Why You Should Give Back
Charitable giving and donating are powerful ways to positively impact your community and support those in need. The holiday season is known for its abundance of food, gifts, and quality time with friends and family—but not everyone is fortunate enough to have the support system or funds to enjoy this season of celebration. Luckily there are multiple ways to donate this holiday season and all year round to help support your community and those in need while receiving tax benefits. Donating is a selfless and impactful act that is recognized and rewarded with substantial tax benefits. The tax benefits of donating require documentation and proof in order to reward deserving individuals for their charitable donations. Before we get into the tax benefits let’s dive into the most impactful types of charitable contributions you can make this year.
Types of Charitable Contributions
Charitable contributions can be divided into three general categories: cash donations, non-cash donations, and appreciated assets. To receive tax benefits, donations must be donated to verified charity organizations and well documented.
- Cash Donations: Cash donations are one of the most popular types of donations and can be made with cash, checks, or online transactions.
- Non-Cash Donations: Non-cash donations include items like clothing, furniture, food, and so on.
- Appreciated Assets: Most people are unaware that stocks and other assets can be donated as charitable gifts. It not only makes a big impact for charities, but it also helps you avoid capital gain taxes if your stocks or assets have appreciated in value.
Tax Benefits of Charitable Giving
The tax benefits connected to charitable giving rewards deserving individuals for their donations. To see a real difference on your taxes, larger amounts will receive larger benefits. If you’re planning on donating the same amount every year, try donating a larger lump sum this year to receive better tax benefits in the long-term. Here are two types of tax benefits you can receive for donating.
Deducting Charitable Cash Donation
Itemized deductions of charitable cash donations to public charities can be deducted up to 60% of your adjusted gross income (AGI) while private charities can be deducted up to 30%. Each charity has specific deduction limits and guidelines. Check out this contribution deductions & benefits resource from the IRS to better understand the limits and benefits.
Qualified Charitable Distributions (QCDs)
This type of tax benefit is only available to individuals 70 and a half years old or older with a traditional or ROTH IRA. These individuals can donate up to $100,000 from their retirement account directly to a qualified charitable organization without paying any tax on the income.
Give Back to Your Community
Giving back to your community is a selfless way to celebrate the holidays this season. Not only do you help support those in need, but you also get deductions and other benefits on your taxes. When navigating the documents and forms for the tax benefits of donating, seek out professional advice at 1st Community Credit Union with offices in Sparta, West Salem, and Tomah. Put your community first with help from 1st Community Credit Union today!
After you've filed your taxes, do you wait impatiently for your refund and make plans for all the ways you want to spend the money?
This year, consider doing something different...something that your future self will thank you for.
The average tax refund is nearly $3,000, which is more than just a little extra spending money. Financial advisors suggest possible ways you can make the most of your tax refund this year:
- Start an emergency cash fund: The majority of financial advisors recommend setting up a separate savings account with three to six months of living expenses saved in the event of a layoff or unforeseen health problem that isn't covered by insurance. Keep this emergency account separate from your checking and regular savings accounts so you won't be tempted to drain the fund by spending the money on non-emergencies. Starting a secondary savings account at 1st CCU is easy, you can do it from the comfort of your home within 1st CCU Anywhere online or mobile banking, simply click 'Add an account' and follow the prompts.
- Invest for your retirement: If you decide to put away your refund for a longer term, advisors recommend putting it toward your retirement by adding more to your employer's retirement program, or open a Traditional or Roth IRA if you are unable to contribute to an employer's program.
- Invest for your child's college education: If you already have an emergency fund, and if you're well-invested for retirement, turn your attention toward building your children's (or grandchildren's) college savings plans.
- Pay down high-interest debt: Many financial advisors believe it is prudent to use your tax refund to pay off as much of your high-interest debt as possible. They advise making a list of all loans, balances, and corresponding interest rates. Start by paying off the highest interest rates first, and work your way from there.
While it can be tempting to use the refund to take a vacation or to purchase a long-awaited new television, computer or other high-tech gadget, take a long hard look at your economic situation and the current economy first. Investing the money in financial stability or a brighter future is a smart choice.
When it comes to teaching smart money management for teens and kids, the more education they have at an early age, the better prepared for life's financial challenges they'll be in adulthood. We're all familiar with the concept of saving from an early age but providing young people with a solid foundation of budgeting, understanding credit scores and building wealth can seem daunting - especially if you haven't been taught these principles yourself! Luckily, 1st Community Credit Union is here with tips to provide parents and their kids the knowledge necessary to make smart decisions with their finances so your children will have beneficial financial habits for their future.
Smart Money Management for Teens and Kids
As a teen or kid, it can be difficult to understand the basics of money management and saving for the future. Fortunately, the internet has several free resources to help teach kids (in a fun way) the importance of saving and spending wisely. There are also books for all ages available at your local library, or consider playing board games such as Monopoly or Payday as a family.
Understanding the value of each dollar is an important part of setting financial goals. This understanding helps with making and sticking to a budget, tracking expenses, and utilizing every resource available. Other impactful tactics include investing in yourself through responsible spending practices, creating an emergency fund, planning for a rainy day. Teaching your young ones steps to get their finances in order now will be sure to pay off late
The Benefits of Good Money Habits
Teaching children and teenagers the importance of good money habits at a young age is essential for helping them make responsible and informed decisions as adults. Developing healthy relationships with money through understanding how to save, budget, and spend wisely can help teenagers avoid future debt, build beneficial financial confidence, and create a more secure future. 1st CCU always encourages smart money management at any age. Making wise monetary decisions now plays a role in ensuring financial well-being and stability in the long run. Not only will these lessons enable teens to become financially independent while they are still young, but they will also provide peace of mind in terms of security later in life.
Strategies to Teach Kids and Teens about Saving
Teaching kids and teens about the importance of saving is an essential part of their financial education. Kids should begin learning about budgeting and smart spending as early as possible so they can develop lifelong saver habits. There are a few key strategies to teach kids and teens about saving: start small, reward good behavior, provide clear examples and make it a team effort. With the help of 1st CCU, parents can suggest savings goals for their children and provide guidance through the process. By recognizing the efforts their children make toward these goals, parents can empower their kids to become smart savers.
Developing a Budget for the Whole Family
Taking a family-oriented approach to budgeting can help everyone in the family learn how to become financially savvy. Developing a budget as a team helps instill good money-managing habits that can be carried over into adulthood. A joint budget not only teaches teens and children to value good financial decisions, but it also encourages collective responsibility for spending and saving habits. Putting together a budget for the whole family is easy, practical, and beneficial for future financial well-being.
Tips to Help Kids and Teens Stick to their Budget
Teaching kids and teens how to budget is essential when it comes to smart money management. But how do you help them make it a habit that'll stick long term? 1st CCU has several tips that will help! For starters, setting up a monthly budget specifically for a teen or kid's spending money can give them the autonomy they require while helping them to stick to an allotted limit. Secondly, encouraging tracking and setting reminders can also keep them on track with their budgeting goals. Most importantly, making sure your kids or teens understand why having a budget is important and the benefits of being financially responsible will go a long way in establishing good habits early.
Encouraging Smart Spending Habits for Life-long Success
As your children take their first steps into adulthood, instilling good money management habits will be paramount in ensuring their long-term success. 1st CCU is a great resource for introducing teens and kids to fiscally sound practices. Enabling them to quickly understand the importance of budgeting and learning how to handle unexpected expenses can empower them with the knowledge needed for longevity when it comes to mastering their personal finances. Start off small by having your kids keep track of daily expenses so they can visualize the difference between instant gratification purchases and building a sustainable financial plan that yields long-term rewards. By creating savings goals that are achievable, your children will also learn how powerful setting aside a certain amount each month or week can be when working towards future goals. Teens may be resilient but providing guidance towards sound spending habits early in life will ensure smart decision making for years to come!
Smart money management for teens and kids starts at home. It’s truly an investment worth making. Help your kids achieve their financial goals with confidence. Just like we can help with home mortgage loans and auto loans, at 1st CCU, we’re here to help the next generation of smart savers start early. Contact 1st CCU in Sparta, West Salem and Tomah for more information.
The new year is a time for resolutions. Many people resolve to get in shape, spend more time with family, or save more money. If you're looking to save money in 2023, we have some tips that can help! Follow these simple steps and you'll be on your way to saving more money without making any big changes to your lifestyle.
Make a Budget
One way to save money is to make a budget and stick to it. This means knowing how much money you have coming in and what your regular expenses are. Once you have an understanding of your finances, you can start making adjustments to spending in order to free up more money to save.
Cut Back Unnecessary Expenses
There are plenty of ways to cut back on unnecessary expenses. This could mean things like eating out less often, buying fewer clothes, or reducing your entertainment budget. When you take a close look at your spending, you may be surprised at how much money you're wasting on things that aren't really necessary.
Utilize Coupons and Discounts
A third way to save money is to start utilizing coupons and discounts. Whether it's clipping coupons from the newspaper or looking for deals online, taking advantage of sales and discounts can help you save a significant amount of money over time.
A fourth way to save money is to get rid of debt. If you have high interest debt, such as credit card debt, it can be costing you a lot of money in the long run. By paying off your debt, you can free up more money each month to put towards savings.
Budget Some Savings
Finally, another way to save money is to simply start setting aside some money each month into savings. Even if it's just a small amount, over time it will add up and you'll have a nice nest egg built up that you can tap into when needed.
Start Saving Today
Start the new year by resolving to save money in 2023 with 1st Community Credit Union in Sparta, West Salem and Tomah. To save even more, let us help with a service that’s right for you. And if it’s time for a home loan or auto loan that makes sense, we can help you with that too - just contact us! Let 1st CCU be your partner in building a solid financial future.
For years, banking was the same. Deposit checks at your nearest financial institution’s branch. Withdraw cash from an ATM. Receive bills in the mail and send them a check for the amount you owe. But the Internet has changed all that. Managing your finances has become so much easier, now that you can do it online or on a mobile device.
- Online Bill Paying - Rather than receiving a bill in the mail, sending a check back, and hoping it gets there on time, an online bill paying portal through your credit union lets you pay each of your bills instantly, at the touch of a button. Enter in the amount you owe, and hit, “Pay,” and the money is automatically sent from your account to the institution you owe. For certain bills that are the same every month, you can even set it to deduct the money automatically.
- Money Transfers - Maybe you have two accounts, and need to move money from one to the other. Maybe you have a client who needs to pay you, or a vendor you need to pay. Maybe you just want to send money to a friend. With regular banking, you had to write a check and wait for it to clear. Now, you can do an online transfer, either directly through your financial institution, or through a secure third-party service connected to your account, such as PayPal or Venmo.
- Deposits - Most employers now offer direct deposit, where your money is sent to your account automatically each pay period. But even when you do get a paper check, you don’t have to go to the credit union and wait in line to deposit it. Just take a photo of the front and the back through your mobile banking app, and the money goes in your account automatically.
- Freedom and Flexibility - Most credit unions today offer both an online option as well as physical branches you can visit. This provides the freedom of managing your accounts any time, from anywhere, with the option to choose whether or not you want face-to-face assistance at a branch location. Want to add a secondary savings account to put money aside for something special? Open a secondary account online from home on the financial institution’s website. Sunday is the only day you have time to apply for a loan? Apply online from the comfort of your home.
- Going Paperless - How much mail do you get from your bank? Monthly statements, notices of important goings on, special offers, etc. All that paper just clutters your home, or gets thrown away. With online banking, you can choose to receive all of these communications through email, or through an online portal on the bank’s website, rather than receiving paper mail. Not only does this make everything a lot easier to organize and keep track of, you can lower your carbon footprint significantly by reducing the amount of paper produced, printed, and sent to you. The energy used to access your email is much less than it is to send mail by post—an important consideration as we continue the fight against climate change.
These are just a few of the benefits that online banking and mobile banking can provide you. It’s easier, it’s more convenient, it saves you money, and it’s better for both you and the environment. What more could you ask for? Find out more about 1st CCU's Online and Mobile Banking, we think you'll love it. Or contact the team at 1st Community Credit Union today to learn more about how online banking can benefit you.