 2020 was going to be the season they put their homes up for sale — until the coronavirus hit. With people struggling just to get by financially, selling a home seemed like a dream from another lifetime. Records of U.S. home sales for March show a sharp decline of 21% in total homes sold, according to data from the National Association of Realtors.

Now, though, the U.S. real estate market is looking very different. As the economy limps toward a recovery, national home sales climbed a record 20.7 percent in June, compared with home sales from June 2019.

However, many homeowners who have planned to sell this year are still reluctant to take that leap. Here’s all you need to know about selling your home during the COVID-19 crisis.

Are you really ready to sell?

Before putting your home on the market, consider all variables involved and be sure it’s a financially responsible move. Thanks to coronavirus, life circumstances you may have relied on, such as a steady salary, may not be dependable anymore.

Stage your home to sell

With restrictions still in place in many states and lots of people home in quarantine, many buyers will be doing their touring virtually. For sellers, this means staging and photographing a home properly is more important than ever.

Consider hiring a professional home-staging and photography service to present your home in the best light. You can also invest in virtual staging software to help you update the furniture with just a few clicks.

To make it easier for buyers to view your home, you can post a virtual tour on your online listing, and offer the option of scheduling a live tour with an agent through FaceTime.

Play it safe

If you will be allowing potential buyers into your home, set up a box of disposable masks, shoe covers and sanitizing wipes at the door for all visitors who will be tramping through your home.

Price it right

Fewer homeowners are putting their houses up for sale this year, but the pool of buyers is also smaller than usual. This means that you won’t be able to jack up the price of your home for way more than it’s worth. Work with a real estate agent to look at comparable home sales in the area and to determine a fair asking price.

Closing during COVID-19

The coronavirus pandemic will likely affect every aspect of selling your home. With many professionals working with a smaller team now, be prepared for various steps of the process to be delayed. This is especially true with lenders, as low mortgage rates have triggered a spike in refinance applications and lenders are busier than ever.

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