The Bottom Line
Small business is important to Central Oregon, and to Mid Oregon. Find tips and resources for business, and information about Mid Oregon’s commercial services and business members.
Understand Your Summer Paycheck
Ever wonder what happens to the money in your paychecks from your summer job? You’ll soon find out that you’re not the only one who has claims on what you earn! It’s important that you understand your summer paycheck.
Why Don’t You Get All of Your Earnings?
Example: You work 25 hours over a two-week pay period. Your pay is $10.50 an hour. You figure you should see $525 on your paycheck, right?
Sort of. But not in your pocket. There’s a big difference between gross income—or your hourly rate times the hours you work—and net income, or your take home pay.
What Are Deductions?
Your gross income is reduced by deductions. Look at your pay stub—the earnings statement—attached to your check. It includes:
• Your identification information
• The dates of the pay period
• Your gross income
• All your deductions, which include taxes and FICA
• Your net income
How You Can Increase Your Income
You can’t control the paycheck deductions, but you can do two things to raise your pay, one for now and one for later:
• For now—Keep your eyes open for opportunities to take on more responsibility. If you’re enthusiastic about your job and do it well, your boss may promote you. Even if that doesn’t happen, you’re developing skills that could lead to better pay in your next job.
• For later—Make smart decisions about your education. Staying in school increases your chance of earning more money in life.
How You Can Prepare For The Future
As you look to future classes, look for ways to earn extra credit, take advanced placement courses, form good relationships with your teachers, and volunteer for school events. All of these can get you good grades, a possible career experience, and excellent letters of recommendation for college.
Want more money now? Save some. Come in to Mid Oregon Credit Union to set up a savings account and learn how to manage your money.
Can You Buy a Home without a Mortgage?
Is it possible to purchase a home today in the U.S. without relying on a mortgage? Yes. About 23% of U.S. homebuyers pay cash, according to Zillow’s Consumer Housing Trends Report 2018. It IS possible to buy a home without a mortgage.
Difficult But Could Be Worth Your Effort
It’s not the easiest way to go about it, but for some, owning a house outright and not paying thousands in interest charges over the life of the loan makes it worth the effort. If you have a strong desire to pay cash for your home and have the discipline to stay on a strict budget, here are a few suggestions to help you accomplish this goal:
- Live off one income – If you have a spouse or partner making a salary you can both live off, reduce your expenses so you can put your own salary into a savings account or investment product. It may take 5 or more years to save enough, depending on your salary and how much you want to save.
- Buy a fixer-upper – If you’ve saved enough to buy a modest home that needs some work, and you’re willing to put in the sweat equity to make the needed repairs, then this could be an option.
- Build your own – If you have carpentry skills, then instead of saving enough to buy an existing home, you’ll just need enough cash to buy the land and the building materials, permits, etc. This option will also require you to be creative with your living arrangements as you build your permanent home. Some people live with friends or family members and others live in trailer homes while they build.
- Sell current home for a less expensive one – If you already own a home and have paid down a good portion of the mortgage (in other words, have plenty of equity in it), you have the option of selling the house and using the profits to purchase a less expensive home.
Additional Expenses To Keep In Mind
Keep in mind that you’ll also have to save for closing costs (inspection fee, property appraisal, attorney’s fees for closing, and property taxes), as well as have enough cash left over to pay for any repairs that need to be made and to cover the usual house maintenance expenses.
If your goal is to pay cash for a house, then having a dedicated savings account or investment product will help you achieve this dream. Talk to any of our new account representatives about opening an account and to learn more about how we can help you. We have several savings vehicles that could help you make your new home a reality!
Financial Tips for New Parents
Are you starting a family or maybe just thinking about it? As a new parent, you want to make sure you can provide your children with a safe, secure home. In addition to getting baby gates and corner bumpers, it’s important to get your finances in good order and keep them there. Here are some great financial tips for new parents.
Have An Extra $230 Thousand…?
Raising children is not cheap. The USDA estimates that it costs over $230,000 to raise a child until they’re 17 years old – and that doesn’t include college tuition. As a new parent, you’ll want to enjoy these years raising your new daughter or son, and worry as little as possible about bills. To minimize the financial stress of raising a child, we offer you these tips:
Update Your Insurance
- Add your child to your health insurance. Your provider does not automatically add your child to your plan, so make sure you tell them. Most require that you add your baby 30-60 days after you deliver. If your employer offers a Flexible Spending Account (FSA), consider signing on. The funds are automatically deducted from your paycheck to be used for out-of-pocket health care costs. An added benefit is that these funds are deducted with pre-tax dollars, so that helps lower your taxable income.
- Buy life insurance. Term life insurance is very affordable, and it will ensure that your child has some financial protection just in case you die before he or she reaches adulthood.
Update Your Budget
- Create a budget. There are quite a few free apps, like Mint.com and Everydollar.com, to help you build a budget. This will enable you to see where your money goes and how to save for emergencies. Which leads us to…
- Start an emergency fund. Again, you’re protecting your family for the “just in case scenario.” An emergency fund will help you keep your family afloat if you lose your job. Try to save a little each month and put it in an account separate from your checking account. Aim to save enough to cover 6 months of household expenses.
Don’t Forget the IRS
- Use the tax breaks. Currently, the Child Tax Credit will let you claim a $2,000 credit per child on your taxes. To learn about all the family credits you may be eligible for, go to the IRS website at https://www.irs.gov/credits-deductions-for-individuals.
- Save for your retirement. If you haven’t started, begin now. The earlier you begin, the more you’ll earn in compound interest. This fund will ensure that your child won’t have to support you when you retire.