Welcome to 2021! That means that the 2020 fiscal year is over. While there’s nothing fun about filing tax returns or paying taxes, taking steps in January to organize your paperwork could help you avoid getting frustrated, frazzled, or befuddled come tax time. Here are 5 things you can do now: 1. Make a copy …
Continue reading “Five simple steps to take now that can make tax filing easier later”
Welcome to 2021! That means that the 2020 fiscal year is over. While there’s nothing fun about filing tax returns or paying taxes, taking steps in January to organize your paperwork could help you avoid getting frustrated, frazzled, or befuddled come tax time. Here are 5 things you can do now:
1. Make a copy of last year’s tax return and attachments. With this to guide your tax prep, you’re less likely to forget a source of income or a deduction.
2. Collect the tax IDs you’ll need. This includes your dependents’ Social Security numbers and the SSN of anyone you employed (e.g., a babysitter, housecleaner, or nanny).
3. Create a file folder labeled “Income”. Use this folder to organize the following tax forms you should receive in January or early February:
4. If you typically itemize your deductions, start another folder labeled “Deductions”. Some of the information that goes here will come by mail; the rest you may need to supply yourself.
5. Rev up your retirement saving. There’s still time before the April filing deadline 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 options.
Compass Community Credit Union does not provide tax advice. We recommend consulting a qualified tax professional to determine how tax laws may apply to your situation.
During these times, having to social distance and avoid being near other people can be challenging. Especially when it comes to running errands like grocery shopping or doing routine banking tasks like depositing checks.
The good news is that Compass CCU’s e-Services allow you to keep track of and manage your money at all times — and you don’t even have to leave your house, much less visit a branch.
Simply sign up for Compass Online Banking or download the Compass Mobile Banking App for your smartphone. Once you enroll for one of these services, your log-in credentials will work for both platforms.
On both systems, you can view your balances, review your transactions, and even tag and attach a receipt to your transaction. You can also pay bills and transfer money to another person. Setting up alerts can help you avoid running low on funds and keep you on track.
What’s more, with the mobile app, you can even deposit checks remotely!
To get started with online banking, click here.
To use our mobile banking services, look for the Compass Community Credit Union Mobile Banking App on the Apple App Store or Google Play Store (for Android devices).
A rainy-day fund may sound old-fashioned, but with what’s happening in the country right now, it’s probably something a lot of people wish they had.
And while now might not be the right time for you to start taking money out of your budget to sock away in a savings account, it may be a good time to sit down and figure out how you can start your rainy day fund when this is all over.
Basically, a rainy-day fund is having enough money in your savings to cover 3 to 6 months’ worth of living expenses. That means necessities like mortgage/rent payments, car payments, utility bills, food, credit card payments, and other bills you normally pay every month. So, for example, if your monthly expenses total $3,000, that means you’ll need to keep between $9,000 and $18,000 in a savings account to cover them in case of an emergency — like the one we’re experiencing right now.
Of course, most people can’t come up with that much money overnight. It’s a fund that you have to build up over time.
But where will all that extra money come from? Here are a few suggestions that might help: First, write down where all your money is going every week — even if it’s just for a pack of gum. Then look to see how much is spent on things you really need (a five-dollar cup of coffee isn’t a necessity). Now see if you can either cut out any frivolous spending or at least cut it back and take that money and use it to start your rainy-day fund. It may seem like nothing at first, but it can add up over time. Do the same with bigger purchases like clothes, entertainment, electronics (do you really need the latest version of that smart phone). Now take what you would spend on these items and add that to your fund as well. Another thing you can add is any extra cash left in your checking account at the end of the month.
We know that saving money isn’t the biggest thing on your mind right now. But we hope when this is all over, it will be. So, when the next rainy day comes, you’ll be ready for it — even if that rainy day lasts for weeks.
With everyone being urged to avoid being near other people whenever possible, we wanted to remind our members that you can practice social distancing and still do your banking with us.
All you need to do is sign up for Online Banking, then download the Compass Mobile Banking App.
The app is free. And it lets you do just about every banking transaction you do at a branch right on your phone.
So, if you want to avoid going out, but you need to do your banking, the Compass Mobile Banking App will let you do both. Why not get started today? Register at compassccu.org for online banking, then download the app.
If you find yourself running out of money before you run out of days until your next paycheck, you’re not alone. In fact, even people who earn tons of money find themselves in this situation every month. And the reason they do is because they have no idea where all their money went.
To figure that out, start with a money diary. Every time you buy or pay for something, write it down. This includes everything from your mortgage and car payment to something as small as a candy bar. Then at the end of the month, take a look and see where all your money is going. Now look to see which expenses you can reduce or eliminate — like that large cup of fancy coffee every morning.
Once you find and reduce frivolous expenditures, take that money you would normally spend on them and deposit it into your savings account for a rainy day fund.
Next, establish a budget. Most financial experts recommend the 50/30/20 budget. 50% of your after-tax dollars on necessities like a mortgage, groceries, and other bills. 30% on wants like clothing and eating out. And 20% on savings and debt repayment. Tracking expenses and living on a budget may take some getting used to in the beginning, but over time it will give you a better financial future.
That may seem like an odd question, but knowing the answer can help ensure that you’ll never have to pay any fees for overdrafts or insufficient funds.
Today, with so many different ways to withdraw from your checking, it’s easier than ever to mistakenly take out more funds than your checking account has available. Checks, ATM transactions, debit cards, automatic bill pay, electronic payments – they can all lead to overdrafts or insufficient funds if you don’t keep accurate track of every transaction.
To make matters worse, the recipient of the non-paid check can also charge you an additional fee of their own — and refuse to accept checks from you in the future.
To avoid finding yourself in this position, keep track of how much money you have in your account by recording all debit card purchases, checks written, ATM withdrawals, and automatic bill payments or other electronic payments. You might also want to get into the habit of using banking tools like mobile or online banking to check your account balance before you make a purchase. In addition, you can also ask us about setting up overdraft protection from your savings account.
Before you run out and buy that new pair of shoes or that really big, big screen TV, don’t just ask how much it’s going to cost. Ask yourself how many hours are you going to have to work to pay for it.
That may sound like a silly question, but let’s face it; working is how you get the money to pay for things. And figuring out just how many hours you’ll have to work to make a purchase may cause you to rethink whether you really need to make that purchase or not. At least that’s what most financial experts believe.
For example, if you earn $20 an hour (after taxes and deductions) and purchase a big screen TV for $2,000, it’s going to cost you 100 hours of work. Spend over $1,100 on a nice vacation? That’ll be another 50 hours you’ll have to work to pay for that tan.
So how many hours will you have to work to pay for your next purchase? Just take the price of the item you want to buy and divide it by your hourly wage (after taxes and deductions). You might find out that purchase isn’t really worth your time.
Any time you research ways you can save money, you usually see the same things: Stop eating out. Stop buying fancy coffee. Even we’re guilty of offering those up as great suggestions for saving money.
But let’s be honest, people like eating out at nice restaurants and drinking coffee with fancy names. So we put on our thinking caps and tried to come up with some other things you can do to save money that you might actually be willing to do.
Let’s start with the most obvious and least painful. Get a big jar. Then at the end of every day, drop any change you have in your pockets into that jar. (If you really want to go crazy, you could add the singles in your wallet.) Once the jar is filled, bring it in and deposit it into your savings account — not your checking account and definitely not back into your pockets.
Next, try living on the 50/30/20 budget. Basically, that means 50% of your income is devoted to necessities like bills, etc. 30% goes to wants. And the final 20% goes into your savings. To help make sure that 20% will actually go into your savings, just pretend it’ s a bill and pay it into your savings every time you write out your bills.
Another easy trick is to take whatever balance is remaining in your checking account on the day before payday and transfer some of that balance into your savings. For example: If your balance is $150 then transfer at least $50.
Here are a few other money-saving tips:
• Have a weekly “no spend day” and don’t buy anything (even lunch) on that day
• Stop paying others for work you can do — like yard work or cleaning the house
• Cancel any auto-renew subscriptions that you aren’t using regularly
• Only make big purchases like furniture or appliances during annual sale periods
• Ditch cable for streaming services
• Shop around for the best cell phone plans and insurance services
• Grocery shop with a list so you’ll be less likely to buy stuff impulsively
• Buy generic whenever possible. According to an NPR study, it’s something even chefs do
• Save your raise (if you’re lucky to get one)
We hope you find these tips helpful. Or at least more palatable then giving up your favorite restaurant or morning cup of coffee.
If you have poor or no credit, don’t feel bad. Because you’re not alone. According to Experian, a credit reporting agency, 68 million people in the US are in the same boat.
The good news is that since you’re a Compass Community Credit Union member, you already have an easy way to start building or rebuilding your credit score. It’s your Compass Savings account.
Simply take out a loan against the balance you have in your savings account. Make payments on the loan on time. And your credit score will start to reflect that in a positive way. Plus, you can use the money from the loan to help pay down any high interest credit card debt or catch up on other bills that you may not be paying on time.
But while taking out a loan against your Compass Savings Account is a really easy way to start improving your credit, it’s not the only step you can take. Here are a few other tips we recommend you try:
• Pay all your bills on time — including your utility and cell phone bills
• Pay off debt and keep balances low on credit cards
• Don’t close unused credit cards unless they charge you annual fees
Remember, having a good credit score can help you qualify for better interest rates and terms when borrowing money, buying a car, or applying for a mortgage. It’s also used by landlords when you apply to rent. And it might even influence your smartphone lease and your life or car insurance rates.
If you’d like to learn more about taking out a loan against your Compass Savings Account, stop by your local branch. A Compass representative will be happy to tell you more.
When it’s time to make a big purchase like a new TV, computer, furniture, appliances, or yard equipment, most people wait for a sale to buy them.
And that’s a great way to save money. But then they’ll put their purchase on a credit card and make monthly payments. Or even worse, they’ll take out a loan.
So why is that so bad? Because what you probably don’t realize is that by paying for your purchase with monthly payments with a credit card or loan, the interest you pay will completely eliminate any of the savings you got from the sale. Or worse, make you end up paying even more.
To avoid making this costly mistake, try planning ahead when you want to make any big purchase. And start putting extra money aside every month until you have enough to pay for the item in cash.
You can earn interest on it by putting that extra money in your Compass CCU savings account. Plus, making direct deposits from your paycheck will make it even easier to save. Once you have the amount you need to make that purchase, then it’s time to start looking for the sales. It’s the best way to ensure that you’ll never pay more than the sales price for anything.
Of course, if it’s an absolute emergency to make a purchase before you save up enough money to pay cash, you can put it on a credit card or ask us for a personal loan. Just make sure you pay it off right away or at least make more than the minimum payment every month. That way, you’ll save on some of those extra interest payments.
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.