Financial Tips to Do Better

Congratulations to all the recent graduates heading off to college or entering the workforce. It's a huge transitional time, which can feel terrifying, but let me be the first to say - most people are still figuring life out, no matter what age they are. So, even if you're 99 years old, this blog might have a few nuggets of wisdom to help you feel a little more like an adult.

Will That Be Cash or Credit?

If you've just opened your first credit card or find yourself out on your own with this seemingly magical piece of plastic, you might not know the power you hold. The most important aspect of credit cards is to always remember they are loans. And with every loan, you must repay what you borrow, plus interest.

It's SOOOOO easy to overspend, leaving you with debt that's difficult to manage. You can scoff at the temptations of a credit card, but anyone can find themself drowning in debt if they're not careful.

Here's tips to keep you safe:

• Keep Balances Low: When you're approved for a credit card, you'll be assigned a credit limit. Avoid maxing out your card and aim to repay the full balance monthly. If you must carry a balance due to a financial emergency, try never to spend more than 30% of your available credit limit.
• Set Payment Reminders: Your payment history makes up a big chunk of your credit score, so even one missed payment can hurt! Set reminders on your phone or calendar to ensure you never forget a payment.
• Borrow Responsibly: Keep spending low as you adjust to your new card. You only want to spend what you can afford to pay off each month; otherwise, you'll be stuck accruing interest that adds up QUICK. This strategy will help you adjust to the concept of credit while building a healthy credit score.

Ready to open a new card and build your credit? We'll help you pick the right card for you!

RENT IS HOW MUCH?!

If you've ever opened Zillow or other renting apps, heart palpitations might feel familiar.

Housing is an expensive necessity that you need to consider the minute you move out of your parent's house.

• Housing Budget: Your rent should take up no more than 30% of your monthly income. That might not feel realistic in today's market, especially with rising rent prices - time to start looking for a roommate to split rent and utilities.
• Living Budget: Before moving out on your own, create a monthly budget. Think beyond rent – including items like groceries, transportation, utilities (electric, water, internet, phone), and renter's insurance. Small things, such as household items and laundry service, will have an impact on your budget.
• Security Deposit: Most landlords will require a security deposit and at least the first month's rent upfront when you sign a lease. Since these costs can be substantial, create a savings plan before you move to avoid any financial setbacks.

Need more budgeting tips? Check out our Budget Better Financial Tips to Do Better!

Zoom, Zoom, Zoom

As someone who has been dealing with the headache of a needy car - reliable transportation is a MUST. Most people need to commute to work, and a car loan typically spans four to six years – marking a longer-term financial commitment.

Here are a few tips to keep in mind when searching for your wheels:

• Determine Your Budget: Take time to review your finances for the past several months. How much room do you have in your budget for car payments? Also, consider fuel costs, insurance premiums, and routine maintenance.
• Obtain a Pre-Approval: A pre-approval document allows dealerships or private sellers to know that you're approved to purchase a car for a specific dollar amount through the credit union. Atlantic's Blank Check Approval Program lets you pocket your check and negotiate the best deal — knowing you can pay right away.
• Enroll in Automatic Payments: After purchasing your new car, enroll in automatic payments. Remember, late payments will negatively impact your credit score – potentially leading to more expensive loans down the road.

Welcome to the Working World

Landing your first full-time job is a major milestone! With money regularly flowing into your checking account, it's easy to want to live life to the fullest. But don't forget your financial responsibilities, such as rent, loan payments, bills, and other expenses.

Plus, the absolute best time to start saving money is in your early twenties. While retirement might seem a lifetime away, small deposits today will grow over time into a substantial sum. Use the following tips to help keep your finances organized when starting your career:

• Pay Yourself First: Treat your savings like any other monthly bill – except it's a payment directly to you (into your savings account). Too often, young adults spend throughout the month only to find there is nothing left to save. Begin by paying yourself first – then move on to bills and other costs.
• Take Advantage of Employer Benefits: Many employers offer retirement plans that include perks, such as contribution matches. Yes, retirement might be decades away, but an employer match is basically free money. Ask your employer about possible perks and work them into your budget – your future self will thank you!
• Build an Emergency Fund: Unexpected expenses will surely pop up, especially when you're first starting out on your own. Put aside extra funds monthly to build up an emergency fund. Then, if life throws you a financial curveball, you'll be ready – and can avoid costly alternatives like payday loans.

We're Here to Help!

Take time to celebrate your achievement and revel in all you've accomplished. Then, when you're ready, begin planning the next phase of your life.

If you have questions about building your credit score, obtaining your first credit card, or setting up a savings plan, we're happy to help. Please stop by any of our convenient branch locations or call 800-834-0432 to speak with a team member today.

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The Atlantic Financial Tips to Do Better strives to deliver informative, relevant, and sometimes fun financial information. If you enjoyed this article, please forward it to a friend.

Each individual's financial situation is unique, and readers are encouraged to contact the Credit Union when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.