Tag Archives: Finances

Financial Aid Information Session

Paying for college can be a complex and confusing process, from finding scholarships, to applying for financial aid, to determining which student loans are the best fit.  Sharon Austin from The Higher Education Student Assistance Authority will help to clear the confusion through their Financial Aid Information Session.  This session will provide useful information on all of the Federal and State grants, scholarships and loan programs available through the FAFSA (Free Application for Federal Student Aid).  Key information and requirements on filing the FAFSA are covered.  In addition,  college cost of attendance, the expected family contribution and their combined role in determining aid will also be covered.


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Home Buying Program Recap

Thank you to James Goodman, Home Finance Consultant for the Credit Union of New Jersey, for breaking down the complex process of buying a home.  James highlighted the entire home buying process step by step, including securing a mortgage and what to expect at closing, especially the different fees that will be factored in.  He also went through the entire mortgage process, explaining how to calculate how much you can afford, the documents needed when applying for a mortgage, as well as the timeline for the entire process.  When choosing a mortgage loan, and by extension buying a house, it is important to consider how much money you can afford as a down payment, what are your financial goals and how a home figures into them, and how the closing costs can affect the overall price of the home and how much money is required up front at closing.  Please visit the following links for more information:

Copy of the presentation

CUN’s Mortgage Center

NJ Housing and Mortgage Finance Agency Home Buyer Resources

You can contact James Goodman at (908)-860-7120 or jgoodman@mortgagedept.com with any questions or for further information on any part of the home buying process.

The Financial Side of College Graduation Program Recap

Thank you to Samantha Benson from the Higher Education Student Assistance Authority for her presentation on what life looks like after graduation in terms of student loans and the costs of graduation school.  The most important thing regarding you or your children’s finances after graduation is to make sure you understand all the details of any loans.  Some loans have a grace period (such as 6 months for Federal Stafford Loans) before any money needs to be paid back.  Consolidation is an option many people take to reduce their monthly payments and interest rate, but it may extend the life of the loan to 30 years and prevent you from over-paying on the loan.  Repayment options (federal loans) include:

  • Standard
    • 10 years
    • Highest payment, but lowest total amount
    • will be auto enrolled after school if no other choice is selected during Exit Interview
  • Graduated
    • 10 years
    • Payments start off low, but increase roughly every 2 years
  • Extended
    • About 25 years
    • Payments are lower, but life of the loan is greatly extended, requiring more to be paid back
    • Must have at least $30,000 in student loan debt
  • Income-Based
    • 20-25 years of qualified payments, then rest is forgiven
    • 10-15% of discretionary income
  • Income Contingent
    • 25 years, then loan is forgiven
    • 20% of discretionary income OR amount if loan was for 12 years, whichever is lesser
    • Payment is calculated each year based your AGI (and spouse’s if married), family size, and amount of loans
  • Pay as you Earn
    • 20 years, then loan is forgiven
    • capped at 10% of discretionary income
  • Revised Pay as you Earn
    • 25 years, then loan is forgiven
    • Payment is calculated each year based your AGI (and spouse’s if married)
    • Payments may be higher than Standard repayment

If a loan is forgiven, the remaining balance MUST BE declared as income on your federal taxes for that year!

There are also federal and state loan forgiveness programs that will forgive your student loan debt if you meet certain requirements, such as work in qualified public service job for 10 years.  For more information

For more information on repaying Federal Direct/Stafford loans, please visit https://studentaid.ed.gov/sa/repay-loans.  For more information on managing your loans after school and preparing for the job market, please visit https://www.mappingyourfuture.org/planyourcareer/.  For a wide variety of information on repaying student loans, please visit http://www.hesaa.org/Pages/PayOnline.aspx.

You can also view a sample Repayment Plan Summary at https://www.njstatelib.org/wp-content/uploads/2018/05/Repayment-Plan-Summary.pdf.

Financial Side of College Graduation

In November, the Higher Education Student Assistance Authority presented a program on how to pay for college.  As graduation dates creep ever closer, HESAA is back to talk about what to expect financially after graduation.  The feelings of joy and accomplishment after graduation can quickly fade as the real world of financial obligations start to set in.  Samantha Benson, Training Administrator for HESAA, will cover topics such as credit scores, student loan repayment programs, aggregate loan limits, and the cost of law and medical school.  Please join us for this critical informational session to help ensure that your children are set up for success after college.


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Small Business Administration Resources and Services Program Recap

Thank you to Erika Pearson for a very informational presentation on the mission and resources of the Small Business Administration.  Created to help foster the growth of small businesses, the SBA offers a wide range of services, including indirect funding, Lender Match, counseling and training, and disaster assistance on rare occasions.

The SBA’s Learning Center, https://www.sba.gov/learning-center, offers 64 FREE training programs, including Buying a Business, Finding and Attracting Investors, and Savings Plans for Small Businesses.  You can also find free/low cost training from local partners at https://www.sba.gov/NJ.

The SBA also partners with many local and state organizations to provide a wealth of resources for small businesses and their owners.  Local partners affiliates include Small Business Development Center and Counselors to America’s Small Business (SCORE).

Perhaps the most important aspect of the SBA are their loans.  SBA loans are not direct loans to the recipient, but rather a guarantee for a traditional lender, such as a bank, where the SBA provides the funding to the lender, which is then extended to the borrower. For example, you apply to the lender, the SBA guarantees the lender of repaying the loan, then the lender approves the loan and gives you the money.

SBA loans help reduce the lender’s risk if the borrower has an aspect that is considered too risky, such as:

  • unstable cash flow or fear of repayment issues
  • insufficient collateral
  • seeking non-standard repayment terms
  • startups

Lenders generally look for the 5 “C”s:

  • Character
    • your background, education, and experience
    • Feasible Business Plan is critical
    • credit history, both personal and business
  • Capacity
    • Cash flow/business plan
    • can you repay?
    • will you show a profit?
    • is that profit sustainable?
  • Collateral
    • Tangible assets
    • property
    • equipment
    • Inventory
    • Collateral can be personal or business related
  • Capital
    • personal investment in the business
    • grants or gifts to fund business
    • how you are investing any profits
  • Conditions
    • Purpose of the loan
    • Amount requested
    • Length of loan
      • Working capital = 3 – 5 years
      • Furniture, fixtures, and equipment = useful life of the items
      • real estate = up to 25 years
    • Local economic climate of industry

In order to qualify for an SBA loan,  the borrower must be:

  • for profit
  • independently owned
  • legal resident
  • meet SBA size requirement

Disqualifiers include:

  • ineligible for financing
  • non-profit
  • money used to buy and sell real estate
  • pyramid sales
  • defaulted on federal government debt
  • probation, parole, or pending criminal charges

SBA Loans Programs

  • 7(a)
    • Maximum of $5 million
    • Fixed interest rate, but rate is negotiable
      • Less than 7 years = Prime + 2.25%
      • Greater than or equal to 7 years = Prime + 2.75%
    • Uses include working capital, inventory, line of credit, expansion/renovation, land, equipment/fixtures, or refinance debt for compelling reasons
    • Fees
      • Only on guaranteed portion of loan
      • Less than 1 year = 0.25%
      • Greater than or equal to 1 year
        • up to $150k = 2%
        • $150k – $700k = 3 %
        • $700k – $5m = 3. % + 3.75% per million
      • If in a HUB Zone, less than or equal to $150k = 0.06667%
      • Fees can be rolled into total loan and no prepayment penalty if less than 15 years
  • SBA Express
    • line of credit up to 10 years
    • Up to $350k = 50% guarantee by SBA
    • Rates
      • $50k or less = Prime + 6.5%
      • Greater than $50k = Prime + 4.5%
  • MICRO Loan
    • Maximum of $50k
    • No fees
    • Maximum of 6 year repayment
    • No real estate
    • Mandatory FREE pre and post loan counseling
  •  504 Loan
    • Primarily for real estate
    • Maximum of $5 million
    • Contribution breakdown
      • 50% of loan from the lender
      • 40% sold in secondary market
      • 10% put forward by borrower

If you have any questions about the SBA or any of the available loans, please reach out to Erika Pearson at 973-645-6160 or erika.pearson@sba.gov.  For a copy of the presentation, please visit https://www.njstatelib.org/wp-content/uploads/2019/04/SBA-Resources-and-Services.pdf.

Small Business Administration Resources and Services

Starting and maintaining a small business can be difficult without the right funding and help.  The Small Business Administration can provide small business owners with the tools and resources to help start and grow your business.  Please join us as Erika Pearson from the SBA will present resources and services the SBA has to offer new and existing entrepreneurs and small businesses. There are local resources available, for little or no charge, that offer training and counseling services developed to assist new and established business owners.  She will answer what SBA programs and loans are available as funding outlets that you may not have considered and can be used to start or expand a business.

Erika came to the United States Small Business Administration (SBA) with 30 years of lending background and a wealth of financial customer service experience.  She worked for the Internal Revenue Service (IRS) as a Taxpayer Advocate assisting taxpayers with resolving their IRS problems that they could not resolve on their own. Prior to the IRS, Erika worked in the private sector as a Wholesale Mortgage Account Executive for Chase Manhattan Bank, Santander Bankcorp, AIG, and PHH/Cendant Mortgage.  She assisted Bankers and Brokers with preparing and underwriting their residential mortgages for sale in the secondary market.


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Understanding Social Security Program Recap

A big thanks to Britany Enelow from the Credit Union of New Jersey for a very informative presentation demystifying the basics of Social Security.  There are many different components to Social Security and deciding when to collect and how to file can have a significant impact on amount of money you can receive.  Some of the major topics covered include:

  • Social Security Basics
    • Social Security was created by an act of Congress so there are no guarantees that the problem will last from year to year
    • Social Security is calculated partly off the number of “Credits” you earn
      • 1 credit is equal to 3 months of working
      • In order to be eligible to collect Social Security, you must a minimum of 40 credits, or 10 years of work
      • You stop earning credits at age 70, so if you decide to keep working, you will not be paying anymore into social security and it will not enhance your benefits anymore
    • To receive all of our Social Security benefits, you must wait until your Full Retirement Age, which is based on the year you were born
      • 1943-1954 – age 66
      • 1960 and later – age 70
      • For years in-between, add 2 months to 66 for every year above 1954
      • If you file before your Full Retirement Age, you will receive reduced benefits for the rest of your life
    • Primary Insurance Amount or PIA
      • PIA is your monthly benefit amount at your Full Retirement Age
      • If you file after your Full Retirement Age, you will receive more than your PIA
    • After you file, you have 12 months to make and changes to your filing status
  • Types of Benefits
    • Spousal Benefits
      • You can collect Social Security Benefits for your spouse whether you are still married, widowed, or divorced
      • You can only collect Spousal Benefits if your spouse is retired or deceased
      • If you claim Spousal Benefits, the amount is equal to half the amount of your spouse’s benefit, minus the amount of your benefit
        • For example, if Spouse A receives $2,000 and Spouse B receives $500, the Spousal Benefits for Spouse B would be $500.
      • If you are divorced, you can collect only if:
        • You were married to that spouse for at least 10 years
        • You are unmarried
        • At least age 62
        • Your benefits are less than the spouse
      • If you are widowed:
        • You can collect at your Full Retirement Age, but the amount will depend on whose benefits are higher
        • You can collected a reduced amount starting at age 60
        • You can collect at age 50 if the surviving spouse is disabled or there is a dependent child
          • Once the child is no longer a dependent, the benefits stop until you refile at age 60 or Full Retirement Age
  • Working After Collecting
    • There are no penalties for collecting Social Security and working if you are past the Full Retirement Age
    • From age 62 – year of Full Retirement Age, they will withhold $1 for every $2 you earn, if you earn above $17,640
    • During the year of your Full Retirement Age, they will withhold $` for every $3 you earn, if you earn above $46,920
  • Important Considerations
    • Pension/Government Pension Offset Plan
      • Some pension programs have an Offset Plan, which means that the amount you receive from your pension will reduce the amount you will collect from social security

Please visit the Social Security Administration’s website, https://www.ssa.gov/, to learn more or to sign up for an account to track your Social Security Benefits.  If you have specific questions about Social Security, the presentation, or would like to discuss your personal financial situation, please reach out to Britany Enelow, Financial Advisor, Credit Union of New Jersey, at 609-538-4061 ext. 2056 or benelow@cunj.org.

Understanding Social Security

As people prepare for retirement, one of the biggest factors revolves around Social Security.  Popular questions include “How much will I get?”, “Will it be enough?”, and “Can I still work?”.  Please join us as the Credit Union of New Jersey and Member Wealth Management unravel the intricacies of Social Security, including:

  • Social Security Eligibility
  • Filing for Benefits
  • Benefits for Spouses
  • Working after you begin collecting

Securities, Investment Advisory and Financial Planning services offered through qualified registered representatives of MML Investors Services, LLC, Member SIPC: 222 Central Park Ave Suite 1100 Virginia Beach VA 23462 (757) 490-9041. Member Wealth Management and Credit Union of NJ are not subsidiaries or affiliates of MML Investors Services, LLC.  CRN202103-244844


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Money Matters Program Recap

Thank you to everyone who attend our kick-off event for Money Smart Week 2019, entitled Money Matters.  One of the first steps to financial security is planning and following through on a personal spending plan or budget.  Budgeting in about choices; choosing how to make money and choosing how to spend money.  Money Matters, a financial workshop created by the FDIC, teaches how to do just that.

The first step in the planning process is to set financial goals, which include:

  • Identify and write down your financial goals, such as retirement, buying a house, or sending children to college
  • Organize your financial goals based on the time frame you would like to complete them in
    • Short-term (less than 1 year), medium-term (1 – 3 years, and long-term (5 years or more)
  • Educate yourself by talking with a financial representative or by reading books or magazines.  Then you can identify small, measurable steps to achieve your goals.
  • Evaluate your progress monthly, quarterly, or yearly to see if you have met your goals or can identify ways to improve reaching your goals

A great way to help understand your current financial situation and what goals are reasonable, is to create a spending plan.  A spending plan is a step-by-step plan for meeting expenses in a given time period and determining what extra money you have at the end of each month.  A spending plan should include:

  • All sources of income, including the dates income is received
    • income includes wages, social security, retirement, government assistance, and child support
  • All of your expenses including due dates, which generally fall into two categories:
    • Fixed expenses do not change from month to month, such as rent, car loans, student loans, child support payments
    • Flexible expenses can vary from month to month, such as utilities, credit card payments, food, gas, and other personal expenses
  • The total amount of income and expenses subtracted from each other to see how much money is left over, that can be put away in savings account, a rainy day fund, or pay off outstanding debt
  • You can create a spending plan using a spreadsheet software or by listing all of the information on a calendar
  • If the traditional ways of creating a spending plan don’t work for you, you can try these options:
    • Expense Envelop System – useful if you pay bills in cash
      • Make an envelope with for each monthly expense by writing the name of the expense, the amount due, and the due date
      • Pay the bills right away so you are not tempted to spend the money
    • Budget Box System
      • A box or folder with dividers, with one divider for each day of the month
      • Whenever you receive a bill or know of an expense, but the bill or a reminder behind the divider of the due date
      • As you receive income, pay your bills in order as soon as possible to ensure all of your bills are paid

While we would like to always have a surplus of money, that might not always be the case.  Should you run into a situation where your expenses are greater than your income, consider the following:

  • Pay your necessary household expenses first, such as rent, mortgage, food, and utilities
    • Some utility companies have programs to lower your bill if you qualify
  • Prioritize your bills by thinking about the health and safety of your family
  • Seek assistance to help cover other expenses, such as credit counseling, government assistance programs, or loan deferments

For more information about personal finances and goal setting, you can talk to a representative from your bank or credit union, or visit MyMoney.gov.  For a copy of the presentation, CLICK HERE.  You can find a spending plan template HERE.

Money Matters

Money plays a critical role in our lives, from how we operate day-to-day to our long term financial goals, such as retirement, purchasing a car, or buying a house.  Educating ourselves on our money, especially spending and saving, are important for ensuring financial stability and becoming financially literate.  As such, the NJ State Library is proud to kick off this year’s Money Smart Week with Money Matters from the FDIC.  The Money Matters module will show participants how to manage their money by preparing a personal spending plan and identify ways to decrease spending and increase income.  The module will specifically cover:

  • List the steps for setting financial goals
  • Track daily spending habits
  • Prepare a spending plan to estimate monthly income and expenses
  • Identify ways to decrease spending
  • Identify ways to increase income
  • Identify spending plan tools to manage bills

Money Smart Week is a public awareness campaign designed to help consumers better manage their personal finances. This is achieved through the collaboration and coordinated effort of hundreds of organizations across the country including businesses, financial institutions, schools, libraries, not-for-profits, government agencies and the media.  For more information, please visit http://www.ala.org/aboutala/offices/money-smart-week.


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WEBINAR – Fighting Consumer Fraud and Identity Theft in New Jersey

Join the Federal Trade Commission on January 14 at 1:00 PM for “Fighting Consumer Fraud and Identity Theft in New Jersey,” a free, one-hour webinar.

You’ll learn about:

  • The top scams reported in New Jersey
  • Tips to help people recognize and avoid scams
  • Free resources you can use to help people in your communities protect their identity and report identity theft

Speakers will include staff from the:

  • Federal Trade Commission
  • Office of the New Jersey Attorney General
  • Better Business Bureau Serving New Jersey
  • Legal Services of New Jersey
  • Centers for Medicare and Medicaid Services

If you would like to attend this webinar in person at the State Library, please register below.  If you would like to attend this webinar remotely, please visit https://www.ftc.gov/news-events/events-calendar/webinar-fighting-consumer-fraud-identity-theft-new-jersey.


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Managing Your Credit and Credit Reporting Program Recap

Thank you to the Credit Union of New Jersey and Pete Manferdo from Experian for presenting Managing Your Credit and Credit Reporting.  Credit plays an important role in our finances, from car loans, to mortgages, to credit cards.  As such, it is important to understand exactly how credit and credit reporting works and what you can do keep on top of your credit.  The following topics were covered:

Credit Report

  • What is on a report?
    • Identifying information such as name, address, and social security number
    • Account information, such as credit cards, car loans, mortgages, etc.
    • Bankruptcy Public Records
    • Credit Inquiries
    • Dispute instructions
      • You can dispute anything on your credit report
      • usually takes 30-45 to process the dispute, including investigation
  • Used by lenders to gauge the likelihood of paying back a loan
  • FICO score is used by lenders to predict your risk of defaulting on loan within 24 months (higher the score, the less risk there is)
  • Credit Reports do not include your Credit Score

Credit Report Retention

  • How long information stays on your Credit Report
    • Accounts open that are in good standing – indefinitely
    • Accounts closed that are in good standing – 10 years
    • Late or missed payments – 7 years
    • Collection accounts – 7 years
    • Chapter 7 bankruptcy – 10 years
    • Chapter 13 bankruptcy – 7 years
    • Credit inquiries (hard hits) – 2 years

Common Myths about Credit

  • Once bad debt is paid off, it goes away – all debt will remain on your credit report according the to the retention information above
  • The credit reporting company denied me credit – the reporting company only houses your information; the lending company makes the decision on the loan
  • I am not responsible for charges on my account – if someone else is linked to your account or you have a joint account, you are responsible for all debt associated with your accounts
  • Divorce decree separates joint accounts – marital debt is considered joint debt even after a divorce decree
  • I must give permission for a report to be issued – Lenders can request information on your credit history (soft inquiries) for purposes such as pre-qualified offers for credit cards or loans.
  • Requesting your own credit report and pre-approval offers harm history – You can obtain your own credit report once a year for free without any impact on your credit score
  • There is one score based on your report – different companies have different calculations for evaluating your credit so scores will be different based on different criteria

Breakdown of the Vantage Score (Similar to FICO Score)

  • Payment History – 40%
  • Depth of Credit – 21% (how long you have had credit)
  • Utilization – 20% (how much you owe vs. your available credit limit)
  • Account Balances – 11%
  • Recent Credit – 5%
  • Available Credit – 3%

For more information on credit reports and credit scores, contact your financial institution or visit the Federal Government’s Credit Reports and Scores page at https://www.usa.gov/credit-reports.