Making the Financial Grade: Back to School Budget Check In

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As the leaves start to turn colors and temperatures drop, the National Foundation for Credit Counseling (NFCC) is encouraging consumers to assess their current financial status before heading into the holidays in November and December.   Take the quiz below!
  
“Consumers may still be receiving the summer vacation and back-to-school bills, but should not lose sight of the fact that the holiday spending season is just around the corner.  This makes it vitally important for a person to understand their current financial situation before taking on new debt obligations,” said Gail Cunningham, NFCC spokesperson. “Doing otherwise could result in damaging an already fragile financial situation.” 

QUIZ Time!  

True or False:  Concerning my current financial situation, I …

  1. Know how much I currently owe on each credit card.
  2. Am receiving collection calls and notices.
  3. Have money saved to pay cash for holiday expenses.
  4. Will be adding new debt on top of old debt if holiday expenses are charged.
  5. Have reviewed my credit report and score in the past 12 months.
  6. Am near the maximum amount allowed on my lines of credit.
  7. Am current on my vehicle payment.
  8. Have applied for a payday loan, title loan or credit card cash advance in the past 12 months.
  9. Have savings in addition to money earmarked for holiday spending.
  10. Have overdrawn my checking account more than twice in the past 12 months.

If the answers for the odd-numbered statement were true, you’re earning an A!  Answering true to the even-numbered statements means you might be headed fora less than passing grade.  This is a great time to spend some extra time studying your budgets before holiday spending begins.

Credit Score Breakdown

You’ll hear everyone talk about the importance of a strong credit score.  But what exactly does that mean?  This infographic from Anheuser-Busch Employees’ Credit Union lays it out in clear language:

10375909_10152670860268764_8146977872305440758_nYour credit union personal finance professionals bring you this website and other tools to help you make the most of your money. To find a local credit union you are eligible to join click here or go to asmarterchoice.org

 

Creative uses for Tax-Advantaged Accounts

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Just as with finding unconventional uses for common items–did you know crushed aspirin is great at removing sweat stains?–there are multiple ways to use your tax-advantaged accounts.  
  
A report released this month from the Employee Benefit Research Institute, Washington D.C., found that the average person contributing the maximum allowed to a health savings account (HSA) could save up $360,000 in 40 years assuming a 2.5% rate of return. That amount jumps to $600,000 after 40 years at a 5% rate of return ( The New York Times Aug. 19). 
  
HSAs were created a decade ago to help people with high-deductible insurance plans pay for health-care expenses. The reason financial planners are beginning to recommend them as a potential vehicle for retirement savings is that they’re triple tax-advantaged: contributions reduce your taxable income, grow tax free, and can be withdrawn tax-free for eligible expenses.  
  
And although the max you can contribute annually to an HSA now is $3,300 for an individual and $6,550 for a family, the balance can be rolled over from year to year and invested.  
  
You can only contribute to an HSA if you’re enrolled in a high-deductible health insurance plan, and it only makes sense to use it as a long-term investment if you have enough money to cover your out-of-pocket healthcare expenses. 
  
Here are some other outside-the-box uses for conventional tax-advantaged accounts ( Forbes Aug. 14): 

  • Make your Roth IRA an emergency fund . Ideally, you’d have an emergency fund equal to three to six months of expenses. What could help get you there more quickly is using your Roth IRA (individual retirement account) as an emergency fund. You can withdraw any money except earned interest, tax-free, from a Roth IRA at any time.
  • Tap your 401(k) for a down payment on a house or for education expenses. You can withdraw up to $10,000 from your retirement account without paying the 10% penalty if it’s used to buy a new home–to qualify you cannot have owned a home in the last 3 years–or for education expenses. Both a degree and paid-off home can be huge assets later in life, but make sure you’re still on track for retirement without that money.
  • Use your Roth IRA for health insurance in retirement. If you retire before you’re eligible for Medicare at 65, you may be eligible for subsidies that significantly lower the cost of buying a plan through a healthcare exchange. Because Roth IRA withdrawals are tax-free, you can use that money to pay for the health plan without affecting your eligibility for subsidies.

Your credit union personal finance professionals bring you this website and other tools to help you make the most of your money. To find a local credit union you are eligible to join click here or go to asmarterchoice.org

Cooperative Nature of Credit Unions: Shared Branching

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Shared branching: It may be the most distinctive feature of cooperative credit unions, but one of the least understood–at least until you need it.

It allows a member from one credit union to make financial transactions–cash checks, deposit funds, make a loan payment–at another credit union that is part of the shared branch network–currently more than 5,300 physical branches and another 2,000-plus self-service locations.

Shared branching is something only the credit union movement could do, said Sarah Bang, chief strategy officer for CO-OP Shared Branching, a business line of CO-OP Financial Services.

The cooperative nature of credit unions allows for members to conduct their financial services needs at another branch by simply being a credit union member of a participating credit union.  This is a huge convenience in day to day life or under extreme circumstances.

The value of shared branching becomes apparent during times of natural disasters–something to consider with National Disaster Preparedness Month coming up in September–and with the 6.1 earthquake that hit the Napa region of California over the weekend.

Just think back to Hurricane Katrina–nearly nine years ago to the day–when displaced credit union members were able to access their accounts even though they were miles away from home.

Bang said the shared branch network set up special identification policies for members who were without wallets or identification. “Imagine how those members felt when they were able to get $200 from the credit union,” she said.

As a parent sending a child off to college, you could search for shared branches located around their school, Bang suggested, so they know how to access funds from their account and from you, without having to open a new account.

With the addition of Ocean Communities FCU the shared branch network in Maine now boasts nearly three times as many branches as any single bank in Maine–a fact the Maine Credit Union League recently touted. “Shared branching provides both convenience and service–it’s a great combination for credit union members,” said league President/CEO John Murphy.

Convenience is something personal to everyone, Bang said. Most people don’t want to leave their credit union when they move.  “If they are moving, show them where shared branches are located and how you can still be their credit union.”

Your credit union can be small and personal and still more convenience than any bank with the number of accessible locations to accomplish your financial services.  Find all of the shared branching locations here, and a credit union you are eligible to join at asmarterchoice.org 

Friday Financial Round Up!

Check out these blogs for great financial education with tips on budgeting, saving, loans all in time for back to school!  You name it, your local credit union has you covered for financial ed 101!

cropped-header-logoGenerations Federal Credit Union: 6 Ways To Save on College Textbooks

College is expensive enough, but then you add textbooks and it can be downright depressing. College textbook costs are on the rise. In fact, Huffington Post reports that college textbooks are 812% higher than three decades ago. Ouch! So, how do you handle the cost of textbooks? 


download (2)3 Rivers Federal Credit Union: BACK-TO-SCHOOL: PERSONAL FINANCE TOOLS FOR COLLEGE STUDENTS

So, you’ve figured out where all of your resources are when it comes to staying on top of your studies, but what about those that can help with your money matters? Supplement your higher education with knowledge that relates to an aspect of your life that is important at any age and any stage, no matter your major – personal finance. While money management isn’t the most exciting topic in the world, there are plenty of tools at your fingertips that can make it easier – and in some cases even fun – to understand.


primewayblog-logoPrimeWay Federal Credit Union:  7 Tips for Back-to-School Savings (and Beyond)

It’s hard to believe another summer has come and gone, and it’s already time for the kids to return to school. With new class schedules, teachers and bus rides also comes the annual back-to-school expenses.


logoUSC Credit Union: 24 Ways to Save Money in College

Ever hear the phrase “starving student?” Well, it didn’t come from nowhere (and certainly not a fat-cat). College students are notoriously broke, but it doesn’t have to be that way. These tips will put more (er, some) money in your pocket.

Your credit union personal finance professionals bring you this website and other tools to help you make the most of your money. To find a local credit union you are eligible to join click here or go to asmarterchoice.org

Simple Ways to Save this Month

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Need a little extra cash? Here’s a super simple plan to save $63 this month from our friends at Money Possible.

Just save.

Set a savings goal of $1.25 per week: $5 per month.

Generic vs. name brand.

Buy generic spaghetti sauce: $1.98 per month. By switching from name brand spaghetti sauce to generic spaghetti sauce, you could save $3.78 per month (based on using 66 oz of spaghetti sauce per month).

How we came up with $1.98 per month:
Classico: $3.82 for 44 oz, 0.08 per oz
Great Value: $3.50 for 66 oz, 0.05 per oz
If you use 66 oz per month, you’ll spend $5.28 per month using Classico or $3.30 per month using Great Value. Using a generic brand will save you almost $2 per month just on one item!

Lunch.

Twice a month, swap eating out lunches with brown bag lunches: $11.38 per month.

This is based on the Big Mac meal at McDonald’s which is $5.69 per meal. Here’s another example: If you ate out twice for lunch at Applebee’s, you’ll spend $16.98 (based on the cost of the classic + signature option lunch combo).

Dinner.

Order water instead of a soft drink twice during your dinners out this month: $4 per month.

Use a credit union.

Use a credit union instead of a traditional financial institution: $7 per month. On average, a consumer can save $84 per year simply by using a Kansas credit union (or $159 per household). Divide $84 by 12, and you’ve saved $7 a month. And those late fees? If you bank at a credit union, you’ll reduce your late fee from $34.18 to $24.56, a savings of $9.62.

Total savings per month: $63.54.

Millennials Help Make 100 Million Memberships a Reality

 Stressed by economic doldrums and callous bank policies, young adults may be finding safe harbor in credit union membership, according to an Aug. 18 report by Chris Chmura, WOFL-TV, in Tampa Bay, FL.

FOX 13 News

“I think millennials choose credit unions because they connect to it, because they connect with the mission,” said Suncoast CU’s Gary Vien, who is chief administrative officer at the credit union. “We save people money.”

  
As the credit union movement celebrates the milestone of 100 million memberships, its not-for-profit cooperative structure and better rates are attracting members like Larissa Dias-Lizarraga. 
  
“Immediately, I felt the difference,” said Dias-Lizarraga, a teacher who spent 10 years with a traditional bank paying fees for account maintenance and statements. “They were just trying to take my money, and that’s not OK,” she told Chmura. 
  
“Our generation and credit unions share a lot of values,” the 33-year-old added. 
  
Though the movement has reached that membership milestone, it still is far behind the banking industry, with only 6% of U.S. deposits found in credit unions and one location for every 14 bank branches. 
  
Chmura noted that this generation of financially and philosophically savvy adults will ask more of their financial institutions, which means, Vien said, banks will have to pick up their game. 
  
In New York, the member-friendly missions of First Source FCU, New Hartford, NY and AmeriCU CU, also appear to have bolstered membership growth to the 100 million mark. 
  
As a 28-year-old, Joe Leonard ditched his bank and joined First Source FCU. Now, at 43, he boasts of the “great personal service and one-on-one time” he gets from his credit union, his exclusive financial institution (Utica Observer-Dispatch Aug. 16). “I tell people all the time how much better it is.” 
  
Judith Cowden, vice president of member relations and marketing, AmeriCU, credited recent success to the dissatisfaction with bank mergers and fees combined with the credit union’s low loan rates and lack of fees. 
  
“The bigger commercial banks have pulled out of this area and don’t seem to be interested in us,” Cowden told the Observer-Dispatch . “And the practices that have been put in place by those that remain have really alienated the average consumer. No one wants to have to pay so much to access their own money.” 

Luxury or Necessity? Having a Car on Campus.

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Original article by Kevin Jeyakumar

Is the convenience of having a car on campus really worth the extra expense?

convenience and saving time

  • Owning a car provides a high level of freedom to travel. You don’t have to deal with waiting at bus stops, walking or biking in harsh weather. Instead, you can leave at your own pace and enjoy a drive listening to your favorite music. Ultimately, it saves time and is more comfortable.

TIP: Check your school’s rules for parking before bringing your car to campus.  Some universities prohibit parking a car on campus or may only allow junior and senior students to park cars.

  • Having a car also expands the number of activities available to you. College plans often are spur of the moment. You could catch that movie in 20 minutes or make it to the store before it closes. A car also is perfect for making trips to places too far to reach by bike or city bus. If all your friends split gas money, you could travel to spring break destinations at a fraction of the cost of other modes of transportation.
  • During holidays and vacations, having a car on campus means you won’t have to ask friends for rides or take the bus. A car is especially nice during move-out periods when you need to convey all your belongings back home.
  • Cars also serve as invaluable tools in case of an emergency. If something serious happens and you need to drive back home, you won’t waste time making travel arrangements. You have the peace of mind that you can leave immediately if needed.

insurance, maintenance, and gas

  • So just when you conclude that bringing your car to campus is your best bet, you realize there is a price to pay for convenience—and it isn’t cheap. Having a car requires the initial purchase price and possibly monthly loan or lease payments.
  • To fuel the car, you have to deal with the steadily increasing price of gas. You’ll also have to pay car insurance premiums, which can be extremely expensive for the college age bracket, especially if you’ve had any past traffic incidents. On top of all that, you have to deal with ongoing maintenance costs such as oil changes, tire replacement, and routine repairs.
  • If you own a car, there’s always the risk of expensive repairs. Not to mention potential parking citations, fines, or even traffic tickets for violations such as speeding. A car is a huge financial burden that many students simply cannot afford.
TIP: Evaluate your budget to see if having a car is even possible. Will you have to work—or work more hours—to afford a car on campus? Will that cut in to your study time and jeopardize your grades? 

  • There also are negative aspects of owning a car that get overlooked. The biggest factor is traffic congestion and parking. Some dense cities have very few parking spots and may charge high rates for their use. The college campus and your apartment/dorm also may have monthly charges for parking passes. Students have to set aside more than $30 each week just for parking, an expense that quickly can add up and ruin budgets.
TIP: Look into the transportation characteristics of your school.

  • The decision about bringing a car to campus depends also on the infrastructure of the city in which your college is located. For example, the University of Florida is located in Gainesville, which is a fairly small college town. Everything a student would want to do is within walking distance from all dorms and apartments. Additionally, the university provides a free pass to board any of the 100-plus bus routes, many of which run 24 hours a day. A car is not a necessity to get anywhere.
  • In a widespread city such as Boca Raton, home of Florida Atlantic University, a car makes travel much more convenient. Boca Raton is a very spread-out, suburban city making walking to places difficult. Additionally, the bus system is not as advanced as other cities. Having a car in a situation like this makes transportation easier and improves the overall college experience.
Having a car is no doubt one of the most convenient luxuries of college life. The freedom it provides is liberating and facilitates independent decision making, but this comes with heavy financial obligations and the burden of finding parking. You need to analyze your situation to decide if it’s worth the associated costs.
Is having a car worth it? 

  1. Does the college permit having cars?
  2. How close are attractions, restaurants, and grocery stores?
  3. How congested is traffic and how available are parking spots?
  4. Between car payments, parking costs, gas, insurance, and maintenance, can you afford a car?
  5. Do you have a friend or roommate with whom you can carpool?

Your credit union personal finance professionals bring you this website and other tools to help you make the most of your money. To find a local credit union you are eligible to join click here or go to asmarterchoice.org

San Diego County Credit Union reclaims world shred record

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Trees rejoice. San Diego County Credit Union set its second Guinness World Record last month during the credit union’s “Super Shred Event” for the most paper ever collected during a 24-hour period in a single location.

The event, which helps members protect and safely dispose of sensitive documents, while also encouraging recycling, saved 3,590 trees. More than 7,000 people showed up at Qualcomm Stadium and shredded 422,350 pounds of paper.

“SDCCU is committed to helping our customers and the community protect their confidential data and privacy,” said Teresa Halleck, president/CEO. “We are dedicated to preventing identity theft as well as (to) our efforts to go green with our online banking services, such as eStatements and eReceipts.”

SDCCU hosted its first shred event in 2007, and since then has shredded and recycled more than 1.1 million pounds of paper, at no charge, saving more than 9,700 trees.

The credit union first grabbed the record for most paper collected during a similar shred event last year, but was overtaken in April by an organization in Texas.

“SDCCU would like to thank the entire community for banding together to help take back our world record and be a part of history,” Halleck said.

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Credit Unions are a Smarter Choice!