by Divora Mehari | Aug 26, 2022 | Financial Literacy
INFLATION AND BACK TO SCHOOL
Friday, August 26, 2022
At YNCU, we know back-to-school can cause a lot of stress during this time of inflation. Rising costs have caused people to have to limit their spending and focus on the essentials. With the upcoming school year fast approaching, parents are concerned about how they are going to pay for these expenses.
A recent Deloitte study says that parents are planning to spend roughly $661 to prepare their families for back-to-school. More than 35% of respondents said they won’t be able to afford back-to-school spending this year. The study also stated that 33% of parents have said their financial situation has worsened over the last year, increasing 11% from 2021.
Schools have been unable to support parents through this difficult time because they themselves are pressed for funding. Some people have needed to work overtime in order to cover the cost of going back to school. Many parents and caregivers are unsure of how they will pay for all the supplies that are needed.
At YNCU we want to help take some of this stress off you by providing tips for the back-to-school shopping season:
Make a plan: Only buy things you need
Oftentimes it is easy to make a new list of school supplies every year and buy everything on that list. Make sure you are taking a look and what you already have from the previous school year. There is no need to buy a brand-new set of pens or rulers if you already have them. Ensuring you are not buying multiples of something that can be reused can help lower the cost of back to school. Teachers will also often provide a school supply list for their classroom, if something isn’t on the list, you don’t need to purchase it.
Set a Budget and Stick with It
Plan a reasonable budget for back to school. Keep your regular expenses in mind when you are creating a budget. Having a budget will ensure you are still meeting your financial goals. Just because your child’s backpack needs to be replaced does not mean you need to spend your entire back-to-school budget on a brand name one. Look for deals or discounts, and switching from your usual brand can be a good way to reduce cost.
It is also important to remember you are not forced to purchase materials for the whole year. It is okay to cut back and buy enough for the first half of the year and allow yourself time to save for the second half. Giving yourself this time will also allow you to stick to your budget and understand what your child is using the most or what they are not using at all. This way you can target your spending during the second half of the school year and reduce cost.
Shop Without Your Kids
We know your kids want to be a part of back-to-school shopping but oftentimes that makes the trip even more expensive. Your kids will beg for things that are not on the list or ask for brand name items. If you shop alone, you are able to ensure that you are only getting the essentials. If your kid really wants brand name items, pick up a couple of items they can wear often like a backpack or shoes. This way your child is able to get what they want but do not have to do a part of the process.
Refurbished Tech Gets the Job Done
Starting early can also help you find the best prices and deals for tech items. Tech is a much-needed item nowadays and people are always on the hunt for the best price. Purchasing refurbished computers or laptops is an option in order to stay within your budget. Laptops and computers can cost upward of $1000 brand new. Refurbished or second-hand technology can make a big difference in the cost of back to school and is also more environmentally friendly. Not everything has to be brand new for the new school year.
Buy in Bulk and Split with Friends
As the cost of almost everything is rising, school supplies are no different. Buying in bulk and splitting the cost with friends can make a huge difference in how much you spend. This can also make shopping more fun as you are able to go with your friends and decide what you both have on your list. Things like pens, pencils, rulers, and notebooks are things that almost all students need. So, if your child has friends from school, get their parents together to save cost on supplies.
Shop With a Cash Back Credit Card
When you are back to school shopping, use a cash back credit card. This way you are able to make money when you make purchases. YNCU has a Collabria no fee MasterCard that can help you with your back-to-school shopping!
For all your general financial inquiries and how you can plan out your financial goals, come talk with someone at your YNCU branch!
by Divora Mehari | Jul 15, 2022 | Financial Literacy
DEBUNKING CONTROVERSIAL MONEY MYTHS
Monday, July 25, 2022
At YNCU, we know that you take your finances seriously. You want to protect your financial assets as best as you can. There are a lot of widely held ideas about money that are simply not true. We want to help you achieve your financial goals by debunking some of the most controversial money myths. Here are five of the top money myths out there:
1. All Debt is Bad Debt
One of the most common money myths is that all debt is bad debt. This is simply not true. There is both good and bad debt. Good debt is money that has the potential to increase your net worth. Taking out a mortgage could be considered good debt because you are able to make more money off that asset as time goes on. Bad debt involves using money on something that slowly loses its value. Some purchases that depreciate in value, like buying a car to commute to work, can be critical. Bad debt is debt for frivolous items that depreciate in value and don’t help you earn money. Furthermore, these debts can often hold very large interest rates.
It is a common belief that all debt is bad debt, but good debt can actually help you gain more money by borrowing. In order to make more money, you need to use outside resources and rely on other people to help. Good debt has the ability to enhance your life in a positive way.
2. Buying a Home is Better Than Renting
It is a long-held belief that your home is your biggest asset. Renting is considered to be throwing your money away. The truth is renting provides you with flexibility, since it is a lot easier to move when you are renting. The prices of houses have been skyrocketing for the last few years and many people do not even have the funds to consider buying a home. There are a lot of benefits from renting that are often overlooked. With the housing market and taxes, buying a home versus renting might not be the best way to achieve your financial goals in the future.
3. Only Save Big Amounts, Don’t Waste Time with Small Sums
Some people believe it is a waste of time to set aside small amounts into your savings every month. They think you should only set aside money when you are able to put aside large sums of money. This is far from the truth. Saving little by little will make a huge impact in the long run. Savings accounts hold interest and the longer you hold money in the account, the more interest you will accumulate. This means that putting aside small sums can add up to more than what you put away over time.
4. Don’t Need to Look into Retirement When You are Young
When you are first starting your career, you may not be considering retirement savings. You may think that because you are so young, you do not need to look into retirement right away. In reality, starting to save as soon as possible will allow you to not have to worry about retirement. You will achieve your goals earlier when you start earlier. Life is unexpected and you will never know when you want to pull out your retirement savings. Starting a plan now could mean you are able to retire sooner.
5. Avoid Credit Cards
People often avoid using a credit card because they believe it will lead to large amounts of bad debt. This is not necessarily true as, if you pay your credit card regularly, there will be no issues and you will be able to build good credit. Having a good credit score will help you get approval for mortgages or other loans. This score proves you are able to pay back bills. By avoiding a credit card, you are also avoiding building good credit.
There are a lot of money myths and bad financial advice out there. If you are looking for a financial institution that tells you the truth about your money, become a member online!
by Hannah Johnson | Jul 8, 2022 | Financial Literacy
RATE HIKES/COST OF LIVING – SURVIVAL TIPS FOR MANAGING RAPID PRICE INCREASE AND DEFLATION
Friday, July 8, 2022
It is no secret that the cost of living has drastically gone up in the last few years. Prices have gone up in every aspect from groceries to the skyrocketing price of gas to interest rate hikes. This has caused a lot of alarm and concern for Canadians who are struggling to keep themselves financially stable. At YNCU, we know that you may be looking for advice on how to manage your money during times of rising costs. First, let’s look at the definitions of inflation and deflation:
Inflation: Inflation is essentially when the cost of living rises. Typically it is due to supply; if there is little supply and a high demand, prices go up. Inflation means your money will be able to provide you with fewer goods and services than before. Inflation rates in Canada have risen about 5.1% since 1991.
Deflation: Deflation is when the cost of living goes down. What happens is, as prices start to come down from inflation, customers hold off on buying items in the hopes of the prices decreasing even more. This increases consumer purchasing power as companies want business from the customer to avoid losing profits. Deflation can lead to unemployment as companies are not making enough profit from customers. Many economists are concerned about a deflation that is certain to follow the current inflation.
As inflation continues in Canada, we know it can be stressful waiting for prices to drop. Here are four survival tips for managing rapid price increase and deflation:
Build new spending habits
As the prices of everyday items go up and your monthly income stays the same, it is important to keep track of where your money is going. You need to examine your personal financial goals and your current financial situation. You must ensure your budget is realistic and takes into consideration the skyrocketing price of everyday goods. Keeping a budget helps keep you accountable for reaching your financial goals. Read more on the Budgeting Basics!
Look for deals
A great way to keep within your budget and to stay on track with your financial goals is to look for deals and sales. Taking the extra time to do research and learn where the lowest prices are can save you a lot of money in the long run. For example, if you are making a big purchase for a television, consider waiting until after the holidays when the prices will be marked down. These small changes to the way you spend your money can make a huge impact.
Start saving
We know saving money may be difficult with the massive increase in cost of living but working savings into your financial plan will keep you financially secure. Setting aside even a little money every month will ensure you have savings in case of an emergency. You never know when something will happen and it is always best to be prepared. Including savings into your monthly budget can protect you and keep you financially stable through unforeseen circumstances.
Find the best rates by becoming a member
As interest rates rise, along with cost of living, it is critical that you use a financial institution that provides you with the best rates possible. At YNCU, we put our members first. We believe in honest financial services that the big financial institutions simply can’t deliver on. We understand how concerning the rising cost of living can be and we want to help our members be secure in their financial situation. If you are looking for a financial institution that puts you first and offers the best rates, become a member online!
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by Divora Mehari | Jun 17, 2022 | Financial Literacy
ALTERNATIVE WAYS TO FUND YOUR EDUCATION OTHER THAN STUDENT LOANS
Friday, June 17, 2022
At YNCU we know planning how to fund your education is stressful. Everyone’s situation is different, so if you’re looking for alternative ways to pay for school, other than family or government loans, here are some tips that may help:
Applying for Scholarships and Grants
One of the best ways to fund your education and reduce your future debt is applying for a scholarship or grant. Scholarships are given out based on financial need and merit. There are many different scholarships you can apply for, all with different criteria. Although scholarships are very helpful in funding your education, they are also very competitive as many other students are applying as well, so it’s important to put in the work to make sure your application stands out. Check out our recent blog on How to Make Your Scholarship Application Stand Out!
Work During School
Many students decide to hold off on getting a job in order to solely focus on their studies. We know working while in school can be difficult, but ultimately it will help you take on less debt by helping to fund your everyday spending. Working while you are in school also provides you with an advantage after you graduate, because you are gaining experiences while also balancing school. This will look good on your resume and impress future employers.
Schools often have jobs available specifically for their students. Looking for part-time student jobs at your school is a great way to ensure you can balance your school schedule with your work hours.
Work Study Programs
As schools have part-time jobs for students available, there is also the option of a work-study program. These programs are great ways to gain first-hand knowledge in your chosen field and allow you to see how your studies will translate into real world experiences.
A work-study program may have certain restrictions on hours you are allowed to work and the pay can be a set amount, so make sure you thoroughly understand the details of the program before you enroll.
Employer Sponsorship
Certain employers are willing to contribute to your education or help you get an advanced degree. These employers typically offer to pay or reimburse you for your tuition if you work for their company for enough time. If you’re interested in advancing your career, it never hurts to ask a current or potential employer if this is an option for you.
Save Your Money!!!
An important tip to funding anything is saving your money and being conscious of your finances. Saving in advance of your post-secondary education can take away the stress of having to figure it out later. Making a budget can be a useful way to ensure you are saving as much money as possible to fund your education. Use YNCU’s household budget tracker to organize your finances. Make sure you are realistic about your budget so it’s easier for you to stay on track.
If you are interested in getting advice on how you can fund your education, visit your closest YNCU branch and talk with one of our advisors.
by Divora Mehari | Jun 3, 2022 | Financial Literacy
HOW TO MAKE YOUR SCHOLARSHIP APPLICATION STAND OUT
Friday, June 3, 2022
At YNCU, we know thinking about starting post-secondary education is stressful, especially when thinking about how you’re going to pay for it. The Ontario Credit Union Foundation is providing funding for Ontarians looking to focus their studies in academic, vocational, or technical at an accredited post-secondary institution in Canada or abroad. CU Succeed Youth Bursary applications are NOW OPEN, you can apply here!
Applying for a scholarship is a smart way to reduce and stay out of student debt! Here are some tips on how to make your scholarship application stand out:
Know The Criteria
Before you begin your scholarship application, ensure you know the type of scholarship you are applying for. There are usually two types of scholarships:
Need-based scholarships: This type is awarded based on financial need. Grades and test scores are also considered but it is mainly based on your family income.
Merit scholarships: This type is awarded based on accomplishments in academic excellence, community involvement, leadership, extracurricular activities, or other factors.
For both of these types of scholarships, it is important to include all necessary documentation in the application. Read the directions carefully – they will tell you what you need to know. Note the deadlines, requirements, application demands, and any fine print. This information will help you stay on track to shine in your application. It is critical to submit by the proper day with all the items needed – this is the first step in making sure your application gets noticed.
Request Letters of Recommendation Early
The sooner you ask for your letters of recommendation, the more time you give your references to write your raving review. This way, you also have time to ensure it fits with your applications.
You may have general letters of recommendations for previous jobs, but this letter needs to be application specific. The people recommending you should write with your award requirements in mind.
Pay Attention to Detail
Once you finish your application, proofread everything. Ensuring your application is free of spelling and grammatical errors will help you look more professional. Read it out loud to hear how it sounds and have someone else read it over as well. Schools receive thousands of applications, and these small steps make a big difference in scholarship applications – so it’s important to pay attention to every detail.
Find Out What Makes You Unique
Scholarship applications are just about the academic requirements. Figure out what makes you unique so you stand out in the sea of other applicants. Why are you applying? What are you particularly good at? What inspires you? What are you passionate about? What do you do that not many other people do?
Don’t be afraid to ask your family and friends for help on what they think makes you unique.
Showcasing who you are allows schools to see your interests outside of academics. A well rounded student who has experiences outside of the classroom is ahead of the game. Many applications will ask you to write an essay, this is where you can really highlight your personality. Ensure you are answering the questions directly but add in your own personality and experiences. Your experiences have shaped who you are and organizations offering scholarships want to see that.
Know Your Audience
Knowing the criteria of the applications is important, but it’s also important to know who your application is going to. Doing research on the values and mission of who is offering the scholarship can help to make your application stand out further. By knowing your audience, you can highlight your interests that align with the organization and communicate more efficiently and effectively.
Writing an application that stands out will help set you up for not only academic success but financial success as well.
For all your general financial inquiries, visit your closest YNCU branch and talk with one of our advisors.
by Divora Mehari | May 24, 2022 | Financial Literacy
THE ULTIMATE GUIDE TO PAYING OFF STUDENT LOANS
Tuesday, May 24, 2022
Graduating from college or university is a very exciting time as you start your careers and begin living independently. But, it can also be a very stressful time as the reality of student loan repayment sinks in. Loans can feel very overwhelming, so having a plan on how to tackle them is crucial in setting yourself up for financial success. Here are six tips to prepare you for taking on those student loans:
1. Consider Your Spending Habits
As you graduate university, you will be responsible for your own spending habits. It is easy to lose track of your money if you are not conscious and deliberate in your spending. It takes time and commitment to get out of debt, so it’s crucial to be intentional about where your money is going. It is important to prioritize your spending to ensure you have enough funds to pay bills and uphold your other financial responsibilities even after making your monthly loan payment. Use YNCU’s financial goals worksheet to start setting these goals.
2. Set a Budget
Setting a budget is the most common way to plan your financial activities. By having a budget, you will be able to lay out your expected expenses and plan accordingly. YNCU’s household budget tracker will help ensure you are living within your means while still making regular payments to your student loan. Regular payments will help you chip away at your debt and maintain a healthy credit score. Be realistic about the budget you are setting to ensure you will be able to stay within it. Finally, make sure you have considered all aspects of your financial activities before creating a budget.
3. Start Right Away
The best way to pay off your student loans is to start as soon as possible. There is a six-month non-payment period where you won’t be charged interest on your loans after graduation. This is the best time to begin paying off your debt as it means you are making payments towards the principal and accumulating less interest overtime. You do not have to wait to pay off your debt. Starting early will put you on the best track to minimize what you owe.
4. Don’t Add More Debt
This seems simple, but we know that after graduation it can be tempting to jump into life by going on vacation or considering a large purchase, like a car. Although these are exciting plans, paying off your existing debt is the best way to gain future financial freedom. Getting rid of your debt becomes extremely difficult if you continue to pile on more. Make sure your budget allows for you to have fun while not increasing your debt.
5. Speak to a Financial Advisor
There are many strategies to paying off student debt, including consolidating or refinancing your debt. As a recent graduate, you may lack the financial skills and knowledge on how best to take on your debt. Different options could be beneficial for you depending on a variety of factors. Consulting a financial advisor allows you to be aware of all your options and can help reduce the amount of debt you have to pay overall.
6. Stay Motivated
We know it is challenging and overwhelming to pay off debt but don’t be discouraged, just keep going. The most important thing to remember when paying off debt is that even small payments over time can make a big difference, so don’t miss a payment and ensure you are meeting your financial goals by regularly checking in with your advisor.
Graduation is a big milestone in anyone’s life and can come with many challenges. Figuring out how to pay off your student loans can be simple if you plan ahead and stay on track.
