Metro Credit Union Blog — A Non-Profit Cooperative Serving Massachusetts

What to Do With a Tax Refund

It’s tempting to blow your tax refund on an impromptu shopping spree or the latest tech gadget, but don’t drop those dollars just yet. Before you spend your refund, think about where that money would really be best used.

Before you even think about splurging, put 50% of your tax refund toward paying off debt. Apply it to your mortgageprincipal, make a larger-than-usual monthly credit card payment, or pay off part of a student loan.

Another option: Nail down any big-ticket items coming up. A tax return can provide a nice chunk of cash to pay for that expensive dental work you’ve been putting off, overdue car repairs, or a semester’s worth of college textbooks. You even could use your refund as part of a down payment on a new car.

Saving money for the long term is another smart decision. Stash part of your refund in an emergency fund, certificate of deposit, or IRA (individual retirement account) at Metro.

You also could use your return to add equity to your home. Tackle those repairs you’ve been meaning to get around to, or make over your yard with some landscaping. Using your tax refund as a base, you could even take out a small home equity loan from Metro to cover projects you need done now.

After you’ve covered your other financial bases, treat yourself. Put some of your refund toward a trip you’ve been dying to take, sign up for a gym membership, or enroll in a class to learn a new skill.

However you choose to use your tax return, think about it first, look at your options, and make the best financial decision you can. If you need help setting priorities, meet with a Metro Credit Union financial adviser today.

Add comment | April 10, 2012

Car Buyers’ Worst Mistakes

It’s February, and you know what that means: car deals. If you’re planning on looking for a new car, there are some things you should avoid to ensure that you get the best deal possible. You’ll save a bunch if you avoid these classic car-buying errors.

1. Showing enthusiasm. If you act excited, the sellers know they have a unique product you want. The price goes up instantly. Keep that enthusiasm in check until you’ve driven home.

2. Buying in a hurry. If you buy on your first visit to a dealership, you don’t have time to compare. Take your time. Be willing to walk away. The price at most dealerships falls quickly if you move slowly.

3. Giving deposits before the dealer approves your offer on a vehicle. Feel free to give a deposit, if you really want a vehicle. But don’t give it until the boss has said “yes.” Some dealerships use deposits to keep you there while they try to convince you to pay more. And you can’t leave if they have your deposit – money, a credit card, or a driver’s license.

4. Being switched to leasing without doing your homework. Because dealerships make a much larger profit if they lease rather than sell, even the best dealership is going to try to “switch” you. They’ll try to convince you leasing is cheaper than buying. In most instances, it isn’t. If you want to lease, that’s OK. Just don’t do it on the spur of the moment.

5. Trading in your old car without knowing its value in advance. A dealership has the right to give you the least you will take for your old car. But you have a right to get the most your car is worth. To get an idea of what your car is worth, you could check Kelley Blue Book or the NADA Guide, which would tell you the suggested retail value. You could also clean it up, and bring it to a few used car departments. The highest amount you’re offered for it is your car’s real value right now. Don’t accept less than that in trade.

6. Financing automatically at the dealership. Dealerships may not be the cheapest place to finance. To find out, simply bring a copy of the filled-out dealer contract to your credit union and compare contracts. If the dealership won’t give you a copy, they’re probably telling you they’re not really the cheapest.

These little mistakes could mean big bucks out the window. We like to help you preserve your money – that’s what credit unions are all about. Avoid these mistakes, and put that money to work rather than throwing it away.

Add comment | February 13, 2012

Know Your Priorities to Make Holidays Special

Hello! This is Rachel. I will be blogging along with Gretchen to share tips and guidance that we hope you’ll find helpful.

Whether you celebrate Christmas, Hanukkah, Kwanzaa, or solstice, the holiday season can be stressful – with financial stress often playing a large role.

Figure out what makes the holidays special for you and your family and allocate most of your spending to those things. Maybe there are other, less important things you can scale back or skip.

For instance, if you love hosting a lavish holiday dinner but are ho-hum about festive holiday clothing, don’t buy that new outfit. Budget more for your dinner instead. The key is to set priorities and identify the important things.

And remember that handmade or homemade goodies, charitable gifts, or the gift of time can mean much more to recipients than presents.

Here are some ideas:

Give loved ones a framed photograph of a place or event that is special to both of you.
Make a charitable contribution in someone else’s name. Give to a fund that person believes in.
Offer to help with a project around the house, take a friend to lunch, or just go for a walk together.
Give baked goods or premade dinners to family or friends.
Offer to pet sit or babysit free of charge.

The holidays are about being focused on others, which actually makes it easier to budget. The less self-centered you are, the less likely you are to have financial issues from spending every nickel on yourself.

Generally the holidays require some gift buying. To help get ahead on next year’s shopping, you can always open a Christmas Club Account at Metro and look forward to a worry-free holiday season. Visit metrocu.org or call 877-MY-METRO for more details.

From all of us at Metro, have a happy and stress-free holiday season!

Add comment | December 1, 2011

Cutting back in a tough economy

Hello everyone!

This is Kait – Marketing Coordinator at Metro. I’ll be blogging along with Gretchen from time to time, and sharing my thoughts with you!

With the economy slow to recover, many of us have found ourselves struggling with reduced household income due to job loss, pay cuts, or increased healthcare costs. So when your household income is reduced, how do you cut back on your spending? People become accustomed to a certain way of life, and being forced to modify that can make your hair stand up on end. But with a slight shift of your priorities and a little (I swear, just a little) extra work, you can find ways to save that actually might improve your life!

One of the first ways to cut back is to get back to the basics. Housing, food, transportation – these are the priorities! Think about all the add-ons we pay for – premium packages, extra features. I started with our cable bill. The cable service we subscribed to allowed us to “suspend” our account for 6 months. At a little over $85 a month, this was a sizeable savings! We now subscribe to Netflix, which at just $10 a month allows us to view movies and popular TV shows on-demand. So we ended up with a net savings of $75 a month!

My next suggestion is to take a close look at your dining habits. Once or twice a week, my boyfriend and I used to hit up a local restaurant for dinner instead of cooking. Now, we plan our meals a few days in advance to help stick to the menu and budget, and since it’s the summer, we can pack up a couple sandwiches, grab a blanket and head to the beach for a change of venue. We still treat ourselves every now and then, usually from a coupon-based website, but we really try to keep dining out to a minimum. Since we started really paying attention we’ve cut our dining bill by about $250 every month.

Lastly, I would take a hard look at your priorities, and let those priorities dictate how you spend money. Now before I run out to dinner, or go on a little shopping spree, I ask myself, is it more important to me to pay a bill and have peace of mind, or have a new outfit? I have become very picky about what I spend my money on, and have started to stash a little bit more away (although not enough, according to this article I Should Be Saving How Much?!). A new study says that we should be saving 16-20% of our income – something I’m sure many of you just read and said WHAT? and then HOW? For those of you that didn’t bat an eye at that number, congratulations. For the rest of us, check out some tips here about the 7 Habits of Highly Frugal People.

So as the economy continues to make baby-steps, we can continue to make baby-steps toward reducing our spending, and increasing our savings. I know for me, taking baby-steps is the only way that I’ll be able to make it! Has your family had to cut back due to this economy? What has worked for you? What are you still challenged with? What do you refuse to give up? Share your ideas here, and let us know how you’re doing!

Happy Saving,
Kait

Add comment | July 18, 2011

Summer is here, let’s hope gas prices cool off!

Hello Everyone

Well it’s finally here – Summer! Let’s hope that gas prices go down a littlle, because we all know what a crimp rising gas prices can put in to our summer fun. We had a tough winter and a not so great spring, so a good summer would be really nice, but will the price of gas cool down our summer?

Gas prices are higher and more volitale than last year and when they go up it affects everything, not just a fill-up at the pump. Now I know prices were up to $4.00 just a couple of months ago, but they are still high. And considering how many things are impacted by the price of gas, you know that means whenever gas prices go up we take an additional hit on food prices and many other goods and services. The funny thing is when gas prices go back down often the other things do not seem to go down much or even at all.

So have you calculated your pain level and how it can hurt your bottom line? I know I would like to just say I’ve waited all year and I want to enjoy my summer, but practicality must factor in, after all I have to be able to pay my bills for the rest of the year. So are you cutting back, changing your vacation, or staying around for the summer? There are many savings tips available to cut gasoline bills and also tips to cut the costs of travel this summer. So take advantage don’t despair and have a great summer!

Gretchen

Add comment | June 17, 2011

The end of “free” checking

VCR’s, phone books, maps encyclopedias, and now free checking? Is that too becoming a thing of the past? More and more the word “free” is missing from all of the fancy checking account names. I’m sure most of you have noticed that the big banks have ended the no-strings attached free checking accounts. Banks, already reeling from huge losses in revenue due to new restrictions on credit cards and overdraft transactions that went into effect in 2010, could lose even more from legislation that is making its way through Congress.

The Durbin Amendment of the Dodd-Frank Act is proposing to cap interchange fees – what banks can charge merchants for debit card transactions. Up until now it has been 44 cents per transaction; the new cap would be only 12 cents per transaction, resulting in a loss of billions of revenue for banks. The Dodd-Frank Act was meant to protect consumers, but more than likely it will create some unintended consequences. The banks will have to make up for this loss – meaning us, the consumer, will have to pay more.

Financial institutions have warned that such a measure would trigger higher fees on basic banking products, as well as loss of reward programs tied to debit card use. It isn’t clear if new fees under consideration will make up for the lost revenue as a result of the new regulation, but banks won’t be waiting around to find out. So expect to see some new fees for what used to be free.

The good news is that many credit unions and small banks continue to offer free checking. In fact BankRate.com just released a survey showing 39 of the 50 largest credit unions have free checking with no strings attached, and about half of them don’t even require a minimum balance. Their ATM fees are, on average, half of traditional banks fees and one quarter of the large credit unions charge no ATM fees at all.

Happy Spring everyone!

Gretchen

Add comment | April 11, 2011

Never ending bank fees.

No matter how many new regulations there are limiting fees that banks can charge, they never end. Let’s face it, this is a revenue stream for banks, and they are not to be outdone by federal regulation. So when new regulations are implemented that limit or cap fees, banks get very creative figuring out what new fee they can charge to make up for their lost revenue stream.

Many banks are now imposing new fees, raising fees, and adding fees to products that used to have “free” in their name! For example, for quite a few years, almost all credit card issuers did not charge an annual fee. This fee has now been brought back to life and most credit card companies and banks are now imposing an annual fee, some as high as $59.

New fees –According to the Wall Street Journal, banks are thinking about imposing annual fees of $25 or $30 on debit cards. Many credit card companies are also starting to charge for monthly statements – about $3 per statement in some cases, which is only waived if the customer opts for electronic statements. Be sure to keep an eye on your monthly statements and watch for this fee!

Raising fees – Many banks are raising their fees when their account holders use foreign ATM machines, and raising the cost when a non-customer uses their ATM. Balance transfer fees on credit cards, which used to run around 1-2% of the balance, are now up to an average of 4-5%! (Metro doesn’t charge a balance transfer fee or an annual fee when you open a credit card with us, by the way.)

Perhaps the most painful for consumers is the disappearance of free checking accounts. Say goodbye to free checking unless you can meet a variety of new conditions set by your bank, such as maintaining a high balance, using direct deposit, swiping a debit card, or making online banking transactions a specified number of times each month. Some banks are getting rid of the free checking option altogether, no matter how many hoops you jump through.

Now I’m sure we all understand that banks are a business and they have to make money to survive, but it just seems like the fees could be more reasonable.

So what can you do? Consumers now more than ever need to pay special attention to the fine print, their monthly statements, and to the Change of Terms notices sent to them by banks and credit card companies. You can also open an account at a credit union, which typically has lower fees than banks. In times like these, every penny counts, and those fees can add up! You owe it to yourself and to your wallet to watch out for the never-ending bank fees!

Good Luck!

Gretchen

Add comment | March 10, 2011

New Year’s Resolutions

Well here it is, another new year; it’s just like starting over. I’ve made my list of resolutions for 2011, even though I didn’t do too well on last year’s list. But it’s a new year and I have new resolutions. I decided to make my goals reasonable instead of lofty and unrealistic. Maybe this will be the year I will actually fulfill my resolutions.

This year I decided that if I set just a few reasonable goals I might have a shot at achieving them. I picked things that I could start right away with out too much difficulty and could realistically achieve. So here we go.

1. Spend less, save more
2. Organize my desk
3. Read more books

Now I know I can accomplish my first goal very easily. I just have to increase the automatic deduction to my savings account. I finally figured out the ‘wait till I see what is left at the end of the month approach’ doesn’t work. You need to pay your self first.

My second goal will be a little more challenging because even though I have good intentions it doesn’t take long for my desk to be, shall we say, a little disorganized. But I have promised myself I am going to make a real effort.

I can’t believe that I was a person who loved to read a good book and now usually the only time I read a book is when I am on vacation. I used to read every night before I went to bed, so what happened? It’s all about time. So to accomplish my third goal I will stop watching television a little bit earlier each night and start reading again.

Well that’s it, just 3 resolutions and I think I have a pretty good shot at making them all.

How about you? What changes do you want to make this year? Save money, lose weight, find love, stop procrastinating, or maybe just get out of debt.

So good luck with your resolutions and have happy and healthy New Year!

Gretchen

Add comment | January 10, 2011

Last minute shopping?

It’s that time of year, Christmas is only 10 days away and yet again I am in a panic. Rudolph is packed and ready to go and I still have shopping to do. It’s not that I haven’t been to the mall but I seem to wander aimlessly in hunt of the perfect gift. I can’t make up my mind whether it is the perfect gift or if I am just desperate.

How is your shopping going? Did you plan ahead? Did you avoid overspending?

Don’t despair! With some simple tips, you can still get your shopping done and avoid overspending.

1. Don’t panic, there are still a lot of deals available. So check out store web sites, watch for coupons and check circulars you receive in the mail.

2. Stick to a budget. It’s tempting to overspend, but remember you don’t want to still be paying off holiday charges in April.

3. Give the gift of your self. Offer to baby sit, cook dinner, do extra chores, or make your own gifts.

4. Shop online – many sites offer great deals and free shipping.

5. Buy gift cards – when you don’t know what to buy, one size fits all.

6. Make a donation to charity that is special to the recipient.

For more tips on how to avoid overspending visit Bankrate.com.

Good luck with your shopping and have a wonderful Holiday!

Gretchen

Add comment | December 15, 2010

How to Build Savings

Finding ways to save can be very challenging, especially in the current economy. I know we all have good intentions but after paying the bills each month it may feel like there is very little left to save. But the important thing to remember is that saving a little over time can really add up.

One strategy that I learned a long time ago is to pay myself first. Each pay period, I have a portion of my paycheck directly deposited into my savings account. That way I don’t spend money I don’t see.

Whether you’re looking to save for a down payment on a house, or just for a rainy day, it’s important that you pay yourself first. Here are some proven ways to help you prepare for tomorrow – and down the road.

Saving for the Short and Long Term

Do you have short-term savings needs, such as saving for a down payment on a car, vacation, or a wedding? Or do you have savings goals that may take longer to achieve, such as retirement or a down payment for a home? With a little discipline and some smart choices, you can achieve your goals.

First, you’ll want to determine how much you’ll need. Depending on your goal, you can figure out how much you need to save each month to achieve your goal. You can use Metro’s savings calculator to figure out your savings plan.

Next you will want to find ways to save. Here are some simple ideas to help you save.
• Pay yourself first. Have a portion of your pay automatically deposited to your savings account.
• Save your next raise.
• Save extra change.
• Save the money you spend on treats and on coffee.
• Cut coupons.
• Save your tax refund.

The right account can make all the difference. Metro offers a variety of savings accounts that can help you reach your savings goals.

Gretchen

Add comment | December 1, 2010

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