Financial Literacy

Money management can sometimes feel inherently selfish. You’re earning, budgeting, saving, and investing, all so you and those you love can enjoy a worry-free life on your own standards. But there is so much more you can do with the money you’ve been blessed with – as well as with your time, talents, and possessions. Let’s explore five different ways you can make the world a better place by paying it forward.

1. Donate funds to your favorite cause

The classic way to pay it forward can also be the simplest. Find a charity or two that speaks to your heart and make a donation that fits your budget. Ideally, it is substantial enough to make a difference, but any amount you are able to responsibly commit adds value and is appreciated. Be sure to verify the authenticity of the organization on a charity-vetting site like BBB Wise Giving Alliance, Charity Navigator, or CharityWatch. Don’t forget to save your receipt so you can claim a charitable-giving deduction on your taxes.

2. Commit to doing one random act of kindness each day

Kindness doesn’t have to be big or loud to make a difference. It doesn’t even have to be costly. Small things that mean a lot can really make someone’s day. You can offer to make a coffee for your coworker, feed a parking meter that’s about to run out for a stranger’s car, remove a branch or rock from the middle of a busy thoroughfare or walking trail, or let someone go ahead of you at a checkout counter. There’s so much you can do when you look to give.

3. Write thank you letters 

When was the last time you thanked your child’s teacher for doing such a fantastic job on providing your child with an education? When was the last time you thanked your parents for giving you life, a happy childhood, and their ongoing love and support? When was the last time you thanked your mailperson? Pick up a nice set of thank you cards and spend 20 minutes writing thank you cards to the people in your life; those who do so much for you, but aren’t always thanked for everything they do. Your letters will likely be cherished by the recipients for many months to come.

4. Donate your time 

Unfortunately, there are numerous people in this world who are suffering from sickness, poverty, loneliness, mental health challenges, or other hardships. With just a small donation of your time, you can help alleviate some of their suffering. You can volunteer at a soup kitchen, help bring cheer to hospitals, offer to babysit for a couple who is going through hard times so they can have a night out to themselves, or make a habit out of visiting a lonely person. You can brighten someone’s day with your presence alone!

5. Share what you have

Aside from money and time, there are so many ways you can use what you have to bring cheer into someone else’s life. You can donate old clothing to Goodwill or gift a friend or neighbor with a full set of your child’s outgrown clothing if it’s still in great condition. Offer to lend out your books to your bookworm friends. Run a low-cost, or even no-cost, yard sale for all the toys, furniture, and other items in your home that you don’t use any longer. Share your unused sports equipment with children who are less privileged than yours.

There are so many ways to pay it forward and make the world a better place. And when you give to others, you’re really giving to yourself by learning how to be a better, kinder person.

1. Hit the beach

Get out to the shore at the first opportunity! The beach can provide hours of relaxation and fun for the entire family at little or no cost, depending on your location. Stock up on some inexpensive patriotic-patterned towels to make the day feel a little more festive.

2. Attend a local event

There’s no need to travel far for a fun Memorial Day outing. Check out local online forums and newspapers to see what’s happening in your town. You’ll likely find a carnival, parade, concert and/or street fair that’ll give you some Memorial Day fun at no cost. As a bonus, local activities that do charge an entrance fee will often donate all proceeds to charity, so you’ll be paying it forward all day long.

3. Host a potluck

If you’ll be hosting this Memorial Day, make it a potluck party. Ask each guest to bring one dish for a complete dinner that won’t cost anyone a lot of money. As a bonus, the menu is a lot more fun when it’s varied and prepared by lots of different cooks.

4. Go easy on the decor

No need to blow a ton of money on making your Memorial Day celebration look festive. Spruce up the place with some red, white and blue balloons from the dollar store, find some patriotic banners and deck the tables with inexpensive and on-theme tablecloths, too.

5. Make a signature drink

Instead of setting up a full bar, make one signature drink for the night. Festive and fitting for the celebration, this comes out a lot cheaper than springing for a full-blown bar. You can find some great ideas for your signature Memorial Day drink here.

6. Look for coupons

Don’t go anywhere without first checking if you must pay full price. You can pick up some great discounts on restaurant meals, entertainment venues, and more at websites like Groupon.com. If you are a member of AARP or AAA, check to see if you can enjoy some additional exclusive discounts as well.

7. Host a DIY sports event

For a fun and frugal alternative to the traditional Memorial Day BBQ, invite family and friends over to your place, or meet up at a park, for a day of sports and games. You can play flag football, soccer, have a tug-of-war competition or even drum up a full game of baseball. You can set up some light drinks and snacks, or ask your guests to bring their own for a truly cost-free day.

8. Visit historical sites

What better way to spend Memorial Day than checking out historical attractions? Lots of historical sites, like the Gettysburg National Military Park in Pennsylvania, host free events in honor of the three-day holiday. This event, along with other similar events across the U.S., like the Annual Flag Planting Event at the San Francisco Presidio National Cemetery are a great way to honor the courageous men and women who have served and lost their lives for our country.

9. Rent a boat

Enjoy a day out on the water at little cost by renting a boat from a nearby boat rental service or a private owner. Small boats, like kayaks and canoes, can cost as little as $30 for a few hours of use. Speed boats and pontoons will be pricier, but can also hold more people to share the cost. Bring along some snacks and drinks and good music for a fantastic day of water fun.

10. Participate in a race

Joining a race can be an enjoyable and healthy way to spend your Memorial Day. Participating in a race can cost you as little as $50. As a bonus, lots of Memorial Day races donate all proceeds to organizations that help soldiers pay for expenses that are not covered under military benefits. You’ll be supporting our servicepeople while stretching those muscles!

Memorial Day is always great fun, but it doesn’t need to cost a great deal of money. Use these tips to enjoy a memorable holiday weekend on a budget.

Consumer debt can be one of the biggest challenges to realizing good financial wellness. Credit card companies design their business model in a way that makes it easy to get stuck paying off debt for years. With some intentional action and commitment, reaching true financial wellness and being financially independent is possible. At the very least, seek to be on track for paying it off shortly.

Below, we’ve outlined how to pay down debt in five simple steps, along with three debt-paying strategies to avoid.

1. Organize your debt

Before you get started, determine how much debt you must pay off. List every credit card you own that has an outstanding balance and jot down the amount owed to each. Next, list the interest rate of each card. Do this for any other fixed installment loan debt you have as well. These numbers will help you build a debt-payoff plan in the next two steps.

You can also add up the amounts owed on each account to reach your total outstanding debt amount.

2. Choose your debt-crushing method

There are two main approaches people utilize for getting rid of their debts:

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

Each method has advantages and drawbacks. The snowball method provides frequent motivation as debts are paid off sooner, but it may involve paying more overall interest on the debt. The avalanche method, on the other hand, generally saves the borrower a significant amount they pay in interest, but it can take a while to generate results.

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, it’s time to find ways to maximize your monthly credit card payments. You can do this by trimming your spending in one budget category and channeling that money toward paying down your debt. You can also find ways to pad your pocket with extra cash for your payments, such as freelancing for hire or selling your creations on a platform, like Etsy, if you’re the crafty type.

Once you’ve determined how much you can afford to pay each month, you can create a debt-payoff plan using the systems you’ve reached in Step 1.

4. Consider a debt consolidation loan

For some consumers, the most challenging part of paying down debt is managing multiple payments across several credit card accounts. With several monthly debt payments to make, it can be complicated to remember them all. It can also feel like the monthly payments are only going toward interest.

A debt consolidation loan can change all that. When you consolidate debts into one low-interest loan, it’s a lot easier to manage the monthly payments. Plus, the savings on interest payments can be significant, especially if the new loan has a low-interest rate.

If this approach sounds favorable, consider taking out a personal loan from SRI Federal Credit Union. The loan will provide you with the funds you need to pay off your credit card bills and leave you with a single, low-interest monthly payment. Click HERE to apply for a personal loan or click HERE to read up on our  Zero % Visa Balance transfer promo.

5. Negotiate with your creditors

Many credit card companies are 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 your options. At the very least, see if you can get the company behind the first debt on your list to lower your rate.

3 Debt-Crushing strategies to avoid

As you work toward paying down your debt, beware of these debt-crushing strategies, which may do more harm than good:

• Debt settlement. Debt settlement services offer to lower your interest rates and boost your credit score in a short amount of time – for a fee. Unfortunately, though, many of these companies are fronts for scammers and should be avoided. Do note, though, that there are legitimate debt settlement companies, so do your research well if you are thinking of using one.
• 401(k) loans. It’s rarely a good idea to borrow from the future you. Withdrawing funds from your 401(k) to pay down debt can mean getting hit with all sorts of penalties, fees, and taxes.

• Home Equity Line of Credit (HELOC). Borrowing against your home means putting yourself at risk of losing your home. Read more information about our HELOC product HERE.

Regardless of the strategy you choose, or the methods you use for paying off your debt, commit to not adding more charges 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!

Consider filing electronically

If you still file your taxes the old-fashioned way, you may want to consider switching to e-filing this year. The IRS e-file is available to all taxpayers, and many can file electronically at no cost.

Re-check your Social Security numbers 

Make sure every Social Security number on your return, including your own, your partner’s and each of your dependent’s, is listed correctly. Check that the SSNs related to claims for Child and Dependent Care Credit or Earned Income Tax Credit are accurate as well.

Don’t forget any deductions

Be sure you’ve taken every tax deduction that’s available to you before completing your return. Here are some of the deductions that many people often forget to claim:

• Home office deduction. If you have a space in your home that’s primarily used for work and is the principal location of your business, you can deduct the cost of upkeep for that area from your taxable income. For example, if you have a 200-square-foot space for a home office in a 2000-square-foot home, you can take the annual costs of your home (excluding rent and mortgage payments) and divide it by 10 to get the sum of your home office deduction.

• Out-of-pocket charitable contributions. Most people remember to deduct the generous donations they’ve made to charity over the past year from their taxable income, but few remember to write off the expenses they’ve covered while doing the good deeds. For example, the cost of ingredients you purchase for a meal you regularly cook for a soup kitchen can be deducted from your taxable liability, as can the cost of gas for any miles you drove for charity.

• Student loan interest you’ve paid, or that someone has paid on your behalf. 

In the past, if anyone other than the student paid toward a student loan, there were no tax benefits. Now, however, any student who is not claimed as a dependent can qualify to deduct up to $2,500 in student loan interest, regardless of who has made the payment.

Make sure to claim the full Child and Dependent Care Tax Credit

A tax credit reduces your tax bill dollar for dollar, so it’s important to claim every credit that is owed to you. There were big changes to the Child and Dependent Care Credit this year, and it’s best to take full advantage of those changes. The American Rescue Plan, signed into law on March 11, 2021, increases the credit and makes it fully refundable, so taxpayers can receive the credit even if they don’t owe taxes. The new law also expands the eligibility requirements for taxpayers who can benefit from the credit’s highest rate.

The changes to the Child and Dependent Care Credit that apply only for tax year 2021 include:

• The highest credit percentage increased from 35% to 50% of qualifying expenses.
• Qualifying child and dependent care expenses increased from $3,000 to $8,000 for one qualifying dependent, and from $6,000 to $16,000 for two or more qualifying individuals.
• The adjusted gross income (AGI) level at which the credit percentage starts being reduced went up from $15,000 to $125,000.

Double-check your figures

If you are filing a paper return, double-check that you have correctly calculated the refund or balance due. Run the numbers through a calculator again, and then again, to ensure you haven’t made any mistakes in your figures.

Get your return in on time

Tax day is usually on April 15. This year, the deadline has been postponed to April 18. If you know you won’t be ready to file on time, you’ll need to request an extension. It’s important to note, though, that an extension to file does not include an extension for payment. Be sure to pay up on time or you may face penalties.

Don’t forget to sign your form

Your tax return must be signed and dated in order to be filed. If you’re filing jointly, be sure to have your partner sign as well.  Also, if you’ve hired someone to prepare your return, have the preparer sign the form and enter their Preparer Tax Identification Number (PTIN).

It’s tax time! Use the tips outlined here to maximize your refund and ensure there are no mistakes on your tax return.

Your Turn: Share your last-minute tax tips with us in the comments.

Let’s get started by taking a look at how to create a budget and review some popular budgeting systems and how they work.

Create a budget in 5 easy steps

• Track your spending and income. This includes all your financial documents, such as your account statements, bills, and pay stubs. [If you’ve followed Step 1, you’ve already completed this step–nice work getting ahead of the game!]
• Tally up your totals. Calculate the totals of your monthly expenses and all your streams of income. If your income exceeds your expenses, you’re in a good place. However, if your expenses exceed your income, or the numbers are too close for comfort, you’ll need to trim some discretionary expenses to make it through the month without falling into debt if an unforeseen big expense happens.
• List your needs. Your needs include anything that is essential for living and basic functions, such as rent or mortgage payments, savings, food, and clothing. Needs always take priority in a budget. As you list each need, write down its corresponding cost. Sum up the total of your needs when you’ve finished.
• List your wants. This includes anything that is not essential for living, like entertainment costs, brand-name clothing, and eating out. 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, starting with fixed-cost needs, then non-fixed-cost needs, and finally, your wants. Assign an appropriate dollar amount for each of these costs, making sure the total does not exceed your estimated total for monthly expenses.
• 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. Likewise, you will hopefully be able to increase the amounts in the income column as you move upward in your career path or find additional income streams.

Budgeting systems

While every kind of budget involves tracking expenses and committing to a maximum spending amount each month, there is a wide range of budgeting systems to fit every kind of personality and money management style.

The traditional budget doesn’t involve much more work than the steps described above. After working out a number for every expense category, you’ll simply need to track your spending throughout the month to ensure you’re sticking to the plan. You can use a spreadsheet for this purpose, or utilize one of the popular budgeting apps, like Mint or YNAB, and do it digitally.

The money-envelope system works similarly. However, instead of simply committing to sticking to your spending amounts for each expense category, you’ll 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, using one for each of these expenses. Then, withdraw cash from the appropriate envelope when making a purchase in that category. There’s no way to blow your budget with this system; when the money in the “Dining out” envelope runs dry, that’s all for this month!

The 50/30/20 budget is simpler but requires more discipline. Set aside 50 percent of your budget for your needs, 30 percent for wants, and the remaining 20 percent for savings. Of course, you’ll need to make sure your income and expenses will work with this kind of budget. Does 50 percent of your income cover your needs? If yes, this budget allows for more individual choices each month and less accounting and tracking of expenses.

A well-designed budget can provide its creator with a sense of financial security and freedom. When you stick to a budget, you’ll always know you have enough to get through the month and save for the future. Start budgeting today!

If the latter is true, there’s probably a good chance that your list of resolutions for the new year looks the same, year after year … after year. Yes, it’s easy to come up with ways you can improve at year’s end, but seeing those resolutions through and actually making them happen is another story entirely.

Spend less, save more, pay down debt — how can you make 2022 the year you actually stick to these and other financial resolutions?

Below, we’ve compiled a list of tips that can help you keep your financial resolutions throughout the new year.

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 to ensure you’re actually making progress. For example, you can resolve to increase your spending by a certain amount by the time you hit the mid-year point, decide to trim your spending in a specific category by a set percentage or promise to pay all your bills on time for the entire year.

Bonus tip: 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 it’s not the real challenge of financial wellness. The hard part comes when you’ve got to actually stick to that budget and make it part of your life. And one reason many people don’t end up keeping their budget is because they spend money without consciously thinking.

Resolve to be more mindful about your spending this year, which means actually thinking about what you’re doing when you swipe that card or hand over that cash to the cashier. You can accomplish this by taking a moment to think about what you’re purchasing and how much you’re paying for it. You can also set yourself up for better success by staying off your phone while you complete your in-store transactions.

Bonus tip: To make this easier, use this calculator to determine how much you actually earn in an hour, and to see how much of your work time you’re “spending” when you make a large purchase. Is it really worth the price?

Partner up with a friend

According to MyFitnessPal.com, dieters who share their food diaries with a buddy lose twice as much weight. It’s basic psychology: When we know we have to answer to someone else, we’re more likely to stick to our resolutions — and this works for financial resolutions as well.

Choose a friend who is in a similar financial bracket as you are and has a comparable relationship with money. Also, it helps if they have similar resolve to set and stick to those financial resolutions together. Set up a weekly time to review progress (or regression) you each have made, and make sure you both come prepared with details and proof to show how you’ve handled your money.

Bonus tip: To make it even easier, you can use a money management app, like Mint, to help you 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.

Bonus tip: Writing doesn’t need to be physical in order to count. You can use a resolution-tracking app, like Strides, where you can record, track and reference your New Year’s resolutions at any time with just a few quick clicks.

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