4 better budgeting considerations

Man having morning coffee
OCCU  -  03.03.2016

When I think budgeting, it’s usually time to add up that pile of receipts that are stretching my wallet, take a closer look at monthly spending, and cut non-essentials so that the income exceeds the spending. For our household, this ritual happens about once a year, usually when we are considering a big house project, purchase, or thinking about a vacation that costs more than a weekend camping trip. It’s much dreaded and I feel like we’re reinventing the wheel every time we do it. 

OCCU has teamed up with Balance Fitness Program and made its BALANCE program available to OCCU members;  turning a daunting chore into a much more pleasant one. BALANCE is a financial fitness program that offers OCCU members online or over-the-phone personal counseling on anything relating to money. Plus, there are handy on-line tools, such as the Money Management Planner that takes the guesswork out of mapping your budget.  BALANCE also includes loads of personal finance resources, such as BalanceTrack, which provides education on everything from teens and money to using your home equity.

In addition to helping you track income and expenses, BALANCE can help you take a look at existing loans to find ways to pinch those pennies. It may seem a little counterintuitive to talk about loans in a discussion on budgeting, but making smart borrowing choices is an important part of your overall budget outlook, says Ethan Nelson, OCCU’s vice president of lending. 

For instance, if you are currently making payments on more than one loan, you may consider consolidating those loans into one loan with a lower interest rate and/or monthly payment. “BALANCE is a resource that people don’t take advantage of enough,” says Nelson. “BALANCE will do a significant amount of counseling about debt management, buying a home, or setting up a savings plan.”

There are, of course, several things to consider when making the decision to borrow money. “You need to establish that you can work the monthly payment into your budget without a hardship,” says Nelson. “The great feeling of buying something goes away if you have to make payments on it over an extremely long period of time and those payments are more than you can comfortably afford.”

Once you’ve made decisions about borrowing money or consolidate loans, talk to your OCCU branch representatives about the best option for you. Some to consider are:

Credit Card

If you believe you can pay off balances on loans or credit cards within a considerably short amount of time, look for a card with a balance transfer promotion, such as OCCU’s Nice Card offering no interest on the first 12 months for balance transfers*. Promotions like these are a great way to save money on interest and may allow up to pay down debt faster.

Personal Lines of Credit

Personal lines of credit offer you flexibility and often a lower interest rate than credit cards. For instance, if you owe $5,000 on a high-interest credit card, you can take out a personal line of credit for $5,000 at a lower interest rate. Just like a credit card, as you pay down the balance, your available balance increases and can be used for life’s surprises, like an emergency repair to your sewer line (yuck!).

Auto Loan or Refinance

Securing a loan on a car you own outright or refinancing your existing car loan is a good option to consider when restructuring your budget. If you already have an auto loan on your car, you may be able to get a lower rate with refinancing or you may be able to take out the equity you have in your car if it’s worth more than the loan remaining on it.

Mortgage Loans and Lines of Credit

Interest rates are still low, making a home equity line of credit or mortgage refinance a great option for tackling home improvements, paying for college, or consolidating debt. Nelson says that, while these loans should be done with care because it involves your home, they may offer some tax advantages, meaning you may be able to deduct the interest you pay from your taxes. Talk to your OCCU branch representative or tax advisor for more information.

Consider all the options above and how they may help bring your monthly budget in line with your life. Let BALANCE and OCCU’s team help you build a better budget.

*Purchase Annual Percentage Rate (APR): 9.24% to 19.24%, based on creditworthiness and will vary with the market based on Prime rate. Balance Transfer APR: 0.00% introductory APR for 12 months from account opening date for balance transfers completed within 60 days from the account opening date. After that, Balance Transfer APR will be 9.24% to 19.24%, based on creditworthiness and will vary with the market based on Prime rate. Cash Advance APR will be 14.24% to 24.24%, based on creditworthiness and will vary with the market based on Prime rate. Balance Transfer Fee / Cash Advance Fee, $10.00 or 3.00% of the amount of each balance transfer or cash advance, whichever is greater. Foreign Transaction Fee, None. Annual Fee, None.

Introductory terms are for new cardholders only. If you have received the benefit of a card promotion on an OCCU credit card product in the past 24 months you are not eligible for this promotion. We will not process any balance transfer request to pay off or pay down any account or loan issued by Oregon Community Credit Union, OCCU Card Services, LLC or our affiliates. Membership and eligibility restrictions apply.
Rates and terms effective as of 3.1.16, when this content was developed. Contact OCCU Card Services at 800.365.1111 for current rates and terms.