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Budget, Credit, Debt, Parachute Services, Student Loans

Latest News: January 2024 Financial Update

Governor Hochul introduces legislation to protect New Yorkers from “bad actors” and medical debt;

New report highlights significant issues with student loan repayment after an unprecedented 3 year period

Parachute Credit Counseling Offers FREE Assistance and Counseling

Parachute Credit Counseling, formerly known as Consumer Credit Counseling Service of Buffalo (CCCS), is the Western New York region’s premier organization providing our community with the best strategies to master their credit. Today they announce a number of notable financial news items emerging this month. Along with these new items, Parachute reminds residents that beginning the new year with a financial “check up” is an invaluable service to their families and themselves.

Call 716-712-2060 or visit https://parachutecreditcounseling.org/ for more information.

The State of Student Loans

On October 1st, Americans resumed paying their student loans, after a 3 and a half year break in payments. Financial experts predicted issues with payments after such a long period, stating that about 20% of student loan borrowers had risk factors that indicated they could struggle when payments resume. These issues have been worse than predicted, confirmed when the Department of Education announced in December that nearly 9 million borrowers–roughly 40% of the 22 million borrowers who had bills due in October–missed their first student loan payment.

Outstanding student loan debt presently exceeds outstanding auto loan debt and credit card debt.

Earlier this month, the Consumer Financial Protection Bureau (CFPB)—the federal government agency that ensures that consumers are treated fairly by banks, lenders, and other financial companies—issued a report on the agency’s monitoring activities of federal student loan servicers since the restart of required payments. Per the CFPB, many borrowers are making their first payment ever on their student loan, and many are also navigating their loan repayment options, including options that allow borrowers to make lower payments based on a percentage of their income. The report discusses challenges faced by borrowers with respect to contacting their servicer, enrolling in alternative repayment options, and billing statement errors. According to borrowers, there have been many problems navigating loan repayment since restarting on October 1^st.

The CFPB pledges to work on this situation and to continue to carefully watch loan servicers and work with federal and state agencies to hold accountable those that violate laws protecting borrowers. The CFPB also has resources for student loan borrowers needing more information. Borrowers can also visit the Department of Education’s Federal Student Aid website for more information on restarting student loan payments. In addition, consumers can submit complaints about financial products or services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).

Parachute Credit Counseling recommends that borrowers contact their office to enroll in their free Student Loan Counseling program, available to all residents of the eight counties of Western New York. Parachute’s Certified Financial Counselors will help WNY residents consolidate their student loans and review other potential relief options and changes to existing programs available to help borrowers reduce or eliminate their debt as well as assist them in making payment plans. Call 716-712-2060 or visit https://parachutecreditcounseling.org/ for more information on our Student Loan Counseling Program and other financial counseling services we provide.

Proposed Consumer Protection Legislation

Governor Hochul has proposed a few pieces of new legislation designed to protect New York residents from unfair and negative business practices and from the all too common issue of medical debt.

Governor Hochul introduces consumer protection legislation

“Buy Now Pay Later” loans have become popular as a low-cost alternative to traditional credit products to pay for everyday and big-ticket purchases, but they remain unregulated and can charge hefty fees. Legislation proposed will require “Buy Now Pay Later” providers to get a license to operate in the state, and to authorize the New York State Department of Financial Services to propose and issue regulations for this rapidly growing industry.

The Governor has additionally called for increased protection measures that strengthen the state’s ability to enforce consumer protections and to penalize “bad actors”.

Governor Hochul introduces legislation to protect New Yorkers from medical debt

Medical debt is a critical issue for many, including over 700,000 New York residents who currently have medical debt in collections. Those with medical debt often forego necessary medical care and historically minimize important social determinants of health, including food, heat, and rent. Overall, this threatens the health and financial stability of New Yorkers. The proposed legislation will limit hospitals’ ability to sue patients earning less than 400 percent of the Federal Poverty Level ($120,000 for a family of four), helping to eliminate medical debt lawsuits filed against low-income New Yorkers. Per the Governor’s office, the legislation would also “expand hospital financial assistance programs for low-income New Yorkers, limit the size of monthly payments and interest charged for medical debt and implement other protections to improve access to financial assistance and mitigate the deleterious effects of medical debt on New Yorkers.”

Regional Bankruptcy Update

Bankruptcy rates up by 2.7%: first year-over-year increase for Buffalo since 2018

The Buffalo News recently reported a rise in bankruptcy filings, based on data from the federal bankruptcy court. According to financial experts at Parachute Credit Counseling, they have been seeing people with higher levels of debt which, coupled with higher interest rates, stagnant wages, and inflation can cause financial stress and instability. Bankruptcy can be attributed to some of these issues.

Parachute Financial Counselors assure the WNY community that, despite some environmental concerns, there are simple, proven techniques to facilitate economic security. Now is the time for borrowers to seek unbiased counseling. Parachute counselors will provide expert strategies for attaining financial stability including any financial assistance needed, from budgeting help to credit education, to buying a home. Call 716-712-2060 or visit https://parachutecreditcounseling.org/ for information on financial counseling services.

Budget, Parachute Services

Post-Holiday Budget Hacks for the New Year; It’s Never Too Early!

Post-holiday budget planning is the process of getting your finances back on track after the holiday season. This can be a challenge, especially if you overspent. But, by taking some simple steps, you can get back on the right track and avoid financial stress in the new year. It can take some time to recover financially after the holidays, but consistency can make a huge difference over time. Be patient with the process and regroup for next year!

Additionally, reading this BEFORE the New Year of 2024 rings in can also be super helpful for this year’s holiday season.

Here are some tips for post-holiday budgeting:

Review your spending. The first step is to take a look at your spending and see where your money went during the holidays. This will help you identify areas where you can cut back in the future. You can use a spreadsheet or budgeting app to track your spending.

Pay down debt. If you overspent during the holidays, you may have some credit card debt to pay off. Make a plan to pay down this debt as quickly as possible to avoid high interest charges. Pay more than the minimum payments required, if at all possible. If possible, consider using all or part of any tax returns to pay down this debt.

Revise your budget. Once you have a good understanding of your spending and debt, it’s time to revise your budget. This may involve cutting back on unnecessary expenses or increasing your income, even if on a temporary basis. You may be back on track after a few months!

Set financial goals. Having financial goals will help you stay motivated. Some common financial goals include saving for a down payment on a house, retirement, or a child’s education. Really be specific with your financial goals to help them materialize. Write out those goals and look at them frequently.

Create a holiday spending plan for next year. Start thinking about your holiday spending for next year now. This will help you avoid overspending again.

Shop around for the best deals throughout the year. Compare prices at different stores and online before you buy anything. Consider dollar, thrift, and discount/liquidation stores.

Take advantage of sales and coupons. There are always sales, coupons and promo codes available, so be sure to check for them before you buy anything.

Take advantage of post-holiday sales. Many retailers offer discounts on leftover holiday merchandise after the holidays. This is a great time to stock up on items you need or want at a reduced price. Be sure to store them in a place you’ll remember!

Return unwanted gifts. If you received gifts that you don’t want or need, return them for a refund or exchange. This will help you get some your money back and/or buy things you actually need.

Regift items. You can regift items that you do not want or need. Keeping inventory of what gift you received from what person can help this be a successful plan from year to year.

Sell unwanted gifts or belongings. If you have unwanted gifts or belongings that you can’t return, consider selling them online or at a garage sale. This is a great way to declutter your home and make some extra money.

Cancel unused subscriptions. Take some time to review your subscriptions and cancel any that you’re no longer using. Be honest with yourself about what you are likely to use in the future. This could include magazine subscriptions, streaming services, and gym memberships.

Here are some additional tips:

Automate your finances. Set up automatic transfers from your checking account to your savings account each month. This will help you reach your financial goals without even having to think about it. Start with a small amount, if needed, and increase it as is feasible for you.

Use cash instead of credit cards. When you use cash, you’re much more likely to be mindful of your spending. People tend to spend less when using cash.

Review your insurance policies. At the beginning of each year, make sure you’re getting the best possible rates on your insurance policies. You may be able to save money by bundling your policies or shopping around for new providers.

Getting back on track financially after the holidays can be challenging, but it’s important to remember that you’re not alone. There are many resources available to help you, and with a little effort, you can get back on track!

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan https://parachutecreditcounseling.org/dmp-calculator/

Would you like to meet one-on-one with one of our Financial Counselors to talk specifically about your budget? Check out our Financial Coaching Session https://parachutecreditcounseling.org/services/credit-budget-counseling/#financial-coaching or call 716-712-2060.

Budget, Parachute Services

15 Universal Truths About Money

Here are 15 universal truths about money. Recognizing them will help you better understand the role that money plays in your life and how to best handle money to achieve your financial goals and attain financial security.

Money is a tool; a means to achieve your goals.
You can’t outspend your income. No matter how much money you make, if you spend more than you earn, you will eventually go into debt.
Saving money is important. It gives you a financial cushion in case of unexpected expenses, and it helps you reach your long-term goals.
Investing your money is a smart way to grow your wealth over time. But it’s important to do your research, understand the risks involved and seek guidance from a professional you trust.
Debt can be a burden. But it can also be a tool to help you achieve your goals. Just make sure you borrow responsibly and pay off your debt as quickly as possible.
Your spending habits matter. The way you spend your money (your own money habits) can have a big impact on your financial future. Small amounts of savings grow to big amounts just like small expenses over time add up to large expenses.
Comparing yourself to others is not helpful to your financial health. Everyone’s financial situation is different. Focus on your goals and make sure you are on track. Stay in your own lane!
It’s never too late to start saving and investing. Even if you are starting late, it is never too late to make a difference.
Get help if you need it. There are plenty of resources available to help you with your finances. Don’t be afraid to ask for help from agencies like Parachute!
Money is not everything. It is important to have financial security, but it is also important to enjoy your life and live within your means.
There will always be things that you want in the short term and cannot afford. It’s true for everyone!
Financial success is influenced heavily by your behavior with money. Consistent patterns are powerful.
Appearances are very deceiving. Just because someone looks like they have a lot of money, simply may mean they spent a lot of money and they be may be in significant debt.
Having a lot of material possessions (stuff) is not the same as having financial security.
Financial success involves what you earn, what you keep, what you grow (i.e., investments) and what you preserve.

These are just a few of the many truths about money. The most important thing is to learn about your finances and make smart decisions with your money. By doing so, you can achieve your financial goals!

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan https://parachutecreditcounseling.org/dmp-calculator/

Budget, Parachute Services

Budgeting for the Holidays – Part Two

The holidays will be here soon and they are a “season”, not just a singular day or event; and, there can be several events! There may be parties and celebrations where you are expected to bring a dish, and/or provide a gift(s) and also meet family and friends out for lunches and dinners. The costs add up!

The holiday season can also include other celebrations such as birthdays, anniversaries or even weddings. Finally, winter is the time where added expenses can come into play such as higher utility (e.g., heat, electric) bills, and unexpected car expenses like batteries and tires that need replacing.

How do you cover these expenses without completely exhausting your budget and getting yourself in post-holiday debt?

Consider several of the suggestions below to help reduce the expense and stress of the holiday season. Ideally, an early and clear plan communicated to your family and friends can help a lot! If you haven’t already, check out Budgeting for the Holidays – Part 1 for more tips!

Try not to get too caught up in Black Friday deals. Many times, people spend far more on other items than they actually save by battling the crowds and spending a lot of time and gas.
Don’t forget discount and dollar stores for cards, tissue paper, gift bags, boxes, and small thoughtful gifts like candles and picture frames.
Delay some family and friend get togethers to late December or January to take advantage of fantastic post-holiday sales. Remember, it is really your thoughtfulness that counts the most.
Shop post-holiday sales for gifts for next year.
Consider buying everyday use gifts. Buy someone’s favorite cereal, coffee, muffins or snacks. Gift cards for essentials like groceries and gas are also often appreciated.
If your family and friends have favorite charities, you can make small donations in their name (e.g., an animal shelter or food bank).
Make a pact to exchange gifts you already have in your home with friends and possibly some family members.
Gifts can be experiences! Offer babysitting services, wash someone’s car for a few months, pet sit or do errands. You can get really creative here.
Be truthful with yourself and your family about what you can and can’t afford. Set expectations early to help avoid disappointment.
What you can’t buy during the holidays is an opportunity for the next holiday season (or for a birthday or other special occasion) and you can use the added time to save.
Finally, try to avoid the mindset that your love for your friends and family equates to how much you spend on them. Most of the time, it is not feasible to buy everything we want to buy for everyone we want to buy for without significantly hurting our budgets and our overall financial well-being.

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan https://parachutecreditcounseling.org/dmp-calculator/

Budget, Parachute Services

Budgeting for the Holidays – Part One

How do you cover these expenses without completely exhausting your budget and getting yourself in post-holiday debt?

Consider several of the suggestions below to help reduce the expense and stress of the holiday season. Ideally, an early and clear plan communicated to your family and friends can help a lot!

Have the list of WHO you will shop for and stick to it! Make agreements with your family and friends as to WHO you will buy for and HOW MUCH you will each spend. It’s very tempting to want to buy “a little something” for others, especially items under $20, but it adds up fast!
If you have large extended family or circle of friends, pick ONE name for each group.
Discuss possible family gifts that you all will enjoy. Start collecting change as a family starting each early each year (January) to help reduce the cost of bigger family gifts. If your children have part-time jobs, ask them for $2-5 a paycheck to help support a significant family gift.
Shopping for items (e.g., at a spring craft show, summer fairs) throughout the year makes a BIG difference! There are sales all year round! It is just a little pre-planning to build your gift inventory throughout the year.
Buy items for your food pantry early, ideally when they are on sale or when you have more spare funds. If your extended family knows you bring a signature dish every year, consider buying non-perishable ingredients early on and then place them in a separate storage area for the holidays.
Buy food staples at discount stores such as Aldi, Save-A-Lot and Price Rite.
Buy food items in bulk, if possible.
Don’t feel obligated to attend EVERY holiday invite you receive.
Open a separate bank account to systematically save for the holidays. Set aside a manageable amount of money for a bank or credit union account that is offering a high interest rate such as a money market account or a short-term (e.g., 3-6 months) Certificate of Deposit so you have your money in time to shop without incurring any penalties.
Consider making or even baking some of your gifts. Personalized gifts are very memorable. Add a small ($5-$10) gift card if you like.
Shop at small businesses in your area that may have unique and reasonably priced gifts.
Try not to get too caught up in Black Friday deals. Many times, people spend far more on other items than they actually save by battling the crowds and spending a lot of time and gas.

Keep a look out for Budgeting for the Holidays Part Two coming soon!

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan https://parachutecreditcounseling.org/dmp-calculator/

Budget, Parachute Services

Family Savings Strategies

Family savings efforts can be a great way to reach your financial goals faster and easier. By working as a family team, you can motivate each other, build stronger family ties, and benefit from shared resources.

Here are some ideas to get you started!

Set goals common to all. The first step is to get everyone on the same page and agree on what you want to save for. This could be a short-term goal, such as a family vacation, or a longer-term goal, such as buying a boat or even a home! Once you have a common goal, you can start to develop a solid plan to reach it.
Create a budget. Once you know what you’re saving for, you need to create a budget that will help you reach your goal. This will involve tracking all your income and expenses to see where your money is going and identify areas where you can cut back. Then you can direct your newly found savings toward your family’s goals.
Open savings accounts for all family members. This helps everyone feel included and provides great lessons and good money practices for younger children and teens.
Automate savings. One of the best ways to save money is to automate your savings. This means setting up a recurring transfer from your checking account to your savings account each month. This way, you’ll be saving money without even having to think about it. If you have teenagers or young adults who earn a paycheck, they can automate their savings too into a savings account through direct deposit. If you have younger children, they can earn a weekly allowance and place, at least part of it, in a savings account.
Set up family savings challenges. A family savings challenge is a fun and motivating way to save money. There are many different types of savings challenges available online, so you can find one that’s right for your family. For example, you could do a 52-week savings challenge, where you save a different amount of money each week. Or you could do a no-spend challenge, where you commit to not spending any money on certain things for certain periods of time. Make it fun and competitive.
Have family savings meetings. Once a month or so, sit down with your family and discuss your savings goals and progress. This is a good time to re-review your budget, make any adjustments as needed, share tips, stay motivated and celebrate your accomplishments.
Make saving money fun. For example, you could have a family competition/contest to see who can save the most money in a month or award small prizes for the most creative way to save. Or you could reward yourselves with a special treat when you reach a savings goal.
Save change. Use cash whenever possible and save that change in a jar or other space labelled with your goal such as “2025 summer vacation trip.”
Consider selling items. Each family member could contribute some unwanted items to a group garage or yard sale to help fund the family goal. Children could host a lemonade stand. Teenagers and young adults could babysit or offer to rake leaves, shovel snow or run errands for neighbors to earn extra money.
Reward good grades or reading goals. Consider contributing more funds to the family savings pool if your children attain certain grades in school or read a certain number of books outside of school.
Consider savings matches: If your younger children or teenagers or young adults save $5, consider a 100% ($5 contribution) or 50% ($2.50) match so their savings grow faster and they are encouraged to save even more!

By following these suggestions, you can develop strong family savings strategies and reach your financial goals and future plans faster!

Parachute Credit Counseling offers group financial education and one-on-one services to help you budget your money, get out of debt, understand and build your credit, and more! Call us at 716-712-2060 or visit us at www.parachutecreditcounseling.org

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan https://parachutecreditcounseling.org/dmp-calculator/