Man relaxing on the beach

Ways to Save on Your Next Vacation

Man relaxing on the beach

As the spring and summer months quickly approach, we are all looking forward to some much needed vacation time. There are typically two types of people when it comes to planning for a vacation. Read the following sceneries and honestly reflect on which one relates most to your approach.

Scenario 1:

You and your friends/family decide to take a sporadic vacation to Mexico during March. The timing works perfectly for everyone, so you buy your tickets at a high season price. As the date quickly approaches, you all have completely forgotten about planning or buying a hotel, so you scramble to find a bouge place to stay. You end up spending way more than you should have due to your lack of planning.

As your relaxing on the beach with friends and family, zero thought goes into what you purchase or where you swipe your card. By the end of the stay, you have racked up a $8,000 bill for your luxury 4-night stay. Was it worth it?

 

Scenario 2:

You and your friends/family decide to take a vacation together at some point during the year. Everyone sits down and searches for the cheapest times for tickets, hotels, etc. Once the perfect date is settled and hotels and flights are purchased at an offseason price, you decide to make a daily budget to follow.

On vacation, you closely monitor your spending and aren’t just whipping out your rewards credit card to exercise your wrist. On your budget, you’ve accounted for extra spending each day so even if some days are more expensive than others, you have the necessary funds for it. Once it’s time to leave, you have a $4000 bill on your rewards credit card, but have enough money in the bank to pay that off immediately due to your proper planning.

 

Some tips to prepare for your next vacation:

  1. Budget. BUDGET! The last thing you want to do after coming back from a relaxing stay at the Bellagio is worry about paying off a credit card that you don’t have the money for.
  2. Use a rewards credit card for purchases. There’s nothing wrong with putting everything on a credit card. As a matter of fact, it’s what you should be doing to avoid having your account compromised. Earn extra money, miles, or gifts by putting everything on your rewards credit card and then pay the balance off to avoid high interest charges.
  3. Book in advance and during offseason if possible. Scenario 1 and 2 stayed at the exact same place but paid completely different prices. Booking well in advance will relieve stress as well as get you the best price. It’s recommended to start planning your vacation a year in advance to give you plenty of time to budget and find tickets.

According to CheapAir.com 2018 Annual Airfare Study, they determined that you should book this far in advanced for the following seasons.

  • Winter: 62 days in advance
  • Spring: 90 days in advance
  • Summer: 47 days in advance
  • Fall: 69 days in advance
  1. Figure out local transportation. You can easily save money by checking if there are local trains, busses, Uber, Lyft, etc. Taking a taxi everywhere will cost you an arm and leg.


Girl holding cash

8 Reasons to Create and Stick to a Budget

50/20/30 Rule to Budgeting

Try to budget with the 50/20/30 rule. What this means is that 50% of your income after tax goes towards nondiscretionary things such as: rent, utilities, food, car payments, etc. Next, 20% of your income should go towards some kind of emergency fund. Experts recommend saving a minimum of 6 months’ worth of expenses. Finally comes the fun. 30% of your income can go towards discretionary items like going out to eat, vacations, clothes, and anything else that you want to buy. 

 

1. Peace of Mind

You won’t have to stress about running out of money halfway through the month. Budgeting properly will lay out your weekly/monthly expenses and tell you how much you can spend. You just need to make sure to follow your budget precisely.

2. Helps you prepare for emergencies

Having an emergency fund set up is crucial. You never know when something bad will happen and the last thing you want to do is take a loan or put it on a credit card. It could take years to pay off the loan or credit card, so budgeting for an emergency fund will allow you to handle whatever life throws at you.

3. Shows bad spending habits

Bad spending habits can be seen through budgeting. You might not realize that you spend $100 on Starbucks every month unless you establish a budget. Once you see a pattern, you can change your habits to save more money.

4. Motivation

When your financially stable and have a clear goal, you’re automatically more motivated. Having a budget motivates you to make more, save more, and spend less. Without this, you might notice yourself slacking in your professional life.

5. Indulge in your wants

With a budget, you can slowly save for things that you don’t necessarily need. It’s better than charging it to your credit card and then having to pay interest over several months. Budget accordingly and maybe cut out certain unneeded things out so you can reach your goal.

6. It can be as simple as you want!

Budgeting doesn’t have to be a super complex task. You don’t need a finance degree to make a simple spreadsheet or plan. There are many online budgeting tools that you simply input your expenses and income. Start your kids out on a budget when they are young so they grow up learning how to use it. The sooner you start, the better.

7. Helps you determine how much debt you can afford

Oddly enough, budgeting helps you figure out how much debt you can actually afford. For example, if you’re buying a new car it can help you determine how much you can spend on a car loan each month. This is important to figure out because imagine how bad it would be to buy a car that is too expensive for you to afford. This happens to a lot of people so budgeting properly will make sure that you can afford whatever you end up buying.

8. It’s fun!

Budgeting doesn’t have to be boring! You can set mini goals for how much you want to save and then reward yourself when you reach that goal. It isn’t always easy, but creating a flexible budget will help you enjoy a financially stress free life.


Multigenerational Family

Multigenerational Households

Generational Family

There are many reasons for multigenerational households. It can be cultural, economic situations, or if you have dependents. There can be a lot of benefits with a full house, but it also requires a lot more planning and has its own set of problems.  

 

Create a new budget 

With more people in a household, you will need to adjust your monthly budget accordingly. Figure out who will pay for what and create a budget based off that. The worst thing you can do is to go into a situation like this blindly and not have a solid plan. If your parents are dependent on you, then you should figure out their needed expenses. This will include doctor visits, medication, and any other special care they require. Being open with your parents about money is going to help tremendously with planning. It will help relieve stress and confusion about their money, making everyone feel confident about the overall finances of the household.  

 

Create an agreement 

Even though they are your family, it’s important to create an agreement for financial expectations. Creating a document laying out rules that are agreed upon will help avoid future conflicts. If there is ever a question about certain finances, it will be easy to pull up the document and look at what was originally discussed. Obviously, this isn’t a legal document, so changes can be made whenever a situation arises that warrants a revision.  

 

Have a conversation about extra spending 

Not all spending will be for necessities. Even your parents want to go out and have a good time, so creating a budget for that is important as well. Cutting expenses might not be needed for many families, so just developing a plan for fun activities will be a good way to create an environment where finances aren’t just a bummer to talk about.  

 

Have a plan for the future! 

Your month-to-month plan should be focused towards an even larger goal. Looking ahead will make sure that your long-term goals will be met. Don’t just focus on immediate needs because you might overlook needs that should have been accessed way earlier to plan for. Having the big picture in mind will alleviate stress for both parties involved.  


Holiday Budgeting

Successful Holiday Budgeting

Holiday Budgeting

Successful Holiday Budgeting Tips

With the holiday season approaching quickly, budgeting for those holiday gifts is going to be super important. Not only will you have your reoccurring monthly expenses, but now you need extra money saved to purchase gifts for your loved ones. Here are some tips on how to prepare.

 

 

Figure out your expenses and make a list

Make a list of all your normal monthly expenses and then add all the gifts you intend to buy. Obviously, the monthly expenses should be the top priority, so once you know how much that is you can estimate how much you are able to spend on gifts or events. It’s super important to stay within you budget because nothing is worse than coming out of the holiday season in debt.

 

Set a limit for how much you are going to spend

Once you have a list of all your expenses, make a limit for how much you can spend. Many people don’t make a limit and overspend on their credit cards. This is a great way to end up in debt and paying interest on those gifts. No matter how special the person might be, giving up your financial freedom isn’t worth it.

 

Sales are everywhere

Check out the sales that are happening near you! Stretching your dollar will help you get the most bang for your buck. Huge retailers typically have flash sales or holiday deals. Make sure to have a shopping plan of where you want to go so you can check to see when their deals are. The best way to stay caught up on deals is to sign up for email alerts. It will save you the hassle of looking online every day to figure out if they are having a sale.

 

Don’t use a high interest credit card

Many banks and retail stores will offer discounts if you sign up for their credit cards, but then hit you with high interest rates. Credit Unions will offer the lowest rates available and many times have 0% APR for 12 months. This could be super beneficial when it comes to spreading out the cost of the gifts. Another option would be to go cash-only shopping so you can be sure that you won’t end up in any debt.

 

The holiday season is a fun time to spend with friends and family. Budgeting will help make this holiday season affordable and stress-free if done correctly!

 


Rear View Of Loving Couple Walking Towards House

What to Expect When Purchasing a Home

Rear View Of Loving Couple Walking Towards House

Mortgages & Home Buying 101

Owning a home is a dream for many people. It’s something they hope to accomplish at some point in their lives. Sure, it is a hard task that requires a lot of work, but with proper budgeting anyone can do it! Mortgages and home buying can be very confusing and scary but researching the steps will relieve some stress. Provided below are common questions and answers people have.

It takes how many years to save for a down payment on a home?

Unfortunately, saving for a down payment on a home can take a lot of hard work and planning. Using the following example, we can illustrate the process you can take to figure out how long you will need to budget for.

Assume you make $56,000 and save around 15% of your income each month. That’s around $8,400 a year. It would take about 5 years to build a 20% down payment for a $216,000 home.

Buying insurance on your loan will allow you to have a smaller down payment but might be offset with greater monthly payments. With proper planning and a bulletproof budget, owning a home can be easy and a great goal to look forward to!

What Should I Expect at Closing?

Once you’ve taken all of the steps in saving, getting a mortgage, and finding your dream home, it’s time to close! There are few things you should be prepared for.

  • Your lender will send you a closing disclosure that outlines the terms of your loan, final closing costs, and outstanding charges or fees.
  • Do a final walk-through of the property to make sure everything is as it should be. For example, make sure any repairs that were made are as expected and that you are happy with your future home.

What to Bring to Closing

  • You will sign many legal documents between you and your lender.
  • Pay attention to all of the costs and escrow items. A majority of the time, the buyer is required to bring funds in the form of a cashier’s check made out to the escrow company.

Present Parties

  • Closing agent
  • Attorney
  • Title company representative
  • Home seller and their real estate agent

Closing Documents

  • Loan estimate and Closing disclosure
  • Initial escrow statement
  • Mortgage note and Deed of Trust
  • Certificate of occupancy


Female holding car keys with car on background

Should I Buy a New or Used Car?

What to Consider When Buying a New or Used Car

 

Wouldn’t it be nice to just snap your fingers and have a new car show up in your driveway? Without this ability, you’re going to need to decide whether or not you want to purchase a new or used car. There are pros and cons to each, so developing a personal buying strategy is key.

 

Advantage of a New Car

It’s never been driven! You know the exact history of the car and know it will be reliable. That being said, you usually receive a warranty for the first few years. This is great because it’s less out of pocket expenses if something was to go wrong with the car. Generally, the first few years don’t see a lot of repairs other than maintenance, but it’s a great thing to have.

 

Disadvantage of a New Car

The second you drive that new car off the lot, the car will lose several thousands of dollars due to depreciation. It will be the most expensive two minutes of your life, so enjoy it. Depreciation has the biggest impact on your car during the first two to three years. This can be a little scary, especially if you’re in the hole with the auto loan. That’s why it’s very important to shop around for the best deals and rates so that you can get equity in your car fast. Buying GAP insurance is another way of protecting yourself when buying a new car.

 

Advantage of a New Car

New cars have the new car scent, fresh seating, and the latest technology. These things are important to many people, so deciding if you want to spend the extra money will be a decision you will have to make. An easy way to do this is to make a list of needs and wants. Once you figure out those two categories you can start looking for a perfect match.

 

Advantage of a Used Car

A used car has already taken the largest hit on depreciation, so you aren’t losing value right away. By not taking the large hit, you almost immediately have equity in the car. This is a huge bonus and will give you peace-of-mind. Provided below is an example of how this would be useful.

 

  • Sarah took a loan out for a new car totaling $20,000. The next week, she decides that she doesn’t like it anymore and wants to sell it. Since the car took a major depreciation hit when it left the lot, its value is now $17,000. In essence, she lost $3,000 in a week.

 

With a used car this hit is much less, and you get equity in the car much faster.

 

Disadvantage of a Used Car

Determining what condition the car is in can be a total shot in the dark. Since the car is new to you but used by someone else, the condition is unknown unless a maintenance check is done. Certified pre-owned vehicles have been tested and checked for imperfections, so you approximately know what condition the vehicle is in. With a new car, you know EXACTLY what condition it is in.

 

Unfortunately, there isn’t a one size fits all answer when it comes to car shopping. When making a decision, you need to determine what you need, want and can AFFORD!


6 Tips on Saving Money this Summer

Summer is the perfect time to re-evaluate your saving’s plan. Here are a few tips on how to keep more cash in your pockets this summer:

A Budget = Your Best Friend

Creating a budget can really help you stay in control of your money. It allows you keep track of how much you are able to spend on certain items and it’s designed to make sure you avoid overspending. With a budget in place, you’ll stay within your means and pocket more savings. The goal of creating a budget though is to stick to it! Be committed to seeing it through to have success.

Look For Free Fun

Going out to have fun is necessary at times, but try to do it a bit less when you want to save extra cash. If you do want to get out of the house, there are a variety of free activities you can do out and about.  There are always free festivals or events going on in the city, you just have to look for them.

Deals Are Golden

During summer time, we all have our adventures planned. But finding deals through the variety of apps and sites available are crucial to having a good time for a low price. You’ll be able to have fun and do it guilt-free when you’ve got a good deal, discount or coupon in tow.

Make Your Own Food

Instead of going and spending $20 dollars a day, you can save more money by meal prepping weekly or making your food at home. You’ll be surprised how much money you can actually pocket if you don’t eat out! As an added bonus, you also become a better chef.

Know Needs From Wants

Try not to impulsive buy; think about whether you really need something or just want it. If you don’t really need it, then save it. The more willpower you have in suppressing each and every want that comes your way, the more in control of your finances you’ll be, and the more money you’ll have in your wallet.

The Big One: Give Your Money A Home!

What better way to save money than to open up a saving account?

At BrightStar Credit Union, we’ve got a variety of options when it comes to saving. See our saving’s options here.

Money comes and goes easily, so be intentional with your cash and what you’re doing with it to become a better saver. The goal for this summer? Have fun, but ball on a budget.


Clean your finances this spring

5 Ways to Clean Up Your Finances This Spring

Clean your finances this spring
When your finances are in check, it shows!

Spring is in the air, but your finances don’t have to be. With spring cleaning on the brain, now is the time to tidy up that closet and more importantly, your wallet.

Fortunately, recent pop culture has heightened the cleaning fix in all our minds. Recently, methods of cleaning up by category and keeping only those belongings that bring you happiness have become increasingly popular. While this method is great for optimizing your physical space, it can also be used with your finances as well.

Here are 5 ways to clean up your finances just in time for spring.

  1. Clean Out Expenses

Give your bank account a clean-out by evaluating any recurring subscriptions that are on auto-pay every month and you can probably do without. For instance, you may realize that you don’t need that 500-channel cable package or magazine subscription. Don’t worry, you can still keep your Netflix subscription, but look into a family account to split the costs. You may want to consider saving money with your Amazon Prime membership by waiting a few extra days for your packages. Not to mention, this can discourage you from buying things you don’t need.

  1. Create Financial Categories

Using this categorizing technique, organize your bank statements from the past few months by creating a category for each transaction. Some categories might include living expenses—such as your rent, car payment, and utilities—savings, and entertainment. Once you’ve created your categories, develop a filing system that works for you, whether it’s folders, an app or online. This will help you see where your money has been going and monitor your spending for the future.

  1. Sort Out Your Credit Score

Improving your credit score is an important step in cleaning up your finances if you want to borrow or make a big purchase in the future. Start by combing through your report to check for any inaccuracies that can be lowering your score. After you’ve created your financial categories from the previous step, keep track of your bill’s payment dates to avoid missing payments. One way you can do this is by setting up automatic payments or calendar reminders.

  1. Pay Off Your Debt

Your first instinct to dealing with debt may be to ignore it hoping it will disappear, but this will only worsen the situation. While you’re partaking in spring cleaning at your home and only keeping items that bring you happiness, set aside the pieces you no longer want and sell them in a garage sale. You can use the money you make to pay off some of your debt. Another way you can accumulate some extra cash is by turning a hobby into a side hustle. For example, if you like crafts, monetize your hobby by selling your works of art online or to family and friends.

  1. Set and Commit to Financial Goals

Outline your short-term and long-term financial goals and plan how much money you need to set aside each month to achieve them. For many people, their primary goal is to increase their savings. While there are many ways to do this, one of the most effective is budgeting. Set a spending limit and commit to saying “no” when you reach your limit. Most importantly, track and be proud of the progress you’ve made to boost your financial confidence and inspire you to keep going.

Regardless of your financial situation, using spring cleaning and organizational techniques in your finances can help you reach your goals and tidy up your finances.


Young Person with Credit Card

7 Tips for first-time credit card users

Young Person with Credit Card

Credit cards are a powerful financial tool. If you use them wisely, they will help you achieve your financial goals. But as the saying goes, with great power comes great responsibility. Abuse them and you will find yourself in a world of financial hurt.

If you recently got your first credit card, here are nine tips to help you use it in a smart, financially-sound way:

1. Read the fine print

Eye-catching promotional headlines can be very appealing. But look at the details. You’ll especially want to watch for things like high annual or late fees, or additional costs attached to using the card.

2. Pay the balance in full every month

Make sure you pay off your purchases at the end of every billing cycle. This way, you’ll avoid paying interest, which, if allowed to build, can dramatically increase the total cost of your debt.

3. Use it to build your credit

Remember when we said credit cards are a powerful tool? When you pay off your balances every month, you establish a positive credit history. You demonstrate to credit agencies that you can handle the responsibility of credit. This will become important when you want to buy a car, rent an apartment or even apply for a job.

4. Treat it like cash

If you don’t have the money now (or in the near future) to pay off the purchase, don’t put it on your card. You increase your risk of accruing interest and expanding what you owe (that’s how people get into debt).

5. Look for a good rewards program (but not at the expense of a high rate)

Cards for first-time users without much of a credit history may not have exceptional rewards, but it can’t hurt to look. You might be able to find decent cash-back or mileage offers.

6. Don’t share it with anyone

Credit cards are private. Don’t let anyone use it under any circumstances, even if it’s a good friend who needs to borrow money.

7. Always check your statements

Unfortunately, credit card fraud is a very real thing. Check your statements every month to make sure there aren’t any unrecognizable charges. If you see a purchase that you didn’t make, report it to the credit card company right away.


Budgeting Fun

How to Make Budgeting Fun with Your Family

Budgeting Fun
Make budgeting Fun with your family!

Setting spending limits and crunching numbers is not exactly a traditional recipe for family fun. But you can make budgeting fun by getting a little creative. Here is how:

Talk it through

Finances are a complicated subject. But it is important for your children to learn this very important skill early in life. In order to make budgeting fun for all, make it a game. Seat everyone at the table and talk about where the money goes.

Show them the money

Ideally, you should keep record of your finances in a tangible place. A specific folder in your computer or an organized excel sheet. But let’s be realistic, creating excel formulas is hardly fun for a child, let alone a fun activity for the family.

Our suggestion: Go old school!

Set out three containers, jars, banks or baskets. Mark one of the receptacles with the word save.  One with the wod spend and the final with the word share.

Use real money and coins to fill the containers each month so the whole family can see exactly how a budget works and where money needs to go. Folger recommends divvying up money according to set percentages. This is an especially beneficial method to help your tweens and teens balance their own allowances while earning real-life financial lessons.

Work toward family-fun goals

Budgets are designed to keep your present bills paid as well as plan for the future. If your family is only focusing on what they’re giving up or not getting, there’s no way your family budget will resemble anything but doom and gloom.

Instead, making budgeting fun by including goal that everyone can appreciate or look forward to using. Perhaps you can work toward a family-fun day at a local amusement park or even an extended getaway.

When planning for a vacation, Godfrey stresses the importance of involving everyone in the family on decisions from where to go and what to do to how money should be spent. A budget designed specifically for fun-in-the-sun or a first-time adventure is sure to keep your kids interested in your family’s financial planning.

Give back as a family

Teaching your kids to give back is an important, life-long lesson. Dedicating a portion of your finances will create a life lesson and a lot of fun memories.

With open communication and an eye on future fun, you and your family can make budgeting fun and support your financial goals.