Bellwether's Blog on life and money
In New Hampshire, there’s really no way around it; having a car is essential to everyday life. With the exception of urban areas such as Manchester or Nashua, there’s little-to-no public transportation available.
If you’re a recent college graduate, the situation becomes even more imperative- gone are the days when everything you need is only a short walk across campus. You may be able to survive by hitching a ride with your family or friends, but that's a temporary solution. Once you land your first professional job, you'll need your own reliable source of transportation.
But how can a recent college student go about obtaining a car loan if you're already swamped with student loans and/or credit card debt?
You're not alone. Here are some facts to consider:
- As of 2012, student loan debt surpassed credit card debt with a total of over $956 billion. (Federal Reserve Bank of New York)
- Over 90% of college students have at least one credit card and graduating seniors have an average of $14K in credit card debt. (Forbes)
- In 2011, students graduating from Granite State colleges and universities had the highest average student loan debt load in the nation at $32.4K compared to the national average of $26.6K. (Nashua Telegraph, the Project Student Debt)
These facts may seem daunting at first glance. But with the right financial institution, you can devise a plan for a successful future.
Some key advice for College graduates seeking a car loan:
1) Build Good Credit
If you can document your monthly income it’s time to start thinking about applying for a credit card under your name. Building good credit is not only a great habit, but also necessary to apply for loans, mortgages, auto insurance, rental applications, cell phone plans and even some jobs. Start by using your card for small, reoccurring expenses that you can pay off in a few months on a regular basis, such as groceries or your Netflix account. It's not a good idea to live off your credit cards, but in the beginning, to build a track record and not spend more than you should, using the card for regular expenses you already know you can afford helps to build a solid payment history. Think of building good credit as a journey; most financial institutions need to see six months or longer of good credit history before they decide to hand you a loan. It takes longer than a month or two, but if you stick to it, you'll get there. Lastly, the quality of your credit score will depend on your ability to make payments on time, so don’t be late!
Quick tip: Did you know that by law you are entitled to three copies of your credit report each year, for free? You can receive the reports all at once, or spread them throughout the year to track whether your credit is improving. Visit www.annualcreditreport.com for a free credit report. This is the official website to obtain your free reports.
2) Co-sign with a Parent/Guardian
If you’re still working on your credit history but need a vehicle now, another option would be to get a parent or guardian to co-sign the loan for your new or new-to-you car. Many financial institutions ask for a co-signer when a borrower has a limited credit history. The co-signer usually has established a good credit history and has a solid credit score. Many parents co-sign for their children’s cars in order to help them achieve financial independence quicker.If they're willing, this is a great way to get yourself started, but make certain you're the Primary Borrower so the payment history helps you build credit history. It’s also important to note that it's your responsibility to make payments on the car loan on time. If you fail to do so, responsibility is then be placed on the co-signer (parents or guardians). This could result in damaging your co-signer's good credit standing. They are taking a risk by signing with you, so talk with your parent or guardian about the possibility of co-signing a car loan before making your final decision and make sure you both understand the level of responsibility.
3) Seek Financial Advice
Regardless of how you obtain a car loan, it’s always important to seek professional advice. Important financial factors like your maximum debt-to-income ratio will determine the terms and amount of car loan available to you. At Bellwether Community Credit Union, our maximum debt to income ratio for auto loans is usually 40%. Meaning total debt (including housing, credit cards, other loans including student loan, and the new auto loan) can't exceed 40% of gross income (before taxes) on a monthly basis. Discussing your options with a professional will help point you in the right direction. Stop by one of our branches or call us at 1-866-996-9828 and we'll be happy to chat with you, no appointment needed. You can also submit one of our online applications available on our website.
To learn more about our auto/truck loans and apply online, visit our page.7 Comment(s)
Warm weather is here and with it comes the excitement of open country roads and a new motorcycle. If you’ve been thinking about getting one, there are few things you should know.
1. You need a motorcycle license.
2. You will need a motorcycle. (May seem obvious, but this is about the destination, not just the journey!)
3. "How will you pay for that new ride?" (a very important question)
Getting the Paperwork Out of the Way
Obtaining a motorcycle license is pretty straight forward. You need to pass a vision test, prove sufficient fitness to drive a motorcycle, and you must be at least 16 years old. Fitness is proven by either passing a Basic Rider Course or by taking a motorcycle skills test. In New Hampshire any applicant under 18 years old must take the Basic Rider Course.
Shopping for a Bike
Now the fun part: What kind of bike do you want? Options are varied:
Sport bikes (emphasizing speed, acceleration, braking and cornering on paved roads) - Kawasaki Ninja or a Suzuki GSC-R are good examples
Cruising bike (less demanding to ride because they're tuned for low-end torque, requiring less shifting. Also designed to allow the rider to sit in a more relaxed position) Honda Shadow, Harley-Davidson Road King, or Honda Gold Wing are great options.
It helps to consider how you will use the bike. Are you looking to save on gas and drive it back and forth to work? Or are you and your friends up for leisurely drives on the weekends?
Financing Your Dream
Once you’ve decided what kind of motorcycle you want it's time to think about financing. Most people finance motorcycle purchases with a loan. Questions to ask yourself :
· Will I finance all or only a portion of the money needed?
· What can I afford for a monthly payment?
· How long do I want to be paying for this bike? (36 months? 48 months? Or something in between?)
A Bellwether bike loan provides multiple options and flexibility. We offer up to 100 percent financing. Apply online or stop by one of our branches to get started. At Bellwether we make applying for a motorcycle loan easy.
So, you’re brown-bagging your lunch, clipping coupons, and saving your pennies. Now what should you do with your savings? It’s time to do a little planning and settle on your savings goals – both short-term and long-term.
Opening a savings account
Don’t simply decide you'll keep your extra cash in your checking account and vow not to touch it. It’s far too tempting to justify a splurge on a cute pair of shoes or a night out when the funds are so readily available. Set up a separate account for your emergency fund. This account should be separate from any other savings account, as well.
Setting savings goals
It’s important to start with a goal in mind, but don’t set your sights too high at first. Trying to save too much and cutting out all fun money can lead to frustration and send you off course. Choose a realistic initial goal, like $500 or $1,000. Employ some of the tips from my previous post to gather up initial savings and help you reach your goal as soon as possible. Once you reach your initial goal, set a new goal. Your second goal could be to save enough to cover one month of living expenses.
Experts generally agree you should have three to six months’ worth of expenses in your emergency account. Make this your ultimate goal, but don’t get bogged down with how far away those numbers seem. Remain steadfast with your commitment to save, and watch your account grow.
Make saving a habit in order to grow your fund, and increase the amount you can save each month as your situation changes. Consider setting aside a portion of each paycheck, and have it directly deposited into your emergency savings account. You may never miss the money you don’t see in your checking account, and this way you won’t be tempted to spend it. A little bit each week can add up quicker than you think.
When to use your savings
Emergency funds are just that: funds to use only in case of a crisis. Be clear on what constitutes an emergency for you. Large car repairs, appliance repair or replacement, and loss of employment all qualify. Nearing the end of a pay cycle and not having quite enough to purchase concert tickets, however, does not. Resist the temptation to dip in when it’s unnecessary, and honor the true purpose of your fund.
And as emergencies do pop up, remember to USE your savings. Many people get caught up in hoarding their savings and forget why they created an emergency fund to begin with. Don’t sink yourself into debt when you have the cash available; you’re creating this safety net to use it when you need it. You should choose to rebuild emergency savings instead of incurring debt and paying high interest. Saving now will allow you to handle life’s future twists and turns without disrupting your living habits.
By Erin Pittman Copyright 2014 brass Media, Inc.
Ready to open an account? Get started here!0 Comment(s)
Our own BCCU Community Teams participated in two important events this month.
Bedford Rotary Memorial Road Races
The BCCU Community Team at the 40th anniversary Bedford Rotary Memorial Road Races, May 17, 2014.
This year marked the 40th anniversary running of the Bedford Rotary Memorial Road Races. Races included the Bedford 12K Championship and the Uncle Sam's Rockin'-Walkin' 5K. The Rotary Club of Bedford NH has been serving the Bedford and West Manchester communities for 45 years—almost as long as the run has been in existence! Proceeds of the races go to local Bedford Rotary Club projects and charities.
The BCCU Community Team participated, with our own runners Don Blanchette and Katie Bisbo, and as a gold sponsor for the event.
Taking first place for the men in the 12K event was Amos Sang from Indian Orchard, MA, and for the women Christine Shaw of Manchester, NH. Our top BCCU Team runners were Don Blanchette and Katie Bisbo (pushing her daughter in a stroller!)
First place in the 5K event for the women was Julianne Quinn of Ithaca, NY, and only seconds ahead of her for the men was Sam Wood of Laconia, NH. Our top BCCU Team runners were Carly Hunt and Andrea Ireland. Nice job ladies!
For all the Bedford Rotary Memorial Road Races results, visit the results page at www.coolrunning.com.
Walk Against Hunger
The BCCU Community Team was proud to help raise $128,000 in the New Horizons Walk Against Hunger on May 20, 2014.
On May 20th, members of our BCCU Community Team took part in the 22nd annual New Horizons Walk Against Hunger. This year the walk raised a record-setting $128,000 to ensure food and shelter for the hungry and homeless people of Greater Manchester.
44 teams came out to walk the four mile route on the 20th, but Manchester middle schools' students, staff and administration members were the largest support of this effort. They held their own walk events at each school and raised $30,000.
Charlie Sherman, Executive Director said, “It’s a feel good event, knowing that every dollar will help to provide children and their families. When children and their families come to New Horizons either for food distributed by our food pantry or for hot dinner meals served in our soup kitchen, it helps to keep them [children and their families] in their homes simply by saving enough money per month to pay rent.”
New Horizons for New Hampshire is a soup kitchen, food pantry and emergency shelter and support service. For more information about this important organization, you can call (603) 668-1877 or visit www.NewHorizonsforNH.org.0 Comment(s)
My plan to save up and get back on the water.
I want to buy a kayak. I had a Perception Acadia a while back and used it every summer, but thought I should be using my money elsewhere, so I sold it. For the past 5 years I’ve missed that kayak and 2014 is the year I’m going to remedy that.
Research Your Goal
I’ve done my research and know the length and type I want. I also have a good idea of the price range ($300 and $500). I’ll consider a used kayak, and I know Fall is a better time to find a good deal, but I want my kayak now. REI provides a great guide on how to choose a kayak. Check their site out if you’re in the market and aren’t sure where to start.
There’s more to a kayak than the kayak
With new sports, there’s always a list of supplies you’ll need. They add to the cost, but also to the enjoyment.
- Personal Floatation Device (PFD- you need one, and can even lose your boat if you’re caught without one on board)
- Kayak rack
- Tie downs
- Water pump
- Kayak cart
- Paddling gloves (I have delicate hands)
- Water boots (makes getting out in marshy areas a little less scary)
- Rope bag (an inexpensive safety item to save someone’s life)
- Dry Bag (to keep your things dry!)
Thankfully, I retained most of these items, but I still need a few, so budgeting is my next step. With everything included, I’ll probably need about $600. I could use my tax refund, or pay for all of this on a credit card, but those don’t seem like responsible ways to buy a toy. Saving is more sensible… giving up some fun things now for a lot of fun over the next few years. Following is my proposal:
Give up buying fast food lunch every day - $25/week
Give up dinner out once a week - $25/week
Buy generic at the grocery store - $10/week
My vacation is in 8 weeks, so with this I'll have $480! I can then reasonably charge $120 and pay it off before the grace period is up by just continuing my “cutbacks” for two more weeks. In this way, I’m not eating into savings, and I know the loss of these extras isn’t going to kill me. In the end, the kayak will provide me with something I can enjoy for years to come. Well worth a few months of frugality!1 Comment(s)