Basic Financial Literacy

February 28, 2023 • By Kevin Alvarez

Saving For The Unexpected – America Saves Week 2023

How often have you heard that saving for life’s unexpected events is very important and a necessary part of being financially prepared? Most likely A LOT! Accompanying this message often is the statement that you need three to six months of expenses in your emergency savings account.

For those of us who struggle with saving for the unexpected or are saving but don’t have that three to six months amount accumulated, our confidence might be shaken because we haven’t met this standard. And when we lack confidence, it can be even harder to get or stay motivated to save for those unexpected events or opportunities that arise.

Instead of focusing on what you haven’t accomplished, here are a few strategies to consider that may help you build your financial confidence and begin or continue on your path to saving for the unexpected.

Set a goal of saving $500 for emergencies and once you reach this amount, set a new goal for another $500 and keep going. Reaching several smaller goals feels good and when we feel good, we’re more likely to remain committed to our plan.
If you’re not sure exactly how much you can realistically save each month, try using the America Saves Spending and Saving Tool to get a clear view of your finances. Once you know exactly what your income and expenses are you will be able to set a realistic timeframe for saving that first $500 or beyond.
Consistency can help build confidence. Saving automatically every time you get paid is the easiest way to be a consistent saver and consistency builds confidence. You can set up split deposit saving with your employer or your financial institution so that a portion of every paycheck goes directly into a dedicated savings account. When you are saving $10, $20 or some other amount every paycheck you will see regular progress, building your confidence along the way.
Instead of only focusing on the negative reasons for having an emergency savings account, think of it as saving for opportunities. Framing the reason you are saving in a more positive light may help you feel better about setting money aside. Not only are you saving to pay for car repairs, home expenses, or medical bills, tell yourself you are saving for an unplanned dinner out to celebrate a friend’s birthday or the chance to go see your favorite artist in concert. Those positive feelings can be motivating.
Use the three to six months of expenses in a savings account as a guideline. Try not to become discouraged if you haven’t met this level. Instead, focus on what makes the most sense for you at this time, knowing that as your income grows and/or expenses decrease your ability to save more and more quickly will change.

America Saves is here to help you get started on any of these strategies. Check out the 6 Steps to Establishing a Spending and Savings plan, take the America Saves Pledge, or listen to our Think Like A Saver podcast. We’re with you every step of the way on your savings journey.

SafeAmerica Credit Union is here to help you on your saving journey. Check out all the Savings opportunities we have to offer.

Savings Accounts

January 13, 2023 • By Kevin Alvarez

4 Financial Resolutions You Can Accomplish Now

New Year’s resolutions are a mixed bag for many of us. On the one hand: personal betterment! On the other hand: methodical auditing of our refrigerator, checking account, and various vices. On the cusp of a fresh calendar year, we feel compelled to immediately transform our lives, but—as is the case with most good things—change takes time. This is especially true when it comes to financial goals. And in the aftermath of steep holiday spending, our goalposts can feel...far away.

If you want a few financial resolutions that you can achieve early into the new year (because who doesn’t love an easy to-do list??) here are some suggestions.

Automate Your Savings.

Life is expensive! Especially when you have your sights set on a vacation, home renovation, or even the creation of an Emergency Fund (which 26% of Americans report not having at all). Setting aside savings is a crucial step towards your financial health. There are multiple pathways to save, from automating contributions to an investment portfolio to downloading an app that bundles spare change on each transaction you make. If you want to avoid market fluctuations and go the straightforward route, set up an automatic direct deposit that funnels a percentage of your paycheck into a designated savings account. Then try not to touch it. You can automate transfers from any account to your SafeAmerica Credit Union savings account by setting up recurring transfers within Online Banking.

Enroll In A 401(k).

Speaking of savings...if your employer does not automatically enroll you in a 401(k) plan, you can sign up yourself. Unlike some company benefits (like flexible spending accounts or insurance enrollments that have deadlines), you can enroll in a 401(k) plan anytime during the year. So why not now? The sooner you can begin growing your retirement savings, the better. What you contribute is up to you, and many employers will match your contributions up to a certain percentage. If you earn income but don’t receive employer benefits, you can open a Traditional or Roth IRA as an alternative.

Trim Subscriptions

The average American underestimates their monthly subscriptions costs by $133 according to a 2022 survey conducted by C+R Research. People estimated they spent about $86 per month when in fact, they were spending about $219 per month. The start of a new year is a good time to take inventory of your streaming networks, music subscriptions, smartphone apps, wine club memberships, or any other miscellaneous expenses that might be drawing away from your overall savings goals.

Check Your Credit Report.

You can get a free report once a year from each of the three major consumer reporting companies (Equifax, Experian, and TransUnion.) This allows you to resolve errors or instances of identity theft—red flags you do not want creditors looking at when they are evaluating your application for loans and credit cards. With the exception of Experian, you will have to pay a fee if you want to see your credit score. There is often a way around this, as more than 170 financial institutions and 10 of the top credit card issuers provide free access to your FICO score (the most commonly used type of credit score).

This article is shared by our partners at GreenPath Financial Wellness, a trusted national non-profit.

How to Get Your Free Credit Report.

The Fair and Accurate Credit Transactions Act of 2003 (FACT Act) entitles you to receive a free copy of your credit report once a year from each of the reporting companies – Equifax, Experian, and TransUnion. The three companies have set up one central website, toll-free telephone number, and mailing address. You can request your free report either online, by phone or even mail by visiting www.AnnualCreditReport.com or calling 1-877-322-8228.

November 16, 2022 • By Kevin Alvarez

Managing Debt as Interest Rates Rise

Debt can be a challenge to manage, even in the best of times. Now, with the economy in the news nearly every day, how do you effectively manage your debt as the cost of borrowing for things like homes, cars,
and credit cards rises? People are successful when they set a realistic budget for spending. Focusing on non-traditional gifts, the joy of experiences and the resulting memories, can be just as rewarding without damaging your finances, especially as prices on essentials are rising.

Here are five general questions to ask in order to minimize the hit to your wallet in the face of rising interest rates.

What's Your Current Credit Score And History?

Knowing this information helps you understand how rising interest rates will apply to you. Some research shows that only 33 percent of Americans checked their credit score in the past year. Regularly monitoring your credit can alert you to errors, protect you from fraud, and provide you valuable information to strengthen your credit score–which can potentially minimize the rising cost of borrowing.

What Is Your Debt Portfolio?

Another helpful course of action is to make a list of your current debt such as credit cards, car loans, student loans and other debt. Although it’s a simple step, this can make a big difference in visualizing the big picture of your financial situation. Part of seeing the impact of rising interest rates is understanding exactly where you stand.

What Are Your Current Interest Rates?

An effective next step is to regularly review your balances, terms, and interest rates on a monthly basis. By staying on top of this vital information, you can make adjustments and informed decisions about reducing any existing balances more aggressively. As a debt paydown strategy, it often makes sense to start with the highest interest credit cards or loans.

What Is A Realistic Payment Plan?

As you are able, consider paying credit card balances in full by the due date each month. You can avoid interest charges on what you purchase, which means rising interest rates may not have much of an effect on your household finances.

What Is Your Overall Financial Plan?

To stay financially healthy and minimize the impact of rising interest rates, it is key to earn more than you spend, so that you have enough money to build savings for the future. Keeping an eye on your spending is an important step in the effort to create a budget without the cost of high-interest debt. Once you develop a household budget and track income and spending, it becomes clear where the money is going and where you need to adjust your spending to achieve your financial goals. By setting financial goals, preparing a financial plan, sticking to a budget, and setting up an emergency fund for the unexpected, you ensure that your financial well-being does not suffer as interest rates rise.

This information brought to you by GreenPath Financial Wellness.

GreenPath Financial Wellness

September 2, 2022 • By Kevin Alvarez

Life Insurance Awareness Month

September is Life Insurance Awareness Month and if we've learned anything from these past few years, it's that life is unpredictable. At SafeAmerica Credit Union, our hope is to bring awareness and encourage you to learn more about Life Insurance and why it's so important to have.

A Member Benefit for You!

We strive to offer our members the best access to many products and services, such as Life Insurance. We’ve partnered with TruStage to provide you with easy and affordable access to Auto, Home and Life insurance.

As a member of SafeAmerica Credit Union, Trustage® will work with you to select a policy that's right for your budget, with ongoing support and no hassle.

Trustage Life Insurance® can help give you peace of mind today and provide an income-tax free cash benefit for your family. It can help pay expenses you might leave behind such as funeral costs, mortgage payments or unpaid debts. Trustage helps make it easy to compare insurance and explore options you can afford—so you can make a good decision today for your family.

Types of Life Insurance

Life insurance can be confusing. Here is a brief summary of the types of insurance you can consider.

Term Life Insurance

Term Life Insurance will cover you for the length of your policy. As long as your premiums are paid, you will be covered. Learn more here.

Whole Life Insurance

With Whole Life Insurance, the rate you initially pay would be locked-in for the entire duration of your policy. Even if health conditions change and your premiums are paid, your coverage will never be cancelled. Learn more about Whole Life Insurance here.

Guaranteed Acceptance Whole Life Insurance

Guaranteed Acceptance Whole Life is a policy which does not turn down people for their health. As long as premiums are made, coverage will never decrease or be cancelled. Learn more about Guaranteed Acceptance Whole Life Insurance here.

Learn More

You can also learn more about Life Insurance by visiting the Trustage website. They offer a variety of quick-read articles to help you make an informed decision.

Read about: Understanding Insurance

Understanding Insurance

Get Started Today

Trustage® can help you get coverage that fits your needs and budget. We designed it to be easy to:

Compare life insurance options
See instant quotes based on your budget
Apply online or over the phone

Don't wait, get an instant online quote today. Or call 1-800-814-2914 and talk to a licensed agent.

Why Trustage®

Since 1935 Trustage has been assisting millions of people by helping protect the financial future of their loved ones with insurance policies designed to be affordable.

Trustage works with thousands of credit unions across the United States helping families prepare for the future and help secure the financial stability of millions of credit union members.

Learn More

Get an Instant quote

TruStage® is underwritten by CMFG Life Insurance Company, a well-known credit union member insurance provider. For more than 80 years, CMFG Life has earned the trust of members nationwide and is rated “A” (Excellent) by A.M. Best, an independent national organization that rates insurers’ financial strength and performance. “A” is the third-highest of 16 ratings, as of March 2021. Join more than 20 million members who rely on TruStage.

TruStage® Life Insurance is offered by TruStage Insurance Agency, LLC and issued by CMFG Life Insurance Company, P.O. Box 61, Waverly IA 50677-0061. The insurance offered is not a deposit and is not federally insured or guaranteed by your credit union. Products and features may vary by state.

GEN-2943854.2

December 17, 2021 • By Kevin Alvarez

Get Your End-of-Year Financial Health Checkup

As the eagerly awaited holiday season gets underway, the end of the year is a great time to get a financial health checkup to make sure finances are on track.

With regular checkups, you can fix small problems before they become big issues.

This year-end keeping financially healthy is especially important due to many economic uncertainties related to inflation, inventory shortages, as well as the expiration of COVID relief programs put in place more than a year ago to help people manage through the pandemic.

Your Financial Health Checkup

Like a physical health checkup, a financial checkup examines your vital signs to be sure all is well when it comes to you financial health and wellness.

Do you have an emergency savings? How do your credit card balances look? Are you tracking monthly income and expenses? What does your credit score and history look like? These are a few of the vitals reviewed during an end-of-year financial checkup.

From an overall budget review to managing credit card debt, the caring, NFCC-certified counselors at GreenPath Financial Wellness will conduct a full review of your current financial fitness and provide recommended next steps for improving your financial health.

A financial checkup guides you to:

Review Your Financial Goals: Has there been a significant life change this past year? A change in jobs, a marriage, divorce, home purchase or other big change can affect your overall financial picture. A check up is a good time to assess whether your current financial goals sync up with your overall situation.
Understand Options to Move Forward after Relief Programs Expire: Loans that were deferred as part of COVID-related relief program need your attention. Deferments provided borrowers with a little breathing room, but now that the temporary pause in payments has expired, a checkup is a good opportunity to understand options, and take a closer look at not only any loans that were on pause, but also your entire financial picture.
Manage Income and Expenses: One of the best ways to cope with inflation is to take the time to prioritize monthly spending. A spending plan helps to ensure that what you spend doesn't exceed what you make each month as prices rise. A financial checkup gives you a better understanding of your income and expenses. It can also be a time to set a spending plan to keep your finances on track and start saving for future goals.
Pay Down Debt: A checkup is a good time to explore options to help you pay down credit card debt as well as options for managing other debts that may be on the horizon - such as expiring forbearances on mortgages or student loan payments.
Assess Your Credit: Are you looking to take out a mortgage or make another large purchase in the New Year? A checkup is a great time to review your credi treport to see where you stand, and get tips to improve your score moving forward.

Your Checkup Starts Here

Your financial fitness is key to a healthy New Year. GreenPath's caring, certified counselors are committed to easing financial stress and worry through access to clear information.

For more information about financial wellness, visit our partner at GreenPath Financial Wellness.

Greenpath Financial Wellness

August 20, 2021 • By Kevin Alvarez

A Guide to Understanding Financial Terms

When reading about credit cards, mortgages, or other financial products, you may encounter financial terminology and acronyms that you aren’t familiar with. Please note, these descriptions are a guide only and are not legal definitions.

A

Adjustable-Rate Mortgage

An adjustable-rate mortgage (ARM) is a mortgage that offers the borrower a fixed interest rate for a set amount of time. After that time expires, the interest rate on the remaining balance varies though out the life of the loan. Depending on the terms of the mortgage, the interest rate resets each month or year. This type of mortgage is also called a variable rate mortgage.

Annual Percentage Rate

The Annual Percentage Rate (APR) is the yearly cost of borrowing money. APR includes the interest and fees charged over a one-year period. Many types of debt include an APR such as credit cards, auto loans, mortgages and personal loans. The APR helps borrowers choose credit card offers, mortgages, loans, etc.

B

Balance

When referring to debt, a balance is the amount of money remaining to be repaid on a loan, credit card or mortgage. When the term "balance" refers to a checking or savings bank account, the balance is the amount of money present in the account.

Balance Transfer

A balance transfer refers to moving a balance from one account to another account, which is often an account at another financial institution. It most commonly describes transferring outstanding debt owed on a credit card to an account held at another credit card company.

Balloon Payment

A balloon payment is the money owed on a loan when the loan term expires (usually after 5-7 years). When the term is over, the borrower must pay a balloon payment for the total amount remaining on the loan, or the borrower can choose to refinance the loan for new terms and rates. Balloon loans sometimes allow the borrower to transfer the remaining amount automatically into a long-term mortgage.

Bankruptcy

When an individual or a company has debt that cannot be repaid, declaring bankruptcy gives the individual or company legal protection from the debts. Bankruptcy is a legal process that can offer relief from some or all debts, depending on the type of bankruptcy.

Budget

A budget is written plan that tracks monthly expenses and income. It is used to help manage finances, keep current with expenses and save money.

C

Card Holder

A card holder is the person who is issued a credit card, along with any authorized users. The primary card holder is responsible for credit card payments. Credit card holders are protected by the federal lending laws which protect consumer rights.

Cash Advance

A cash advance is a loan issued from a creditor. The most common cash advances are issued by a credit card or through a loan taken in advance of a paycheck. These types of cash advance loans charge special interest rates and fees on the amount of the advance.

Cash Advance Fee

A cash advance fee is a charge made by the bank or financial institution that the borrower owes after taking a cash advance loan. This fee could be either a one-time, flat fee that is owed at the time of the transaction or a fee charged as an annual percentage of the amount of the cash advance. Did you know SafeAmerica waves cash advance fees on our Visa Credit Cards? Click here to learn more.

Collateral

Collateral is an asset that a lender accepts as a security for a loan. If a borrower defaults on their loan payments, the lender has the right to seize the collateral and sell it to recoup any losses.

Collections

Collections occur when a creditor, or a business, like a utility company, sells past-due debt to an agency to recover the amount owed. The delinquent debt could be past due credit card debts, utility charges, medical bills, cell phone bills or other payments that are over 6 months past due. Collection agencies attempt to recover past due debts by contacting the borrower via phone and mail.

Conventional Mortgage or Loan

A conventional mortgage or conventional loan is available through a private lender or two government-sponsored enterprises-Fannie Mae or Freddie Mac. Conventional loans are considered risky because they are not guaranteed by the government. These mortgages can have strict requirements and higher interest rates and fees.

Credit

Credit refers to the money that is borrowed that the borrower will need to repay.

Credit Card Charge-Offs

Occurs when a borrower does not pay the full minimum payment on a debt for several months. At that time, the creditor writes it off as bad debt. Note that a credit card charge-off does not absolve a borrower of responsibility for the debt. Interest is still owed on the balance. even after a credit card charge-off, the lender could turn over the account to a collections agency.

Credit History

A person's credit history develops as they borrow, repay and manage their loan payments, expenses and other transactions. Future loans depend on a solid credit history, because lenders check this information.

Credit Report

A credit report is a statement that has information about a person's credit history, including loan paying history and the status of credit accounts. Lenders use credit reports to help them decide if they will loan money and what interest rates they will charge.

Credit Score

A credit score is a number based on a formula using the information in a person's credit report. The result is an accurate forecast of how likely that person is to pay bills or repay loans. Lenders use credit scores to determine what interest rate they will offer on credit cards, mortgages, car loans and other loans.

Creditor

A creditor is a person or institution that extends credit by lending a borrower money. The borrower agrees to repay the funds under the agreed upon terms.

D

Debt

Debt is money owed to a lender, such as debt from credit cards, student loans, or a mortgage.

Debt Consolidation

Debt Consolidation means that a person's debts, whether credit card bills or loan payments, are rolled into a new loan with one monthly payment, A debt consolidation loan does not erase debt. Borrowers might pay more by consolidating debt into another type of loan.

Debt Management plan

A debt management plan is when an organization works with creditors to reduce a borrower's monthly payment and interest rates. People working through a debt management typically take 3-to-5 years to pay off debt.

Debt Counseling

Borrowers receive debt counseling (also called credit counseling) when a trained credit counselor reviews their personal finances, debt and credit history to help manage financial challenges.

Debt Settlement

Debt Settlement is a process of negotiating with creditors to accept a percentage of the full amount of debt that is charged off or severely delinquent. For-profit debt settlement companies operate to deliver profits to their organization. As part of the for-profit business model, debt settlement employees are often paid on a commission basis, based on the fees they collect from consumers.

Default

A default on a loan occurs when a loan payment is not made by the borrower according to the payment terms of an agreement.

Deferment

A loan deferment is when a lender agrees that a borrower can pause making monthly payments for a set amount of time. Loans that are deferred are not forgiven. The borrower still owes the money and must repay the debt. Deferments are often available with student loans to provide the borrower with a set amount of time before making any payments.

Delinquent

When a borrower is late or overdue on making a payment, such as on payments to credit cards, a mortgage, an automobile loan or other debt, it is called delinquent. People who are delinquent, or late, with making payments may be charged a late fee.

F

Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act is a set of laws that protect consumer rights during the debt collection process.

Fannie Mae

Fannie Mae, the informal name of the Federal National Mortgage Association, is a U.S. Government-sponsored enterprised that buys mortgages from lenders, bundles them intp investments and sells them on the secondary mortgage market. typically, Fannie Mae purchases home mortgages loans from commercial banks or big banks.

Finance Charge

A finance charge is the cost of borrowing money. The cost to a borrower includes interest and other fees. Lenders typically set finance charges as a percentage of the amount borrowed. Some lenders might set a flat fee finance charge.

Fixed Rate

A fixed rate is an interest rate that stays the same for the life of the loan, or for a portion of the loan term, depending on the loan agreement.

Forbearance

Forbearance is a process when a lender agrees to a lower payment or no payment for a temporary period of time. Forbearance is not loan forgiveness. After that time expires, the borrower may face higher payments, accrued interest or an extended loan term.

Foreclosure

Foreclosure is a legal proceeding that happens when a borrower does not make payments on a secured debt. The lender may start legal foreclosure proceedings to seize the property associated with the debt. As an example, default on a mortgage could result in foreclosure and auction of the property.

Freddie Mac

Freddie Mac, the informal name of the Federal Home Loan Mortgage Corporation, is a U.S. government-sponsored enterprise that buys mortgages, combines them with other forms of loans, and sells the debt on the secondary mortgage market. Typically, Freddie Mac purchases home mortgage loans form smaller banks and lenders.

G

Grace Period

A grace period is a set period of time in which borrowers do not have to pay finance charges or interest if they pay balances in full. Revolving credit card lending provides a borrower with a grace period.

I

Interest

Interest refers to the cost of borrowing funds, paid to the lender by the borrower. Interest also means the profit that accrues to those who deposit funds in a savings account or investment.

Interest Rate

An interest rate is the fee lenders charge a borrower, calculated as a percentage of the loan amount. The percentage charged when borrowing money is known as the interest rate.

L

Loan

A loan is sum of money that is advanced to a borrower. The borrower agrees to specified terms such as finance charges, interest and repayment date. Some examples include auto and recreational vehicles loans, home loans, home equity loans, personal loans as well as student loans.

Loan Forgiveness

Loan forgiveness means a borrower is no longer obligated to make loan payments. With student debt loan forgiveness, the borrower must meet criteria such as actively serving in the military, performing volunteer work, teach or practice medicine in certain types of communities, or must meet other criteria specified by the forgiveness program.

Loss Mitigation

Loss mitigation is the process when mortgage servicers work with borrowers to avoid foreclosure.

Loan Modification

Loan modification is when a lender makes a permanent change to loan terms. The modifications could inlcude changing the interest rate, type of mortgage or extending the time to pay the mortgage balance.

M

Minimum Payment

The minimum payment is a payment made on a loan or credit card that is specified by the lenders as the smallest payment amount due. Borrowers can pay more than the minimum payment.

Mortgage

A mortgage is the loan a borrower takes in from a lender to purchase real estate.

P

Past Due

Past due is when a payment has not been made by its due date. Borrowers who are past due will usually face penalties and are subject to late fees.

Private Mortgage Insurance

Private mortgage insurance is a type of mortgage insurance that might be required for borrowers to pay for with a conventional loan. Private mortgage insurance protects the lender in the event a borrower stops making payments on the loan.

R

Reinstatement

Reinstatement refers to a lump sum payment that makes an account current when the borrower pays everything that is owed. This payment would include any missed payments and fees.

Refinance

Refinancing applies to all types of loans, this simply means you are replacing any existing debt and terms with a new set of debt and terms, most often with a lower interest rate than the original loan rate.

Repayment Plan

A repayment plan is a written agreement for borrowers who are past due on loan payments. This option allows the borrower to pay the late amount as a smaller addition to the regular monthly payment, spread out over several months.

Revolving Credit

Revolving credit is when a creditor increases the credit limit to an agreed level as a borrower pays off a debt, such as a credit card. Revolving credit may take the form of credit cards or lines of credit with other lenders.

S

Secured Debt

A secured debt is a loan that allows the lender to seize the asset or collateral used to acquire the debt to repay the funds advanced to the borrower in the event of default. Examples of secured debt are mortgages and auto loans.

Short Sale

A short sale is when a homeowner in financial distress sells property for less than the amount due on the mortgage.

U

Unsecured Debt/Unsecured Loan

Unsecured debt or an unsecured loan is a loan that is not backed by an asset or collateral. It is riskier than secured debt. The interest rate for unsecured debt is normally higher than secured debt.

V

Variable Rate Mortgages

A variable rate mortgage is a mortgage in which the initial interest rate is fixed for a period of time. After that period expires, the interest rate on the outstanding balances varies throughout the life of the loan. Depending on the terms of the mortgage, the interest rate resets each month or year. This type of mortgage is also referred to as an adjustable-rate mortgage (ARM).

As a valued member, we provide you with access to certified experts through our partners GreenPath Financial Wellness who will empower you to eliminate financial stress, get out of debt, increase savings, and achieve your financial goals.

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Sources:

https://www.greenpath.com/

https://www.debt.org/

https://www.investopedia.com/

https://www.consumerfinance.gov/practitioner-resources/youth-financial-education/