Tag Archives: spending

Save Smarter

Money Master or Financially Challenged?

Presented by Member One Federal Credit Union

With the inevitable uptick in holiday spending in sight, it’s high time to check in on your money management know-how. Many people might think they have a solid grasp of their finances, but there are certain key pieces you should have in place to truly be considered a financial pro. Below are five checkpoints to help determine if you’re really the money guru you think you are.

You’re aware of your income and expenses. If you track how much money is coming in and going out each month, consider yourself a smart money manager. Failing to be in tune with your income and expenses can lead to over-spending and debt, or missed opportunities to make the most of your money through investing. If you need to improve in this area, start by tracking your monthly income and expenses over a period of time and watch for trends. Ideally, you’ll have money left over at the end of a month to put into savings or in-vestments. If you’re consistently left in the negative, find ways to cut down on expenses.

You have a savings plan. Not only does this include having funds on hand to pay for emergency expenses, this includes long-term investments for a secure financial future. If your employer offers an investment plan like a 401(k), participate—especially if they match your investment. If you’re not investing and don’t know where to begin, your local bank or credit union is a good place to start. They can direct you toward low-risk investment opportunities. It’s never too early (or late) to begin investing.

You’re debt-free or making progress on paying off debt. There’s good debt, like a mortgage that provides a roof over your head, and bad debt, like credit cards near their maximum limit. Having some debt is fine, but it should mostly fall into the good category. If you have bad debt, get rid of it as quickly as possible by devising a plan to pay it off. Start by tackling the largest balance with the highest interest rate first.

You’re aware of monthly bills. Similar to an awareness of your income and expenses, you should know what bills you’re incurring each month. Even if you have automatic payments established, you should know when bills are typically deducted from your account, the amount, and the terms of the purchases. Billing mistakes can happen, and it’s your responsibility to make sure you’re paying the correct amount or take action to correct the charge if necessary.

You think about the big financial picture. When do you want to retire and what investments will help you get there? How many years are left on your mortgage? How will you pay for your children’s education? You don’t have to make all the big financial decisions right now, but you should remain mindful of your overall financial health. If you always consider how every major purchase or investment impacts your overall finances, you’re more likely to make smart money choices.

Join Member One here each month for more money-saving tips and financial advice! Be sure to visit their website, www.memberonefcu.com, for more info on their products and services. Member One Federal Credit Union is federally insured by the National Credit Union Administration.

Warm Up to Responsible Spending

With warm, sunny days upon us, it’s time to plan for more than just your tan: summer spending. Vacations, airline tickets, dining out, and entertainment—it adds up. If you haven’t budgeted for these expenses in advance, a quick swipe of your credit card takes care of it. But if responsible credit card use isn’t your strength (or you just need a refresher), these tips could help curb the temptation to overspend this summer.

Be selective. There are several factors to look at when picking a credit card. First, you’ll want to see what your limit is. If you don’t think you can handle the freedom of a credit card, start with one that has a lower limit, like $1,000. Additionally, look at the credit card’s annual percentage rate or APR. That interest will add up if you’re not planning on paying off the total each month, so shop around for a low APR. Finally, look out for cards that charge annual fees just for keeping them open.

Monitor your balance. You should keep credit card payments to 10 percent of your monthly take-home income. For example, if your monthly income is $2,000, your monthly credit card payment should not be more than $200. This doesn’t mean your balance should not exceed $200, but make sure your minimum payment is no more than that. Keep in mind, however, that paying off the entire balance each month is in your best interest financially.

Know the benefits. By making purchases with your credit card and paying the balance off each month, you’re proving to lenders that you’re a responsible, creditworthy consumer. It boosts your credit score and will help you in the future if you ever want to get a loan—or another credit card.

Stick to a budget. It’s important to set parameters for yourself when using a credit card. One simple way to do this is to use the credit card for one specific purpose, like gas or groceries, so it’s easier to keep your spending in check. Another way is to get a card with a low limit. This forces you to keep your spending under a certain amount.

Smart credit card use doesn’t have to be a mystery or limit your fun this summer. Follow these simple tips and your poolside lounge session (while possibly chasing the kids) will be that much more relaxing.

Presented by Member One Federal Credit Union