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• By Kevin Alvarez

What’s On Your New Year Financial To Do List?

Start the New Year Strong

Most of us stay current with routine weekly and monthly money tasks– like paying bills, monitoring credit card balances and savings accounts – yet some financial wellness tasks lend themselves to the beginning of a New Year.

The following suggestions are not intended as an exhaustive list, but can be considered reminders as part of your New Year financial to-do list:

To Do 1: Know Where You Stand

A healthy financial future begins with understanding your current situation. Start your New Year To Do List with a financial assessment to get a clear picture of your financial health.

An online financial assessment helps you see how mortgage, consumer debt, student loans or other debt might be affecting your budget, how long it will take to pay your debt off, and other personalized information.

This is a useful first step to understand the impact of interest charges to help you effectively manage your debt and reduce your financial stress.

To Do 2: Review Your Credit Report

Taking stock of New Year finances means getting a view of your credit history and credit score – important measures of financial health. If a mortgage, car loan or new line-of-credit is in the New Year plan, note that lenders look to your credit score as an indicator of your creditworthiness. The New Year is a good time to know how your credit score is calculated and understanding how to read your credit report is an important component of your overall financial health. Obtain a free copy of your credit report from annualcreditreport.com or other sources.

To Do 3: Build a Budget

A simple budget is the foundation of financial health. As the year gets underway, make a realistic plan for the money that you earn. Develop a line item in your budget for groceries, gas, savings, and entertainment as well as debt payments. If you haven’t had the chance to get around to a budget, take time to create one and track your expenses so that you can go back, review and adjust as needed.

Financial To Do List

To Do 4: Plan and Build an Emergency Fund

For a financially aware New Year, it is helpful to plan for the unexpected.  Depending on your budget, determine a set amount to put into a savings account from each paycheck. Some people have their employer directly deposit part of their paycheck into a savings account. Over time, you can build a budget buffer to help with unexpected expenses or emergencies.

To Do 5: Get Ready to Manage Student Loan Debt

For the more than 45 million people who carry student loan debt, the New Year is the time to prepare for the end of federal student loan payment relief measures, which paused federal student loan debt collection and reduced interest rates on federal student loans to 0%.

As of December 2022, the Student Loan Repayment Pause has been extended to June 30, 2023. Click here to read the U.S . Department of Education's press release regarding the matter.

This article is brought to you by our partners, GreenPath Financial Wellness

GreenPath Financial Wellness

• By Kevin Alvarez

Increasing Your Financial Awareness: Recorded Webinar

Learning about personal finances can feel overwhelming or out of reach. This webinar recording provides discussion and tips for more easily manage our finances.

What You'll Learn

  • Ways to take control of your finances
  • Money mistakes you can learn from
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As a member, we provide you with access to certified experts who will empower you to eliminate financial stress, get out of debt, increase savings, and achieve your financial goals.

Click below to learn more on how GreenPath Financial Wellness can play an important role towards your financial freedom.

GreenPath

• By Kevin Alvarez

The Impact of Stimulus Payments on Your Taxes

What a year 2020 has been! New Year’s celebrations were barely over when the coronavirus turned things topsy-turvy. But one bright spot for 159 million people was the $1,200 Economic Impact Payment that appeared in their mailbox or checking account.

If you didn’t receive a payment, you may be wondering, why? And if you did, you may be wondering, what’s the catch? We are here to help put your mind at ease, so let’s tackle your questions, one by one.

Do I owe tax on the money I received? That’s an easy one: No. The stimulus payment was designed to impact the economy, not your taxes, so it won’t reduce your 2020 refund or increase your tax due.

I didn’t get a payment – why? If your income for 2019 or 2018 was over $75,000 ($150,000 if you filed jointly, $112,500 if you were head of household), then your payment was reduced by $5 for every excess $100 you earned. And if you didn’t file a tax return for either year, you may not have gotten a payment. But don’t despair, you still may be entitled to payment.

Really? What can I do now? If you were supposed to file a 2019 tax return and didn’t, file right away. If your income was too low to file, at IRS.gov you can click on the tab marked “Non-filers” and fill in your basic information. If the IRS determines you are eligible for a payment, they will send it to you.

What if my income has gone down? If your 2019 income was too high for you to receive a payment, but your income this year is much lower, you are in luck. You can claim your stimulus payment on your 2020 income tax return, and it increase the refund you receive (or reduce any tax due).

My 2020 income is higher than in 2019 – will the government want the money back? No. If you received a stimulus payment based on lower income in 2019, that payment is yours to keep even if your income increased above the threshold in 2020.

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From simple to complex taxes, TurboTax® has you covered. And when you need help, real experts are standing by — and can even do your taxes for you, start to finish with TurboTax Live®. Getting your biggest possible tax refund has never been easier. And as a credit union member you can save up to $15 on TurboTax. Click here to get started today!

The information in this article is for general educational purposes only and not intended to provide specific advice or recommendations.Please discuss your particular circumstances with an appropriate professional before taking action.

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• By Kevin Alvarez

New Year, New Money Habits!

The New Year is a time for powerful new beginnings. It also presents an opportunity to look at our everyday habits – whether those habits relate to our health and fitness or our money habits as we manage any financial challenges.

What is a habit? A good working definition is that a habit is a routine behavior that is repeated regularly and tends to occur without a lot of conscious thought.

Many of us already have healthy habits that we do by routine – like brushing our teeth or washing our hands.

We might also have healthy money habits. Carefully reviewing your credit card statements each month could be a habit you already have in place, for example.

As the year gets underway, there are opportunities to reinforce healthy money habits that already work for you. And it’s an opportunity to create new habits like
writing down financial goals or building savings.

Make It a Habit

Building positive money habits can affect your entire well being. Here are a few ideas to try as the New Year gets underway.

1. Make a Goal (and Write It Down)

Goal-setting gives you direction. You can decide on your destination and make a plan to get there. This action might seem small, but it’s not. Make it a habit to look at monthly finances and jot down one or two goals. The goal could be taking a bite out of your credit card balances or setting aside a small amount each month for a large purchase.

2. Set it and Forget It

You likely have many of your outgoing bills set to “automatic payment,” which is a positive money habit. Setting up “auto pay” on monthly utilities, cable, and other bills lets you be sure bills are paid on time. Consider setting up “auto save” as well. If you set a goal to save for a big purchase, like the down payment for a car, automate monthly savings to help you achieve your goal. Set up automatic transfers or use direct deposit from your paycheck to automatically place funds in your goal account.

3. Spend with Care

Mindful spending is a powerful financial habit to build. If you don’t already have one, build the habit of using a monthly spending or budgeting plan. You’ll learn how much money you have to work with, the amount that is going out each month for bills and expenses, what you need to set aside for other bills and living expenses, and how much you can devote to your goal from each paycheck.

4. Deal with Debt

Think about your habits when using your credit card and when considering your total debt situation. Are most of your purchases made with consumer credit cards? What are your current credit card balances and other debt balances? Listing out all your monthly debt payments helps you stay aware and act if needed. If you are in the habit of only making minimum payments on your credit card balances or experiencing collection calls, consider learning about how a Debt Management Plan can get help support healthy money habits.

5. Celebrate Your Progress

As we noted, you likely have many positive habits already. That’s something to be proud of, as you can apply those lessons to building new money habits. Make it simple. Tackle one habit at a time and celebrate your wins. The New Year is sure to be a success when you tackle one habit at a time and make it work for you.

Ready to build new money habits?

Our partner GreenPath specializes in helping people improve their financial wellness.

Learn more about building healthy financial habits here:

Redesign Your Financial Habits