Tips to build your credit while you're young—and a million reasons why it's important

Why Gen Z Should Start Building Credit

How to build up a good credit score while young and how to not get caught up in over-the-top marketing when choosing which options are right for you

Credit is the ability to borrow money with the understanding and under the agreement that you will pay later. A credit score is a three-digit, numeric representation of an individual’s capacity to repay a loan.

Buying on credit became popular during 1920s consumerism to allow average Americans the ability to finance higher-priced items like cars. These days, you probably think of credit more in terms of a credit card, and less in terms of having an account with a specific store.

Why is having “good credit” such a big deal?

Having good or even decent credit can help you big time in the long-term.

You can reap the benefits from the best credit cards

The top-tier credit cards provide users with special access to private lounges and clubs. Some credit card companies even have deals with popular restaurants where they have leverage getting you into an almost impossible seating.

You can get loans with more favorable terms more easily

In the loan-approval process, those with bad credit scores are often denied, as they’re considered unstable and risky. However, a good credit score can make the loan application process seamless, as they trust that you're "good for the money." With better credit, you're more likely to secure lower interest rates and better terms on loans, cards, and insurance. Why? Because lending companies tend to reward your responsibility with lower rates because you are deemed less of a financial risk.

The importance of starting building credit young

Your credit score will stick with you for your entire adult life. While it’s possible to improve a bad credit score, it’s much more work to fix than to just start out with a favorable one. Do yourself a favor and learn how to achieve and sustain a great credit score from the get-go.

. The most common is to open up your first credit card. However, if you are still financially dependent on your parents, you can explore the option of becoming an authorized user on their account, which is essentially another card for them, but in your own name. This will help your credit reputation—as long as your parents maintain good credit—and is easy to do while you’re still young. It’s beneficial to discuss how your parents manage their credit as insight into how you can continue their positive credit behaviors after you get your own card.

If you are at the stage at which you are ready to open up your own credit card, find a card where the terms are fitting for you and go for it! It’s time to build up a great credit history.

There are many mistakes that can harm your credit. Building good credit habits can prevent your score from dropping.

Having backed up or late payments even by a few days can initiate massive blows to your credit reputation. That's why it's crucial you're sure that every purchase you make is well within your means. Just because it's not immediately drawing from your checking account like a debit card, you're still on the hook to make those payments! Bottom line—if you can't afford it now, don't purchase it. And having a poor payment history is the easiest way to hurt your credit score.

Obviously, it’s best to pay off your credit card bills on time. If you find yourself in a tough spot, give your credit card company a call and see if they're willing to work with you.

A credit utilization rate (ratio) is a numeric expression of the amount you currently owe in terms of your credit limit. While you always want to meet your card’s minimum charge, it’s important to pay your outstanding balance in full to keep your ratio favorable.

Loans and previously opened accounts also factor into your credit score, so keep up with all of your repayments to ensure the best score. Additionally, mortgage foreclosures, bankruptcies, and car repossessions all pay into credit.

No matter how eager you are, don’t get into a credit application frenzy. When credit card companies detect that you've been applying for more credit options than a 90s one-hit-wonder, especially in a short period of time, it sends the message that you're financially unstable and not an ideal customer.

No matter your age, it's incredibly easy to be swept away by 

 or too-good-to-be-true deals. A large percentage of the credit cards you see advertised on TV or online use over-the-top marketing strategies that leave users confused as to which companies truly offer good deals and which are scamming their audience.

Beware of phrases such as “as low as” since this could give you an unrealistic example of the card rate you’ll actually be receiving. Also, think twice about introductory rates. While having a discount at the beginning of a contract can be a good thing, make sure your full-time rate is something you can manage. The first six months aren’t going to last forever.

Unnecessary points can also be a credit card scam. If your potential card helps you acquire a large quantity of points, but those points are useless to you, it’s not worth using points as a deciding factor. Some points quickly expire or have insane terms that make them practically impossible to redeem.

Remember you don’t need the physical card to act as a status symbol. Gold cards sound and look fancy, but in reality, (unless you actually qualify for the upgrade), you shouldn't waste your money on the special cards when the benefits aren’t often dramatically better.

Bottom line: if it seems too good to be true, do some more research and read 👏the 👏 fine 👏 print 👏.

Don’t beat yourself up if you can’t keep your credit perfect at all times: carrying some debt and incurring interest is inevitable at points. Start young, keep it up. And remember: you can always boost your credit score; no score is too high!

orsa, the credit union you knew as Community Financial Credit Union (CFCU)
Content before 2026 may contain references to our former name.

Why Gen Z Should Start Building Credit Blog Content

7 reasons why Gen Z should start saving for retirement now

Start Saving for Retirement Early

Between keeping up with the latest TikTok trends and Outer Banks episodes, starting your retirement fund might be one of the last things on your mind, especially if you’re in your late teens or early 20s.

But we’re here to tell you that the time to start saving for retirement is now! So listen up, Gen Z! Below are seven reasons why you should start saving for retirement now.

Growth, baby! Or, Compound growth, to be more specific.

Two words. Compound growth. Once you put money into your retirement fund it will grow exponentially. No extra work needed!

So the amount you are putting aside into your retirement fund from your entry-level job may not seem like a lot at first but, over time, you could end up with thousands of dollars worth of interest.

Let’s say you have an annual income of $70,000. Then you invest 15% in a fund that provides you with a 7% return rate. Well, if you start saving at age 30, at age 67 you will have about $167K in savings. Whereas if you start saving at 20, at age 67 you will have about $330K in savings. That’s nearly double the savings!

For those over 50 who need to accumulate funds in their 401k fast, some plans allow individuals to make up a catch-up contribution. These contributions are in addition to the annual 401(k) contribution limit. (These catch-up contributions payments are also an option for some individual retirement plans; contributions vary, and change each year, so double-check!)

But if you start saving for retirement at a younger age, then you will not have to play catch-up when you're older to have sufficient retirement funds. This means you can avoid having large amounts withheld from your paycheck when you’re older, and in return, have a more relaxed budget.

Investing early means more money! Opening a retirement account and starting to accumulate compound interest in your 20s could result in thousands—even million—more dollars in your account. And this extra money can allow you to have more flexibility in your retirement plans. So if you dream of spending your retirement in Hawaii... who’s stopping you?!

If your employer offers a 401k or 403(b), a percentage of your paycheck may be automatically added to your retirement account. In that case, your taxable wages would be reduced by the amount of the contributions to a 401(k) or 403(b) plan, if you chose to participate in them.

Now, yes, when you take out your money upon retirement you will then have to pay the taxes on the distributions from those retirement accounts. (Note: details depend on if they are ROTH or traditional 401(k)s). But the hope is that you will be in a 

 after you retire, which would lead to paying less in tax.

Don’t have an employer-sponsored retirement plan? Well, don’t worry because you have options. An IRA account or individual 401k can still give you tax benefits.

When it comes to finances, nothing is guaranteed. But, by saving early and staying financially responsible there is the possibility that you could retire early if you wanted to do so.

In their 20s and 30s, people often have fewer financial obligations like a child’s 529 plan or mortgage payments. With a greater disposable income when you’re younger, placing a percentage of your salary in your retirement fund will be less of a hassle.

For those 62 or older, the average monthly social security benefit is around $2,000. Generally speaking, the longer you wait to file for your benefits, the larger your monthly benefit may be.

Now, depending on where you live, this benefit may not be enough money to cover your monthly expenses. But even then, in 2034, the Social Security OASI Trust Fund for retirement benefits is estimated to be depleted. This does not mean that no one will receive retirement benefits. However, it does mean that the fund is expected to see a 24% decrease—and therefore fewer benefits for you. Boo! With these factors in mind, be proactive and start saving early, so you don’t have to rely so heavily on social security benefits. Think of these benefits as a supplement to your retirement fund.

Tips for those who want to start saving young

Weigh in the financial benefits of prospective employers

Target a job that is going to help you achieve and maintain financial wellness. So before accepting any job offer, be sure to analyze the company’s financial benefits like 401(k) or 403(b), health insurance, financial wellness support, physical wellness support, etc.

Invest enough to maximize the company match

Do you already have a job with an employer-sponsored retirement plan? Awesome!

Many of these plans feature an employer match. This means that your employer will match your investment (or at least part of it) up to a certain percentage. This money is already earmarked as part of your compensation package—so, take it! If you don’t invest up to that matching percentage, you’re leaving free money on the table!

Have an old 401(k) account? There are a few ways to deal with this situation

 You may leave it where it is with your old employer, roll it into your new employer's 401(k) or roll it into a rollover IRA. Watch out if you are tempted to cash it out, this could result in penalties and tax payments.

By investing for your retirement early you can help make life for your future self easier. These payments don’t have to be big. Even small deposits can have a huge impact—remember compound interest?! With this head start, later in life, you’ll be able to rest easy, knowing you have enough saved up. And, not to mention, you could invest in other options like the market, your child’s college fund, home renovations, and more.

Next up? Hit up that To-Do list and make sure you’re keeping the Ts crossed and Is dotted in your financial plan!

Blog Content

Everything you need to know about a Home Equity Line of Credit

What is a HELOC?

So you'd like to look into a long-term loan. Your initial reaction is to run down to the local bank and apply for a loan. You agree on terms of a normal loan before finalizing the agreement: repayment period, monthly payments, and costs. You naively think this is your sole option, your dead end to getting that money you need. 

! But wait… there's more: a fork in the road perhaps. If you're a homeowner, you may be eligible for a HELOC.

A HELOC (home equity line of credit) allows you to borrow money against your home. It's a revolving line of credit, meaning it's not an installment loan like a mortgage or personal loan that you borrow and pay back during a set period of time. Instead, it's secured by your home and you can tap into it as you need it, and leave it alone when you don't.

With a HELOC, you are using the equity in your home as collateral. And, you'll typically get a lower interest rate than if you got a traditional loan. It’s like when you go kayaking and they make you leave your ID card as collateral: you're not going to steal the equipment because then you won’t get your ID back.

Using the equity in your house as collateral follows the same idea: you pay the loan amount back and you keep your equity stake in your home. 

(The equity in your home is the amount between your home’s total value and the current balance of your mortgage.)

Like a credit card, you can borrow from your HELOC—up to a limit. (More on that limit below.) But, unlike credit cards, you can only access the funds for a certain period of time, called the draw period. Most HELOCs give you a 10-year draw period, during which you can access as much money as you need up to your total available credit line. When the draw period ends, you will repay the amount you borrowed.

So, during the draw period, you don't have to pay back the principal you borrow, only your interest owed. And, with a HELOC, you don't have to start using the money immediately; you can borrow from it at any time during the draw period.

After you finish drawing from this line of credit, you’ll start chipping away at your principal repayment. This phase typically extends 10-20 years, though you can always pay it back faster. When you pay off the principal—first, do a happy dance, because, dang!—the funds will be allocated back to your line account.

As you (now) know, your line of credit will be replenished as you repay the outstanding balance. Uh oh, what if disaster strikes and you need to borrow against it? 

 You can borrow any amount you need (up to the credit limit) during the draw period. From there, you'll repay it in the next period.

In order to qualify for a HELOC, the amount you owe on your home must be less than the value of your home. Essentially, you need to have paid off half your house already. If you’re not quite there yet, keep this information in mind for when your house matures a little more.

Generally, in the U.S., you can borrow up to 85% of the value of your home, less the amount you owe on your mortgage. So, if your home value is $100,000 and you owe $50,000 on your mortgage, you can borrow up to $15,000 from your HELOC. (Come nerd out with us 🤓: Subtract what you still owe on your home ($50,000) from 85% of your home value ($85,000) and you’re left with $15,000. As always, your credit score will factor into the exact specifications to which your lender agrees.

The quick answer: yes and no. There’s always risk involved whenever you’re borrowing money, especially if you're borrowing against your home. As long as you're fulfilling your payments in a timely manner, a HELOC won't negatively affect your home ownership or credit.

You can actually increase your credit score (which is good!) by using your HELOC funds to pay off high interest credit card debt. This is, of course, assuming the HELOC has a lower rate than your credit card.

As long as you're making your payments on time, you'll also lower your credit utilization ratio, which in turn increases your credit score. (Your 

 is just a fancy term of saying whether or not you typically max out your credit cards. A high ratio means you're often maxing out, or near-maxing out, your credit cards. High ratio = bad, low ratio = good.)

Of course, the opposite of that is true. You will decrease your credit score (which is bad!) with a HELOC if you don't make your payments on time.

Below are two simple ways to minimize your risk when using a HELOC:

As long as you make your payments to your HELOC consistently on time and keep your overall balance low, you’ll keep your credit score rocking along.

When it comes down to it, a HELOC has the same risk as a normal loan. But, this time around, your main asset is your home. We recommend you pay close attention to the terms and the repayment process, as you can find yourself in hot water if you find yourself unable to pay the loan back. The worst case scenario if you can't make your payments on your HELOC is losing your home. So, make sure you pay attention to the fine print here!

Is a HELOC right for you? Hopefully, we’ve helped you determine the answer to that. In short: do you qualify, are you comfortable with the risk involved, and are you confident you’ll be able to pay it back on time? If you answered “yes” to each of those three questions, a HELOC may be right for you. You can use your HELOC for lots of things, of course, but the first thing we recommend you do is think through your plan.

Your lender combines your HELOC loan and your mortgage into one loan balance. So, ahead of inking that HELOC, make sure you can afford the monthly payments.

And, keep in mind the interest on your HELOC may be tax-deductible if you use it to improve your home. 

(Make sure you talk to a tax advisor to double-check the regulations for your situation.)

Now, more than ever, it's important to stay on top of your finances. A few minutes a week and you can work yourself into tip-top (financial) shape! 

A simple and straight-forward guide to figuring out how expensive of a car you should buy or lease on your budget

How Much Car Can (Should!) I Afford?

Just because you can, doesn’t mean you should.

We hear (and share) this advice all the time. Maybe you can spend $10,000 on a diamond necklace, because sure, you have that money somewhere. But would that be a smart allocation of money? Ehh, for most of us, probably not.

The same thing goes for your assets, like that new car you’ve been daydreaming about. Don’t overspend just for temporary fun and an extra spark of “yay!”—that shiny, new excitement feeling is not sustainable. This isn't to say you should never splurge a little! Instead, we recommend you work within your means so another aspect of your finances, like your mortgage or credit card debt, doesn’t have to suffer.

Surely you daydream about having the coolest car; maybe getting compliments from friends and strangers alike. But spending an absurd amount of money on a car solely for the status symbol is not going to be a smart investment. Sure, you might be able to 

 at—but at what cost? You could afford a lot of things if you’re willing to spend your entire life’s savings! But, then again, you’ll never be able to pay for education—yours or your child’s, travel, and unforeseen emergency expenses—that is, unless you never plan to retire. Plain and simple: remind yourself that the purpose of a car is to get yourself safely to where you want and need to be… not to keep up with the Joneses like it's the 1920s consumerism race.

. First, figure out what portion of your wealth you can 

 to buying a car. If you go into the car buying process with a clear budget in mind, and stick with that thought, you’ll save yourself from the inevitable heartbreak of test driving something you can’t actually afford. Don’t set yourself up for a breakup with a car before you even have a relationship with it. Besides, there are so many cars out there, you can find a car that you want 

Okay, you don't want to overspend on a car, but how do you decide what you 

Many financial professionals will give you a rule of thumb to keep total car costs below 15% to 20% of your take-home income. That means, after tax, how much cash are you actually taking home each month.

 car costs. This is all encompassing of what it costs to own (or lease) a car, and not just your monthly payments on your 

 (Psst, we’ll dive into some of those hidden costs in a bit.)

This means that, even if the payments on your new car are 10% of your take-home pay, you still need to expect to spend another 5% of your take-home pay on other car expenses like general maintenance, service and repairs.

Remember those pesky fees and random costs!

The decision you make on which car you buy impacts what your payments look like. For example, service fees and maintenance on foreign cars tends to be more expensive, since the car parts are pricier than American-made ones. (Now, some may argue that foreign cars last longer than domestic. We’ll leave that research up to you and the car experts!)

When taking out a loan, you have to keep in mind that the type of loan you settle on matters. Not all loans are financed the same. You’re gonna have your monthly payment, loan amount, APR (annual percentage rate), the term, and total interest. A common mistake we see people make is only focusing on the monthly rate, and not factoring the other rates and costs. Sneaky, sneaky, sneaky. Don't fall into that trap. But hey! You’re reading this article right now so you won’t fall victim to the fine print. Remember, the loan you're able to take out depends on your credit score. 

Annual property tax, and registration and inspection fees

These fees are unavoidable, unless you want to get fined for an expired inspection sticker or for keeping a temporary plate on long overdue. Guesses are, you don’t want that hefty fine. Depending on the state, you’ll owe a few hundred bucks each year for these fees.

Different cars have different gas mileage. Some require a higher level of fuel, some run mostly on batteries. Ask these questions 

you make the purchase instead of waiting to discover on your own that you need to pay $20 more to fill your tank than your previous car. You’ll want to determine the average MPG (miles per gallon) the car gets for both highway and city driving. And, you’ll want to know how big the gas tank is. That way, you’ll determine how often, and how much, you’re filling your tank each month.

Just like any other product, especially those we use often, cars break. Engine lights come on, seat heaters stop warming your tush, smoke comes out from under the hood. While you can’t necessarily avoid having to pay for car repairs, you can help cushion the cost. For one, you can consider purchasing another warranty, especially if you’re buying a used car. And, you can consider whether a foreign or domestic car is in your budget—remember, foreign car parts tend to run more expensive. Foreign or not, certain models, especially some of the more innovative newer makes may require parts to be shipped which can be costly and time consuming.

Don’t forget about your car insurance! Especially when getting a new (or newer) car, your car insurance will likely go up a little. Keep in mind that the collision and comprehensive portions of your car insurance policy are likely going to suffer some price hikes. If you’re worried about high insurance costs, you could choose an older model used car instead of a just-on-the market car.

These car fees sure can add up and can’t always be predicted. But you can budget for them. When determining how much money you can budget for your new car, make sure to leave some cushion room in your budget for these popup fees.

Function over fashion does not only pertain to clothes. This cultural proverb can extend to your car, too. Make sure your car functions within your budget 

Pay attention to what’s going on in the car market. Do you need that new car right away? Or can you hold off until you find the perfect match for you? Regardless, keep these ideas in mind: budget carefully, don’t spend beyond your means, read the fine print, and watch out for pesky costs.

A straight-forward guide to deciding if you should rent or buy your home 

Is Buying or Renting Right for You?

DVDs, cars, ski equipment—we face lots of situations in life where we must choose whether to rent or buy. And while we can make some of these decisions in seconds (I only snowboard once every few years, come on, I don’t need to buy a board!), one in particular requires much more thought: should you rent or buy your home?

You might be asking yourself if renting or buying is better in the current market. Or, more specifically, if renting is safer than buying in this market. So, how can you know which decision is right for you and your family?

We recommend you consider several factors before signing that lease or making that down payment. But don’t get overwhelmed.

Check your budget—before you move a muscle!

Important: Before deciding on whether renting or buying your home sweet home is the best option for you, make sure you know your budget and payment options. Before you start negotiating, figure out how much house you can afford. And, really, it’s how much house you 

Renting is a great option for anyone expecting life changes or for those who enjoy a change of scenery every now and then. So if you are planning to expand your family or work in an occupation that may require relocation, renting might be a good fit for you. Once your lease is up, the good news is that you’re free to go. So, if you want to move to a different area of Boston every year, no one’ is stopping you. With renting, the world is your oyster! But, of course, you’re here because you’re wondering if renting a home is a good financial choice. Let’s get down to business, shall we?

 If you plan on moving in a place short-term or just aren’t enjoying the home as much as you thought you would, you can move out when your lease is up. There is no need to worry about putting your house on the market and searching for a new tenant.

 Did the dishwasher break and leak bubbles all over your kitchen floor? No worries! Call up your landlord. They are the individuals responsible for repairs. (Remember: Always look at the fine print. Although your landlord pays for home repairs they do not always cover the cost of your utilities. Be sure to read your lease to see if they are included in the monthly rent. If not, be sure to weigh the cost of utilities when you are creating your budget.)

Renting can cost less than buying a home.

 Sometimes, and certainly not always, a monthly rent check is less than a mortgage payment. This is not always the case, so we recommend you look closely at the fine print in these contracts—and don’t just take Zillow’s word for it!

 Want to paint the family room a pretty ocean blue or remodel the outdated master bath? These desired renovations may require approval from the landlord first! (Check the guidelines for renovations in your lease before signing it)

Unlike buying a house, you’ll receive no return on the home down the line. Homes can be a form of investment and, when you don’t own it, you’re simply helping the homeowner invest in their property without any returns or benefits for yourself, But hey! Maybe you’ll get your whole security deposit back.

 Much like the lack of ROI on a rented home, you are not building your equity. As a rental, your home does not count as one of your assets. And, as such, if you decide to buy your next home, you will not be able to put your home equity into your next home’s down payment. That means the cash you’ve put into rent won’t help you in the future, like the cash you put into your monthly mortgage payment would.

Buying your first home is an event you will always remember. But it is not something you should rush into. Before buying you should first make sure you are financially stable. Do you have job security? What’s your credit score? Are you investing in your future? Do you have a lot of debt? These are all questions you should ask yourself.

When buying a home, you should also be ready to settle down. It is a big commitment. With so many initial one-time fees you want to make sure you are ready to live in the area for a few years. This way you can avoid facing the expenses of moving for longer.

 If you don’t like the color of the living room, are dying to replace the kitchen countertops, or want to expand the deck, you are completely free to do so (as long as it’s within your budget!) It’s yours, after all!

 If done right, buying your own home can be an investment that could increase in value in the future. By keeping up your home and renovating the space you may see a nice return on your investment if or when you decide to sell the house. (But buyers beware! Although the value of real estate typically rises with time, there is always a possibility that it won’t increase. Real estate bubbles have been common throughout history, it seems each generation gets to learn about "bubbles" for themselves. You can talk to a local real estate agent for their insight on different properties in the area.)

Your home counts as one of your assets—and you’re building equity and ownership on the property. If you decide to sell your house and buy a new home, you’ll be able to cash in your equity of your sold home into the down payment of your new home. That means the cash you’ve put into your mortgage payments against principal each month can come back to you in a "normal" (non-real estate bubble) real estate market.

People who itemize their taxes are often able to deduct mortgage interest in their tax returns. However, this perk is not applicable to everyone. Do your research. Look to see if you have the ability to itemize your deductions and determine if your mortgage interest can qualify for a deduction.

. After a few years, the amount you’ve paid toward your mortgage payment oftentimes ends up being less than a monthly rent payment. This means you could save in the long haul. But you have to make sure you are handling your mortgage payments in a smart and efficient manner. Mastering your mortgage and determining when the right time is to refinance your mortgage are all part of the fun of owning a home! (Don’t worry, we’re here to help.)

 Is there a leak in the roof? The cost to fix it is coming out of your wallet (or, hopefully, your emergency cash fund). Before buying a property, review the seller’s disclosure and get a home inspection to help ensure that a property will not come with too many repair fees. In case of emergencies, make sure you have enough money to set aside for repairs— not just for the down payment.

 Buying a house usually means taking out a loan. Paying these off takes time. If you plan to buy, make sure you are willing to settle down in that location for at least a few years while you pay it off.

We’ve given you a lot to think about. So don’t rush things. Take your time and think about what makes the most sense for your current stage in life. Now breathe. 

If you decide to buy your home, congrats, ‘Nester! Next up, we’ll help you figure out how to master your mortgage!

Remember. Before you make any decisions you need to make sure you are financially ready to be a house tenant or homeowner. Download the our digital banking app for help getting your finances in order before taking on a new rental or home.

Follow this guide for easy home improvement tips on a budget so you can finally ditch those old kitchen cabinets! 

Home Improvement Budget Tips

So you’re finally ready to ditch your old kitchen cabinets? Here’s how to do it without spending all of your savings.

Shows on HGTV make home improvements look simple. In one 30-minute episode, an outdated kitchen is completely transformed into a new unrecognizable space with a sparkling farmhouse sink and cream colored cabinets.

Although considered reality television, these programs can be far from the reality experienced by most homeowners undertaking home improvements. Renovations require research and planning to ensure projects are completed on a timely basis, with care, and on budget.

Before you dig into your new house project, take a hot second to make sure your finances are in tip-top shape. After all, we’re all wondering where that next dollar goes. If you have some extra cash this quarter, do you put it toward your retirement savings? Or, do you pay more heavily into your mortgage payment or your credit card debt? What about your kids’ college savings plans?! Before you kick off Demo Day, set up your your financial plan. From there, we’ll help you determine if putting extra cash toward your home makeover is the best next step. (Don’t worry! We won’t tell you NOT to do anything. Instead, we might suggest if it’s best to wait a couple of months until you put a solid dent into that credit card debt.)

Now that your budget buckets are set and you know where that next dollar should go, we’ve compiled some easy home improvement tips to stay on a budget—and get the best bang for your buck.

With so many pins on your Pinterest renovation board it can be hard to choose which project to tackle first. What’s our solution? Create a list ranking the projects.

Figure out which project will give you the largest ROI. You want to add value to your home. Especially if you plan on moving within a few years following the renovation. If you need help, reach out to a local real estate agent. They will be able to give you insight on what renovations will make you the most (or any!) money down the line.

This is your home! It is supposed to be a space you are proud to call your own. If one renovation project will make you happier than another, that is definitely a factor that should play into your decision.

 then a new bathroom might have more value than a home gym. Or maybe the home gym is more valuable. You have to decide that, but you should be thinking about what makes sense now 

When creating a budget, try to avoid over-renovating. If your house is worth $250,000, spending $90,000 on a kitchen renovation may be a bit much. Also, spending more usually means you will see a smaller ROI. In an article by the 

, Dan Diclerico, a smart-home expert for HomeAdvisor, says that kitchen renovations should cost between 5-15% of your home value; whereas, bathroom renovations should be between 3-6% of your home value. You should also be sure to include a 10% contingency in your budget. Generally speaking, projects cost a bit more than expected. Planning for a contingency in your the budget will give you a spending buffer.

Once you have picked the project you want to tackle, it is time to capture all the expenses in a budget. The budget should include costs like materials, labor and the contingency we talked about before. This will take a bit of research. The budget is not going to be exact, but should reflect your best estimates. Most homeowners will see their budgets change over time as they refine costs and finalize plans.

Before moving ahead with a home improvement project you should connect with multiple contractors. Try to meet with at least three. Just like Goldilocks, you are looking for the contractor that is just right for your renovation needs. Through this process you can also figure out the average price of similar projects in your local area. When considering contractors it is also important to weigh in the reviews and opinions of others. Ask to see their completed projects and make sure you talk to other homeowners who have worked with the contractor. While the initial low cost of one contractor may seem like a great deal, the price may start to make sense when you see the quality of the work.

Labor is one of the most expensive parts of renovations and, by deciding to do that paint job yourself, you may save some serious cash. Hey, you can even do your own demolition and save money while also letting out some of your pent up anger from the workplace. It’s a win, win. But if it cannot be done yourself, leave it to the professionals.

You can also save some money by purchasing materials online. But before placing an order get the necessary dimensions from your contractor first and make sure the product has a good warranty. When materials arrive, inspect the item(s) to confirm that they are as described before accepting the delivery.

Shopping in the sale or clearance section of stores for materials like floor tiles is an extra way to save. Everyone loves a good bargain and there are probably a lot more good pieces hiding in the sale section than you'd think.

Keep in mind that renovating your home right now may cost a bit more as the prices of goods like lumber have risen due to the COVID-19 pandemic.

The longer you take to plan your renovation the more likely you are to stay on budget. So do not rush your project. Wait until you feel confident in your contractor and in your budget. Trust us, the results will be more than worth it!

 to make sure your finances are in tip-top shape before calling that contractor or picking up that hammer.

Easy, straight-forward guide to determine how much money you should put away for retirement 

How Much to Save for Retirement?

 the million dollar question: how much money should we save for retirement? There are some super complex projections out there, as well as some really easy calculators. Which are the best tool to use? We think any of them... as a starting point.

How to determine how much to save for retirement

One rule of thumb is to multiply your retirement savings by up to 10X your annual income in the years nearest to retirement. The reason for socking away more money in the years closer to retirement is because you're likely making the most money in your final working years. That's right, all that hard work has paid off!

A more detailed approach is to use the factor rule is featured below, from 

Each year, Fidelity Investments issues a table showing how much one should have saved for retirement, depending on your age, multiplied by a factor. Take a peek!

how-much-should-i-save-for-retirement.avif

Aim for your portfolio to double every 10 years

, an appropriately allocated portfolio can double every 10 years, if it is getting a 7.2& return. Sure, that return might seem a bit aggressive these days, but again, this calculation is a good starting point.

To make sure those in the back heard us: 

it's possible to take the amount of your investments now, and aim for them to double every 10 years.

Let's take this calculation for a spin, shall we? Let's assume you're 35 years old and will retire 30 years from now. Let's also say you've saved $50,000 and have invested in a properly allocated portfolio. It's reasonable to assume that this pot of $50,000 can increase to $400,000 over the next 30 years. To reach this pretty-penny-number, we assume that your savings will double three separate times over the course of the next 30 years—in theory, your savings could reach $100K at age 45, $200K at age 55, and $400K at age 65. Hooray! 🎉

See why we're such big fans of planning for the future!? It literally pays for itself!

What to tackle first when planning for retirement

If you haven't started saving for retirement yet, that's okay! Rather than beat yourself up for not saving "enough" or getting started "too late," we believe it's NEVER too late to start saving! #YouGotThis! (We can help.)

Follow the below steps to get your retirement savings in order:

Use the table (pictured above) to gauge how you're saving for your retirement so far.

Based on what you have saved, or what you will have invested in the near future, use the Rule of 72. If your portfolio is doubling every 10 years, is your retirement savings fund nearing what you'll need come your golden years of retirement?

 You can aim to generate 4% on your portfolio each year to generate enough cash for retirement. If your finances are properly allocated, this is a fine and totally acceptable assumption to make. This, plus your age and risk tolerance, is a formula to help you determine how much you need to save for retirement, and at what age. That means that if you have $1,000,000 saved by retirement, you can reasonably assume that $40,000 in interest will be yours to spend without touching your principal.

 Next, play around with CFCU's retirement calculator. (Or, you can skip the previous steps and pop right into the app to plan your retirement. We won't leave you hanging!)

 Yep, you guessed it! Next up is start to save and invest as much money for your retirement as you possibly can! We recommend starting to save for retirement early. If you commit to a disciplined investment and savings strategy, and you evaluate it annually, you can set yourself up for a successful and worry-free retirement. And who the heck doesn't want that?!

Before you get bogged down in the details or feel like your retirement savings plan is an insurmountable goal, remember, planning for your retirement is a road map, not a destination!

How Much to Save for Retirement Blog Content

Lease? Buy? Uber? Find the right transportation option that won’t break your budget

How to Budget for a New Car

Are you looking for a hot new set of wheels? Or, maybe just something to get you from point A to point B?

Either way, you have plenty of options to consider when it comes to choosing your next car. We can help you decide which one will work best for your busy lifestyle—and save you the most cash!

Key deciding factors when getting a new car

There are a few major factors good to keep in the back of your mind when making your decision.

How much should you spend on transportation?

 Make sure your budget is up to date so you’re working with the right cashflow.

It’s common to get an auto loan lined up before buying or leasing a car. After all, not all people have $30K+ in their bank accounts to just drop on a car! There are lots of different lenders who have different 

 deals. Shop around to find the one that’s best for you. And, once you settle on your new loan, keep in mind that you can often refinance if rates or your situation changes. Typically, people 

 if their credit score sees a significant lift, if car loan rates come down, or if they simply need a lower monthly payment.

Whether you’re buying or leasing, you’ll most likely need to purchase car insurance since car insurance is mandatory in most U.S. states. There are different types and levels of coverage, so the monthly fee can vary. Always shop around for the best auto insurance cost.

How important is the flexibility of the option you choose? Think of “flexibility” in terms of vehicle interior size, availability, towing capability, trunk space, etc.

Buying your own car can have some major perks. Before deciding to buy your ride, consider whether you want to buy a new or used car. Maybe you value being the first owner of your car and don’t want to worry about any previous damage or wear and tear. Or, maybe you’re more interested in the lower sticker price and can find a solid deal on a pre-owned car.

Accidentally spill your iced latte on the passenger seat while in a hurry to get out the door? No need to worry about additional fees from the leasing agent. After you finish paying off the loan on the car, it’s 100% yours.

Get Inspired

Guide

Why Gen Z Should Start Building Credit

Guide

Start Saving for Retirement Early

Guide

What is a HELOC?

Guide

How Much Car Can (Should!) I Afford?

Guide

Is Buying or Renting Right for You?

Guide

Home Improvement Budget Tips

Guide

How Much to Save for Retirement?

Guide

How to Budget for a New Car

Guide

How to Get a Car Loan

Guide

Should You Consider an Auto Loan Refinance?

Guide

Top Credit Myths

Guide

How to Build Good Credit