Learn how to spend, save and invest your first job income while paying down debt.

When you’ve been living on a college budget, the first real paychecks from your post-graduation job can feel like more money than you know what to do with. Here’s how to spend, save and invest that income while paying down debt and splurging a bit, too.

1. Create a simple budget

A budget is certainly the first step. Once you budget and ensure you’re meeting essential needs, you can spend money on things or experiences you value – all while feeling confident that you can afford them.

The 50/30/20 approach is a good budget starting point.

• Spend 50% on needs like rent, groceries and minimum loan payments.
• Spend 30% on splurges like trips, takeout and concert tickets.
• Spend 20% on savings and extra payments on high-interest debt.

2. Make a money priority list

You can’t do everything at once when you’re saving money and repaying debt. Prioritize in this order:

• Save $500 for emergencies in a high-yield savings account.
• Contribute enough to your 401(k) to get your employer’s match, if there is one.
• Pay off any high-interest debt.
• Save for retirement. Aim for 15% of your pretax income.
• Expand your emergency fund. Aim for three to six months’ worth of expenses.

3. Understand investing basics

Buying individual stocks is one investment option, but is not often recommended for beginners.

Your first priority should be a retirement account like a 401(k) or Roth IRA, even as your career.

The money in these accounts is invested in stocks and bonds and grows over time due to compound interest. For example, every $1,000 invested at age 22 becomes nearly $20,000 when you are 72, assuming a 6% rate of return.

4. Take an inventory of student debt

While saving for the future is important, you’re also likely facing something else: student loans. Start dealing with them by answering these questions:

• Are the loans federal, private or a mix of both?
• How much do you owe?
• What are the loan interest rates?

Many student loans are owned by the Department of Education. To see your federal loan details, visit the Federal Student Aid website. For private student loans with a bank or credit union, check your account with that lender.

Most student loans have a six-month grace period. This means payments won’t come due until late fall. If you start making payments earlier, you’ll save on interest and establish the habit of paying.

If you have federal loans, you can also apply for an income-driven repayment plan that caps payments at 10% to 20% of your income and forgives the remaining balance after 20 or 25 years. Private student loans aren’t eligible.

5. Work on your credit

Can you name a benefit of student debt? It may seem difficult, but here’s one: Consistent on-time payments reflect well on your credit. A credit score in the high 600s or above is necessary to access the best rates on loans, insurance and a future mortgage. Some employers and landlords check credit, too. Review your credit report to see where you stand.

An expected refund or stimulus payment can inspire exciting plans for spending our new money. The COVID-19 pandemic was and is still stressful for many people, both financially and in other ways. It’s natural to want to reward ourselves using part or all of a tax refund or stimulus payment, which we may think of as extra money. Whether it’s your regular pay, a refund or a stimulus payment, you should be responsible with how you use that money.

A 2020 National Retail Federation® survey found that about 50 percent of those surveyed will likely to use their tax refund to contribute to savings. 34 percent were going to use the refund to pay down debt and 24 percent planned to use their refund for every day expenses. The smartest thing you can do with any extra income is use it for necessities, including increasing your savings and decreasing your debt.

Pay your bills
If your job was affected by the pandemic, the best thing you can do with any additional money is to stay current with your regular financial obligations, pay bills and pay down any additional debt you may have accumulated.

Add more to your savings or money market accounts—or invest in a CD
It’s always a good idea to add to your savings. Many people start building their financial resources with a basic savings account. Saving accounts earn interest and can be linked to include direct deposit of a paycheck or to a checking account. If you’d prefer a flexible account that can earn a higher rate of interest for your savings, look at a money market account.

A certificate of deposit (CD) is another way for you to watch your money grow at a higher interest rate than a savings account. When you open a CD, the money is invested for a fixed amount of time (fixed-term) and can be used once the certificate of deposit has matured—when the fixed-term has ended. CDs can be be invested for terms of 6, 12, 24, 36, 48 or 60-months.

Put money in an IRA or other retirement savings account
The additional funds you receive now can make a big difference in the future. If you use them to make an extra contribution to your Roth IRA or a traditional Individual Retirement Account (IRA), they could significantly increase by the time you retire. If you don’t already have an IRA, use your refund/commission/bonus to jump-start one. In 2021, the annual contribution limit for IRAs is $6,000 ($7,000 if you are 50 or older).

Build—or rebuild—a short-term emergency fund
Finance professionals typically recommend saving three to six months’ worth of living expenses in a separate emergency fund to protect against a financial setback such as an unexpected job loss or medical emergency. For many Americans, the pandemic demonstrated that it can be difficult to start or maintain an adequate short-term emergency fund. Using your stimulus payment, tax refund, commission or bonus payout to start or build up your savings is something you will be thankful for when you need it.

Pay off high-interest debt, such as high-interest credit card bills
One of the best ways to spend your tax refund is to eliminate credit card balances and other types of high-interest debt. Reducing high-cost debt not only relieves the stress of making monthly payments; it also enables you to save hundreds, or even thousands, of dollars. Another option for lowering your debt is to take out a car loan, personal loan, or a home equity line of credit and use the loan to pay off other debt that has a higher interest rate. You will then have more money available to pay off the new, lower-interest loan faster.

Help others
If you’re in a strong financial position, you may consider helping others with the additional money you’ve received. Maybe you can assist a family member or a friend in need or support a charitable organization. If the organization is tax-exempt, your contribution may be tax deductible.

Do something special for yourself
If you’ve eliminated high-interest debt and fully funded your savings and emergency accounts, you may want to indulge in a smaller, more personal reward. Treating yourself to a a nice takeout meal from a restaurant, some new clothes, rent a movie from a streaming service, buy music, a book, or videogame, or do something else that you would enjoy.

Debt consolidation combines multiple debts into a single payment. It can be a good idea if you qualify for a low enough interest rate.

Debt consolidation rolls multiple debts, typically high-interest debt such as credit card bills, into a single payment. Debt consolidation might be a good idea if you can get a lower interest rate. This will help reduce your total debt and reorganize it so you can pay it off faster.

If you’re dealing with a manageable amount of debt and just want to reorganize multiple bills with different interest rates, payments and due dates, debt consolidation is an approach you can tackle on your own.

How to consolidate your debt
There are two main ways to consolidate debt. Each combine your debt payments into one monthly bill.

• Get a low interest, balance-transfer credit card. Transfer all your debts onto this card. You will save money by having a lower interest rate. You will likely need good or excellent credit to qualify.
• Get a fixed-rate debt consolidation loan. Use the money from the loan to pay off your debt, then pay back the loan in installments over a set term. You can qualify for a loan if you have bad or fair credit (689 or below), but borrowers with higher scores will likely qualify for the lowest rates.

Two other ways to consolidate debt are taking out a home equity loan or 401(k) loan. However, these two options may include some risk to your home or your retirement. The best option for you depends on your credit score and profile, as well as your debt-to-income ratio.

When debt consolidation is a smart move
Having success with debt consolidation typically requires the following:

• Your total debt (excluding mortgage) doesn’t exceed 40% of your gross income.
• Your credit is good enough to qualify for a low-interest credit card or debt consolidation loan.
• Your cash flow consistently covers payments toward your debt.
• You have a plan to stay out of debt.

For many consumers, debt consolidation reveals a light at the end of the tunnel. If you are approved for a loan with a three-year term, you know it will be paid off in three years — assuming you make your payments on time and manage your spending. On the other hand, making only the minimum payment on credit cards would mean months or years before they’re paid off, as they accrue more interest than the initial principal.

When debt consolidation isn’t worth it
Consolidation isn’t a magic solution for debt problems. It won’t stop excessive spending that creates debt. If you’re overwhelmed by debt and have no hope of paying it off even with reduced payments, debt consolidation may not be the right solution for you.

If your debt amount is small and you can pay it off within six months to a year. You would likely save only an insignificant amount by consolidating. Try a DIY debt payoff method instead, such as the snowball method or debt avalanche.

AllCom Credit Union offers debt consolidation products to fit each member’s unique situation. Our low interest credit cards offer balance transfers with no transfer fees, saving you even more money. Prefer a fixed repayment plan? We also offer debt consolidation loans between $500 and $15,000 and with terms from 12 to 60 months. Apply today and receive your approval in as little as one hour. Have questions? Call 508.754.9980 to talk with a member service representative.

If you or someone you know plans to attend college this year after graduating from high school, you’ll be happy to know that AllCom Credit Union is offering eligible members a chance to win a $1,500 scholarship to help cover the expanding costs associated with your college education.

The Credit Union College Scholarship Program, supported by Massachusetts Credit Unions and our statewide campaign, Better Values – Better Banking, is funding six (6) $1,500 scholarships that will be awarded to six (6) high school graduates chosen as winners from across the state. 

2021 College Scholarship Application

Application deadline: April 9, 2021

Scholarship Eligibility
1. Eligibility is limited to high school seniors who will be enrolled in an undergraduate college degree program during the 2021-2022 academic year.

2. Applicant or parent/guardian must be a member of the sponsoring credit union.

3. The credit union must be a member in good standing with the Cooperative Credit Union Association.

4. Each applicant must complete a current scholarship application form and submit it with the other required material to the sponsoring credit union.

5. Each credit union will select its top 3 applications and forward them to their chapter president. They must be accompanied by a cover letter from the sponsoring credit union CEO verifying that each applicant and/or parent/guardian is a credit union member.

Each chapter will select its scholarship winner evaluating each applicant on the same criteria the credit unions will be using grades, essay and extracurricular/community activities.

Students must submit the following items with their completed applications. All items requested must be received in order for the application to qualify for consideration.

1. Completed printed application.

2. An academic transcript of grades.

3. A typewritten essay of at least 250 words describing what you career you wish to pursue when you complete your education and why.

4. A detailed list of extracurricular/community activities and/or volunteer activities.

If you have any questions, please call Erin Harvey, Branch Manager at 508.754.9980.

During the pandemic, we’re doing more online – working, connecting with family and friends, shopping, and banking. So, if something goes wrong with your device, you want to fix it right away. Scammers are preying on this, offering phony tech support services. Here’s what you should know about tech support scams.

How to spot tech support scams

Scammers take advantage of your reasonable concerns about viruses and other threats, but their real goal isn’t to protect your computer. Instead, they want to sell you useless services, steal your credit card number, or install malware, which lets them see everything on your computer.

How do you know if you’re being scammed? Here are three common scenarios:

Scenario #1: Unsolicited call from tech support

You get a call from someone who says he’s a computer technician. Maybe he claims to be from a well-known company. He says there are viruses or other malware on your computer to trick you into giving him remote access to your computer or buying software you don’t need. He may ask you to pay by gift card or wire transfer.

Scenario #2: Unknown pop-up appears on your screen

A pop-up window appears on your computer screen with a message warning of a security issue on your computer and tells you to call a phone number to get help. The person who answers may pretend to run a diagnostic test and claim to identify more problems.

Scenario #3: Unsolicited email about a suspended account

You get an email saying your account has been suspended. In a recent twist, scammers are sending emails saying your Zoom account has been suspended or you missed a meeting. If you click on the link, it will install malware allowing the scammers to see what’s on your computer.

How to avoid tech support scams

Here are four tips to protect against tech support scams:

• Never give control of your computer to someone who contacts you out of the blue. Criminals can spoof phone numbers, so you can’t rely on Caller ID. Avoid giving anyone you don’t know access to your computer, or your credit card information.
• Don’t click links in unsolicited pop-ups or emails. If an unknown pop-up appears on your screen, avoid clicking on any links. The same is true for unsolicited emails. Instead, navigate to the company’s site by typing in their URL.
• Maintain your anti-virus software. Use trusted anti-virus security software and make sure to update it regularly.
• Recognize legitimate tech companies. Legitimate companies won’t contact you by phone, email or text message to say there’s a problem with your computer. Security pop-up warnings from real tech companies won’t ask you to call a phone number.

Act quickly if you’ve been scammed

If you’ve been scammed and you paid by credit or debit card, contact your credit card company or bank to ask them to stop the transaction. If you paid with a gift card, immediately contact the company that issued the card , and tell them you paid a scammer and ask if they can refund your money.

You should also report any tech support scams to the Federal Trade Commission at reportfraud.ftc.gov .

For more information on fraud and scams, download the CFPB and FDIC’s Money Smart for Older Adults resource guide.

Article originally posted to the CFPB (Consumer Financial Protection Bureau) blog January 21, 2021. 

The new year is almost here and that means it’s time to think about resolutions for the year. After a year like 2020, financial resolutions are probably top of mind.

The beginning of the year is the prime time to focus on what’s going on with your money. With the right plan in place, you can stick to your financial resolutions and end the coming year in a better place than you started it.

To help you get started, here are 5 financial resolutions to set, along with expert tips on how to keep them.

1. Refinance your mortgage and/or your student loans

While the coronavirus pandemic has wreaked havoc on many parts of life this past year, it has also provided some opportunities. You can now secure record low mortgage rates, making this a prime time to refinance and lower your monthly payments.

As for student loan refinancing, federal student loans are in forbearance until Jan. 31, meaning interest is suspended and payments are not required. However, this does not apply to private student loans and you may want to consider refinancing these types of loans to lock in lower rates.

2. Pay down credit card debt

Consumer credit card debt dropped in 2020 for the first time in eight years. This data came as a bit of a surprise considering the pandemic-created recession, but it’s a hopeful sign that consumers are getting their debt under control.

If you have credit card debt, consider making it a goal to pay it off. AllCom Credit Union offers debt consolidation loans between $500 and $15,000 with the best rates possible. Learn more here.

3. Can’t stick to a budget? Create a spending plan instead

If you’ve had trouble sticking to your budget in the past, consider ditching the traditional budgeting method and create a spending plan instead.

A spending plan allows you to choose what you spend your money on instead of restricting yourself on what you can’t spend. Start by determining your monthly fixed income and then decide what spending categories are most important to you.

4. Automate your savings

One of the easiest ways to build your savings is automating your contributions.

When you automate your savings, you won’t have to think about how much money you want to set aside each month or be tempted to put less into savings.

5. Start an emergency fund

A Bankrate survey from June found that not having enough emergency savings was Americans’ top financial regret since the coronavirus began. Bottom line: Don’t overlook your emergency fund.

The new year is as good a time as any to start (or grow) your emergency fund. In general, experts recommend saving three to six months of living expenses. Start by opening a separate and dedicated high-yield savings account. After that, consider these four tips:

• Evaluate your spending and look for areas where you can save.
• Set a savings goal.
• Set up automatic contributions.
• Try to increase your contributions over time.

Once again we are moving towards another years’ end and the holiday season. For many, the year cannot end soon enough. Yet the holiday season gives us an opportunity to appreciate those things we have sacrificed this year as we look forward to 2021.

I am most grateful for the opportunity you have given AllCom to remain your trusted partner during these unprecedented times. My number one goal will continue to be to keep you and our staff safe while still being able to meet your financial needs as conveniently as possible.

While we are very excited to unveil the long awaited results of our facility renovations, to ensure everyone’s well-being, our branch lobby will remain closed until it is safe to re-open. We are confident that you will love our new look and that the updates will better serve your needs.

We will continue to communicate with you and look forward to guiding you  through life’s many stages. AllCom is committed to the communities we serve and will move the credit union forward by providing the best financial products and services designed to improve your financial lives.

From all of us at AllCom Credit Union, we wish you a healthy, warm and safe holiday season and New Year.

Debbie Guiney, President/CEO, AllCom Credit Union

The recent rise in COVID-19 cases across the United States is a serious reminder of the strength and longevity of this pandemic. 

Many people may have “covid fatigue” and miss living the lives we once did. We shouldn’t let our guard down or it may be much, much longer before we will be able to live those lives again. While communities have focused on avoiding large gatherings, which is appropriate, the spread of the infection in this second surge has been attributed to smaller, casual gatherings that are deceptively safe.

With the holidays upon us, it has never been more important to double down on our efforts to exercise good judgment with our behaviors. These behaviors may contribute to our ability as a community to limit the continued spread of coronavirus.

Be vigilant in your actions by doing the following for the foreseeable future:

• Wear a mask
• Wash your hands, frequently
• Keep physical distances
• Avoid social gatherings of those outside your immediate household
• Stay home when you are sick