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 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:

Have you named a durable power of attorney (POA) for finances?
Where do you keep your financial records and assets?
What is the name of your mortgage lender?
What are your monthly expenses?
How do you pay your bills?
How much is your annual income?
What kind of health insurance do you have?
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.

Step 8 of 12 Steps to Financial Wellness – Know When and How to Indulge

Living a life of financial wellness means being happy with a lifestyle that’s within your means, but doesn’t leave you feeling like you’re lacking. At the same time, financial wellness means money choices are governed by discipline and not by emotion. So how do you strike a balance between the two?

Here’s how to indulge responsibly.

Live with a budget

To do this, track your spending for three months. Next, make a list of all your expenses and list your income in a parallel column. Tally up your totals and assign a realistic dollar amount to each expense. Going forward, be sure to only spend within the allocated amount for each expense category.

Leave room in your budget for “just for fun” purchases

As you work on building a budget, leave room for the occasional treat. The exact amount will vary by income level, lifestyle and personal choice. However, wisely choose an amount you can easily afford without feeling deprived.

Review your savings

Before giving yourself permission to indulge, make sure you’re setting aside some of your monthly income to savings. Ideally, short-term savings should be enough to keep you afloat for 3-6 months if you have no source of income. Long-term savings should be sufficient to support your retirement and any long-term savings goal you may have.

Choose your “treats”

Everyone’s got a personal vice or three. Take a look at where your non-discretionary money went over the last month and highlight the more expensive impulse buys. Hold these purchases up to these questions:

Did this purchase bring me happiness or positive energy the day I bought it? How long did that feeling last?
Did this impulse buy blow my budget?
Does thinking about this purchase now fill me with joy, guilt or something else?

Use the insight about your indulgences to help you make better money choices in the future.

Lose the guilt

Once you’ve decided how much you want to spend each month on indulgences, it’s time to let go of guilt. If you’re spending responsibly, there’s no need to eat yourself up over an impulse buy you could have done without. As long as you’re keeping these just-for-fun purchases within your budget, you can maintain your financial wellness.

Should I keep Cash at Home?

Q: I’m seeing posts on social media about keeping cash at home during rapid inflation. Is this a good practice?

A: Keeping large amounts of cash in envelopes, kitchen drawers or stuffed under the mattress is not recommended during times of high inflation – or any time.

Why is it a bad idea to keep cash at home?

While it’s perfectly OK to keep some cash at home, storing a large amount brings two big disadvantages:

The money can be lost or stolen. Hiding cash under the mattress or anywhere in your house always carries the risk of being misplaced, damaged or stolen. Unfortunately, there is no way to trace or reclaim lost or stolen cash.
The money isn’t growing. When cash doesn’t grow, it loses some of its value. This is especially true during times of high inflation. The current inflation rate is 8.5%. This means, if you’d keep $1,000 at home for the next year and inflation stays at 8.5% during that time, your cash would be worth only $985. Of course, if inflation rates increase, the loss would increase as well.

Where is the best place to keep cash?

Here are some places you may want to keep your cash at this time:

Savings account. A savings account is a secure place to keep extra funds. When you open a savings account at Olean Area Federal Credit Union, there’s no risk of your money being lost or stolen.
Precious metals. Precious metals, like gold, silver and platinum, have proven to hold their value even in times of inflation and a volatile stock market.
Share certificates. A share certificate is a savings account that’s federally insured, has a fixed dividend rate and a fixed date of maturity. The fixed dividend rate will remain unaffected by the fluctuating national interest rate.

Inflation is high, but that doesn’t mean it’s a good idea to hoard your cash at home. Follow the tips outlined above to find the perfect place to park your cash.

12 Steps to Financial Wellness Step 7: How to Pay Yourself First

“Pay yourself first” is a catchphrase that refers to prioritizing your personal savings above other expenses. To achieve it, savings should be a fixed line on your budget that happens every month without fail.

Here’s how to pay yourself first.

1. Review your spending

Take a clear look at your spending. If you already have a budget, this will be as simple as reviewing the column which lists all of your expenses, including your discretionary spending. If you don’t have a budget, track your spending over several months to identify your primary expenses and to find the average amount of money you spend each month.

2. Set short- and long-term saving goals

Short-term savings, or funds you want to be able to access in the near future if necessary, can be allocated to an emergency fund. Experts advise having three- to six-months’ worth of living expenses set aside in an emergency fund in case of a sudden, large expense and/or loss of employment.

Long-term savings should include funds you can afford not to touch for several years or more. Your long-term saving goals can include your retirement, as well as a down payment on a home, a new car, a sabbatical from work or any other super-big expense.

Narrow down your short- and long-term goals, then attach a number to each savings category.

3. Set a timeline for each savings goal

Now that you have a number for the amount you want to save, you’ll need to work out a realistic timeline for meeting those goals. It’s best to give first priority to your emergency fund, but at the same time, it’s a good idea to start saving for retirement today so compound interest has an opportunity to work its magic. To that end, you may want to allocate the bulk of your monthly savings to your emergency fund until you meet your goal. Once your emergency fund is full, you can divide your savings more evenly between your short-term savings and long-term savings.

4. Calculate how much you’ll need to save each month

Take your total for each goal, and divide it by the number of months in your timeline. For example, if you’ve decided you want to have an emergency fund of $24,000 established in four years’ time, you’ll divide $24,000 by 48 months to get $500 a month. This is the amount you’ll need to set aside each month to reach your goal in time. Do this for each of your goals.

5. Automate your savings

Once you’ve got your savings plan ready to go, it’s best to make it automatic. You can set up a monthly transfer from your credit union checking account to your credit union savings account or share certificate. This way, your savings will grow even when you forget to feed them.

Congrats–you’ve mastered the art of paying yourself first!

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.

10 Fun Gifts for Dad that Don’t Break the Budget

It’s Dad’s time, a day to go all-out to make your all-time favorite hero happy. But, Father’s Day doesn’t have to drain your wallet. You can make Dad’s day and keep your budget, too. Here are 10 fun and low-cost gifts that’ll make Dad smile.

1. Apple charging dock

This awesome charging dock can juice up an iPhone, Apple Watch and AirPods all at the same time. Get Dad’s 3-in-1 charging station for just $19 on Amazon.

2. BenShot pint glass with real golf ball

Does Dad love to golf? Surprise him with this unique pint glass with a real embedded golf ball. Just $26 on Amazon.

3. Classic charades

The classic game of Charades, just $12 at Chroniclebooks.com, will help create warm family memories way beyond Father’s Day.

4. Open bottle wine rest

This adorable mountain-shaped wine bottle rest is the perfect gift for the outdoorsy dad who loves to enjoy a good glass of wine and save the rest for later.

5. Rainbow socks pizza socks box

The pizza-box packaging of these socks make them a super-fun Father’s Day gift. Just $26 on Amazon.

6. Bluetooth speaker beanie

With its built-in Bluetooth speakers and a super-warm design, Dad won’t want to take this beanie off all winter! Just $28 on Amazon.

7. Fitness dice

At-home workouts are fun again with this innovative fitness dice set. Every roll gives you one of 45,000 possible routines, all are equipment-free. Only $19 at uncommongoods.com.

8. Bean Box coffee subscription

If Dad likes his morning cup of Joe, he’ll love a regular delivery of fresh bags of whole bean coffee from artisanal brand Bean Box. Subscriptions start at just $16.50.

9. Chillsner

Dad will never have to wait for his drink to chill again when he has this nifty little gadget. Keep the Chillsner in the freezer and pop it into any drink for an instant chill. $10 at uncommongoods.com.

10. Marvel’s greatest comics

Let Dad dive into an anthology of the greatest Marvel comics of all times, including favorites like Iron Man, Captain America and more. Get the collection here.

Use this guide to find the perfect gift for Dad that doesn’t break the budget.

12 Steps to Financial Wellness – Step 4: Have the Money Talk with Your Partner

Communicating openly about how you manage your money is a big part of having an honest and trusting relationship. Here, we’ve compiled six tips to help guide you in this super-important conversation.

1. Plan in advance

Broach the topic with your partner a few days before you want to have the “Big Money Talk” and ask if you can have an open discussion about money sometime soon. This way, you’ll both be ready to focus on the conversation and won’t be caught off-guard.

2. Start with a vision

Instead of starting the conversation by bringing up a time your partner overspent, talk about a vision you can both share. For example, you can rhapsodize about how wonderful it would be to take a luxury vacation to the Cayman Islands, or how you’d love to start saving for a home. This way, you’re putting a positive spin on your money talk, which will set the tone for the rest of the conversation.

3. Listen carefully

Your partner will have their own ideas about money management, and you may be surprised at the insights they have to share into your own spending habits or expensive vices.

4. Talk openly about sharing expenses and savings

At a certain point in your relationship, you may decide to share expenses and to pool your savings. If you plan to bring up the topic now, be sure to talk openly about the way you feel to better avoid future resentment. For example, if you earn more than your partner, should you be splitting expenses evenly? Can one partner take additional financial responsibilities in lieu of contributing an equal amount of income to the pot? All of these questions, and more, are important to discuss up front.

At this time, consider linking one of your accounts or opening a shared account at Olean Area Federal Credit Union.

5. Consider having a slush fund

Sometimes, you just want to splurge without having to explain the purchase. You may also want to spend money on a surprise gift for your partner without them knowing you’ve just dropped a large sum of money on something. Having a slush fund, or money set aside for your “just for fun” spending, can help you maintain a sense of independence and keep some of your purchases private. You can keep this fund in a separate checking account under your name at Olean Area Federal Credit Union.

6. Set up a weekly or bi-weekly time to talk money

It’s a good idea to touch base about finances once a week, or once every two weeks. You can talk about recent purchases, big expenses that are coming up soon, surprise bills and more.

Be sure to stick to your commitments and to bring up any money issues that may arise during your regular money talks for continued harmonious collaboration about all financial matters.

Step 3 of 12 to Financial Wellness: Pay Down Debt

You’ve tracked your spending, designed a budget for your monthly expenses, and you’re on a good path to financial wellness. In this next step, you’ll create a plan for paying down debt.

Consumer debt can be one of the biggest challenges to financial wellness. With some intentional action and commitment, reaching true financial wellness is possible.

Here’s how to pay down or off your debt in five simple steps.

1. Organize your debt

List every credit card you own along with an outstanding balance. Jot down the amount owed to each card issuer. Next, list the interest rate of each card. Repeat these steps for other loans you may have as well.

2. Choose your debt-crushing method

There are two approaches generally advised to folks who are seeking to get rid of their debt:

The snowball method involves paying off your smallest debt first, and then moving to the next-smallest until all debts have been fully paid.
The avalanche method involves getting rid of the debt that has the highest interest rate first before moving on to the debt with the next-highest rate until all debts are paid.

Choose the method that makes the most sense for your personal and financial circumstances.

3. Maximize your payments

Once you’ve chosen your debt-crushing method, find ways to maximize your monthly payments. You can do this by trimming your spending in one budget category and channeling that money toward your debt. You can also find ways to get some extra cash for your payments, such as freelancing for hire.

4. Consider a debt consolidation loan

When you consolidate debts to one low-interest loan, it’s a lot easier to manage the monthly payments. Plus, the savings in interest you won’t pay can be significant, especially if the new loan has a low interest rate. If this approach sounds right for you, consider taking out a personal loan from Olean Area Federal Credit Union.

5. Negotiate with your creditors

Many credit card companies will be willing to lower your interest rate once you prove you are serious about paying down debt. After kicking off your debt payment plan, it’s worthwhile to contact each credit card company to discuss options.

No matter which strategy you go with or the methods you use for paying off your debt, commit to not adding more debt onto your card while paying it down. Paying off a large amount of debt will take time and willpower, but living debt-free is key to financial wellness. Best of luck on your debt-crushing journey!

The Best Way to Spend Your Paycheck

Everyone loves payday, but too many employees don’t know how to allocate their paycheck in a way that best serves their financial needs. Use the tips outlined below to learn how to manage your paycheck responsibly.

1. Automatically deduct contributions

Your first step in managing your paycheck is making sure you are deducting the optimal amounts. Your employer will likely deduct funds for your health care plan and taxes, but you can determine how much tax is withheld by changing a few elections on your W-4. If you receive too large a tax refund for the prior year, or you’re stuck with a big bill when you file, consider adjusting the amount withheld on your W-4. Also, be sure to take full advantage of any employer-matching offers for your retirement funds — don’t give up free money!

2. Budget for necessities

After your contributions are deducted from your paycheck, you’ll be left with your take-home pay, or net income. You’ll use this money for covering expenses until the next payday, so it’s best to budget first for necessities, such as your mortgage or rent payments, utility bills, etc. You can use the “envelope system” to put cash away for necessities or set up a detailed old-fashioned budget. You can also choose to use the “50/30/20 budget” that sets aside 50% of your income for needs.

3. Budget for wants

Once you’ve set aside money for your needs, you can use some of the remaining funds for wants, or discretionary expenses. This can include entertainment costs, dining out and clothing, in addition to what you really need. Here, too, you can put away the cash you need for a spending category into an actual envelope, mark down the amount you can spend in that category on a paper or in an app budget, or simply keep in mind that 30% of your paycheck can be spent on these expenses.

4. Pay yourself

Now that you’ve taken care of your needs and wants until the next paycheck, it’s time to think about the future. Put a percentage of the remaining funds into savings. This includes IRAs, college saving plans, CDs, investments, emergency funds and the like. Use your predetermined amounts, or 20% of your take-home pay, if using the 50/30/20 budget. If you have any outstanding consumer debt, be sure to pay toward it as well.

5. Don’t feel forced to spend it all

Many people mistakenly think they need to spend all of their paycheck before the next one arrives. If you’re left with extra money at the end of the month, there’s no need to waste it. You can beef up your savings, get ahead of your debt or stash some cash away for the holiday season.

Learning how to manage a paycheck takes time, but once you get used to it, it will almost happen by itself.

Find more financial tips by visiting our blog, and by following our social media pages!

What to Buy and What to Skip in February

Are you looking to snag some bargain buys this month? We’ve got you covered! Here’s what to buy and what to skip this February.

Buy: TVs

Whether you’re a diehard football fan or love to binge watch, you can pick up fantastic deals on big-screen TVs in February. These sales often continue through President’s Day and may even run until the end of the month.

Skip: Flowers

Flowers have their big day in mid-February, but that doesn’t mean fresh blooms are discounted this month. In fact, you’re better off skipping flowers in February and finding another way to express your love.

Buy: Winter gear

Retailers generously mark down winter gear this month as they make room for the spring stock. Prices on sporting equipment, like skis and snowboards, can be slashed by up to 30%. You can find winter clothing discounted by as much as 80%!

Skip: Electronics

Aside from TVs, you’ll want to skip all major electronic buys this month. You’re better off purchasing them during Black Friday sales in November. If you can’t wait that long, you can also pick up great deals on electronics during “Black Friday in July” events.

Buy: Furniture

Pick up some beautiful new furniture at great prices during Presidents Day sales, which can run for a full week or two. Be sure to check out prices at several stores before splurging on a big-ticket item since prices on furniture can vary between retailers.

Skip: Fitness equipment and gym memberships

Fitness equipment and gym memberships are at their lowest in January to attract the hordes of people seeking to get fit in the New Year. By February, markdowns on workout gear and promotional offers on gym memberships are gone – and you won’t see them again until warmer weather sets in.

Buy: Jewelry

During the second half of February, prices on jewelry plunge up to 80%. Hold onto your bargain-priced jewel buys until Mother’s Day, your love partner’s birthday or your shared anniversary.

Find more financial tips by visiting our blog and following our social media pages!

12 Steps to Financial Wellness – Step 2: Creating a Budget

Now that you’ve tracked your spending and kept a careful record of where your money goes over the course of a month, you’re ready to move onto the next financial wellness step: creating a budget. Budgets play a crucial role in promoting financial awareness, which leads to more responsible money choices.

Let’s take a look at how to create a budget and review some popular budgeting systems, as well as how they work.

Create a budget in 5 easy steps

Track your spending and income. This includes all your financial documents, like your account statements, bills and pay stubs. If you’ve followed Step 1, you’ve already completed this step–nice work!
Tally up your totals. Calculate the totals of your monthly expenses and all streams of income.
List your needs. Your needs include anything that is essential for living and basic functions, such as mortgage payments. As you list each need, write down its corresponding cost. Sum the total of all your needs when you’ve finished.
List your wants. This includes anything that is not essential for living, like entertainment costs. Here, too, note the monthly cost of each item on your list and add up the total when you’re done.
Assign dollar amounts to your expenses. Open a new spreadsheet and copy your list of expenses. Assign an appropriate dollar amount for each of these costs.
Review and tweak as necessary. You will likely need to adjust the amounts in each expense category at least once a year to keep your budget relevant.

Budgeting systems

There is a wide range of budgeting systems to fit every kind of money management style.

The traditional budget. After working out a number for every expense category, you’ll track your spending throughout the month to ensure you’re sticking to the plan.
The money-envelope system. Withdraw the amount you plan to spend on all non-fixed expenses in cash at the start of the month. Divide the cash into separate envelopes, designating one for each of these expenses. Then, withdraw cash from the appropriate envelope when making a purchase in that category.
The 50/30/20 budget. Set aside 50 percent of your budget for needs, 30 percent for wants and the remaining 20 percent for savings.

A well-designed budget can provide you with a sense of financial security and freedom. Start budgeting today!

12 Steps to Financial Wellness – Step 1: How to Track Your Spending

Tracking your spending is the first step toward greater financial awareness and overall financial health. But mastering this skill is easier said than done. How can you track every dollar you spend when you make multiple daily purchases?

We’ve outlined how to track your spending in 3 easy steps.

1. Choose your tools

Tracing every dollar’s journey isn’t easy, but with the right tools you can make it quick and simple. Choose from one of the following money-tracking techniques:

Budgeting apps. If your life happens on your phone, download a budgeting app like YNAB or Mint to help track your spending. Both apps allow you to allocate a specific monthly amount of money for each spending category and enable you to track your spending with just a few clicks.
Spreadsheet. If you like to see everything spelled out clearly, a spreadsheet might be a good choice. You’ll need to record every transaction, but if you prepare the sheet with all the spending categories you think you’ll need, it shouldn’t take long.
The envelope system. If you’re a big cash spender, consider withdrawing the cash you think you’ll spend in a month and keeping it in an envelope for each category. When you need to make a purchase, just use money from the envelope.
Receipts. Hold onto every receipt from the purchases you make this month to help you track your spending.
Pencil and paper. Recording each purchase the old-fashioned way can help you make more mindful money choices throughout the day.

2. Review your checking account and credit card statements carefully

Along with one of the tools listed above, you can track the purchases you make with plastic by reviewing your monthly checking account and credit card statements. You can access these online by logging into your account and downloading.

3. Review and categorize your purchases

At the end of the month, use your chosen tool to review all the purchases you’ve made throughout the month. When completing this step, don’t forget to include any automated payments you rarely think about, such as subscription fees and insurance premiums.

Use the tips outlined here to successfully master the skill of tracking your spending.

New Year, New Money Habits: How to Stick with It in 2022

Spend less, save more, pay down debt — how can you make 2022 the year you actually stick to these and other financial resolutions? To help answer that, we’ve compiled a list of tips.

Set measurable goals

Don’t just resolve to be better with money this year. Set realistic, measurable goals to help you stay on track and ensure you’re making progress. To make it easier, keep those goals SMART:

Specific

Measurable

Achievable

Relevant

Time-based

Spend mindfully

Creating a budget can take some time and lots of number crunching, but the real challenge of financial wellness is sticking to that budget. And one reason many people don’t keep to their budget is because they spend money without consciously thinking.

Resolve to be more mindful about your spending, which means thinking about what you’re doing when you pay for a purchase of any kind. You can accomplish this by taking a moment to think about what you’re buying and how much you’re paying for it. Gain a little more awareness about your spending by staying off your phone while completing in-store transactions.

Partner up with a friend

It’s basic psychology: When we have to answer to someone, we’re more likely to stick to our resolutions. Choose a friend who’s in a similar financial bracket as you and has a comparable relationship with money. Ideally, they will also have the same resolve to set and stick to those financial resolutions together.

To make it even easier, use a money management app, like Mint, to help track your spending, find your weak areas, and stay accountable for your friend.

Write it down

In an era where some people can go without touching a pen and paper for days, writing down New Year’s resolutions can seem obsolete, but that doesn’t mean it shouldn’t happen. The act of putting your financial resolutions into writing will help to imprint them on your memory. Plus, you’ll have a list of your resolutions to reference throughout the year to help keep you on track.

Sticking to your financial resolutions isn’t easy. Follow the tips outlined above to make 2022 the year you get your finances into shape.

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!

Don’t Get Spooked by One of these Halloween Scams!

That cackling witch might send your heart fluttering, but Halloween scams are even spookier! Here’s what to know about them:

1. The Joker

Scammers target people with messages promising loads of money for little effort. Just send a bit of money to a digital address using a money transfer app, and your money will double, triple or more. Unfortunately, the joke’s on you.

Spot a money-flipping scam through the amateur writing and the promises of unreal rewards. Also, you know what they say about anything that sounds too good to be true … it probably is.

2. Night of the Living Dead

In the deceased identity theft scam, scammers steal the identity of someone who is no longer living. They may empty the decedent’s accounts, use their credit history as their own, and use their Social Security number.

Protect a late loved one’s identity by locking their social media accounts, credit report, and Social Security number. Keep an eye on their accounts until their assets have been lawfully divided.

3. Trick or Treat

You found the perfect costume online – and for a bargain price! You complete your order and wait for the package to arrive. And wait … and then you realize you’ve been tricked.

In a variation of the online order scam, the package arrives but looks nothing like it did online. You try to find a customer service representative, but they’ve apparently vanished!

Don’t get tricked! Only order from reputable sites that display complete contact information for the company. Ignore offers that scream “Hot Deal! Act Now!” Shop with caution so you’ll only walk away with treats.

4. Hitman

There’s a hitman at your door – and no, this is no disguise!

In the hitman scam, scammers pretend to be assassins hired to take out a target. They’ll send extortion emails and messages, promising to spare the target’s life for just a few thousand dollars. Yikes!

Don’t get scammed! If you receive an extortion message, contact local law enforcement. Never share money with an unverified contact. Keep your money and your life safe.

Have a happy and safe Halloween!

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.

Technology a Necessity in Today’s World

Whether you’re trying to keep up with younger family members or you’re trying to make an appointment for a COVID vaccination, like it or not, you need to be up on the latest technology.

Some devices may still be somewhat intimidating, but digital devices have become more user-friendly over the years.

If you can yell, “Alexa!” you have the ability to get the news and weather, find out where your delivery is and, more importantly, call for help just by using your voice.

Older adults and technology usage

According to AARP , people over age 50 are using smartphones, tablets, smart speakers and wearable devices as much as adults ages 18-49. Many say they use their devices daily, mostly for social media.

Those who are not adopting technology say there is a lack of knowledge and a presence of health problems, such as hearing and vision issues. Cost is also sometimes noted as a reason for shying away from buying that smartphone or Apple watch.

Most devices that are specifically designed for older people, such as wearable fall-detection devices, are viewed as a negative stereotype for aging.

Useful products for older adults

Charlotte Yeh, the chief medical officer at AARP, says technological devices geared toward older adults should not only focus on protecting their safety, but also give them a feeling of purpose and connection, as well as a positive view on aging.

Some examples of these products include the Amazon Alexa Care Hub, created for independent living with the security of knowing you’re connected to loved ones; and the BUDDY app for Fitbit smart watches to monitor and manage fall prediction, prevention and detection, medication schedules and reminders, GPS locations and emergency notifications, all with modern style.

Some libraries and township recreation departments provide free instruction on how to use tablets and e-readers, like Amazon Kindle. Check their schedules or grab your teenage grandkids to hook you up. Technology is a necessary part of today’s world, and once you embrace it, you’ll feel less isolated and more in control of your daily life.

Financial technology

Having the ability to manage your financial accounts without going into a branch is especially important for older adults. If you haven’t already, enroll in Olean Area FCU’s online banking service, E-teller, and enjoy 24/7 online account access! Learn about the benefits of E-teller here.