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Should You Be Using Your Home’s Equity? 

Should you be using your home's equity?

Should You Be Using Your Home’s Equity? 

Maybe you’ve heard of home equity loans and lines of credit, maybe you haven’t. There’s no need to hang your head if the terms are unfamiliar to you. It’s easy to get lost in all the terminology of the financial world. But when the discussion turns to home equity, it’s important to know more than just the lingo—especially if you’re a homeowner. Whether you just purchased your first house (congratulations!) or you’ve been in your home for decades, it pays to understand the power of your equity.

What is equity? (And why does your home have it?)

With details ranging from fixed rates and loan terms to property appreciation and market value, home equity can be a complex topic. For the sake of conversation, we’ll stick with the basic premise that your home’s equity is the difference between what your home is worth and how much you still owe on it. As your home’s value goes up over time and your monthly payments chip away at your mortgage balance, your equity increases.

It can be reassuring to know that if you ever choose to sell your home, that equity would come back to you as profit. The beauty of home equity loans and lines of credit is that they let you leverage that equity without requiring you to sell your home. If your house is currently worth $250,000 and you have a principal balance of $150,000, you’re sitting on $100,000 in equity. Those funds may be comforting in theory, but they can also be an effective tool for your financial future.

Does it make sense to use your home’s equity?

Since it represents debt you’ve already paid off, you may be wondering why you would ever tap into your home’s equity in the first place. That’s a fair consideration, and it’s always a good idea to discuss the decision with a trusted financial advisor before proceeding. However, there are a few key benefits that make home equity loans and HELOCs a solid financial solution:

· Because they’re considered secured debt, home equity loans traditionally offer lower interest rates than credit cards and other consumer loans.

· A fixed-rate loan lets you lock in a low rate for the duration of the loan, protecting you against market fluctuations.

· If you don’t need the money in one lump sum, a home equity line of credit provides as-needed access to the funds and only requires you to pay interest on the amount you borrow. 

After you secure a home equity loan or HELOC, you’re free to spend the money however you please, but some of the top uses for home equity funds include:

· Consolidating high-interest debt

· Medical bills

· Home improvements

· Emergency fund

· Education costs 

A word of caution 

It’s important to remember that using equity as a quick fix without considering the budgetary impact is a dangerous proposition. If you’re consolidating debt without changing poor spending habits or if you’re making home improvements that won’t add value to your house (e.g., swimming pool, landscaping, solar panels, etc.), you could be setting yourself up for a financial crisis. Since you’re using your home as collateral, it’s important to honestly assess your financial situation before rushing into a decision.

If you’re wondering whether a home equity loan or HELOC is right for you, contact your credit union today and schedule a consultation with one of our mortgage experts. If you’re not a credit union member yet, this is the perfect time to change that. Like finding the right home equity solution, joining a credit union offers benefits that can put you on the path to financial success.

The Pros and Cons of Becoming an Airbnb Host

Do you have what it takes to be an Airbnb host?

Do You Have What It Takes to Be an Airbnb Host?

If you’re a homeowner in 2018, there’s a good chance you’ve kicked around the idea of renting out your house through Airbnb. Whether you travel for work or suffer from a perpetual case of wanderlust, you’ve probably thought about opening your house to Airbnb guests while you’re on the road. Maybe you don’t travel, but you’ve considered renting out a spare room to earn some extra money. Either way, you share the same enterprising spirit that helped Airbnb’s founders stumble across a simple idea that changed the way people travel.

 Big business with humble beginnings

When a popular design conference led to a sellout of San Francisco hotels in the fall of 2007, Brian Chesky and Joe Gebbia decided to rent out their apartment to Bay Area visitors. After a positive hosting experience, Chesky and Gebbia saw the potential for success on a larger scale. In August of 2008, the roommates teamed up with Nate Blecharczyk and launched Airbnb.

Since then, the company has brokered more than 260 million guest arrivals and amassed more than 4 million listings across 191 countries. While the global scale of Airbnb’s success is impressive, the genius of their business model lies in the fact that it offers average homeowners an opportunity to participate in the $1.6 trillion travel industry

Make your home work for you.

If you travel throughout the year or have a spare guest room, listing your house on Airbnb can be an excellent way to leverage your investment, generate additional income, and accelerate your progress towards your financial goals. But before you get blinded by the prospects of teaming up with a business that reported approximately $1 billion in Q3 revenue, it’s wise to consider what it takes to be a successful Airbnb host. 

Creating an inviting home atmosphere is important, but there’s more to it than that. As with any business venture, there are risks and rewards. Before listing your home with Airbnb, here are a few pros and cons to consider: 

Pros

· Extra income. We can all agree this one belongs in the “pro” category.

· Cultural engagement. Since Airbnb offers global exposure, you have the potential to connect with people from diverse cultures around the world.

· Improved maintenance. When you routinely welcome others into your home, there’s a greater tendency to keep your house in order even when you don’t have guests. 

Cons

· It’s a business. Operating a quality Airbnb property requires regular attention to business-related details like marketing, customer communication, insurance, and property maintenance.

· Digital business still involves real people. If you’re not a people person, extended interactions with customers may prove frustrating.

· Risk of loss or damage. While you’re careful with your things, guests may not always be as considerate. When you rent your home, you assume the risk of accidental property damage and unexpected repairs. (This explains the aforementioned insurance.) 

When it comes to business opportunities, it’s always a good idea to count the costs before launching your venture. However, if you’re a homeowner searching for an additional income stream to help you establish an emergency fund, pay off student loans, or set aside retirement savings, Airbnb may be the opportunity you’re looking for.

Debt and Dating

Debt and dating flowers

Debt and Dating: Can Poor Financial Habits Keep You in the Friend Zone?                                 

Dating is all about discovery. It can be fun to open up and share a few personal details with someone we’re attracted to. In turn, learning more about the other person is a great way to spark conversations that go beyond polite formalities. But while we’re more than happy to show our highlight reels, we all have those things we’d rather not talk about. You know, things like misspelled tattoos. Failed relationships. An affinity for Nickelback. High school, in general. But what about our financial habits? 

Is it possible that the way you manage money could have an impact on your relationship prospects? It’s a fair question, and a recent survey of 2,000 millennials uncovered some interesting opinions about debt and its impact on a person’s dating potential.

Does debt matter? Yes. And no.

In short, significant debt is frowned upon, but according to survey responses, it’s not viewed as negatively as being a workaholic. That’s the dating game in a nutshell, isn’t it? Don’t work too little and don’t work too much. Apparently, sensible moderation is attractive. So, what do you do if you’re interested in someone but your finances aren’t as solid as you’d like? 

Before you start fumbling for the right words to confess your mountain of debt, don’t get ahead of yourself. Less than 10% of people thought that this kind of information should be shared early on. More than 87% thought it best to wait until the relationship becomes exclusive or moves to the point of sharing household expenses. So, if you’ve just started seeing someone and have more debt than you’d care to admit—relax.  You’ve got time. 

To share or not to share, that is the question. 

Maybe all this talk about debt and dating has you wondering whether you’d be willing to share your most intimate financial details with a potential partner. The survey designers wondered the same and posed an interesting question: Would you rather tell your partner about your large debt or a pre-existing STD? Not surprisingly, the majority of respondents said they’d rather spill the beans about bloated borrowing. But it’s worth noting that more than 39% said they’d find it easier to divulge their most personal medical details. 

If almost 40% of people would rather reveal their personal medical history instead of discussing monetary struggles with a potential partner, it’s safe to say debt-related anxiety can impact us emotionally as well as financially. If there’s a takeaway from this survey, maybe it’s the fact that debt and relationships have something in common: Neither improves when ignored. 

Three tips for navigating the debt discussion 

1)  Understand your debt. Rather than lumping everything you owe into one negative category, it’s important to remember not all debt is bad. Home mortgages and student loans are traditionally viewed as desirable, while credit card debt and payday loans can be roadblocks to financial success. Knowing the details of your debt is essential to managing it effectively. (It can also help you sound smarter if, and when, the topic comes up on a date.)

2)  Eliminate bad debt ASAP. High-interest credit cards, auto loans, and title loans can throw you into a tailspin of making minimum payments that never pay down the principle balance. Whether you cut frivolous spending or pick up a side job, find ways to pay off the accounts with the highest rates first.

3)  Get a good wingman. When it comes to your finances, there’s no shame in admitting you need help. With debt management tools ranging from credit counseling to low-interest consolidation loans, credit unions can play a pivotal role in your financial success. And judging from thousands of survey responses, a solid financial foundation may improve more than just your credit rating.

 

Random Acts of Kindness Day

 Random Acts of Kindness Day 2018: Let’s Do This!

“No act of kindness—no matter how small—is ever wasted.”

-Aesop 

February may be the shortest of all the months, but with two separate days dedicated to helping others feel special, it certainly seems like the nicest. Just three days after Valentine’s Day celebrates the beauty of romantic love, Random Acts of Kindness Day comes along on February 17th and encourages charity.

Though the day may seem like an appeal to selflessness and altruism, helping others is usually a mutually beneficial experience. Kindness tends to reward the giver as well as the recipient.

Being kind is good for everybody.
We’ve all heard that being nice to others makes you feel good, but did you realize science backs up that claim? According to researchers at Dartmouth College, simply seeing an act of kindness causes our bodies to produce oxytocin, a hormone that lowers blood pressure and increases optimism. If just observing kindness can improve our heart health and social outlook, imagine what can happen when we get involved!

Okay, I’m in. What do I do?
There are endless ways to be kind, but sometimes the myriad of options makes it hard to decide what to do. While randomness offers a world of freedom, it also leaves room for overthinking. To help you avoid analysis paralysis, we’ve come up with a few ideas for you to consider on Random Acts of Kindness Day:

Look back and pay it forward.
If you’re hitting the drive-thru for coffee or breakfast on the way to work, paying for the order of the car behind you is a great way to start a chain reaction of selflessness and smiles.

Sweeten up the office.
When it comes to the workplace, stumbling across free food in the breakroom is one of life’s simple pleasures. You can boost everyone’s mood with nothing more than some bagels, donuts, cookies, or candy (or fruit, if resolutions are still unbroken).

Put your phone away.
Just for the day, commit to keeping your smartphone out of sight while you’re talking with someone else. The notifications will be there when you’re finished, and the people who got your undivided attention will feel valued.

Smile. Seriously, just smile.
A genuine smile can make you and everyone around you a little happier. But did you know a fake smile can do the same thing? That’s right, as far as your brain is concerned, a smile’s a smile. It releases endorphins either way. So even if you’re not feeling it at first, go ahead and grin. When you start getting return smiles from others, you won’t be faking it for long.

Let the kindness begin.
Now, before any of us try to excuse ourselves from participating with rationalizations like “We should be kind EVERY day, not just once a year,” let’s remember that every perpetual motion needs a little nudge to get it started. Random Acts of Kindness Day 2018 may just be the friendly push we need.

Find the Three C’s of Success at Great Meadow Federal Credit Union

Next time you drive around town, pay attention to the number of financial institutions you pass. Chances are you’ll see a variety of national, regional, and local banks along with several investment firms. You’ll probably see a credit union or two as well. With so many banking options, it’s natural to wonder what makes a quality credit union stand out from the crowd.

After more than 50 years of helping our members achieve financial success, we’ve identified three keys that make Great Meadow Federal Credit Union a beneficial part of any financial strategy. We call them the “Three C’s.”

The Three C’s of a Successful Credit Union

Convenience: Because of their focus on performance over time, most investment firms offer extremely limited cash management services. By combining investment options with the ability to wire funds, make ACH transfers, and access mobile banking services, a Great Meadow account offers more control than a traditional brokerage account. As an added benefit, members who open a share certificate at Great Meadow can withdraw at any time without penalty.

Comfort: Traditional bank accounts are insured by the Federal Deposit Insurance Corporation (FDIC), and credit union accounts are insured by the National Credit Union Administration (NCUA), both up to $250,000. For members who have more than $250,000 in an insured account, diversifying is a strategic way to maximize financial protection and secure additional peace of mind.

Community: As an organization, we are committed to giving back to the communities we serve. When you trust our credit union with your money, it allows us to leverage those funds for loans that benefit the community. You can feel good knowing that as you invest with us, we are investing it back into our community.

As we offer the “Three C’s” of convenience, comfort, and community, the Great Meadow team also works hard to give our members one more “C”—confidence. To find out how we can help you secure your financial future, contact us today.

Plan a Blockbuster Valentine Date on a Budget 

Plan a Blockbuster Valentine Date on a Budget 

From picking the right card to choosing the perfect flowers to selecting the best chocolates, planning for Valentine’s Day can be daunting. When you get it right, the smile on your Valentine’s face is priceless. If you miss the mark, well, so does Cupid’s arrow. The risk/reward scenario is the stuff romantic comedies are made of. But there’s a big difference between Hollywood hijinks and real life. The difference? Budgets. 

Movie Magic vs. Real Life

While cinematic screenplays portray extravagant splurges that make audiences swoon, most of us don’t have the unlimited finances required to take a hot air balloon ride over Central Park while a string symphony serenades us from below. So, is it possible to plan a successful Valentine’s date without breaking the bank? Absolutely. 

Creating a budget-friendly Valentine’s Day that’s memorable for all the right reasons requires purposeful thought and advanced planning—just like your budget itself. This is not the time to keep up with the proverbial Joneses; don’t waste energy comparing your ideas with anyone else’s. When it comes to making February 14th something special, individuality wins. If you’re looking for a few tips to spark your frugal creativity, we’ve got you covered.

4 Ways to Enjoy Valentine’s Day on a Budget 

1. Cook at home. Go out for dessert.

Whether you decide to cook dinner for your date or prepare a meal together, staying in lets you plan the menu around your budget and enjoy the experience of crafting your own culinary adventure. After leisurely dining at home, you can venture out for a delicious dessert knowing you’ve missed the overcrowded restaurants and overpriced entrees.

2. Coupons can be your friend.

Can we get real for a minute? Free food tastes better. It just does. And if you’re looking to counter the unfair stigma attached to coupons, consider the following scenario: If you have $50 to spend on dinner, that means you can get two meals that cost $25 each. If you have $50 and a Buy-One-Get-One coupon from sites like Restaurant.com or Living Social, you can each enjoy a $50 meal. Doesn’t sound like a difficult decision, does it?

3.Pick a plant instead of flowers.

With many florists inflating prices by as much as 100% for Valentine’s Day, buying traditional flower arrangements can an expensive proposition. Instead of giving your date a bundle of flowers that will be gone in a couple weeks, plan a date that includes selecting a plant that will provide beauty for years to come. The shared experience provides an excellent chance to learn each other’s tastes and preferences, which may prove helpful for future Valentine’s Days.

4. Visit museums and art galleries.
If you live in an area that has a museum or art gallery, many of these venues offer free or low-cost admission. In addition to giving your date a touch of culture, the subjective nature of art and exhibits offers endless opportunities for conversation, lessening the chances of awkward silence throughout the evening. 

Sticking to a budget can be tough, especially when you’re trying to impress your date. But if our favorite rom-coms have taught us anything, it’s the fact that over-the-top spending may seem fun, but it rarely leads to happily ever after. Whether you use these tips or come up with creative ideas of your own, being smart with your Valentine’s Day spending is a great way to craft a feel-good story that will leave you cheering when the credits roll. And who knows, if all goes well, there might even be a sequel!

                                     

 

Should You Pay for Credit Repair Services? Probably Not.

Call it a coincidence. Call it savvy marketing. Whatever you call it, there always seems to be a spike in credit repair advertisements around the time the first Christmas shopping bills arrive. Maybe you’re staring wide-eyed at a balance that’s higher than you expected, wondering how you’re even going to keep up with the minimum payments. This kind of uncertainty can set the stage for bad decisions. So, before you scramble and sign-up for credit repair services, take a deep breath and realize you have more control than you think.

Risk vs. Reward: Is credit repair worth the cost?

It’s important to remember that some credit repair services are legitimate businesses, able to follow through on their claims. Unfortunately, the reputable companies reside in a corporate landscape littered with scam artists and opportunists. If you’re willing to devote enough time and research, it’s possible to separate the upstanding services from the scams, but as NerdWallet columnist Liz Weston points out, “If you’re able to do that kind of research, then you can certainly figure out credit repair and do it yourself.”

While the trustworthy credit repair companies aren’t necessarily too good to be true, there’s a good chance they’re too costly to be worth it. When you consider that many of these services charge monthly fees ranging from $30-$100, the boost in your credit rating may not justify the ongoing expense.

Facing credit challenges? Your credit union can help.

Good credit isn’t the result of tricks and trade secrets. It’s established by applying solid financial habits over time. The same holds true for credit repair. While it there may be some additional steps required to clean up your credit report, rebuilding good credit requires a consistent commitment to responsible money management.

Credit unions exist to ensure the financial success of their members. Educating people on proper credit management is part of that mission. If you’re drowning in debt and struggling to regain your financial footing, your credit union could be the lifeline you’re looking for. While they may not advertise it, many credit unions offer free credit counseling for their members. Discussing your current challenges with one of the credit union’s representatives can be the first step towards putting those struggles behind you.

Repairing damaged credit is no walk in the park. But with a little hard work and dedication and the guidance of your credit union’s financial professionals, you can be on the way to reclaiming the good credit you deserve.

Is This the Year You Keep Your New Year’s Resolution?

Now that 2018 is officially here, many of us are coming to grips with a familiar, frustrating truth: there’s a big difference between making a new year’s resolution and keeping one. The good news is that we’re not alone. It’s estimated that approximately 40% of Americans make resolutions when the new year rolls around, but only 8% of them are successful in keeping them. Making a resolution only takes a moment of inspiration, keeping it calls for consistent dedication.

With the abundance of self-help books, podcasts, and seminars at our disposal, it’s easy to get tossed around on the latest and greatest informational waves. Too often, we jump from one fad to the next, spending substantial energy without moving closer to our end goal. It’s tempting to confuse activity with productivity. That makes it even more important to know the difference between the two. If you want to join the 8% of people who successfully stick to their resolution, you have to work smarter – not harder.

Simplify for Success

By limiting the variables in your resolution’s success equation, you can employ principles similar to those that make life hacks so popular. And while mental tricks and efficiency shortcuts aren’t substitutes for perseverance, they can help you avoid overthinking a problem or wasting time on unproductive practices.

As you work towards your 2018 resolutions, focusing on the following three aspects of each goal can help simplify your planning and streamline your pursuit.

Psychological

When the American Psychological Association weighs in on new year’s resolutions, it’s a good idea to hear them out. In an article on their website, the APA recommends a sensible approach that involves breaking large goals into smaller, attainable action steps. Following this recommendation increases the opportunities to tally some quick wins, and the psychological benefits of early success are invaluable to long-term achievement. 

Example: If you want to build up an emergency fund of $1000, aim for saving $20 a week. It’s not as overwhelming, and over the course of the year, you get 52 chances to celebrate! 

Physical 

Even if your resolution isn’t physical in nature (i.e. – lose weight, get in shape, run a marathon, etc.), it may be a good idea to incorporate some physical activity anyway. On the Harvard Health Blog, Heidi Goldman shares that exercise can help wire the brain in a way that protects memory and critical thinking skills. Considering the fact that “I forgot” and “I just can’t figure it out” are common excuses for breaking a resolution, improved clarity and brain function sounds pretty helpful.

Example: You resolve that 2018 is the year you finally learn to speak Italian. A 30-minute walk each day offers an excellent opportunity to practice your new vocabulary, and the cardiovascular exercise encourages the growth of new blood vessels in the brain, which can improve your brain’s ability to learn and retain new information.

Personal

In a previous post, we discussed the need for accountability. Here’s where the rubber meets the road. Recruiting someone to hold you accountable makes the resolution a little more personal because it involves a risk of social capital. The key is finding someone who knows you well enough to challenge you but cares for you enough to encourage you as well.

Example: Let’s say you resolve to pay off credit card debt this year and you ask your best friend to hold you accountable. When you pull out a credit card to pay for dinner, your friend can offer a good-natured reminder that putting your meal on credit isn’t helping you reach your goal—the kind of reminder you’d easily brush off if it came from a stranger.

Just because the concept of keeping a new year’s resolution is simple doesn’t mean the process is easy. But if something mattered enough to inspire a resolution in the first place, it’s important enough work towards throughout the year. If you stick with it, you’ll probably find that the satisfaction that comes from accomplishing a goal is often more rewarding than reaching the goal itself.

The New Year’s Here: Make Better Resolutions in 2018

From starting a workout plan to saving for retirement, roughly 80% of New Year’s resolution fail within the first month. Of the people who keep their commitments through February and beyond, only 8% ultimately reach their goal. Why is that? If you ask 100 people, you’re likely to get 100 different excuses reasons. Making a resolution is easy. Sticking to it? That’s a different story.

But instead of focusing on the failure, let’s look at some ways to increase your chances of success in 2018. Compiling an exhaustive list of what it takes to accomplish your goals would be…well, exhausting. So, to keep you from getting overwhelmed, we’ve narrowed it down to 5 simple suggestions that should help you start the new year strong.

5 Ways to Make Your New Year’s Resolution Stick

Be real.

If you want to get in better shape but haven’t exercised in years, walking for 20 minutes a day makes far more sense than running a marathon in March. If you want to have 3-6 months of living expenses in an emergency fund but haven’t saved a penny over the last year, start with setting aside $20 per paycheck. Realistic goals pave the way for quick wins and consistent progress.

Be specific.

When it comes to setting goals, it’s tempting to speak in generalizations. “I want to feel better.” “I want to be smarter with my money.” The danger of statements like these is that they can’t be measured. Being smart with money is tough to quantify. Paying an extra $50 towards credit card debt is much easier to track. Instead of playing it safe with general statements, dig into the details.

Be consistent.

If you’ve ever run a 5K or 10K, you’ve seen THAT person—you know the one. They’re toeing the starting line, psyching themselves up, trembling with anticipation. As soon as the starting gun fires, they launch from the gate at top speed. You probably passed them after a mile or two, didn’t you? As you make your resolutions for the new year, don’t be THAT person. Understand that lasting success isn’t a sprint. Identify your goal, break it down into smaller action steps, and take clear, consistent action towards accomplishing those steps every single day.

Be accountable.

If nobody else knows about them, our best intentions can be our worst enemy. It’s easy to say you want to save $100 each month. It’s also easy to rationalize why you missed a month or two. To keep from fooling yourself, ask a trusted friend, family member, or co-worker to check in and keep you accountable. If there’s one thing worse than missing a goal, it’s having to admit it to someone else.

Be cool.

While January 1st seems like a logical time to make a fresh start, let’s not forget that technically it’s just another day. In reality, every day offers the chance to correct mistakes and build on successes. When making your resolutions, allow for some flexibility. Overly restrictive deadlines and constraints can lead to crippling discouragement. The end goal is improvement, not perfection. So yes, set your goals. But don’t forget to leave yourself some room to enjoy the process of achieving them.

Can Regional Floods Impact Car Owners Across the Country?

In August 2017, Hurricane Harvey unleashed a wave of historic destruction on Houston, Texas and surrounding areas. Just weeks later in September, Hurricane Irma tore through the Caribbean island before zeroing in on the state of Florida, leaving a statewide path of destruction in its wake. All in all, the damage of these two storms is estimated at more than $290 billion, according to Money.com. 

After the flood waters receded and the magnitude of the loss became apparent—so did the shady tactics of opportunists. Across the country, a growing number of flood-damaged cars are being listed for sale, and all too often, signs of that damage can be difficult to spot with a quick visual inspection.

Flood damage should show up on the car title, right?

In conventional situations, flood damage would be listed on an automobile’s state title, and the red flag would be waving. However, as a result of the staggering number of cars impacted by the hurricanes, many state offices are encountering a gridlock-inducing backlog of work. What does this mean to an average consumer? Unfortunately, it means some flood-damaged cars are being auctioned off and shipped all over the country before the title reflects the defects—leaving the new owner holding a “flood title” when the records are finally updated.

Short of becoming an expert in the mechanical and cosmetic indicators of flood damage, how can prospective buyers safeguard themselves? Obtaining a thorough vehicle history report is a solid start that offers a quick and easy way to spot trouble. 

An Ounce of Prevention is Worth a Pound of Cure

To apply the old proverb to the car-buying process, spending a few dollars on a vehicle history report can save hours of headaches and thousands of dollars in the long run. With the National Insurance Crime Bureau (NCIB) providing free VIN checks and reputable companies like Carfax and AutoCheck offering reliable reports for reasonable prices, buying a car without gathering all the facts is an unnecessarily risky proposition. And with the recent catastrophes that swept across the South, it’s more important than ever for consumers to have all the facts possible before making a purchase decision.