What Is The Child Tax Credit?

A child tax credit is a tax incentive for families with dependent children under the age of 18 and is linked to a taxpayer's income level as well as the number of children in the household.

How It Works

The Child Tax Credit Calculator will help you estimate the amount of your 2021 Child Tax Credit refund. To use the calculator, answer the following questions with the information you provided in your most recent tax filing.

The Child Tax Credit Calculator above requires one of the following web browsers:
Google Chrome (>= 42), Firefox (>= 39), Microsoft Edge (>= 14), Safari (>= 10.1)

Starting July 15th, 2021, millions of families across the country will be receiving the first payment of the newly expanded child tax credit. Under this enhanced stimulus package, the IRS will pay all eligible parents half the credit in advance monthly payments. The other half will be included in 2021 tax returns. The IRS will use 2020 (or 2019, if applicable) tax information to determine eligibility and will automatically enroll individuals for advance payments. For more information, visit irs.gov.

Live Smarter

If your financial situation has recently changed or if you’re simply looking for help managing your spending, we’re happy to help. Make an appointment with one of our friendly and knowledgeable representatives today.

Article adapted from Banzai Financial Education Program. Not intended to be tax or financial advice. Please see your tax professional for further information.

Is It Okay To Tap Into My Retirement Funds?

The global health crisis has hit everyone in some way. For many, they experienced tremendous loss of income, some with none at all. While unemployment and added government assistance stimulus checks were helpful to some degree, there are many who are still greatly struggling and weighing all income options, including accessing retirement funds early as a matter of survival.

Tips From Our Friends at Choice Investments

Generally speaking, it is always better to leave your retirement accounts alone and pull funds from non-retirement accounts first. This has to do with many factors including the longevity a retirement account requires to make steady gains and compensate for market losses. Over time, these accounts steadily grow. If money is taken out, the compound rate of return structure changes and there are usually pretty stiff penalty fees and taxes for early withdrawal.

Alternatives To Consider

• If you have an Individual Retirement Account (IRA) and are under the age of 59-1/2, rather than withdraw from your IRA, you may want to consider a personal loan, or home equity line of credit (HELOC). This allows you to borrow against yourself at a lower rate, rather than assume the 10% penalty, and have to pay taxes on the money withdrawn.

• If you are over the age of 59-1/2, you could take a monthly withdrawal from your IRA to make the loan payments. This way you are only taking out a portion each month, which can be more cost effective than withdrawing a larger lump sum.

• If you have a 401k you can always take a loan out against that plan too. Again, this is not ideal, but it is a better alternative than withdrawing a larger lump sum.

• If you have no other choice, then by all means withdraw from your IRA. Money is needed for survival and nothing is more important than your life and health. Just be aware of what you may lose in income overall during the long term.

Invest Smarter

Whether you’re a new or experienced investor, we’re here to help with our investing options. We are more than happy to discuss your personal situation as everyone’s is unique, especially during this stressful time.

Call 315-735-8571 to talk about your options or make an appointment with one of our friendly and knowledgeable representatives today. Simply click on the button below, select “Advisory Services” from the menu and choose “Investment Services.”

¹IRA's are offered through First Source FCU and are federally insured by NCUA.

²Stocks/Stock Funds, other securities, and advisory services are offered through Cadaret, Grant & Co., Inc., a Registered Investment Advisor and Member FINRA/SIPC. These products may also be offered by a First Source "dual employee" who accepts deposits on behalf of the credit union and also sells non-deposit investment products on behalf of Choice Investments LLC through Cadaret, Grant & Co. Choice Investments LLC, Cadaret, Grant & Co., Inc. and First Source are separate entities. You can check the background of these financial professionals through FINRA’s BrokerCheck. First Source Federal Credit Union is not a registered broker dealer and is not affiliated with Choice Investments LLC.

NOT FEDERALLY INSURED    •    MAY LOSE VALUE    •    NO CREDIT UNION OBLIGATIONS    •    NO CREDIT UNION GUARANTEE 

Funds invested through Choice Investments are not federally insured, may lose value, and are of no way obligations of First Source FCU. Involves investment risk and may involve loss of principal. First Source has no guarantees of securities and annuities products offered through Cadaret, Grant & Co., Inc. Financial Professionals associated with this site are registered to conduct securities business and licensed to conduct insurance business in certain states. Response to, or contact with, residents of other states will be made only upon compliance with applicable licensing and registration requirements. The information in this website is for U.S. residents only and does not constitute an offer to sell, or a solicitation of an offer to purchase brokerage services to persons outside of the United States.

Credit cards are a powerful financial tool and as the saying goes, “with great power comes great responsibility.” If you are looking to get your first credit card, these tips can help you use it in a smart, financially-sound way. If you abuse your credit card, intentionally or unintentionally, you could find yourself in financial distress.

Credit cards can help build your credit score. Good credit scores can, in turn, allow you to access better loans and mortgage rates, higher limits on future credit cards and more. Credit cards can also damage your credit score if you use them unwisely. Avoid maxing them out, always pay your monthly statement on time and pay more than the minimum if you can. Try to pay in full whenever possible.

1. Consider Becoming An Authorized or Joint User First

Not comfortable with having your own credit card yet? See if a relative will let you become an Authorized or Joint User on their card. If you become one, you will be issued a card with your name on it but the primary cardholder will be held accountable for charges and payments. Some credit card companies may report credit activity for you as the Authorized or Joint User, and if the card is being used wisely by all parties, you could earn good credit yourself.

2. Treat It Like Cash

If you don’t have the money now or won't in the near future to pay off the purchase, you may not want to put it on your card. You'll increase your risk of accruing interest and expanding what you owe. This can put you into debt which can be hard to get out of and hurt your credit score.

3. Pay The Balance In Full Or Close To It Every Month

Make sure you pay off your purchases at the end of every billing cycle. This way, you’ll avoid paying interest, possible late fees and avoid damage to your credit score. Making only the minimum payments will cause the interest to really add up, costing you more money in the long run.

4. Use It To Build Your Credit

When you pay off your balances every month, you establish a positive credit history. You demonstrate to credit agencies and lenders that you can handle the responsibility of credit. This will become important when you want to buy a car, rent an apartment, or buy a home. Your credit score shows how financially responsible you are and is used by those checking to predict your future responsibility. On the flip side, late or consistently missed payments can damage your credit score, making you a higher risk to future lenders.

5. Always Check Your Statements

Unfortunately, credit card fraud is a very real thing. Check your statements every month to make sure there aren’t any unrecognizable charges. If you see a purchase that you didn’t make, report it to the credit card company immediately.

6. Avoid Scams and Fraud: Don’t Share Your Info With Anyone

Credit Cards are private and one way to help you avoid fraud is by never sharing your card information with others. Don’t let others use it, even close friends or family members. Beware of phishing scams where someone calls pretending to be the credit card company and asks you for personal information to “verify who they’re speaking with”, such as the security code on the back or your billing zip code. Your credit card company will already know this information and will not call you asking for it.

7. Look For A Good Rewards Program

A rewards program is designed to give card holders everything from merchandise to miles and even cash back, just for using that card. While cards for first-time users may not have a breadth of rewards available, it can’t hurt to look. Every card’s rewards formula is different, so make sure you understand what your rewards options are before you decide.

Pay Smarter

With a First Source credit card, you get the purchasing power of Visa®, for safe and secure transactions thanks to the EMV chip technology. We offer great options like non-variable rate cards and variable rate cards with reward options.

Learn more about our credit card options and benefits to see if one is right for you. Get started with the application process below.

If you have more questions, feel free to give us a call at 315-735-8571 or make an appointment with one of our friendly and knowledgeable representatives today.

Article adapted from BALANCE Financial Fitness Program.

Forming New Spending and Saving Habits

COVID-19 has caused shifts in many of the things we do that make up our daily lives. One major shift has been with money management. 

What have you noticed about your spending habits in the past few months? With stores, restaurants, venues, attractions and so many other places closed during lockdown and beyond, the options to spend money outside of our home, other than online shopping, or for essentials, were few and far between. In that time at home, away from our usual daily stops, we were given the opportunity to reflect upon our past spending habits.

We’ve been able to look at that daily cup of coffee we used to get on the way to work, the places we’d go to on our lunch breaks, and meeting friends out on the weekends with a different view. All of a sudden that money wasn’t being spent. It was being, more or less, saved. People are now spending less, saving more, and planning ahead. 

Statistics show that over the past 5 months, including both during quarantine and post quarantine, entertainment, social activities, traveling (even gasoline) and impulse buying are all down. That’s just the tip of the iceberg. According to CUNA Mutual Group’s Trends Report, indicating COVID-19 impacts, personal spending fell 13.6% while savings balances in credit unions rose 4.7% in April. Consumers, it seems, have been sticking to purchasing essentials only- and only when needed.

This shift in spending, along with stimulus checks and relief loans, have helped to ease the financial burden of furlough and layoffs, enabling many of us to get by. Even for those that may have been fortunate enough to continue working in an essential industry, we still see those consumers driving less, eating out less, traveling less, shopping less, etc. This has helped increase the balance of their savings. 

If you have been able to create some pockets of extra funds, now is the perfect time to consider looking at your budget and deciding more strategically on what it is you really need. It is a time to scrutinize your own past habits and channel those funds to what is really important. Use our Budget Calculator to find out your net monthly and yearly income.

Paying owed bills is certainly a great start. Paying off loans is yet another. Once loan payments are more manageable, or possibly gone quicker than you were expecting, you can take the money you were using to make those payments and use it for something else- like building up your savings again. 

If this experience has taught us anything about our spending habits, it’s to consider planning ahead with serious, realistic goals of saving. 

To help you get going on starting a new savings strategy, try a Term Share Certificate or Money Market Account. These are great places to save that can earn higher dividends.

Can you refinance and consolidate your debt? Rates are very low right now on car loans, mortgages, home equities and more.

Use this helpful Savings Goal Calculator to find out how long it will take you to reach your savings goal.

Save Smarter

We are here to help you plan for the future with our Savings Account Options. Call 315-735-8571 to talk about your options or make an appointment with one of our friendly and knowledgeable representatives today. Simply click on the button below and select the “New Accounts” service from the menu.

Pros And Cons To Paying For Your Next Car

Looking for your next car can be exciting! Before getting behind the wheel for a test drive, or even beginning your search, knowing the varying factors of purchasing one is helpful to keep in mind, as that can greatly influence your financial position.

When it's time to purchase your next vehicle, there are generally three options: buy used, buy new, or lease. Here are some pros and cons for each.

Used Cars

Pros: 

• Used cars are generally less expensive up-front and they have the added benefit of not drastically depreciating when they leave the lot. 

• Buying a used car, offers a pretty good-sized savings percentage compared to purchasing that same car brand new. Therefore, it may be easier to afford a higher class of car than you normally could have. 

• Also, car insurance rates and registration renewals are typically lower for used cars. This can save you hundreds of dollars, or more, over the life of the car.

Cons: 

• While today’s cars are much more efficient and can go longer between scheduled maintenance visits, if you choose to buy used, there are some additional costs to consider. For example, you’ll want to have the car checked out by a trusted mechanic to determine when maintenance work or repairs would be necessary.

• You may have to pay additional money to have the car certified.

• Depending on the age of the vehicle, you may possess it for less time, which means spending more on a another vehicle sooner.

New Cars

Pros: 

• Buying a new car may present you with more financing options from a seller, as well as new-car incentives such as cash rebates and great interest rates. You may also be able to spend less than the first-market price after negotiations, incentives and rebates. 

• New cars are also likely to provide the latest in tech features for performance, safety and comfort. 

• A brand new car offers peace of mind without the need to take it to a mechanic before buying. If issues arise, most warranties will cover the cost of repairs for the first few years.

Cons: 

• New cars are expensive and you may have to put a large amount down up front. They also depreciate as soon as you leave the lot. In some cases, the value of the car drops as much as 20 percent right when you pull away! That means a $25,000 car will lose $5,000 within the first few minutes of ownership.

Leasing A Car

Pros: 

• When you lease, you don’t pay the full purchase price of the car, rather, you pay the depreciation of the car. This means if you lease a $25,000 car for 3 years, and the anticipated value of the car at the end of the 3 years is $15,000, you only make payments on that $10,000 difference. If you had purchased the car, you would make payments on $25,000.

• Leasing is also often available with no money down or a much smaller amount than when buying the car outright.

• A major benefit of leasing is that you get to drive a brand new car every few years. This means the latest in safety and technology.

Cons: 

• A drawback of leasing, is that the money you're spending isn’t investing in an asset, it’s simply spending money. Like renting instead of buying, you are not purchasing any equity in an asset you can later sell.

• Other considerations are mileage fees and potential damage to the vehicle. If the car is damaged or you drive it over the mileage limit, you may end up with hefty fees.

• Leasing often costs more than buying in the long run, as you typically drive a purchased car for longer than 3 years.

Drive Smarter

When buying your next car, consider the various financial choices, your driving habits, and your personal preferences of owning a car. Before deciding, visit our Car Loan page to learn how we can help you get on the road with a car that's right for you. Start the application process below.

Apply Now

If you’re not ready to apply for a car loan, and have questions, we are here to help. Call 315-735-8571 to talk about your options or make an appointment with one of our friendly and knowledgeable representatives today. Simply click on the button below, select the “Apply for a Loan” service from the menu and choose the “Auto/Recreational” option.

Article adapted from Banzai.