Category: FINANCIAL LITERACY,

Are your finances in shape? If not, here’s what you can do to get everything in order. Review your credit report Have you looked at your credit report lately? This is one of the most important steps to take each year to keep your finances in order. You can obtain a free copy once a …

Spring Financial Cleaning

Are your finances in shape? If not, here’s what you can do to get everything in order.

Review your credit report

Have you looked at your credit report lately? This is one of the most important steps to take each year to keep your finances in order. You can obtain a free copy once a year from each of the three major credit reporting agencies at annualcreditreport.com. You can get all three at once and compare them to make sure everything is correct, or you can order one from each agency about every four months. You’ll want to ensure that your payment history and amount owed are listed correctly and make sure there are no inaccuracies or accounts you are not aware of.

File documents

Made any big purchases? Home improvements? Business expenses? Insurance policy changes? Gather the documents for these important financial events and file them where you can easily find them when needed. These receipts, contracts, and policy documents can be essential for filing taxes or when selling your home or vehicle.

Also, go through your files and discard paperwork you no longer need. If possible, shred those documents, don’t just toss them in the trash. Get rid of warranty documents for appliances and vehicles you no longer own, insurance policies you no longer carry, and other outdated paper. Check with your tax adviser to see which receipts and tax documents you need to keep and for how long.

TIP: You can scan and attach a receipt to the transaction using the Compass mobile app. To learn more, click here.

Check your budget

This is a good time to make sure you’re achieving your financial goals, such as hitting a savings benchmark, retirement strategy or paying down debt. Look at how you are spending your money. Are you overspending in a category, such as food or clothing? Have your main expenses changed?

Take a little time to clean up your finances so you can make changes as needed — and stay on track to reaching your financial goals.

Five simple moves after New Year’s Day can make tax filing easier

There’s nothing fun about paying taxes. But by taking these five steps in January to organize your paperwork, you could avoid getting frustrated, frazzled, and perhaps befuddled come tax time.

1. Make a copy of your 2020 tax return and attachments. With this to guide your 2021 tax prep, you’re less likely to forget a source of income or a deduction.

2. Collect the tax IDs you’ll need. You’ll want your dependents’ Social Security numbers and the SSN of anyone you employed (e.g., a babysitter, housecleaner, or nanny).

3. Start a file folder labeled “Income.” Put in it the following tax forms you’ll receive in January:

  • W-2s and 1099-MISCs from employers
  • 1099-INTs reporting interest income
  • 1099-DIVs reporting mutual fund or stock dividends
  • 1099-Bs reporting brokerage transactions

4. If you itemize, start another folder labeled “Deductions.” Some of the information that goes here will come by mail; the rest you may have to dig up yourself.

  • 1098s reporting interest you paid on mortgages and equity loans (also real estate taxes, if included in your monthly mortgage payment)
  • A receipt for real estate taxes if you paid them yourself
  • A copy of your W-2s showing state and local income taxes you paid
  • A receipt for personal property tax from your town or the taxing authority
  • Receipts for charitable donations and document your mileage
  • Receipts for medical expenses and document mileage
  • Receipts for bills incurred while job-seeking

5. Rev up your retirement saving. There’s still time before April to contribute to a Traditional IRA or Roth IRA. For details, search “IRA Contribution Limits” at www.IRS.gov. Don’t have an IRA yet? Ask us about our insured IRA choices.

Compass has partnered with TurboTax, which guarantees 100% accurate calculations so you can be confident your taxes are done right and get your biggest possible refund. With TurboTax Live, you can even talk with a tax professional onscreen for unlimited advice and a final review of your return. To learn more, visit https://compassccu.org/membership/benefits/

The Hidden Costs of Buying a Home

Buying a home is often one of the biggest financial decisions you can make. The process of becoming a homeowner can take a great deal of patience and fiscal commitment, but in the end, it’s an incredibly rewarding milestone to achieve. However, it’s important to remember the total cost of buying a home encompasses more than just your down payment and monthly mortgage. Below are some often overlooked and unexpected costs of buying a home.

Utilities

Typical utilities include electricity, water, internet, heating, cooling, and waste management. Be sure to factor in utility costs when determining whether you can or can’t afford to purchase a home. If you want a better idea of what the costs will be for a home you’re interested in, request a copy of previous bills from the real estate agent.

Homeowners Insurance

Your home is far more than a roof to sleep under. In many cases, a home is one’s most valuable asset—an asset that most can’t afford to replace out-of-pocket in the event of disaster-related damage or total loss. Homeowners insurance helps protect your asset. Additionally, most lenders require that you have insurance on your home, as it safeguards them (as well as you) against financial loss. Make sure you add in the cost of protecting your home when putting together your monthly budget.

Property Taxes

Beyond your mortgage, down payment, and insurance, it’s important that you also remember to factor in property taxes. The cost of your taxes will vary depending upon where you live and the value of your home. The taxes will either be billed directly by your local taxation office or paid through your mortgage lender.   If paying directly, you’ll usually make two payments each year.  If paying through your lender, the cost will be added to your monthly mortgage payment. Make sure to budget for this ongoing, recurring cost, as you will always need to pay property taxes.

Maintenance and Repair

As a renter, your landlord was likely responsible for regular maintenance and repairs. If your furnace stopped working, you could call your landlord and they would coordinate making the repair at no extra cost to you. As a homeowner, though, it’s up to you to fund maintenance and repairs. According to the one percent rule, you should set aside one percent of your home’s value each year for home maintenance. If your home is valued at $200,000, you should be setting aside $2,000 to cover any repair costs.

When you’re ready to take that next step to buy your home, Compass is here to help you with the financing. If you have any questions, feel free to reach out to us at 707-443-8662 x5.

In short, a credit union is a cooperative financial institution where people work together to make everyone’s lives better. Everyone who has an account here is a member. And every member is an owner.

Rather than making profits to send to far-off shareholders, Compass CCU reinvests in our credit union. Which means we reinvest in YOU. That’s why we say that, at Compass Community Credit Union, we guide you to better banking.