Newsletter articles for quarter 1, 2017

These complimentary newsletter articles are designed to be consumer-friendly and include tips about personal finance, budgeting, money management, privacy/security, and other items of interest to your members. Credit unions are encouraged to use them in their publications. Feel free to add your credit union information to the articles, or revise to fit your needs.
Have an idea for an article? Send it to .

5 FINANCIAL RESOLUTIONS FOR 2017

Chances are your 2017 resolutions probably contain words like money, saving or budget… and you’re not alone! After all that holiday spending, many are looking to improve their financial health.

Here are the top five financial resolutions for the New Year, and tips for how to successfully complete them.

  1. Create a budget… and stick to it! Know exactly how much money comes in and goes out each month. While it sounds a bit basic, many people do not know how much they spend on a regular basis. Note your essential expenditures like bills and groceries, decide how much you want to save a month and then work out what’s left over for the nonessentials and entertainment. The hardest part will be sticking to it!
  2. Start or grow your emergency fund. Begin small. Set up a separate saving account and deposit $25-50 each week or pay period. Your goal is to have at leastsix months of living expenses in this fund. You can keep adding to it, but avoid taking money out, unless an emergency occurs.
  3. Prioritize debt. List out your debts—credit cards, loans, etc.—and organize them by annual interest rate. Pay down the higher rates first. You’ll save in the long run.
  4. Talk to a financial advisor. There are tons of ways to save money AND make it grow. Ask your friends, family and even your workplace for recommendations.
  5. Check in on your finances. With online banking, it’s easy to monitor your finances. Set up a time each week to review your spending habits, account balances and upcoming bills.

NEW YEAR, NEW YOU: RECOVERING FROM HOLIDAY CREDIT CARD DEBT

If you rung in the New Year with credit card debt, join the club! It’s all too easy to swipe that credit card during the holiday season and rack up fees and interest.

Never fear—you can do something about that. Here’s an outline for recovering from holiday debt.

  1. Assess your overall financial situation. What are budget, upcoming expenses, and financial goals? After listing that out, you’ll have a better idea of how soon you can pay down the debt.
  2. Strategize about your payments. Focus on paying down the credit cards with the highest interest rates first. Sound daunting?Pay down the smallest balance first. Regardless, it’s important to pay more than the minimum balance on time each month.
  3. Stop overspending. Limit or cut spending on non-essential items, at least until you catch up on the extra debt from the holidays. A simple lifestyle change, like carpooling or brown bagging it to lunch, can help you save thousands over the course of the year.
  4. Put tax returns and bonuses to work. Use extra income to pay down credit card debt or save for next year’s holiday expenses. It’s not FREE money!
  5. Start saving for next year. Did you know [your credit union] has a Christmas saving account? If you put $50 a month into this account, you’ll have $600 saved for next year’s holiday expenses.

TOP 10 WAYS TO PREPARE FOR RETIREMENT

Retirement may or may not seem like lightyears away, but it’s closer than you think. Fewer than half of Americans have calculated how much they will need for retirement. That’s a scary thought as the average American spends approximately 20 years in retirement.

There are steps you can take now:

  1. Start saving, keep saving and stick to your goals. Kudos if you’re already saving—keep at it! If you aren’t saving, get started now. Make it a priority, devise a plan and stick to it.
  2. Know your retirement needs. Experts estimate you will need at least 70 percent of your preretirement income to maintain your standard of living.
  3. Take advantage of your employer’s retirement savings plan. Sign up and contribute to your company’s 401(k). Your taxes will be lower, your company may kick in more, and automatic deductions make it easy. Over time, compound interest and tax deferrals make a big difference in the amount you accumulate.
  4. Check out your employer’s pension plan. This may not be for everyone, but if your employer does offer a plan, you should learn more about its benefits and factor that into your plan.
  5. Consider basic investment principles. Know how your savings or pension plan is invested. Learn about your plan’s investment options and ask questions. Diversify your investments to reduce risk and improve return—this may change depending on age, goals, and financial circumstances.
  6. Leave your retirement savings alone!When you take money out of your retirement savings, you lose principal and interest, and you may lose tax benefits or pay penalties.
  7. Ask your employer to start a plan. Some employers might not offer a retirement plan. If yours doesn’t, they might be able to set up a simplified plan that benefits you and your employer.
  8. What about IRAs?Opening an Individual Retirement Account (IRA) is a great way to save for everyone. You have two options when opening an IRA—traditional IRA or Roth IRA. Contributions to a traditional IRA are tax deductible on both state and federal tax returns for the year you made the contributions, while withdrawals in retirement are taxed at ordinary income tax rates. Roth IRAs provide no tax break for contributions, but earnings and withdrawals are generally tax-free.
  9. And Social Security benefits? Social Security pays benefits that are on average equal to 40 percent of what you earned before retirement. Visit the Social Security Administration’s website to use the retirement estimator,
  10. Ask tons of questions and keep learning! Read helpful publications from the Employee Benefits Security Administration, the Social Security Administration, and more. Talk to your employer, your credit union, your union or your financial advisor. Ask questions and make sure you understand the answers!

CLEAN UP YOUR ONLINE REPUTATION

Last in a series about keeping you cyber safe

We’ve all heard the importance of changing your smoke detector batteries in spring and fall, during daylight savings time. You take your care in for maintenance every 15,000 miles. [Insert credit union name] offers shred days to eliminate documents you don’t need anymore. What about your digital life?

Monitoring your online reputation can keep your identity safe.
Here’s a handy outline to help you get started:

  • Parents and older kids with social media accounts can take an active role in making sure their online reputation is squeaky clean.
  • Own your online presence: Review the privacy and security settings on websites you use ensuring they remain set to your comfort level for sharing. It’s OK to limit with whom you share information.
  • Clean up your social media presence: Delete old photos and comments that are embarrassing or no longer represent who you are.
  • Update your “online self”: Are your social media sites up to date? Review your personal information and update it where needed.