Buying Vs. Leasing

Buying Vs. Leasing a Car

Buying Vs. Leasing

 

There are big differences between buying and leasing. Typically, if you were to purchase a new car, you would make a down payment and finance the remaining cost. At the end of the term, the car would be yours. Leasing is essentially renting, with your payment going towards the car’s depreciation. If the lease includes a purchase option, you may buy it at the end of a specific time period.

So which is better? That depends on your individual situation and needs. You will have to decide for yourself by analyzing the advantages and disadvantages of each:

Leasing Advantages 
There are short-term cost advantages to leasing. The monthly payments on a leased car are usually far less than on a loan – even for a luxury model. The down payment usually works out to be less than what you would pay for a bought car as well. Because the typical lease is for three years, most repairs are covered by factory warranty. Sales tax is cheaper too, as you only pay it on the financed portion.

An attractive feature of leasing is the ability to drive a new car every few years. You never have to go through the hassle of selling it; you just turn it in at the end of the term.

Leasing Disadvantages 
While the payments are often reasonable, you never gain equity in the car. If you were to buy it at the end of your contract, it would cost you a lot more than if you had just bought it in the first place.

Leases are restrictive. If you exceed the yearly mileage limit you can be assessed an extra charge. You must take good care of the car as well, as any nicks or dings can be considered “wear and tear” and could cost you.

Comparing lease offers can be very confusing, making it hard to know if you got a good deal. And you will find it difficult to get out of your lease early if you want to – a problem if your driving needs or financial circumstances change.

Buying Advantages 
When you buy a car, it’s yours. You can customize it and drive it as hard and far as you want, penalty-free. Rather than having infinite payments, buying means you will eventually pay the car off. Once paid off, if you want to sell it you can do so at any time, as Erik Fortier you are not locked into a contract.

Buying Disadvantages 
Down payments on bought cars can be substantial. Monthly payments are usually higher than a leased car, and once your warranty expires, you will be responsible for the maintenance costs. When you want to sell it (or trade it in) you will have to go through the hassle of doing so. And, as an investment, new cars depreciate rather than appreciate.


Avoid Shopping

8 Amazing Ways to Avoid Binge-Shopping

Avoid Shopping
Avoid binge spending

 

It would great if we all made only rational, well-analyzed spending decisions. But none of us are robots. We’ve all made emotional buys at one point or another. Think back on things you bought because you had a rough day at work. Or maybe it was an argument that got you agitated. No matter the cause, purchases made on feelings instead of frugality can be rough on your bottom line. Here are a few ways to soothe yourself without draining your funds

1. Create “me” time

A In a lot of cases overspending happens because it gives you a sense of control over your surroundings. Instead of trying to grab control with money, take control of your time and your surroundings. Whether that means gifting yourself with a nice hot bath or time to work on that tinkering project in the garage, commit to unwinding on your own terms.

2. Connect with a loved one

Loneliness is another emotion that can turn you into a frenzied consumer. A call to a relative you haven’t spoken to in a while or even a spontaneous get-together with a friend can remind you of the wonderful bonds in your life.

3. Volunteer

It may sound strange, but in many cases the best way to help yourself is to work at making someone else’s life better.

4. Exercise

Scientists believe that for certain people splurge shopping releases the same amount of endorphins in the brain as skydiving. So if you are one of those people who gets a real charge out of filling a shopping cart, consider alternatives like going to the gym, walking or riding a bike to get your endorphin rush (if the plane and parachute are not available).

5. Enjoy nature

One of the best ways to get away from your problems is to, well…get away from them! Leave your connectivity behind and get back in touch with a favorite out-of-the-way spot.

6. Read

A little healthy escapism is always good for taking your mind off your day-to-day worries. Whereas passive media like television usually serves more as just a casual distraction, diving into a good book forces you to actively engage in the story.

7. Play

Be it with children or a pet, having some silly fun can shed a lot of stored up tension you might otherwise look to purge with shopping.

8. De-clutter

Because coming home to a place full of stuff can add to your stress level, give yourself a present and a future of increased serenity by hunting for items that can be donated or sold online or at a garage sale.


The 50/30/20 rule

What is the 50/30/20 Rule?

The 50/30/20 Rule is the simplest way to create a budget. It helps you keep your spending aligned with your savings goals. This very convenient, especially if this is the first time you try to organize your finances. Once you know how to achieve a balanced budget, you can further customize this rule around your unique expenses and goals.

50% of Your Income Goes to Essentials

Start by setting 50% of your income to pay essential items such as rent, utilities, car transportation and housing. This might be a little high in the beginning but once you get the hang of it you will be able to customize your budget to your needs. For instance, some people live in high-rent areas, yet can walk to work, while others enjoy much lower housing costs, but transportation is far more expensive.

30% of Your Income Goes to Your Lifestyle

Your lifestyle is important and although you may need to sacrifice some luxuries, you need to splurge once in a while. Therefore, 30% of your income goes to personal expenses like travel, dining out, cable, and even expensive coffee. If you travel extensively or work on-the-go, your cell phone plan is probably more of a necessity more than a luxury. It is up to you to decide which items are consider personal and which you should cut-off.

20% of Your Income Goes to Savings

The last step is to designate 20% of your income to savings. This is for your future, for everything unexpected that may come your way. This is the category you should think about after your essentials and before feeding your lifestyle expenses. It is your “get ahead” section and you must give it importance.

You don’t need to make a lot of money to budget properly. The 50/30/20 rule is only the beginning, you will customized this rule when you become an expert at budgeting.


Reduce Home Ownership Cost!

How Can You Reduce Your Home Ownership Cost?

Reduce Home Ownership Cost!
Reduce Home Ownership Cost!

Owning a home is rewarding but it can also be costly at times. You have to be able to keep up with air conditioner repairs, appliances breaking down, and pipes that can sometimes burst. The Bureau of Labor Statistic reported that an average homeowner paid $4,808 in mortgage principal and interest in 2013.

The good news is that home ownership costs aren’t fixed and we have a few tips that might help you.

  1. Buy a Smart Thermostat

    In Florida AC is not a luxury, is a necessity. Sometimes it gets so warm outside it is easy to feel discomfort when all you think of is cooling off. In order to help you reduce your AC cost, try a smart thermostat. It can adjust to your household routines, temperature preferences, external weather conditions, and can even track your location.

    Why is this useful? 
    With a thermostat this sophisticated you can divide your days into blocks and set desire temperatures for each. For example, you can adjust your settings to a higher temperature while you’re at work and lower them when you return from work automatically. A smart thermostat can trim cooling cost by 15%.

 

  1. Switch to low flow fixtures

    Although water is not as expensive as electricity, saving water can save you money. Low-flow faucets reduce tap water usage by up to 30%. Low-flow toilets can save a family of four around $110 a year depending on home size.

 

  1. Insulate Hot Water Pipes

    According to the Department of Energy, insulating your hot water pipes can reduce your electricity or gas bill by $12 annually. Insulating your hot water pipes is inexpensive—especially if you have duct tape at home.

 

  1. Unplug Idle Electronics

    Every time you leave your TV, cable boxes, computers and other small electronics plugged you drain power and drive up your electricity bill. There are devices that can help you power off devices without having to unplug them. Such as the Bits Energy Smart Strip, this can cost up to $40 and help you reduce your light bill on a monthly basis.

These tips will not save you thousands of dollars in home ownership cost. However, it can save you a few hundreds and every little bit helps.


pay off your high debt

How Can You Pay Off Your High Debt?

pay off your high debt
A Balance Transfer can help you pay off your high credit card debt

High debt can make you feel stressed, worried, and a little discouraged. Just remember, where there is a will, there is a way to pay. One of our goals as a credit union is to help you become financially stable. Take a deep breath, create a timeline and think how you can reduce your spending.

Then use some of the following tips as a guidance to help you pay off your high debt.

  1. Get rid of high rate credit cards first
    What does this mean?
    Your credit card interest rate vary between financial institutions. Allowing your spending to increase unconsciously. For example let’s pretend you spend $450 in credit card A with a 29.99% interest rate; and you spend $475 with a 12% interest rate in credit card B. In time, the $450 spent in credit card A may become more expensive due to its higher interest rate. You must avoid falling into this trick.
    First, go over all your credit card statements and create a list starting with your highest interest cards and ending with your lowest. By increasing the payment on your highest interest cards you are saving money and avoiding high interest charges.
    TIP: Remember to continue paying the minimum amount due on the rest of your credit cards.

 

  1. Take advantage of Balance Transfer Promotions.
    If you have high interest rates on another credit cards think about moving your debt to your BrightStar Credit Card—especially during our Balance Transfer Promotion period. Keep in mind you must be strict with your payments in order to take advantage of the promotional rate before it expires.

 

  1. Stop spending so much on your credit cards.
    If you’re trying to pay off your high debt, credit cards are NOT your best friend. Remove all credit cards from your wallet, and start budgeting your expenses with cash. Don’t worry, this change is only temporary, only while you get more financially stable.

 

  1. Put work bonuses, or other incentives toward debt.
    We get it! Taking that work bonus and using it on a nice vacation is tempting. However, sometimes we need to put temptation aside and start thinking of our financial future. If you receive a bonus for a good sale, holiday, or other use it to pay off your debt. Your wallet will thank you later.

 

  1. Sell unwanted items online.
    A good way to make some extra cash is to clean your house from unwanted items. Sell those old presents collecting dust and start fattening up your wallet. After all, one man’s trash is another’s treasure.

 

High debt should not affect your well-being. Go on, change your habits, make some smart choices, and reward yourself in the future.

You can do it!


Simple Budget

How to Create a Simple Budget?

Budgeting at BSCU
Learn how to budget your expenses!

To spend wisely is to live more comfortably. Yes, we get it, you hate the word “budget” it is scary and at the same time overwhelming . The thought of quitting some of your spending can seem unimaginable. But, fear not, budgeting allows you to see where your money goes. Leaving you with the option to treat yourself once in while without feeling overwhelmed by debt.

How should you start?

  1. Calculate your income and your expenses
    The first step is simple. Write down how much you make along with some prioritized spending categories. Include your rent or mortgage, utilities,  food, automobile expenses, and insurance.TIP: Make sure you budget for fun. You should not spend $200 every Saturday night, but you can leave $150 aside to have some fun during the week. This way you can continue to enjoy your fancy coffee and your brunch with friends.
  2. Set realistic goals for your budget: If you want to go on a trip to visit family during the holidays, do not wait to start saving. Create a separate Wish Account to prepare you for your vacation. This will allow you to have some self control.  It will stop you from spending money on petty items and you might be able to enjoy your vacation without worrying about the bills that await home.
  3. Track your progress: Creating a budget is only helpful if you can commit to it. Tracking your monthly, weekly, and daily spending will allow you evaluate and reflect on your progress. Remember your spending may fluctuate according to the month and that’s Okay. Just be diligent and discipline the majority of your time.

There is no science behind budgeting, the trick is to spend less than what you make. Come on members! Have discipline, be conscious of your spending, and save money.

Good Luck!