Wednesday, June 8, 2016

HOW MUCH 20-SOMETHINGS SHOULD SAVE

Your 20s may seem like an odd time to think of retirement, but it’s actually the perfect moment to start planning for your later years. That’s because the earlier you start saving, the more time your money has to grow.
Savers who begin setting aside 10% of their earnings at 25, for example, could amass significantly more by retirement age than those who wait just five years to start saving. You can use online calculators to see how much starting saving now can produce once you reach retirement.
Building a nest egg on a starter salary and a shoestring budget can seem daunting, though. Focusing on the incremental savings, rather than the goal, can help your savings objectives feel more manageable.

HOW MUCH TO SAVE FOR RETIREMENT

For those earning around $25,000 a year, the median income for 20 to 24 year olds in 2015, saving the recommended sum of 10% amounts to a little more than $200 a month.
It may seem like a reach, but consider this: If you start saving $100 a month at age 25 and invest it to return 7.7% a year — the average total return of the Standard & Poor’s 500 Index of U.S. stocks over the past decade — you’ll have more than $378,000 available at retirement age. And it could be tax-free.
If you wait until you’re 30  to start and save the same monthly amount at the same rate of return, you’ll wind up with less than $253,000.
Several vehicles can help you build a retirement fund. A 401(k) contributory plan, typically offered by your employer, is often the most convenient and easily accessible of these. Contributions you make usually aren’t taxed, which helps reduce your income tax liability.
Pre-tax 401(k) accounts make up around 80% of retirement plans offered by employers, according to the American Benefits Council. Roth 401(k) accounts are another option, though these are less widely available, and money contributed to a Roth 401(k) account goes in after it’s taxed. Money withdrawn from this type of account — including earnings — is usually tax-free.
Companies that offer a 401(k) plan often match employee contributions, up to a certain percentage. This is essentially free money toward your retirement.
If your employer will match your contributions, try to take full advantage and commit a large enough percentage to get the full benefit.

HOW MUCH TO SAVE FOR EMERGENCIES

In addition to retirement, it’s also wise to save for a rainy day. Ideally, your emergency fund should be enough to cover three to six months of living expenses.
Some experts suggest setting aside even more for savings and investments: 20%. That’s roughly $415 a month on an annual income of $25,000.
That’s not always feasible, especially if a big chunk of your monthly income goes to student loan and credit card payments. Consider saving what you can, even if it’s just $10 a month.
Making a habit of saving now could serve you well down the road. And, as your income increases, the percentage you save can as well.
© Copyright 2016 NerdWallet, Inc. All Rights Reserved

Wednesday, May 18, 2016

4 Things to do before buying a home

As exciting as it is to buy a home, the lead-up can be a dizzying experience, especially for first-time buyers. But don’t fret. Breaking down the process into smaller steps can help ease your anxieties. Here’s a look at the kinds of questions you’ll want to ask yourself, as well as a few other practical tips.

JUDGE READINESS FOR RESPONSIBILITY

Although the thought of homeownership is generally a pleasant one, the reality can be much more stressful. That’s why it’s crucial to ask yourself whether you’re really ready for the hassles of buying and owning a home. Gone will be the days when you could simply call the landlord to fix a leaky faucet. Those chores will become your responsibility once you own your castle.
You’ll also want to think about how long you plan on living in the home you’re interested in, which will determine whether you want a fixed- or adjustable-rate mortgage. The latter typically offers a lower interest cost if you plan to sell in a few years.

DETERMINE WHAT YOU CAN AFFORD

Use a mortgage calculator to figure out how much home you can afford. It’s one of the most important steps to take. To start, think about your down payment, as well as the transaction costs. Although experts recommend having 20% of the price for a down payment, you may be able to put down as little as 3%, assuming your credit score is good and you’re willing to accept a higher interest rate and pay for private mortgage insurance, or PMI. To give you a better sense of what you might owe, consider that the median sales price of an existing home was about $200,000 in February 2015. So 20% down amounts to $40,000.
Don’t forget the transaction costs, which can amount to 5% of the price, to cover things such as appraisal, title search and lawyer’s fees. When coming up with a homeownership budget, factor in the monthly mortgage payment, maintenance costs and energy bills.

CLEAN UP YOUR CREDIT

If you’re applying for a mortgage, you’ll want to clean up your credit to get the best possible interest rate on your loan. To lock in the best ones, shoot for a credit score of 700 or above. Over the course of a 30-year mortgage, higher rates stemming from a low rating when you borrowed can cost you thousands of extra dollars.
For starters, reduce your debt as much as possible. That includes slashing your credit card debt as well as any remaining student loans. To see what else needs fixing, order a copy of your credit report.

STICK WITH YOUR CURRENT JOB

Financial planners agree that people should spend 28% or less of their gross monthly income on housing payments. The key to that, of course, is having a job. If you’re in between work, lenders are likely to view you as a greater risk when it comes to making mortgage payments. As such, the months leading up to purchasing a home are definitely not the time to make a sudden job or career change.
There’s little denying that the process of buying a home can be stressful. In fact, that may serve as good preparation for some of the hassles related to actually owning a home. In both cases, though, the benefits of homeownership tend to outweigh the occasional headaches.
© Copyright 2016 NerdWallet, Inc. All Rights Reserved

Monday, May 16, 2016

Getting Married Doesn't Need to Mean Marrying Finances

GETTING HITCHED DOESN’T NEED TO MEAN MARRYING FINANCES

Marriage generally implies that two homes and lives become one. Should it also involve a complete merging of earnings, assets and expenses? With money arguments being one of the leading causes of failed marriages, combining finances can be scary. For some couples it’s the right approach, but there are several other options.

THE TRADITIONAL APPROACH


ust a few generations ago, one spouse was generally the breadwinner who paid all the bills. Although today most marriages involve two people who work, the traditional approach isn’t entirely obsolete. It can be effective when one partner is a stay at home parent or full-time student, or one spouse earns much more than the other. It’s also appropriate for couples choosing to bank one income to save for shared goals, such as a down payment for a home. Single breadwinner couples may merge assets or maintain separate accounts.
This type of arrangement works best when both partners have similar financial styles so that no one ends up feeling like a child having to ask for spending money or resenting the other for spending too much.

THE SHARE-EVERYTHING APPROACH


With this option, couples completely merge financial assets and responsibilities. All investments and debts are in both names and bills are typically paid from one joint account. Sharing everything works particularly well for couples that enter marriage with similar incomes and limited assets. As with the traditional approach, it’s vital that spouses have compatible styles to avoid feelings of resentment or deprivation.

THE FOUR-ACCOUNTS APPROACH


Sharing is beautiful but sometimes it’s also nice to have a little something of your own. With this arrangement, both partners contribute equally to a joint checking account used to handle household expenses and joint savings to reach shared goals. Their remaining income is deposited to individual accounts to be saved or spent at each partner’s discretion. This approach makes sense for couples with comparable incomes and debts, or when one partner is much more frugal than the other, since it lets both manage money as they see fit without straining the relationship. In cases where one spouse earns substantially more than the other, couples may want to contribute a percentage of their income as opposed to a fixed monthly amount to the joint accounts.

THE WHAT’S-MINE-IS-MINE APPROACH


Some couples may simply be more comfortable maintaining totally separate assets and liabilities. With this approach responsibility for household expenses may be split equally, divided according to ability to pay, or each spouse may pick which bills to cover. Keeping finances separate may make sense if one partner has a much larger income, net worth or debt than the other. When entering into marriage with vastly different financial positions, it’s also a good idea to consider a prenuptial agreement, whether or not separate or joint accounts are maintained.

WHICH WAY IS BEST?


Whether and how completely to merge finances is ultimately a matter of individual style. With honest communication and trust, any of these vastly different approaches can work, giving those who choose what feels right a good chance at avoiding the bitter money conflicts that plague so many married couples.

© Copyright 2016 NerdWallet, Inc. All Rights Reserved

Monday, April 25, 2016

4 Tips for Managing Finances After College Graduation

College graduation marks the end of one chapter and the beginning of another. Gone are dorm rooms, awful part-time jobs and asking your parents for money — hopefully. Now it’s time for your first full-time job and paycheck.

Managing that money on your own can be a tricky task, but these four tips can help recent grads master some of the basics.



1. EVALUATE YOUR CHECKING AND SAVINGS ACCOUNTS

Student checking accounts offer great benefits, such as waived ATM and monthly service fees. Those perks may disappear after graduation, though, making it an ideal time to review your checking and savings account options.

Most financial institutions offer a variety of accounts, so try to find one that will maximize the return on your money, and look for ways to minimize fees. A lot of checking accounts will waive monthly service fees if you set up direct deposit, for example.

2. STAY ON TOP OF STUDENT LOANS

Nearly 70 percent of college graduates have student loan debt, and those who take out loans owe an average of $28,950, according to an annual report by the Institute for College Access and Success.

Understanding what you owe, whom you owe it to and what your repayment options are can help make paying off your loans seem a little less daunting.

The National Student Loan Data System is an easy way to view all of your federal student loans. These loans have multiple repayment options, many of which are income-based. Private lenders set their own repayment terms, so it’s best to contact each lender to review your balance and repayment choices.

Setting up automatic payments through your bank or the loan servicer can help ensure you never miss a due date.

3. START SAVING FOR RETIREMENT

Full-time employment can come with a lot of benefits.  One many employers off is a 401(k).

Some companies will match a portion of what you put in, giving you free money toward your retirement. And since it’s a pretax plan, putting money in reduces the amount you’re taxed on each paycheck.

A 401(k) isn’t your only option, though, Traditional and Roth IRAs also come with tax benefits. Start saving now, even just a small percentage, and the money you set aside can build upon itself over time.

4. USE CREDIT WISELY

A good credit score can save you thousands of dollars in interest on mortgages and auto loans. One way to build your score is to open a credit card. 

Look for cards with low fees and interest rates. Rewards such as airline miles or cash back are also a nice bonus. Avoid applying for multiple cards at once, though, as this can harm your credit rather than help it. 

If you open a card, try to use it only for essentials, and pay your balance in full each month to avoid interest charges. Failing to do so can also hurt your credit. 

Following these tips can prepare you for the big financial challenges ahead and help set you up for success in your 30s, 40s and beyond. 

© Copyright 2016 NerdWallet, Inc. All Rights Reserved

Thursday, April 7, 2016

What Everyone Should Know About EMV Cards

Americans report billions of dollars in credit and debit card fraud each year. A new technology using microprocessors called EMV chips could help curb future losses.
The chips are embedded on the front of credit and debit cards and exchange information with chip-card readers. Used together, the two make it harder for fraudsters to copy card information and make bogus in-store purchases.
Here's what you need to know about EMV cards.

How EMV works

If you have an EMV card, you'll insert the chipped end into a slot on an EMV-enabled reader, instead of swiping. Leave the card there for a few seconds, while the chip exchanges information with the payment processing system and authenticates the account; then remove it. Depending on the account, you might also sign for the purchase or enter a personal identification number, or PIN, to verify your identity and complete the sale.

How chips protect you

Named for developers Europay, MasterCard and Visa, EMV chips encrypt your information and generate a unique code each time you use your card. Each code can be used only once — so they're useless to hackers.
Traditional cards use a magnetic strip that transmits the same unencrypted information every time you swipe. If someone copies the data, he or she can easily duplicate your plastic and use it to make fraudulent purchases.

Where they're used

EMV-enabled cards are already the standard in parts of Europe, Asia, Latin America and the Middle East. In the U.S., where credit and debit card fraud losses have risen steadily over the past few years, retailers and issuers are slowly catching up. Many issuers have sent new EMV cards to customers, and chip-card readers are becoming more common at stores across the U.S.
Banks, credit card companies and merchants in the U.S. picked up the pace of adoption last fall, when new fraud liability standards went into effect. Before Oct. 1, credit card issuers had borne the brunt of fraud losses, but responsibility now could fall to the retailer, if its system is less secure than the card used.

What it means for you

There's a good chance you've already received an EMV card. If you haven't, call your financial services provider and ask for one.
Using an EMV card at a retailer that has a chip-reading system should make your purchase more secure. It will also make it easier to use your card in the myriad countries that already have the technology. Traditional cards can still be used most places too.
Although EMV technology helps you shop more safely, it doesn't thwart thieves entirely. Hackers can still pilfer your card information online or over the phone, or simply steal your card. So it's wise to exercise caution when using your credit or debit card. If your card goes missing or you spot suspicious activity, notify your financial institution immediately.


© Copyright 2016 NerdWallet, Inc. All Rights Reserved

Tuesday, March 15, 2016

Workers' Business Spotlight - JP Mat Services

“Financial freedom, unlimited earning potential, and creating careers for current and future employees” are just a few of the reasons Pete Binkewicz of JP Mat Services made the decision to open his own business.

Pete always wanted to own a business. The desire, he states, arose from his days at Babson College while he was working towards his MBA in entrepreneurial studies. “Owning your own business allows you all the joys and benefits of making decisions on vertical markets, products, services offered, and each decision plays out like a case study; you won’t know the outcome until you take a risk.” After working for several companies in the uniform and facility services industry, Pete took the risk.



As is the case with the majority of small businesses, the beginning presented its own set of challenges. Three and a half years ago, JP Mat Services had zero revenue and zero customers. All of that changed when Pete met Michael DeMarco, AVP, Commercial Lending of Workers’ Credit Union, at a monthly networking meeting.

“Michael was a strategic resource for me because I felt very comfortable working with him. I went to several other banks and financial institutions, and none were more professional, none were of a higher standard, and Workers’ really gave me the best deal. From the introduction meeting, to the application process, and approval for my business loan, Michael was professional, knowledgeable, and at all times, it felt like he was a teammate of mine, assisting me with the best solution for my financing needs.”



“The solutions we were able to provide gave Pete the ability to create a wonderful new operation based in Marlborough, MA with a state-of-the-art facility and equipment. We were able to use the SBA’s 7(a) program which is intended to help small businesses like Pete’s support his rapidly growing business. We were also able to provide further support with a working capital line of credit to provide peace of mind during the transition from a home-based business to a maturing company with deep resources.”                            
 –Michael DeMarco, AVP of Commercial Lending, Workers’ CU 

Pete shared what he feels are the key elements for starting and running a successful business:
  1. Know your market inside and out – your competitors, what products and services you will offer.
  2. Create a strategic business plan. Be sure to identify all barriers to entry, as well as the biggest obstacles preventing you from succeeding. 
  3. Ensure you have enough funding for start-up costs, and be sure you have enough money set aside for generating no personal income for the first three years in business. Most, if not all of the net income you generate will be invested back into the business.
  4. Surround yourself with people who are smarter than you, people who thrive on taking risks and succeeding, and are not afraid to make mistakes.
  5. Do every job or task in the company. Anything you ever ask your employees to do, you have already done… you have walked in their shoes.

Today, JP Mat Services, LLC does a half a million dollars in sales. Some of the products and services they offer include multiple types of floor mats such as anti-fatigue, first step scraper, industrial, and customized logo mats, traditional dust and wet mops, linens such as bib aprons and towels, table cloths, uniforms, chef coats, shirts and pants, air fresheners, handcare sanitation products, and much more.

Are you looking to start your own business? Consider Workers’ Credit Union as your partner – contact a Commercial Lending Representative by email or call 978-353-7178 for more information.



JP Mat Services Photo Shoot

By Jennifer Freeman | March 15, 2016 | Small Business Spotlight

Friday, March 4, 2016

0% Auto Loan Might Not Be the Best Deal

0% Auto Loan Might Not Be the Best Deal

In seeking the best deal on your next car, you might've stumbled upon advertisements or offers to get a 0% interest auto loan. As great as this sounds, you may not save as much as you expect with this type of incentive.
Since auto loans can come through either a dealer or a lender, such as a bank or credit union, it's important to note that a 0% interest loan generally, if not always, is obtained through a dealer. Automakers offer them to attract buyers to certain car models, especially ones that aren't selling well. Here are a few things to consider about 0% financing and why it might not be in your best interest to use it.

You might be forfeiting a better deal

Typically, you can't receive both reduced rate financing and a cash rebate when you buy a car, so you may have to choose one. Manufacturers' cash rebates can range from a couple hundred to a few thousand dollars. The well-known auto research website Edmunds found that the cost of incentives that automakers pay to attract customers was around $2,300 per car industrywide, which includes cash rebates and cost of reduced financing.
While a 0% loan may sound appealing, a cash rebate might save you more money. If you buy a $20,000 car that has a $2,300 rebate, you are really paying $17,700 plus interest. If the interest rate for a five-year loan is 2.7%, which was the average rate at credit unions toward the end of 2015, then you would pay a total of $1,242 in interest. That would bring the cost of the car plus interest to $18,942, saving you $1,058 compared with what you'd pay with a 0% loan.
You may want to check the auto loan rates at local lenders too, since you might be able to get a low rate and also pick up a rebate when you negotiate with the dealer.

Rate may not last as long as your loan

Some car models may have 0% financing for a limited term, such as five years, which could be less than the length of your auto loan. In the third quarter of 2015, the average loan term for a new car was five years and seven months, and the term for used cars was five years and three months, according to Experian's State of the Automotive Finance Market report. These are the longest average terms calculated since the firm began collecting data in 2006.
You may even receive a longer loan if you want lower monthly payments than you were offered initially. If your term is longer than the 0% financing deal, you generally pay interest on the remaining months or years.

This offer can be limited

A 0% rate might only be offered for a handful of models, especially newer cars, and less for used cars or older models. But even if this deal is available for the car you want, qualifying for it typically requires a high credit score. Check on the eligibility rules for getting this rate before stepping onto the dealer's lot if you can.
As you sift through car prices and incentives, remember that trade-offs are part of the process when buying a car. Although a 0% interest rate may save you money in some cases, you might also be letting a better savings opportunity pass you by.


© Copyright 2016 NerdWallet, Inc. All Rights Reserved

Thursday, January 7, 2016

Workers’ Credit Union Expanding Again


Workers’ Credit Union purchases additional office space in Littleton to accommodate its rapid growth, freeing up needed space in their Fitchburg and Lunenburg offices.

The $1.3 billion community credit union has just closed on a multi-tenant office building at 119 Russell St., Littleton. Located at the intersection of Routes 495 & 119 this site will house Workers' senior management team and a number of administrative departments. The current main office location in Fitchburg will continue to house all of the other departments it does today which include mortgage and commercial lending, collections, deposit support, loan servicing, and a number of smaller units. The Workers’ branch at the same location will continue to serve the community.  

According to Doug Petersen, president and CEO, Workers’ Credit Union, the growing organization has run out of space at its Main Street facility.  “This new arrangement gives us the best of both worlds; it allows us to maintain a major presence in Fitchburg while giving us an outpost in a market where we have seven branches and plan to add more.” Earlier this year, Workers’ opened branches in both Westford and in Fitchburg at Monty Tech High School. 



Workers' Monty Tech Branch, Fitchburg, MA.

“Workers’ Credit Union is committed to Fitchburg and will continue to support the community with employee volunteer hours, financial contributions and leadership,” Petersen said. Former Fitchburg Mayor Lisa Wong said "I am glad to see that Workers’ Credit Union is committed to remaining on Main Street in Fitchburg.  Workers’ is a big supporter of the Fitchburg community and I am glad they will continue to be a fixture here."  New Mayor Steve DiNatale also stated “I am looking forward to having Workers’ Credit Union as a partner for many years to come; to help the City of Fitchburg move ahead”.

‘We are growing at a rate of 10 to 15 percent per year and this new office space will allow us to accommodate that level of expansion well into the future while freeing up space in our Fitchburg and Lunenburg offices for our operational departments to expand,” Petersen said.

In addition to the office building Workers’ Credit Union has also purchased a parcel of adjacent land on which it plans to build a new, state-of-the-art branch. “We are looking forward to having a branch in Littleton and being even more convenient for our members in the area,” said John Doyle, senior vice president of retail services. The credit union will begin work to upgrade the office building shortly with an exact move-in date to be announced at a later date.