Discover "The Magic Of Saving" During National Credit Union Youth Week
If your money seems to vanish, it's time to discover "The Magic of Saving" during National Credit Union Youth Week, April 19 - 25, 2009. Just as magicians have tricks up their sleeves, so do successful savers. They do whatever it takes to help them save. Some trade a habit: They give up soft drinks or junk food for a week and put what they would have spent into savings. They cut out pictures of what they're saving for - a down payment on a car or a security deposit for an apartment - and glue it to a jar. Then, every day they toss their loose change in the jar, knowing that even small amounts add up. When the jar is full, they bring it to the credit union to deposit it into their share account.
Savvy savers also know the trick to calculate how many years it will take to double their money: Divide the interest rate into 72. This is the Rule of 72 and it reflects the benefits of compound interest. Learn more about "The Magic of Saving" when you stop by the credit union during Youth Week.
On Route To A Car? Here's Some Travel Advice
The time is finally here - you're ready to buy your first car. In a perfect world, you'd have someone drop you off at the dealer and you'd drive away in your dream car. But in the real world, there are a few more steps along the way. A good overview of the car buying experience is available at www.howstuffworks.com - search on "buy car."
Then head to the library to find the April issue of Consumer Reports. This annual car buying guide provides a quick review of new cars as well as the repair history for used cars. Use the guide to help you narrow down your choices. Visit Web sites such as www.kbb.com (Kelley Blue Book) or www.edmunds.com to learn more about prices and to compare models. As you look at cars, think about your budget and how much car you can afford. Remember, it's not just the car's cost, but what you'll have to pay for gas, maintenance, insurance, and repairs.
Once you've done your homework, look for cars available locally by searching the classified ads and dealer ads. But it's still not time for the test drive. Before you go to the dealer or call a private seller, come to the credit union to talk about how to get a loan. We'll help you better understand terms such as "annual percentage rate" and tell you about some common experiences people have at dealerships. You may need a co-signer, a person who agrees to pay back the loan if you're not able to, usually a parent or an older relative.
Now, with help from the credit union, you're ready to get behind the wheel. For more information, contact the credit union.
Take Seven Simple Steps To Save
Saving money doesn't just happen. You have to take action. Here are simple steps to begin a cash-stashing routine:
1. First, recognize the importance of setting aside some cash (or a portion of every paycheck) in your share account at the credit union each month. Having a goal in mind - a down payment on a car, college, furnishing your first apartment - makes it easier to save.
2. Develop a detailed budget to find out how much you are able to save each month. Look at every expense to see where you might cut back, then save the difference. Begin with whatever you can afford, even if it's only a few dollars.
3. Deposit some or all of the gifts of money you receive.
4. Put yourself on a short-term austerity program. Commit to buying only what you absolutely need and put the difference into savings.
5. Save all, or almost all, of any raise you get.
6. Save your loose change in a jar. Once the jar is full, take it to the credit union and deposit it in your share account.
7. Once you have a plan in place, keep an eye on your savings. Watching your savings grow is fun. Take pride in what you have achieved. And if you experience a setback, don't panic or give up. Simply readjust your budget and try to make it up next month or in future installments.
You may think budgeting is just for older people or it's only necessary when you need to pinch pennies. But you would be wrong. Budgeting is for anyone who wants to take control of their money. The word "budget" does have a lot of negative vibes, but in fact, it's simply a spending and saving plan.
Start by taking a look at where you are: What is your income? And where does it go? For most, it's easy to write down where money is coming from. But tracking where it goes is harder. Don't guess. For several weeks, write down every nickel you spend - yes, even the change you put into the vending machine for that soda. After about a month, you'll have a general idea of your spending habits, but if you have a bill to be paid quarterly or semi-annually, for example, an insurance premium, don't forget to include that in your list of expenses. Now, compare the two columns. Are you spending every penny you earn? Think about things you want in the future: an apartment, a car, a college education. Is what you're buying keeping you from getting these things? Many people are surprised when they account for all of their purchases. What if you skipped the things you don't really need and saved the money instead? That's the real purpose of a budget: A plan to help you get the most for your money.
FYI: Do You Know Why Credit Unions Are Different?
People are worth more than money at credit unions. This way of thinking shows in many ways:
* Credit Unions are owned by the members we serve. You are not just an account number to us; you are one of the owners.
* Credit Unions are not profit-oriented. We aim to offer the best service to our member/owners.
* Credit Union deposits stay local within the community through loans to other members.
* Since Credit Unions are not-for-profit, we have better rates and lower fees than for-profit institutions.
* Credit Union members elect a volunteer board of directors annually with each member having an equal vote.
For these reasons, and more, is why credit unions continue to thrive, even in economic downturns. We are here to treat you like a real person, not just another customer.
Ready For Checking?
Paying for purchases with a share draft or check is more convenient and safer than paying with cash. Another key difference: You'll need to track your funds more carefully. That's because when you don't find any money in your wallet, you may be out of luck trying to buy something, but that's it. With a checking account, you may have plenty of checks in your checkbook, but if there's no money in your account and you write a check anyway, you'll pay an NSF or "non-sufficient funds" fee. If you do it repeatedly, you could find yourself in legal trouble. Keep track of your checks and any cash withdrawals you make in your checkbook register. Then review your monthly statement to make sure the amount you think you have in your account agrees with what the credit union thinks you have.
Car Shopping: Things To Know Before You Go
Time for your very own car? Then, you are so ready to hit the car lots to see what's available. But before you head to the dealer, take a few detours. You will be glad you did.
First stop: The library. Review the April issue of Consumer Reports for information on new cars as well as repair records on used vehicles. This will help you start to narrow down your choices. Next, browse Web sites like www.edmunds.com and www.kbb.com (Kelley Blue Book) for pricing information and other tips. Visit www.howstuffworks.com to learn about the car buying process.
Next stop: The credit union. We'll work with you to pre-qualify you for a loan. That way you will know how much car you can afford to buy. You may need a co-signer for the loan. A co-signer is someone - often a parent or an older sibling - who promises to make the loan payments, if for some reason you are not able to. With a pre-qualified loan, you are in a better negotiating position at your next stops: the car lots, where you can check out the vehicles you have researched. Plan to visit more than one dealer and to visit more than one time. Armed with your research and your pre-qualified loan, you are more likely to be able to drive a good deal.
Start Here To Get What You Want
To many people, "save" is what you do to your documents so they are there the next time you need them. But besides your documents, there's something else you should think about saving so it's there when you need it: Your money. By tucking cash into your share savings account at the credit union, you will be able to get both things you need and things you want in the future. Start by writing down your saving goals. Your goals should include long-term items such as a security deposit on your first apartment, a down payment on a car, or money for college, as well as shorter-term things like a new pair of jeans or a video game. Then, each time you get some money - from your job, as a gift, or an allowance - put part of it into your savings account. You may be surprised just how fast your balance will grow when you save regularly. The key is to start. Stop by the credit union today, and we'll help you get what you want tomorrow by saving today.
Five Ways To Earn Money This Summer
It's finally summer: Time for fun and for earning some extra cash. Here are five jobs that may be available:
- Baby-sitter or parent's helper. Now that school's out, younger kids need a watchful eye. Boost your chances of being hired by taking a baby-sitter certification course.
- Mowing lawns or gardener. Neighbors may need your help keeping up with their lawns or gardens. Check with area farmers, too. They often hire an extra hand to pick ripened crops or to sell them at a farmer's market or vegetable stand.
- Recreation assistant. Country clubs, parks, and attractions often have seasonal openings for younger workers to perform maintenance and other chores. Are you a good swimmer? Take a lifeguard course. Even if you don't get a full-time job at the pool, you may be able to fill in as a substitute.
- Renovation helper. Summertime is prime time for remodeling. Many homeowners need assistance with packing and moving belongings to storage facilities, as well as cleaning up after the contractor every day.
- Entertainment specialist. Check with friends, family, and neighbors about summer parties or reunions they are planning. Offer to help with cleanup (before and after), invitations, decorations, nametags, or food preparation.
What Is ... A Share Secured Loan?
A share secured loan is a way to borrow money that lets you leverage your savings at the credit union. By that, we mean you keep your savings intact at the same time you get the money you need. Your shares are collateral for a personal loan, just as a car is the collateral for a vehicle loan. Because the loan is secured - you pledge your shares - you will pay less interest than if you borrowed the money as a cash advance on a credit card or as an unsecured personal loan, sometimes called a signature loan. You pay less to borrow the money because the loan is less risky to the credit union. If something were to happen and you could not pay the loan back, the credit union would use the money in your savings to pay it off. A share secured loan is a way to get money for something you need now, like a security deposit on your first apartment, without raiding the share savings you have future plans for, like a down payment on a house.
Good Things Always Come to an End
Have you watched as your parents struggle during these economic times? If you remember, just a couple of years ago, things may have been much different for your family as the economy was soaring to new highs. But the past year and a half have been a different story.
Talk with your parents about how they are dealing with the challenging economy. You have a great opportunity to learn how to not repeat the financial mistakes they made in the past that makes dealing with the current economy more challenging. Ask your parents what they would have done differently to prepare for the current economic downturn. Would they have saved more? Would they have paid for items less often with credit cards? Learning these lessons now will make you better prepared when you are an adult.
During good economic times, remember that good things always come to an end. Learn these smart financial lessons now to make the future more secure.
Investing Now Will Pay Off Huge Later
The economic downturn has wreaked havoc with the retirement savings that many people have invested in the stock market or in interest-bearing accounts. But for young people, the news is better. That's because younger people have time on their side. While it may seem as though things like retirement, or even buying a house, are very far away, the fact is that investing funds now has a huge payoff in the future. If you start with $100 now and save just $20 a month on an account earning 1%, you'd have $5,433 at the end of 20 years, and after 40 years, you'd have almost $12,000. You'd earn even more if you save money in a tax-advantaged way, such as in an Individual Retirement Account. The sooner you start, the more time your money has to grow and potentially compound. The key is to start now, investing even small amounts, and watch your money grow. You can find out just how much you can accumulate over time by using one of the many financial calculators available online.
How to Get the Most Out of Your Money
Does setting up a budget sound like something only geeks do? It's not. A budget is simply a spending and saving plan and can help you get the most out of your money. Start by figuring out your income - money you get from an allowance, job, or gifts. Then do the math on all the things you have to spend money on, like school supplies that are your responsibility, as well as the things you'd like to buy, like an upgraded cell phone. Chances are you won't have enough money to cover everything. So after you calculate what you need to spend, put aside money in your share savings account at the credit union for things you want in the future - both near-term and long-term. Also, consider helping out those less fortunate than you by accounting for charitable donations in your "need to spend" column. By planning how you are going to spend, save, and share your funds, you'll make sure that your money is going where you want it to go.
What Is a Debit/Check Card?
A debit/check card looks just like a credit card. It sports a Visa or MasterCard logo. It has a magnetic stripe on the back. But while it appears to be a credit card, it works the same as a check - only faster. You can use it to access the money in your checking account to pay for purchases or to get cash at an automated teller machine (ATM). When you write a paper check, it must be physically transported to be processed in order to complete the transaction. That means some time elapses between the time you write it and when the merchant gets the money. With a debit/check card, the data is transferred electronically and the deduction from your account happens immediately. To use your debit/check card at an ATM, you enter a Personal Identification Number (PIN). At a store, if the cashier asks "debit" or "credit," you have a choice. If you say "debit," you must enter your PIN. If you say, "credit," you may be asked to sign a transaction slip. Either way, a debit card is a fast and convenient way to go.
Save Early, Often and Experience the Power of Saving
Maybe you've picked up some extra cash as a gift or for helping a neighbor with a chore. Or you have a steady paycheck from a part-time job. Do you usually spend all of your money on downloads or on a trip to the mall? If so, you could be missing out. Because you have time on your side, by saving part of it now you can reap big rewards later. Say you are 15, and you can save $20 a month. Even if you only earn 1 percent interest, you'd have $15,574 by the time you were 65. If you could earn 2 percent, you'd have $20,627! Saving money in your share account at the credit union is a great way to get ahead financially. And the sooner you start, the farther ahead you will be.
What is ... A Share Certificate?
A share certificate is a special account you can set up with the credit union for savings you don't need immediate access to. Think of it as a wallet with a lock. You agree to keep your money in the account for a specified amount of time, say six months or a year. In return, the credit union will pay you more interest than you would earn in a regular share savings account. If you have an unexpected expense and you need your money back before the term is up, you'll have to pay an interest penalty. That means that a share certificate is an ideal way to save for things like the security deposit on your first apartment, the down payment on a car, or furnishings for your dorm room. You can predict with some degree of certainty when you will need the money, so match the term of the certificate for that time frame. Typically, the longer the share certificate term, the higher the interest rate. That's your reward for planning ahead.
Checking Account: Keeping It Straight
Using your debit account or writing a check is a safer way to pay for things than carrying a big wad of cash in your pocket. The difference is when you reach in your pocket and it's empty, you don't overdraw your account. You have the evidence you need that you're out of money. With a checking account, you'll need to keep track of your deposits and withdrawals to avoid the potentially costly embarrassment of overdrafts. Costly because you may incur fees, embarrassing because your debit card might not work. You also need to balance your check register every time you receive your account statement. Keep it straight by following these steps:
- Every time you write a check or use your debit card, make an entry in the check register. Also keep track of your deposits.
- When your statement comes, follow the directions to balance your account. In general, you want to make sure that you and the credit union agree on how much money you have. First, write down the amount the credit union says you have. Then go through to see if any checks you've written have not cleared the system as of the statement date. (A check you mailed just before the end of the month, for example.) Subtract those checks from the statement amount. Now add any deposits you have made since the statement date. This number should match the number you have in your check register. If it doesn't, look for a math error or discrepancies, such as an ATM service fee or a charge for ordering checks that you forgot to account for.
- If you can't figure it out, ask a parent for help. Any errors you ignore don't go away. They just turn into more complicated errors the next month.
You're The Star During Credit Union Youth Week
It's all about youth during National Credit Union Youth Week, April 18-24, 2010, and this year's theme "Get in the Savings Game" celebrates the advantages young members have when they start saving now. That's because you have time on your side. In the savings game, that's like having a huge group of fans cheering for you. Your money earns money because of the power of compound interest. Even if your savings earn just 1.0% APR (annual percentage rate), if you start with $25 and add $25 a month (about $6 a week), you'd have $6,669 after 20 years and $10,524 after 30.
So visit us online or stop by the credit union to find out how to be the star of the Savings Game. National Credit Union Youth Week is celebrated every year in April as part of Financial Literacy Month.
Getting Your First Loan
Getting your first loan may not be as hard as you think. There are basically two steps:
Step One: Save for a down payment
Most people get loans for things that they can't afford to pay for all at once - like a car. While it's possible to finance 100 percent of the purchase, whatever amount you can make as a down payment will save you money because you are borrowing less.
Step Two: Find a co-signer
If you are younger than 18, you probably need a co-signer. Sometimes, even if you are 18 or older, the lender will require one. A co-signer agrees to pay back the loan if you don't. Often, a parent or older sibling will agree to be a co-signer.
Once you get the loan, be sure to make your payments promptly. You're writing your credit history. And, what you do now can have an effect on your credit rating for many years ahead.
Stash Your Cash
Buying things can be pretty expensive these days. Let your credit union help by giving you some money saving tips to help save for those special things:
- Set a specific goal.
- Make a weekly budget and stick to it.
- Create a plan and know the difference between needs and wants.
- Deposit money into your savings account every week or two.
By learning to budget and save your money, you can enjoy the satisfaction of reaching your goal.
Tips For Buying Your First Car
If you're anxious for your own wheels, there are five things you need to know before you buy your first car:
- Save before you borrow. The more money you can contribute to a down payment, the less the car will cost you over time.
- Spend some time online. Check out sites like edmunds.com or kbb.com (Kelley Blue Book) to get a sense of prices and learn about the car-buying process.
- Keep your options open. Focus in on the type of car you're looking for - rather than one specific make and model. Visit several dealers and scan the classified ads to see what's available.
- If you have narrowed your choices to used vehicles, know what you are buying. Dealers should be able to provide a vehicle history. If it is a private sale, ask to see the maintenance records and before you buy, have the car inspected by a trusted mechanic.
- Line up financing at the credit union before you make the deal, but don't share that information with the dealer. Dealers make money off the financing, so if you announce you already have a loan, they may try to make up for lost profit somewhere else.
Tuck Your Money Away Now: Get What You Want Later
If you like to spend money - and who doesn't? - then you'll like saving it, too. Just think of saving as delayed spending. By setting funds aside now in your share savings account at the credit union, you can get the things you want later, including things you couldn't afford to buy at the moment. Saving also sets you up for buying big ticket items - like your first set of wheels - on credit. For example, when you save for a down payment on a car, you put yourself in a better position to get a loan and will pay less for the car over time, leaving you money to spend on other things: gas, insurance, and date night. Even if you don't have a lot of money, you can save. Simply set aside at least 10 percent of whatever money you earn or get as a gift. Remember, the more you save, the more you can spend.
What Is...? Direct Deposit
Landed your first real job? With a real paycheck? Congratulations! But don't be surprised if you never actually see the check. You'll still get paid because your employer may require you to have the funds electronically deposited. It's called direct deposit and it's more efficient for both you and your boss. You will fill out forms from your employer that will ask you for information about your account. You can specify that your pay be deposited in your share checking account at the credit union.
Once you know the money has been electronically transferred into your account, you can then write checks or make withdrawals. If you want, you can ask the credit union to transfer funds into other accounts, for example to make your car loan payment or to add to your share savings account. Direct deposit is available for any recurring payment. For example, older people use it to have Social Security, pension, or annuity checks deposited into their accounts. For them, it's safer and faster than getting their checks in the mail.
Invest Now For Rewards Later
Investments aren't just for old guys who wear $100 ties with their $5,000 suits. Start investing when you're younger, and you'll have time on your side. The longer the time frame, the more you can earn. Start by saving in your credit union share account. Once you have enough to cover things you need in the next six months, put the rest in a share certificate.
Share certificates earn more interest because you promise to leave the money alone for a specified time, for example, 12 months. Then for money you can set aside for an even longer time, consider a mutual fund. Brokerage firms pool money from many small investors and purchase stocks, bonds and other securities for the fund. Some mutual funds require a high minimum deposit, but others let you open an account with $500. A good place to look for funds is at www.morningstar.com, a research company. Government bonds are another option. Go to www.treasury.gov to learn more about rates and terms. The key is to invest money now, leave it alone, and you will be amazed at how much it can grow.
Don't Let Your Money Fly Away: How To Make Your Cash Last
Whether you have a job or get an allowance, chances are your money doesn't last as long as you would like it to. If it seems as though your cash is flying out of your pocket, use a budget. The term "budget" gets a bad rap because a lot of people think of it as a straitjacket - preventing them from getting the things they want. But a budget is simply a way to plan your spending and saving.
Note that "spending" is part of the equation. In fact, by budgeting your money you can get more of what you want. Start by tracking your spending. Use a small notebook, or some mobile phones have an app for that. Then, analyze where your money is going. Are you spending a lot on snacks instead of saving it for the down payment on a car? Then set up a plan. Don't despair if you don't always stick to it. The key is to think about where your money is going and where you want it to go.
Five Easy Ways To Save
If you wish you had more money to spend - and who doesn't? - then think about how to save it. To get you started, here are five easy ways:
- When you go out and about, bring snacks and drinks from home instead of buying overpriced bottled water or soda, and candy bars from a vending machine.
- For clothing, check out resale shops. Previously loved outfits are available for a fraction of the cost you would pay at an upscale boutique. Some resale shops specialize in like-new fashions for teens.
- Save money on gas by driving the speed limit. Gas mileage typically decreases rapidly at speeds above 60 mph. Avoid aggressive driving, which can lower your gas mileage by 33 percent at highway speeds and by 5 percent around town, according www.fueleconomy.gov.
- Make your own gifts. Visit the library for books and DVDs that can provide ideas and directions or look for how-to sites on the Web.
- Ask about discounts for students. Some merchants may offer them, but don't give them unless you ask.
What Is...? A Share Draft Account
A share draft account - or credit union checking account - is the best place to keep money you need regularly. You access your cash by either writing out a share draft - a personal check, or by using a debit or ATM card. The check has your personal information printed in the upper left corner and the credit union's information in the lower left. Along the bottom you'll find the credit union's routing and transit number (which identifies the credit union as the check makes it way through the financial system) and your account number. Your debit card has this information encoded on the magnetic stripe on the back.
Because a share draft account makes it easy to spend your money, it's important to keep track of your funds. When you write a check, keep an accounting in the check register by subtracting the check amount from the balance. When you use a debit card at a merchant or at an ATM, keep the receipt and remember to do the math later. Each month, you'll receive a statement from the credit union that will show all of your transactions. Follow the directions to reconcile your account. This makes sure your figures and the credit union's agree on how much money is in your account.
Like Spending? Then You'll Like Saving, Too
It may seem as though saving money isn't nearly as much fun as spending it. But saving money in your share account at the credit union means it will be there when you are ready to spend it. Say, for example, you want to get your own ride. Instead of just buying things you don't really need - like yet another tee shirt or too much fast food - put the money aside in your share savings account. Do that often enough and before you know it, you will have enough savings to put toward a down payment on your new wheels. Having a goal makes saving easier. Or make it a game: Ask your parents to match a portion of your savings. If you save $10 per week, ask them if they will put in $5. But if you don't save what you promised, you have to give them $5. For more tips on saving, visit www.americasaves.org.
The 411 On Paying With Plastic
When you are at the checkout, ever wonder why a sales clerk asks you whether your card is "Debit or Credit"? What difference should it make? The clerk is asking because the merchant can process the transaction either way.
If you say "debit" you enter your Personal Identification Number (PIN) and the store has to pay only pennies for processing. However, the financial institution, including your credit union that issued the card, will earn less on the interchange fees - the money that's made by moving funds through the financial system.
If you say "credit," you sign a sales slip. Now, the transaction costs the store more, but your credit union (or other financial institution) earns more on the interchange fees. Some stores do not accept credit-based transactions and only allow PIN-based purchases.
Because financial institutions, including your credit union, count on interchange fees to defray the cost of doing business in plastic, there may be a small fee charged to your checking account each time you use your debit card. The best thing to do is to find out more by contacting the credit union.
Understanding Terms Of A Loan
You're hungry; your wallet is empty; you need some cash. So you borrow $10 from a friend for a pizza. But when you borrow money for a bigger purchase like a car or furniture for your first apartment, the transaction gets more complicated. You must sign loan documents that are a legal contract between you and the credit union. Here are some basic terms you will need to know:
- Interest rate - This is how much you must pay for the privilege of borrowing the money. Your credit union or other lenders express the interest rate as an "annual percentage rate" or APR. The lower the APR, the less the loan will cost you.
- Loan term - This is the length of the contract between you and the credit union. The longer you take to pay back the loan, the more it will cost.
- Co-signer - The credit union or other lender may require that another person also agree to the terms. If you can't pay the loan back, the co-signer is legally responsible to do so.
- Collateral - A car loan is typically secured - or backed up - by the car itself. Loans with collateral usually have lower interest rates than unsecured loans because the property can be recovered or repossessed if you stop making your payments.
- Lien - To protect its interest in the collateral, a lender puts a legal claim on it until you pay off the loan.
- Default - When you sign a loan agreement, you promise to pay the money back on the schedule specified in the documents. If you can't, the loan is said to be in default and the lender can take away any collateral.
Borrowing money and promising to pay it back is serious business. So before you do so, ask the loan officer at the credit union about anything you are not sure about.
What You Need To Know About Your First Credit Card
Having a credit card gives you a lot of advantages. For one, it's safer because you can carry less cash. For another, you can buy something you need now rather than waiting for payday. But a credit card also comes with responsibilities. How you handle credit now will influence your credit rating down the road because your credit record shows lenders what kind of risk you are. If you don't make timely payments or always max out your credit limit, you may hurt your chance to get the best loan rate later. That could add up to thousands of dollars more.
Protect yourself from fraud, too, by signing your card as soon as it arrives. Make a photocopy of the card's front and back and keep the copy in a safe place. That way if the card is lost or stolen, you have a complete record and can report the loss promptly. Keep your receipts and compare the transactions with your statement. If you discover a questionable charge, report the problem in writing. The details are on the statement's back.
Listen up: It's all about you at the credit union in April. It's Financial Literacy Month and the week of April 17-23 has been designated as National Credit Union Youth Week. This year it's a chance to find out how MoneyRocks@MyCreditUnion. We want you to know how to make the right moves with your money by being smart about it, like saving for the future, avoiding penalty fees or paying too much for a loan.
At the credit union, we want to treat you like a rock star. That's because when you join the credit union, you become a member and an owner. At banks and other financial institutions, you're just a customer because the goal is to make sure you make money for them. But the credit union is a not-for-profit financial cooperative. Sure, we have to make money, but it's returned to our members, so you get higher rates on savings, lower rates on loans, or new services that will help you get more for your money. Visit the credit union to find out more.
Taking Control Of Your Spending
First: You need to figure out where your money is going. In order to do this, you will need to keep track of every purchase you make - from a pack of gum to a new pair of shoes. Do this for about a month.
Second: You need to make a list of your short and long-term goals, such as buying a pack of gum and a set of wheels. And, don't forget the long-term goal of saving for college.
Third: You need to compare your purchases to your financial goals, expenses, and your income (allowance and/or earnings from your job). If you find yourself coming up short of funds than you'll need to make adjustments, such as cutting back on less important purchases.
Tip: When making purchases, ask yourself two questions before buying an item:
1. How much will this purchase set me back from reaching my goals?
2. Do I really need the item?
You may want to walk away from the item for a day or more. By walking away, you will be able to make an objective decision.
Develop a smart saving habit by "always" putting away funds for your long-term goals first. Put these funds into your Share Savings account. Besides keeping your funds safe, you will also earn interest on your balance, which in turn will make it easier to reach your goals.
What is....? A Share Savings Account
When you become a credit union member, you do so by opening a share savings account. Your credit union is a financial cooperative, and when you join, you become a member/owner. Your share account is your "share" in the credit union. It's the basic unit of savings and the foundation for all of the other financial products and services available.
You may hear other financial institutions referring to you as a member, but when you open an account at one, the fact is, you are just a customer. Other financial institutions are either privately held - owned by a small group of investors, such as a family, or publicly traded - owned by stockholders who buy and sell shares on the stock market.
But a credit union is fundamentally different. Here, members are the shareholders. Use your share savings account to accumulate funds for short-term goals, like the down payment on your first car. Once you open a share account, you may have access to other products like a checking account with a debit card or opening a share certificate. Contact the credit union to find out more.
Prepaid Debit Cards: Convenient, But Watch Out For The Gotcha's
Prepaid debit cards are touted as convenient, safe and cost-effective - a straightforward way to manage your money. Funds are loaded onto the card and then you can use it pretty much any place that accepts plastic cards, including at an ATM. Unlike a debit card that's tied to your personal checking account, the card's issuer holds the money in a big pool. That means you don't have the consumer protections a traditional debit card has. For example, if you contact the debit card issuer about a lost or stolen card within two business days, your liability is limited to no more than $50. If you don't, your loss is capped at $500. Many prepaid debit cards don't offer that kind of protection.
Consumers Union, the publisher of Consumer Reports magazine, also found prepaid cards can have many different types of fees, and not all cards have the same fees. You may be charged for:
* Initiation or activation of the card
* Owning it (a monthly fee)
* Point-of-sale transactions
* Cash withdrawals
* Balance inquiries
* Transaction statements
* Customer service
* Bill payments
* Adding or "loading" funds
* Not using it (dormancy fees)
* Getting your remaining funds when closing the account
* For overdrafts ("shortage" fees)
A prepaid debit card does offer the convenience of using a plastic card when you don't qualify for a credit card or don't yet have a checking account. But make sure it's worth the money by carefully reading the terms and conditions. Compare the fees each charges. Be sure what the big print promises isn't taken away by the small print.
Ready For Your First Car? Answer These Questions To Find Out
Sure, you're ready to get behind the wheel of your own car. But are you really? Answer these questions to find out.
1. Have you done your homework? Check out sites such as www.edmunds.com, www.kbb.com, or www.autobytel.com to get pricing information and additional tips on car buying. The April issue of Consumer Reports magazine is devoted to all-things-auto and worth reading.
2. Where will the money come from to pay for the vehicle? Perhaps you've been saving for it since you were two and you're ready to hand over the dead presidents to the seller. But most people need a loan to buy a car. If you're one of them, do you have funds for a down payment? A down payment lowers the amount you will need to borrow, saving you money in interest.
3. Is a parent or older sibling willing to co-sign the loan? A co-signer agrees to pay back the loan if the primary borrower (you) can't make the payments.
4. Can you afford the gas? Filling the tank can be an expensive proposition. From time to time, you may need to ask your passengers to chip in for gas. Are you willing to do so?
5. Who will pay for the insurance? Your family may be willing to foot the bill, but they may ask you to contribute.
6. Can you set money aside for regular maintenance and repairs? Even the most reliable car needs regular oil changes and many cars will need repairs as you pile on the miles.
7. Have you talked to the people at the credit union? We're here to help. So give us a call when you're ready to shop for wheels.
What Is A....? Christmas Club
Even a little can add up. That's the principle behind a Christmas Club account. With a Christmas Club, you set aside money every month in a special savings account. Then, when it's time to do your holiday shopping, you can withdraw the funds and start your carts!
Christmas Clubs were created during the Great Depression in the 1930s as a way for people who had very little money to be able to save. They could accumulate funds over the course of a year in order to have money for gifts and other holiday expenses. Typically, financial institutions encouraged consumers to keep the money tucked away with various restrictions on the account, for example charging fees for withdrawals.
Today, people have more options for their savings, but Christmas Clubs are still a popular choice for many. It's much easier to save when you have a specific goal. Because a Christmas Club account has a clear purpose, it's a way for people who might otherwise have a hard time saving money to keep their focus and save.
Savings: Make It A Habit You Can Live With
Wish you had more money to spend? Start by saving more. Here are some fun ways to get into the saving habit:
- Save your change. At the end of the day, put it in a glass jar. At the end of the month, take it to the credit union and deposit in your share savings account.
- Each time you get a dollar bill, note the letter of the alphabet to the left of George Washington's picture. (The letters A through L designate a Federal Reserve region.) Pick a letter to represent something you want to save for, for example, C for a computer or H for a new hairstyle. Set these bills aside to deposit in savings, but keep a running total so you know when you have enough to reach your goal.
- Go to the library instead of buying a book. Check out a DVD in place of going to the movies. Put aside the money you would have spent.
- Clean out your closet. Take clothes in good condition to a consignment shop or hold a yard sale. Save the money you earn.
- Stop snacking. If you spend $3.50 on soda and candy every day for a year, you'll spend $1,278. Save it instead for something you really want.
The fact is the more you save now, the more you'll have for the future. And you have time on your side. Use the Rule of 72 to figure out how long it will take to double your money: Divide 72 by the interest rate you're earning to determine the number of years until your savings double.
On The Go? So Is Your Credit Union
Now you can use your cell phone or other mobile device with a built-in Web browser to access your credit union account. It's easy to use, and accessible anywhere you have cell phone service. With the credit union's mobile branch you can check your account history, transfer funds among your accounts, make a loan payment, pay bills and receive email and text alerts. But like all things involving personal information and money, you need to exercise a few precautions to protect yourself and your funds. Here are some common-sense do's and don'ts:
- Do require a password to power up your phone or awaken it from sleep mode.
- Don't allow your device to automatically log you in to your account. If your phone is lost or stolen, you'll give anyone who has it access to your money.
- Don't share your password, account number, Personal Identification Number (PIN), or answers to challenge questions. Don't save this information anywhere on your phone.
- Do remember text messages are not encrypted and are stored on the phone.
- Don't respond to text messages purportedly from the credit union requesting a PIN, account number or other information. (We would never ask for this information, nor would any other financial institution.) Do let us know about the messages.
- Do use the same cautions you use on your computer. For example, don't click on links in e-mails that require you to enter passwords or other confidential information.
- Do immediately contact the credit union if you lose your phone.
Using Your Debit Card
A debit card gives you easy access to your funds in your checking account. And, we know you hate to write checks and endure the hassle and time of showing ID. Just choose your PIN (personal identification number), and your debit card becomes your ticket to hassle-free purchases, whether they are online or in person. With a debit card transaction, you can even request cash back at many businesses if you just need a little walking around money.
When using your debit card, remember a debit card is directly connected to your checking account at the credit union. So when you use your card, the amount is immediately taken out of your checking account. It is easy to overdraw your account if you have miscalculated how much you have, and this could become costly if you overdraw your account. Recording your debit card transactions and keeping track of your checking account balance will help prevent you from overdrawing your account. Also, check your bank balance often to detect any discrepancies.
Build Savings Now For The Future
Saving money may not seem to be as much fun as spending it. Yet if you build up your share savings account now, you can have a lot more fun later. That's because you have time on your side. Even though interest rates are at historic lows, over time even small amounts can add up. Say you have $100 you've earned from your part-time job. If you put it in your share savings account and you add about $40 per month or $10 per week to it for the next 20 years, you'll accumulate $10,000 in your account. That's assuming you're earning only .10 percent interest
Because interest rates will likely go up in the future, it will take even less time to reach $10,000. It's all about saving early and often. Most people find that having a goal helps them stay on track with their savings. So think about what you might like to be doing or things you might like to have, then start saving now so you can enjoy them later.
Wheels For You
If you're yearning for the day you don't have to ask a parent or an older sibling to borrow the car, we have good news for you. With a loan from the credit union, that day could be sooner than you think. Getting a vehicle loan is serious business, but if you've demonstrated that you're financially responsible, we can make your dream of owning your own car come true.
Here are key questions to consider:
1. Do you have a down payment? Having savings to put down on the vehicle shows you recognize the importance of savings and also decreases the amount you have to borrow, saving you money on payments.
2. Do you have enough income to make your payments? And have you figured out how to pay for vehicle registration costs, gas, maintenance, and insurance?
3. Do you have a cosigner? A cosigner can be a parent, older sibling or even a family friend, but this person must be someone who is willing to take over the loan should you not be able to make your payments.
To find out more about how a loan from the credit union can put you behind the wheel, call, click or stop by the credit union.
Debit Card Ready? Find Out Here
Are you ready for a debit card? Take this quiz to find out.
1. I never keep track of my checking account balance. True or False
2. If I have money in my pocket, I'll spend it all. True or False
3. I frequently lose track of things, like homework and passwords. True or False
If you answered "true" to these questions, you'll need to brush up your money management skills before you apply for a debit card. A debit card is an electronic passkey to your credit union checking account. It's easy to use. You simply swipe your card any place that accepts plastic. Sometimes, there's a slight delay in the processing, but typically, the money is immediately withdrawn from your account and deposited into the merchant's. That means you need to keep track of your balance so the transaction will be approved. A debit card's ease-of-use also could be trouble for you if you can't resist spending money you have very convenient access to. You also need to guard your card as well as your personal identification number (PIN) because while there are some legal protections against fraud, a thief could drain your account and the investigation could take awhile. For more information on how to get your first debit card, contact the credit union.
Get Financial Freedom Through Budgeting
You may be young, but you have the power to take control of your finances by creating and sticking with a budget. Plus, by developing good money management skills and gaining financial literacy now, you'll be setting the stage for a lifetime of financial well-being and know-how, even when your finances become more complicated later on. Read on for some simple tips on starting your budget.
- Track your spending and compare it to your income. If you find you are spending more than you're making, figure out ways to make more money and areas to cut back.
- Understand wants versus needs and figure out which expenses are truly necessary. You'd be surprised by what you think you "need" but can actually live without. Many of the items we spend our money on could actually be categorized as "extras" or "luxury" items. By cutting back on some of these, you'll see your savings grow.
- Set goals for saving. Maybe you have something important to save for like college expenses or auto insurance. By putting some real goals in place and eliminating wasteful habits, you'll have more money for what really matters when you need it.
- Avoid impulse buying and don't shop with friends who tend to spend a lot. Instead, plan activities that are free or cost as little as possible. Stay home and have a movie/game night or have a picnic in the park.
- Reward yourself for a job well done! Once you see yourself sticking with that budget, it's ok to splurge just a little. Indulge in something you really love - your favorite restaurant, that new pair of jeans or long-awaited CD.
For more tips, visit the Youth section of your credit union's website. Good luck and here's to your financial freedom!
What Is A . . . ? Cosigned Loan
As the name implies, a cosigned loan is a loan with one or more cosigners. Cosigners agree to pay back the loan if you default - that is, stop making your payments. A cosigner is essentially guaranteeing the loan, so chances are, if you are looking for someone to cosign a loan for you, it will need to be someone who is close to you and trusts that you will keep up with the payments. Typically, this is a parent, grandparent, aunt, uncle, or older sibling. Cosigners are taking on the risk of the loan, so they'll want to be reasonably sure that they are not left with the debt.
Applying for a cosigned loan can be a wise idea because as a teen you have not had the opportunity to build your credit history. It solves the Catch-22 problem of how to build a strong credit record when you are unable to get a loan. Adding a creditworthy cosigner to your application strengthens the chance that you will be approved for the loan. Just make sure you live up to the trust that's been placed in you.
Solve The Money Mystery During National Credit Union Youth Week
You don't have to be Sherlock Holmes to know money has a way of vanishing. You've probably even heard a parent ask, "Where does the money go?" You can find clues to what happens to your cash during "Savings Sleuth-Solve the Mystery," this year's National Credit Union Youth Week coming to the credit union, April 21-27, 2013.
Stop in to learn the telltale signs of how money disappears. For example, do you spend all of your spare change? Or do you collect it each evening and then bring it to the credit union to put in your share savings account so that it will be there for the future, like when you're ready to move into your first apartment? Do you buy the latest video game at the first store you see it or do you shop around for the best price, saving money for something else you might want? For more hints, stop by the credit union during Youth Week.
Start Now To Budget For Success
Does it seem like some of your friends, even if they don't have wealthy parents, always seem to have money? And do others, even those with parents who are well off, never seem to have any cash and want to borrow it from you? The difference may be that those who have the funds have learned how to budget.
Budgets sometimes have a bad reputation - people think of them as a straitjacket, not allowing them to buy the things they want. But in fact, a budget done well is exactly the opposite. It's a spending and saving plan that helps you get what you want. It's a matter of writing down your income (the money you get from a job, an allowance or as a gift) as well as your expenses (what you spend on food, entertainment and so on). By writing your income and expenses down you can see if you are living within your means. You can determine if you need to earn more money, for example, by doing extra chores around the house or solving a computer problem for an older neighbor. And you can find out where you're wasting money, like buying snacks at the convenience store instead of at the grocery store. A budget should also include saving money for the future - a down payment on a car or for a security deposit on your first apartment. Go online for forms that can help get you started with setting up a budget.
Mobile Banking Safety Tips
Your credit union offers these safety tips for our members to keep in mind when banking online:
- Password protect your mobile device and always lock it while not in use. (Set the auto-lock function on your device.)
- Do not store sensitive information, like passwords and social security numbers, in your mobile device.
- Install mobile security software on your device to protect you from viruses and malware.
- Make sure you log out when you have completed your mobile banking session.
- Be aware of your surroundings when typing sensitive information.
- Keep your mobile device software and applications updated.
- Never share your password, account number, PIN and answers to secret questions. And, don't save this information anywhere on your phone.
- If you lose your mobile device, please let your credit union know immediately. Also, if you change your phone number, please let us know.
- Remember, your credit union will never contact or text message you asking for personal or banking information.
Get Into The Saving Habit
Here are some tips on how to successfully get into the saving habit:
- Start with small amounts. When starting to save, start by saving a $1 or $2 each day. By the end of the month, you will have saved $30 to $60 dollars. As time goes, try to increase the amount you save each month.
- Make it a habit of carrying very little money with you. You can't spend it if you don't have it. Buying a candy bar would be nice, but without a dollar, you can't buy it. You would be surprised how quickly a dollar here and a dollar there adds up.
- Have a small bank you can put spare change and bills into. When there is a significant amount in the bank, take it to the credit union and deposit it into your share account. Make this a routine. And, every time you get money, make sure you put some away.
- When considering buying a big purchase, wait a week or two to think about it. This will help you make sure that you still want the item. And if you are lucky, maybe the price will go down.
- Deposit your money into your credit union's share account instead of your wallet.
What Is ... NSF?
"NSF" is not something you want to see stamped on a check you wrote for a purchase or to pay back money to a friend. "NSF" stands for "non-sufficient funds" and it means you failed to have enough money in your checking account to cover it and the check has "bounced back." It's like an undeliverable email that's returned to the sender - but it has more consequences. You may have to pay a fine - an overdraft charge.
Overdrawn accounts can happen to anyone, especially those in the habit of not writing down the withdrawal when they use a debit or check card to pay for purchases or to get cash from an ATM. The best way to keep it from happening to you is to always write down deposits and withdrawals in your check register, and if you don't have the funds, don't write the check! Balance your account every month to make sure you and the credit union agree on the amount you have in your account.
Hit The Road With A CU Auto Loan
So you studied, practiced, passed your driving test, and have gotten pretty good on the road. Now you're tired of asking your parents to borrow the car every time you want to drive somewhere. Maybe you're finally ready (and responsible enough) to buy your own set of wheels.
As a young credit union member, you're on the right track to getting your very first car. The credit union offers low-rate auto loans to teen drivers as long as you meet the following criteria:
* You're at least age 16
* You have a qualified adult cosigner
* You have a steady part-time job
Don't forget, there are other things to consider besides paying for your new ride, including:
* Choosing a safe, reliable vehicle
* Selecting the best type of auto insurance
* Keeping your grades up in order to take advantage of "Good Student" driver discounts
Rely on your credit union for the resources you need to stay safe and smart on the road, and when buying your first car!
Begin Building For Tomorrow With A Term Share Certificate Today
Do you have big plans for the future? You want to go to college, travel the country (or maybe the world), perhaps start your own business one day, and buy a car and a house. All of these goals have one thing in common...they require cash. And it's never too early to start saving for tomorrow.
Luckily, as a credit union member, you're ahead of the game. Your credit union offers some valuable tools for saving, one of which is a Term Share Certificate of Deposit (CD). This is a secure, low risk way to invest your money at a great rate. You purchase your certificate for a specific amount and set period of time, such as $500 for 6 months. During the term, your interest adds up, or accrues. You cannot withdraw money from the account without paying an interest penalty so it sort of forces you to save for that time period.
A Term Share Certificate of Deposit also allows you to:
* Choose from a variety of terms (ranging from 6 - 60 months)
* Start saving with a low minimum deposit
* Maximize the interest you earn
* Use savings as collateral for a future loan with the credit union
If you're looking to grow your savings for the future, a CU Term Share Certificate may be your solution!
Frugal Furnishings For Your First Place
Finally! A place of your own. But if the security deposit and first month's rent drained your savings, here are five tips for furnishing your new space on a tight budget:
1. Browse the Web for decorating ideas on sites such as Pinterest, hgtv.com and apartmenttherapy.com.
2. Check out thrift stores, such as Goodwill, Habitat for Humanity's ReStore and others. Many have a Facebook page where weekly specials are posted.
3. Treasure hunt at garage/estate sales and flea markets. Find bargains on Craigslist.com, in the classified ads or posted on bulletin boards.
4. Repurpose items: An old door can be attached to a pair of legs (available at the hardware or home store) and serve as a table or a desk. Large pillows placed on trunks or small sturdy tables can provide a comfy place to sit. In addition, a slipcover can refresh a sofa or chair.
5. If family members or close friends are replacing furniture or decorations, do not be shy: Ask if you can give the older versions a new home.
Share Account: Did You Know That . . .
1. Saving is wise and a useful habit to have throughout your life time.
2. Saving at your credit union is beneficial because we pay you higher interest rates on your share account and as an established member, it is easier to apply for other services you may need.
3. Your share account can also be used as collateral to purchase your first vehicle, borrow against for a different loan or another purpose.
4. A share account can also provide you with funds held to the side for a secured credit card.
5. By borrowing against your share account and making monthly payments on time, you're on the way to building your credit history.
So keep building up your savings, maintain a good saving habit, and when the time comes for borrowing needs or a secured credit card, just call or visit the credit union and we'll be happy to help you.
Be Smart, Be A Saver
You work hard in school to get good grades and be a smart student, right? Why not work just as hard when it comes to your money? With a few simple tips, some helpful tools from your credit union, and a little bit of effort, you can be a smart saver. It's never too early to start saving. In fact, learning how to save and developing smart money habits now, will help you be a more responsible adult and reach more goals later in life.
Smart Saving Tips:
* Learn about the different types of accounts that your credit union offers. These include:
- A basic Share Savings Account to help you earn interest, and you can access your money at any time.
- A Coverdell Education Savings Account to help with saving for college.
- A Share Certificate (or CD) with a better interest rate on money you put away for a while.
- IRAs and investments to save for the future.
* Keep a savings journal. A written "wish list" will help you remember those important things you're saving for to avoid wasting money on other things.
* Save first. As soon as you get paid, take part of that hard-earned cash and tuck it away in your savings account.
* Save for the future. After your savings account is built up, take some extra money and open a Share Certificate or CD.
Vehicle Loan Can Make Your Dream Car Appear
If you're dreaming of the day you can stop begging Mom or Dad for the car keys, good news. That day may be closer than you think. A vehicle loan from the credit union may help get you behind the wheel of your own car. Follow these three steps:
- Do your homework. Whether you are buying your first car from Dad or from a dealer's lot, research sites like kbb.com (Kelley Blue Book) or edmunds.com to find out about prices and reviews. Also, check the April issue of Consumer Reports, its annual car buying guide for repair records and other buying tips.
- Figure out what resources to draw on for your down payment. The larger your down payment, the smaller your loan. Figure out what payment you can afford; keep in mind you will need insurance and funds for gas, oil and repairs.
- Line up a co-signer. A co-signer (typically a parent or older sibling) agrees to pay back the loan if for some reason you are not able to do so.
Now, you're ready to stop by the credit union. We'll do what we can to put you in the driver's seat.