Tag Archives: Finances

Planning for College

Proper planning for a child’s education is a critical part of financial well-being.  With the rising cost of education and the burden of student loans, it is as important as ever to prepare financially for your child’s higher education.  Please join us as Britney Enelow, Financial Advisor from the Credit Union of New Jersey discusses:

  • Understanding college costs
  • Funding college
  • Financial aid
  • Options for decreasing costs


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Understanding Credit Program Recap

Credit plays a critical role in many of our lives, allowing us to afford cards, homes, and even college education.  It is used as a gauge of financial responsibility that can influence where you live and even where you work.  By understanding the basics of credit, you can more easily master this financial necessity and get yourself out a debt or plan for a better financial future.

Credit is borrowed money that you can use to purchase goods and services when you need them.  You get credit from a credit grantor, whom you agree to pay back the amount you spent, plus any applicable finance charges, at an agreed-upon time.

There are 4 types of credit:

  1. Charge cards/accounts
  2. Revolving credit – credit cards, equity loans
  3. Installment credit – mortgage, student loan, car loan
  4. Service contracts – cable, utilities

Credit in and of itself is neither good or bad; it is how you utilize it that can have positive or negative impacts on your financial well-being.  Credit can be a convenient way of purchasing items, especially expensive items, without the need for cash.  However, credit is a loan and you will be paying more for that purchase in the long run.  Also, because of the convenience, it is easy to overspend with the appropriate means to pay back the loan effectively.

All of your credit information is compiled into a credit report by 3 different credit reporting agencies: Experian, TransUnion, and Equifax.  Your credit report is made up of:

  • identifying information (name, address, social security number)
  • Job history (where and how long)
  • Creditors; payment history (name of creditor and how long credit has been open)
  • Legal actions (liens, collections, foreclosures, bankruptcy)
  • Inquiries you initiated (where personally or by a creditor with your permission)

You are entitled to a free credit report every year from each of the 3 reporting agencies so it is best practice to request your report from a different agency every 4 months to ensure your credit report is accurate.  If there is an error with your report, you can dispute the error in writing to the credit agency.  The agency is required to investigate your dispute within 30 or automatically remove the disputed item from your credit report.

Credit reports and credit scores are often mistakenly assumed to be the same thing, but they are very different and focus on different aspects of your credit situation.  The most common credit score is the FICO score which is used by Experian.  Each credit reporting agency has its own scores and ways of calculating them.  As a general rule of thumb, you credit score is made up of:

  • Payment history – 35%
  • Accounts owned – 30%
  • Length of credit history – 15%
  • New credit – 10%
  • Credit mix – 10%

Your credit score is often utilized by creditors to determine interested rates while your credit report can be used to determine pre-qualified or pre-approval amounts.  Lenders, landlords, insurance companies, and even employers can all look at your credit score.  Generally, a credit score of 700 or higher is considered good.  There is a new movement to include other information for consideration in your credit score, especially for those with little or no credit history, including payment history for service contracts as well as length of address history.

There are many different ways to establish credit:

  • Open a checking or savings account with a credit union
  • Put utilities/rent/mortgage in your name
  • Get a local department store or gas card
  • Have a co-signer for a small personal loan
  • Apply for a secured credit card

While your credit report and score are major components that creditors consider, they also look at the 3 C’s of Credit:

  1. Character – From your credit history, a lender may decide you possess the honesty and reliability to repay a debt
  2. Capital – A lender will want to know if you have valuable assets such as real estate, personal property, investments, or savings with which to repay debt if income is unavailable
  3. Capacity – Refers to your ability to repay the debt.  The lender will look to see if you have been working regularly in an occupation that is likely to provide enough income to support your credit use

So how to you maintain good credit?

  • Create a spending plan and live within it
  • Pay your bills on time, all of the time
  • Have some credit, but not too much
  • Have a mixture of credit types
  • Keep credit card balances low
  • Use caution when closing accounts
  • Be aware of your debt-to-income ratios
  • Contact lenders if you fall behind on payments

For more information about managing your credit or to discuss your personal credit situation, please reach out to the Credit Union of New Jersey for a consultation.  For a copy of the presentation, please visit https://www.njstatelib.org/wp-content/uploads/2020/01/Understanding-Credit-Compressed.pdf.  For a copy of the handouts, please visit https://www.njstatelib.org/wp-content/uploads/2020/01/Understanding-Credit-Handouts.pdf.

Understanding Credit

Please join us as the Credit Union of New Jersey talks about all things credit and credit-related.  They will cover the following topics:

  • The benefits—and costs—of credit cards
  • The different types of credit
  • The difference between your credit report and credit score
  • How to figure your credit limit
  • How to build a good credit history


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How to Manage Debt

Debt and credit impact our lives in many ways, from determining what we can afford to interest rates on loans.  Managing your debt effectively can open financial doors and is a great indicator of your financial health.  Please join us as the Credit Union of New Jersey will discuss debt management, including:

• The different kinds of debt
• The benefits and costs of credit
• The warning signs you have too much debt
• How to improve your credit report and score
• How to tackle your debt and avoid pitfalls
• How to rebuild good credit
• How to stay out of debt


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Planning for Retirement Program Recap

One of the biggest financial considerations for anyone is retirement.  When do I retire? How much money will I need?  Where should I put my money?  These are some common questions as it relates to retirement, but you don’t need to be a financial expert to start planning.  Britany Enelow, Financial Advisor from the Credit Union of New Jersey shared the following information to help you on the pathway to retirement.

First and foremost, there are some broad considerations regarding retirement you should think about.  What does retirement look like for you?  When are you going to start retirement and how long will it last?  What sources of income do you need in order to live comfortably in retirement?  By having a clearer picture of what you want your retirement to be, including where you are going to live, you will have a better understanding of how you should start preparing financially for retirement.

Once you have a picture of our retirement, you need to start building a retirement strategy.  When determining how you are going to prepare for retirement, you should plan to have enough funds to last 20-30 years while in retirement.  The assets in your portfolio should be spread out between Growth, Access, and Predicable Income:

  • Growth – assets that continue to grow while in retirement, such as stocks.  Goal is ensure that your money outpaces inflation.
  • Access – liquid money that you can use immediately for emergencies or unexpected expenses, such as a savings account
  • Predictable Income – used to cover necessary expenses, regardless of how the market is doing, such as Social Security, Pension, Annuity, part-time employment

According to the Bureau of Labor Statistics, the average annual expenditures for persons aged 65 and older are:

  • Housing and utilities – 34%
  • Transportation – 15%
  • Health Care – 15%
  • Food – 13%
  • Entertainment – 5%
  • Other – 18%

By preparing a budget using the assets in your portfolio, as well as your current expenditures, you can more definitely determine how much money you would need in retirement to survive.  This includes determining the sources of income that you will rely on to meet those expenditures.  Possible sources of income include Social Security, 401k, IRA, investments, pensions, or deferred compensation.  Once you identify all of your income sources, organize them into Predictable and Variable incomes to better determine how much money you will have easily accessible to pay for your necessary expenses as well as plan for non-essential costs that add to your quality of life.  Use the 4-Box Strategy, shown below, to better visual your incomes and expenses and determine what works best for you.

Once you have done all the planning, its time to start building your Nest Egg.  As you approach retirement, your asset allocation should become more conservative, relying less on stocks and high-risk ventures and more one safer options, such as bonds.  In an ideal world, you want your Nest Egg to be 15x your annual income.  The reason for such a high number is to ensure that your annual growth from the investment, about 5%, will equal 75% of your pre-retirement salary, which should be enough to pay for your necessary expenses.  For example, for someone making $75,000 a year, their Nest Egg should be around $1.125 million.  5% of that Nest Egg equals $56,250, which is equal to 75% of their $75,000 annual income.  This will help insure that you will not run out of money in retirement and allow you to have some monetary legacy to pass on after your death.

Unfortunately, retirement planning and funding are not without risk.  With modern medicine, people are living longer which means that you might outlive your retirement funding.  Therefore, it is critical to plan for at least 20 years of retirement when determining how much money you will need.  Another risk is inflation, which means that the money you have today will not be worth the same amount in the future.  Therefore, it is important to have some of your money in growth-focused assets to ensure that your money keeps up or outpaces inflation.  Healthcare expenses are rising quickly and can easily consume a majority, if not all of your retirement spending.  For example, the median yearly cost for a home health aid is about $50,000; it is higher if you live in NJ.  Lastly, withdrawing money too soon or too often can have a devastating impact on your future finances, which you may never be able to recover from.

For more information on retirement planning or investing, please contact Britany Enelow at benelow@cunj.org or 609-538-4061 ext. 2056.  For a copy of the handout, please visit https://www.njstatelib.org/wp-content/uploads/2019/11/Planning-for-Retirement.pdf.


Planning for Retirement

Join us for a COMPLIMENTARY seminar from the Credit Union of New Jersey to help you better understand how people prepare for retirement. Retirement planning is the basis of a person’s future financial well-being and all their long-term financial plans.  Britany Enelow, Financial Advisor, will outline strategies you can use to help create a secure retirement plan, including:

  • Envisioning your Retirement
  • Building your Retirement Strategy
  • Sources of Retirement Income
  • Building your Nest Egg
  • Retirement Risks to Consider
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.  CRN202101-253093


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Investment Basics Program Recap

Thank you to Britany Enelow, Financial Advisor from the Credit Union of New Jersey, for discussing the basics of investing from which anyone can start planning for their future.  While all investing carries some risk for the potential of some or all loss of money, being able to understand the different investment types, will help you to minimize your risks and work more effectively with a financial advisor.

So why should you invest?  Investing allows you to grow your money to meet your financial goals, such as retirement or college.  Money has purchasing power, both actual and potential.  Investing allows you to potentially increase the potential purchasing power by growing a set amount of money into more money that hopefully surprises the rate of inflation, netting you more actual purchasing power in the future.

Before investing, it is important to determine what your financial goals are and what your risk tolerance is.  All investing comes with some amount of risk so being able to determine how aggressive you want to be with your money will determine how you should invest it.  Generally, as we get older, we become more conservative in our risk tolerance because it becomes more difficult to replace any lost money.  This transition will affect your portfolio and the makeup of your investments.  It is also important to diversify your investments to help mitigate any potential losses.  By putting your money in a variety of investment types, you are better able to withstand market fluctuations and rebound quicker from downturns in the economy.

There are many different investments you can put your money into and each one will have a different level of risk as well as return.  Generally, the greater the return, the higher the risk so it is important to understand the different investment types on how they can best serve your financial goals.

One of the most popular investment choices are stocks.  When you buy stocks, you are buying into some ownership of that company.  When the company does well, you do well, but the reverse is true.  Stocks tend to have higher returns, thus more risk.  However, over the long-term, stocks tend to provide a positive return on your investment.  There are different types of stocks:

  • Income stocks – these stocks pay dividends to their shareholders and tend to be in less volatile industries, such as energy, finance, and natural resources.
  • Growth stocks – these stocks tend to invest all of their profits back into the business so you are relying on the success of the company to deliver a higher stock price which you can then sell to make money.  These stocks tend to have a higher risk than income stocks.
  • Value stocks – these stocks tend to be undervalued by the market even though the company’s performance may indicate otherwise.  These are bought low and then sold when the market positively adjusts to the success of the company.

Another type of investment are bonds.  Bonds are issued by a company or government entity to raise money for a project or activity.  When you buy a bond, you are essentially becoming a creditor to the bond issuer and they promise to may you interest on your bond for the life of the loan.  Generally, there is a minimum amount you must commit in order to purchase a bond.  These are generally safer than stocks because the borrowing entity agrees to pay back the amount with interest, but also have lower rates of return.  There are different types of bonds:

  • Corporate bond – issued by private and public corporations and generally issued in blocks of $1,000.  You are paid interest as the bond matures.  If the company declares bankruptcy, bondholder claims may be given preference over other creditors.
  • Municipal bond – issued by state, city, or other local governmental entity, but you do not receive any interest payments until the bond has matured.  However, oftentimes the interest earned is exempt from federal, state, and local taxes.
  • Treasury bond – issued by the U.S. Department of Treasury on behalf of the federal government.  These are generally seen as risk-free, but often have the lowest yield of any bonds.

Mutual funds are a great way to diversify your money within a single investment.  When you invest in a mutual fund, your money is pooled with other investors that is managed by a professional money manager who will charge of fee for managing that fund, generally 1%.  Each mutual fund has a stated purpose and goal, which the money manager is required to follow.  These funds can be spread out across one or more investment types, essentially trying to hedge as many bets as possible to maximize returns while mitigating risk.  However, depending on the fees, they may lower or eliminate your rate of return and if other investors in the fund decide to sell and pull their money out, the entire fund will suffer, including yourself.

When investing, please remember DAD:

  • D – Determine your financial goals and risk tolerance
  • A – Allocate your money to best meet those goals and in your risk comfort zone
  • D – Diversify your assets to help mitigate the risks inherent is all forms of investments

If you have any questions, please reach out to Britany Eneloy at 609-538-4061 ext. 2056 or benelow@cunj.org  For a copy of the handout, please visit https://www.njstatelib.org/wp-content/uploads/2019/10/Investment-Basics.pdf.

Investment Basics

Join us for a COMPLIMENTARY seminar from the Credit Union of New Jersey to help you better understand investments.  Investments are a key part of a person’s financial well-being and long term financial plans.  Britany Enelow, Financial Advisor, will outline different types of investment vehicles and their associated risks, including:

  • Benefits and Risks of Investing
  • Types of Common Investments
  • Understanding Your Risk Tolerance
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.  CRN202004-253092


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Lifelong Financial Education Program Recap

Our financial situations are constantly changing, whether we get a new job or raise, pay off a debt, or adjust how much we are putting away in savings.  Additionally, the financial environment, such as interest rates or stock values are constantly in flux.  As a result, it is important to continually evaluate and manage our finances.  Dayana Moya from Lifelong Investments LLC shared information and tips related to 3 important areas of personal finances: cash flow management, investment strategies, and life insurance.

Cash flow management takes a look at your entire financial picture to help you better understand where your money is coming from and invested so you can make sound financial decisions, such as monthly payments for a car or mortgage or how to save your money, such as a savings account, bonds, or stocks.  The Financial Formula provides a visual guide to different places money can be stored or taken from in terms of risk vs. potential returns.  Cash alternatives like CDs or savings accounts are at the bottom because they have very little risk but also very little potential return.  Determining where you are comfortable putting your money will determine what type of future incomes you can expect, helping you better understand your current and future financial situation.

Additionally, everyone should have some amount of money put away in savings, which can be as simple as putting away $20 a paycheck into a separate account.  It is recommended you have enough in your savings to replace 3-6 months of income, a portion for emergency situations such as unexpected medical bills, and any planned expenses such as a vacation or a down payment on a car.  By continuously evaluating your finances, you can better estimate how much money you should have saved and use any extra to contribute to a retirement account or life insurance premiums.

Investing can be very complicated and it is going to be different for every person based on their financial goals as well as their risk tolerance.  Below are 5 smart investment strategies to consider:

  1. Don’t time the market – In an ideal world, everyone would buy stocks when the price is low and sell when it is high,  but more often than not, people do the opposite as they try to figure out where the market is going.  It is very difficult to predict what will happen in the market so do not rush into decisions to try and make a quick buck.
  2. Asset Allocation – 91.5% of financial performance rests with asset allocation.  By strategically placing your money in different assets, you can better ensure profitable investments and insulate yourself from financial losses during financial crises.
  3. Investment Selection – It is important when selecting investments to look at the long-term performance for all options you are considering.  Depending on the year, some investments (stocks, bonds, cash alternatives) may perform better, but not as well as others over the long term.  By focusing on long-term performance and calculations, you can better determine which investments will bring you the best returns with the right amount of risk.
  4. Dollar-Cost Averaging – It is important to track your investments over time to determine if you are making money, especially in relation to stocks.  If you buy a stock over a certain period and the price rises, you will own less shares, but the average price per share will be greater than the average cost you spent on each share.  The opposite is true if the price falls, even slightly so averaging the dollar-cost will help you better understand when to sell in order to ensure you do not loose any money.
  5. Rebalance Your Portfolio – Essentially, you are repeating strategies 2 – 4 at regular intervals to ensure that your money is being allocated effectively with the maximum amount of return.  Whether it is your investments or your personal budget, it is important to reevaluate your financial situation to make sure you are in a comfortable place and are able to achieve your goals.

Life insurance is often thought of as an obligation, but in reality, it can be an opportunity to provide your loved ones with financial security, at a financial advantage.  First and foremost, you should conduct a Detailed Needs Analysis to determine the benefit payout of a policy.  By assessing and quantifying your short and long term financial needs and obligations and deducting any liquid assets, you can figure out how much money would be needed for financial security after your passing.  This will help you determine what type of life insurance would be best for your unique situation.

Term life insurance has a designated time-frame, 10 years for example, in which any benefit will be paid out.  Generally, the premiums are lower and the benefit payout is less than permanent life insurance.  There are different types of permanent life insurance, all remain in effect until your deaths as long as the premiums are paid:

  • Whole – The policy has a cash value from which you can withdraw that is tax-deferred
  • Universal – Allows for flexible premiums which creates adjustable benefits based off those premiums.  This still has a cash value that is tax-deferred
  • Variable – Allows for flexible premiums and additionally premiums above a set minimum can be designated into investment subaccounts.  The benefits, however, are variable.

If you have any questions on the information covered in the presentation, please contact Dayana Moya at 973-317-2831 or dayana@lifelonginvestments.com.  For a copy of the presentation, please visit https://www.njstatelib.org/assets/LifelongFinacialEducation.pdf.  For a copy of the handouts, please visit https://www.njstatelib.org/wp-content/uploads/2019/09/Lifelong-Financial-Education-Handout.pdf.

Lifelong Financial Education

Finances play an important role in our everyday lives and often determine what we can and cannot do, such as buy/lease a new card, rent or buy a home, and even how often we can treat ourselves to meals at a restaurant.   As we grow and make more financial obligations, especially planning for retirement, it is important to be educated in financial literacy to make sure we make the appropriate decisions based on our goals and means.  Dayana Moya and Brad Katz, from Lifelong Investments LLC, will discuss 4 important parts of financial literacy:

1. How to make a financial plan
2. Income, benefits and spending
3. Saving and Investing
4. Risk Management

Dayana Moya is the Client Relationship Manager at Lifelong Investments LLC.  She is also a licensed Insurance Agent.  In her role, she is responsible for assessing, researching and advising clients regarding their insurance needs; in addition to building and maintaining relationships with Lifelong’s clients which includes everyday client services and administration of the office on a daily basis.  Dayana received her Bachelor of Science in International Business Management from Bloomfield College.

Brad Katz, CWS®, AIF® is the founder of Lifelong Investments LLC and is a Registered Principal with First Allied Securities with more than 20 years of experience in the financial services industry. Specializing in comprehensive wealth management services, Brad works with each client to determine their specific goals and objectives before crafting a customized strategy designed to not only grow their wealth, but to also protect, distribute, and transfer their wealth.

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Financial Aid Information Session Program Recap

Thank you to Samantha Benson from the Higher Education Student Assistance Authority (HESAA) for her presentation on essential financial aid information for students and parents as they prepare for college.  Paying for college, especially the financial aid process, can be a complex and daunting aspect of the college admission process.  However, Samantha broke down many aspects of the different sources of funding as well as the process to apply for aid into manageable and easily digestible nuggets of information.

Sources of financial aid include the federal government, state of New Jersey, the individual college or university, or other outside organizations such as churches or community organizations.  Any of these sources may make available one of more of the following types of financial aid – grants (free money), scholarships (free money), loans (must be repaid, often with interest), or employment opportunities.

At the federal level, there are grants and loans available to students and their parents.  Pell, SEOG, and TEACH grants are available in differing amounts and are generally awarded based on need.  The federal government also provides all students with loan options, called the Federal Direct Loan Program.  Split between subsidized (no interest accrual while in school and need based) and unsubsidized, undergraduate students can borrow up to a specified maximum amount each year, which increases based on your current year in school.  The maximum for a freshman student is $3,500 subsidized and $2,000 unsubsidized. Graduate students can borrow up to and exceed the entire cost of a school years expenses.  Interest rates will change from year to year, but the current interest rate for 2019 is 4.53% and a 1.062% origination fee.

The state offers a wide variety of grants, scholarships and loans, most of which are administered by HESAA.  TAG is a need-based grant for NJ residents who attend an institution in New Jersey and are enrolled full-time in a qualifying degree program.  Additionally, there is a part-time TAG grant that is specifically for students enrolled in a community college.  There is also the Educational Opportunity Fund that is designed for educationally and economically disadvantaged students as well as the Governor’s Urban Scholarship, designed for disadvantaged students living in 1 of 13 designated areas and attending an institution in New Jersey.

The NJ STARS scholarship is designed for students who ranked in the top 15% of their high school class and are attending community college full time.  NJ STARS II is designed for those students in NJ STARS who move on to a 4-year state or private institution in New Jersey as a full-time student and have a family taxable income of less than $250,000.  Another state scholarship is NJ GIVS, specifically for women and minorities who enroll in a community college or technical school while pursuing a certificate or degree in a construction-related field.  Lastly, the Community College Opportunity Grant offers free tuition and fees at a community college for a student who’s household Adjusted Gross Income is less than $65,000.

If you are looking for additional funding after all grants and scholarships,  New Jersey does offer NJCLASS loans, designed to cover the rest of the costs of college not covered by other means.  Your interest rate is based off of the term of the loan, which can be 10, 15 or 20 years.  Each option has a 3% origination fee and interest rates ranging from 3.99 – 6.50% as of 2019.

In order to be eligible for most of these, as well as all institutional financial aid, the student must complete the FASFA each year.  The FASFA is free and designed to take a snapshot of the student and their household’s financial status in order to better determine eligibility for financial aid, mainly need-based aid.  Available October 1st of every year for the following school year, the FASFA does allow you to import your tax information from the IRS as long as you have filed for that year, your return has not been amended, and you did not file “married, filing separately”.   In addition to the FASFA, the student and a parent will need to register for a FSA ID in order to electronically sign the FASFA.  The earlier you fill out the FASFA, the better and it is a good rule to complete all of your forms and documentation by the earliest date based on the dates listed by each school the student wishes to attend.

Components of the FASFA include:

  • student demographics
  • student income and assets
  • student dependency status
  • parent demographics
  • parent(s) income and assets
  • household size
  • federal means tested benefits

If you are applying for any state-based grants, scholarships, or loans, you will need to file a New Jersey Alternative Financial Aid Application through NJFAMS.

For more information on any of the financial aid options listed above or help navigating the process, please contact Samantha Benson at sbenson@hesaa.org or 609-588-3300 ext. 1403.  For a copy of the presentation, please visit https://www.njstatelib.org/wp-content/uploads/2019/09/FInancial-Aid-Information-Session.pdf.

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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