SafeAmerica Credit Union

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• By Lisa

Five Part Checklist to Improve Your Financial Fitness

Being financially fit can be thought of as performing like an elite athlete on the playing field of your finances. It’s all about money-savvy acrobatics to keep your cash in tip-top shape.

Financial fitness lets you flex those savings muscles! The stronger your savings get, the more you can lift your dreams into reality. Whether it’s a dream vacation or a shiny new gadget, your savings make it happen.

Financial Fitness

Being financially fit also means you’re in the race to win at personal finance. You’ve got the determination, discipline, and enthusiasm to take home the gold medal in money management.

Your financial fitness lets you effectively manage your financial resources, make informed financial decisions, and maintain a stable and healthy financial state. It involves practices such as budgeting, saving, investing, and managing debt to achieve financial goals and withstand unexpected financial challenges.

Financial Fitness Checklist

Credit card debt, high interest rates, and rising prices are just a few factors that can challenge how you think about your financial fitness.

While the short video lifted up steps to get you thinking proactively about your financial future, there are other considerations.

To guide those looking to achieve financial goals,  this five-part checklist is a way to break the steps down for success.

How did you do on the checklist shared in the video above? Are you working through the items sometimes, all of the time, or never?

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1. Track Monthly Spending

Staying financially fit begins with ensuring you 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 that builds. 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.

If you take the time to manage financial tasks, you will start to develop financial fitness. This includes making sure that your bills are paid, that you have saved money for emergencies and that your financial strategy for the future is on track.

With this helpful online worksheet, getting a current snapshot of monthly money will help as you create a plan to increase financial fitness.

2. Set Goals

If you are saving for an emergency home purchase or paying off high-interest debt, a simple plan will help you meet your goals. As an example, by managing debt, you ensure that your financial well-being does not suffer.

It is not uncommon for people with credit card debt to only pay the interest on the amount borrowed, instead of planning to eliminate the debt altogether. When considering your overall financial picture, consider a debt management plan.

3. Know Your Credit History

Another tip from the financial fitness checklist is to pull all three of your credit reports each year. It is easier than you might think.

Checking your credit history can reveal any inaccuracies or issues you might want to resolve. If you find inaccuracies or errors in your credit report, you can dispute them with the credit reporting agencies. Addressing these issues promptly can help improve your credit profile and prevent potential obstacles in the future. Each person’s situation is unique when it comes to credit history and score, a key part of financial well-being.

4. Build a Savings Habit

Setting and sticking to a realistic savings plan is another key component of financial fitness. You can automate savings directly from your employer or put into place other tricks to make it a seamless savings process. No matter the amount, setting aside a budget-friendly amount each month for savings builds fitness and financial health.

5. Connect with Trusted Resources

When it comes to financial fitness, you are not alone. The trusted national nonprofit GreenPath offers the expertise of caring, NFCC-certified financial counselors who are trained to understand your unique financial situation and provide personalized solutions. GreenPath’s caring counselors can help you create a comprehensive plan to manage your debts effectively. In addition, nonprofit credit counseling agencies such as GreenPath offer educational resources, online webinars, and tools to help you understand the fundamentals of personal finance. This empowers you to make better financial decisions in the future.

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Why Work Towards Financial Fitness?

Imagine your finances as a well-tuned engine powering your life. When that engine runs smoothly, you have the freedom to do the things you love and handle any unexpected bumps in the road with confidence. Here’s why being financially fit matters:

Less Stress, More Peace: When you have control over your money and know that your bills are covered, it’s like a weight lifted off your shoulders. You can sleep better at night and enjoy a more peaceful, stress-free life.

Freedom to Pursue Dreams: Being financially fit gives you the ability to chase your dreams and passions. Whether it’s traveling the world, starting your own business, or buying a home, having the financial means makes those dreams attainable.

Security During Emergencies: Life throws curveballs, and having a financial cushion means you’re ready for them. Whether it’s a medical emergency, unexpected car repair, or a sudden job loss, being financially fit means you can weather these storms without losing your footing.

Retirement Comfort: Financial fitness ensures that you can retire comfortably when the time comes. You won’t have to rely solely on social security or work during your golden years, giving you the freedom to relax and enjoy life.

Building Wealth: It’s not just about getting by; it’s about thriving. Being financially fit allows you to save and invest, which can grow your wealth over time, giving you more options and opportunities.

Reduced Debt Burden: Financial fitness often involves managing and reducing debt. Lower debt means less money going toward interest payments and more money for you to use as you see fit.

Peace of Mind for Loved Ones: If you have a family or dependents, being financially fit means you’re providing security and a better future for them as well.

Final Thoughts About Your Financial Checklist

As with a healthy diet, we maintain our physical fitness in the same way, and if we follow this checklist shared in the materials above, we can return to financial fitness with a little help and a clear strategy.

It is always a good time to understand where you are financially and get help to keep things on track. Caring, certified counselors from the trusted national nonprofit GreenPath Financial Wellness can help you get started on your financial journey and then, keep going.

In the end, financial fitness isn’t about having tons of money; it’s about managing the money you have wisely. It’s a journey, not a destination. So, take small steps, make good financial habits, and watch how it transforms your life for the better.

This information is brought to you by our partners at GreenPath Financial Wellness

Greenpath Financial Fitness

• By Lisa

Paying Down Debt Is Saving — America Saves Week 2023

Making the decision to pay down debt, particularly consumer debt, can be mixed with emotion. You feel good about choosing to take concrete steps to pay off balances on credit cards, auto loans, student loans or other installment loans. On the other hand, you feel less positive about the amount of money you are directing into a savings account. Well, we’re here to show you how reducing debt is a form of saving, to give you strategies for the best way to do so that align with your personal situation, and to boost your financial confidence to keep you working toward your goals.

As you pay off your debt you are freeing up money, allowing you to direct those funds toward saving for something else that’s important to you – perhaps an emergency/opportunity fund, a vacation, home purchase, or retirement. This money is freed up as you spend less on interest, and possibly late fees, and lowering the debt balances themselves.

If you have more than one debt you want to pay off, for example an auto loan and a credit card balance, there are two main strategies to help you decide which debt to pay off first.

  • The snowball method focuses on the balances of each loan. In this strategy, you make the minimum payment on all your loans except the one with the smallest balance. With this loan, you put as much money as you can toward it and when it is completely reduced you allocate that money to the next smallest balance. Your confidence gets a boost every time you see an account balance at zero.
  • The avalanche method focuses on the interest rates of each loan. In this strategy, you pay the minimum payment on all your loans except the one with the highest interest rate. You apply any remaining money you have for debt repayment to the highest interest rate loan. By paying off the debt with the highest interest rate first you reduce the overall amount of interest you must pay.

You choose which method is right for you and your situation.

Once you are on a path to reducing your debt, reflect on the type of relationship you have with credit. Credit is a tool. When used wisely and with purpose, credit can help you achieve your financial goals and build financial confidence. Having a clear view on when and for what purpose you use credit is the foundation for a positive relationship.

Sometimes we’re told that there are good types of debt (home mortgage) and bad debt (credit cards). This type of categorization is based only on the financial aspect and not the personal situation you are dealing with. It may feel better to ask yourself if the type of debt you are taking on is a good decision for you or not.

For example, when an emergency expense crops up and it is large enough that it will deplete all or nearly all of your emergency savings, you may feel like you’re on shaky ground if another expense crops up before you can replenish your savings. So, you may weigh this option against using a combination of savings and credit based on what feels best for you in the situation.

Making purposeful choices about credit, something that you plan for financially and mentally, can help you build more financial confidence.

You can use the America Saves Spending and Saving Tool to calculate how much you have available for debt repayment, take the America Saves Pledge to make a plan for this repayment, or listen to the ThinkLikeASaver Podcast for even more tips.

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

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• By Lisa

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.

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• By Lisa

Free Webinar March 9 — Starting From Scratch: How To Build Credit

This free, one hour webinar is presented by GreenPath Financial Wellness

What do renting an apartment, getting a job offer, and car insurance rates all have in common? Your credit history could impact every one of these things (and more)! Credit is important for more than just getting a loan, although it impacts that too. If you know you need to build credit and aren’t sure how to do so without going into debt, this webinar will provide guidance and tools to start you down the path to building positive credit history. Whether you have never had any credit history or are looking to rebuild credit after an extended period without, this webinar will cover why it is important to build positive credit history and how to do so responsibly.

Click through each tab below to learn more.

Who Should Attend

  • Anyone with no credit history
  • Anyone with no credit history for 5+ years
  • Parents of teenagers who want to help their children start building good credit

What You Will Learn

  • Why credit is important
  • Tools to start building positive credit history
  • Healthy credit habits for using credit responsibly

Details

Date: Wednesday, March 9, 2022

Time: 10:00 am PST

This webinar will be recorded and a link will be sent out to all registrants after the webinar.

Click the red button below to register.

Register Now

• By Lisa

The Impact of Stimulus Payments on Your Taxes

What a year 2020 has been! New Year’s celebrations were barely over when the coronavirus turned things topsy-turvy. But one bright spot for 159 million people was the $1,200 Economic Impact Payment that appeared in their mailbox or checking account.

If you didn’t receive a payment, you may be wondering, why? And if you did, you may be wondering, what’s the catch? We are here to help put your mind at ease, so let’s tackle your questions, one by one.

Do I owe tax on the money I received? That’s an easy one: No. The stimulus payment was designed to impact the economy, not your taxes, so it won’t reduce your 2020 refund or increase your tax due.

I didn’t get a payment – why? If your income for 2019 or 2018 was over $75,000 ($150,000 if you filed jointly, $112,500 if you were head of household), then your payment was reduced by $5 for every excess $100 you earned. And if you didn’t file a tax return for either year, you may not have gotten a payment. But don’t despair, you still may be entitled to payment.

Really? What can I do now? If you were supposed to file a 2019 tax return and didn’t, file right away. If your income was too low to file, at IRS.gov you can click on the tab marked “Non-filers” and fill in your basic information. If the IRS determines you are eligible for a payment, they will send it to you.

What if my income has gone down? If your 2019 income was too high for you to receive a payment, but your income this year is much lower, you are in luck. You can claim your stimulus payment on your 2020 income tax return, and it increase the refund you receive (or reduce any tax due).

My 2020 income is higher than in 2019 – will the government want the money back? No. If you received a stimulus payment based on lower income in 2019, that payment is yours to keep even if your income increased above the threshold in 2020.

When it's time to file your taxes TurboTax is here to help!
From simple to complex taxes, TurboTax® has you covered. And when you need help, real experts are standing by — and can even do your taxes for you, start to finish with TurboTax Live®. Getting your biggest possible tax refund has never been easier. And as a credit union member you can save up to $15 on TurboTax. Click here to get started today!

The information in this article is for general educational purposes only and not intended to provide specific advice or recommendations.Please discuss your particular circumstances with an appropriate professional before taking action.

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• By Lisa

What is a balance transfer?

A balance transfer is a financial resource that doesn't get as much recognition as it deserves. Let's shed some light on balance transfers and go over how you could take advantage of paying down debt with a lower interest rate and get you on track for your next financial goal.

What is a balance transfer?

It's moving high interest debt (usually credit card debt) amount from one account to another account that has a significantly lower interest rate.

How does a balance transfer work?

Let's use an example; you have a credit card balance of $1,200 at 24.99% APR from your favorite retailer and transfer that total debt amount to another financial institution with an interest rate of 10%.

Think of the financial position you would be in with an interest rate of 10% or even 0%. Instead of paying $299.88 in interest with your 24.99% APR account, you'd now pay $120 with your new 10% APR account or even $0 with a 0% APR.

Does a balance transfer hurt my credit?

As long as your credit account from the previous financial institution is kept open, your credit will improve.

Is there a fee to transfer a balance?

Many big banks charge a balance transfer fee between 3% and 5% of the amount that would be transferred. Let’s continue to use the $1,200 at 24.99% APR scenario for another example. When you transfer over to a financial institution with a lower rate but charges a balance transfer fee of 5% be prepared to pay the additional $60. As situations vary from person to person, the fee itself may be the deciding factor for transferring over a balance. Of course, be aware of all fees in order to make sure a balance transfer is truly beneficial to your current financial situation. Remember as a member of our credit union, you receive a lower or no balance transfer fee, one of the many differences between your local credit union and the big banks.

Should I close my old credit card after a balance transfer?

You definitely should not close any of your credit cards. Since balance transfers are linked to a credit card, you would be increasing your credit utilization amount, which would then improve your credit score. As long as you have no balance and are not charged an annual fee, it won't cost you to keep the account.

Does a balance transfer count as a payment?

A balance transfer does not count as a form of payment. You transferred a balance in order to make lower payments.

What is a typical minimum payment on a balance transfer?

Minimum payments vary with financial institutions and its always good practice to clarify with your financial institution.

Do balance transfers earn reward points?

This would also vary between financial institutions. For the most part, financial institutions would not offer rewards points for balance transfers. This would be something to verify with the financial institution when applying for credit cards with the balance transfer feature.

How long does a balance transfer take?

Industry average is between 14 and 21 days to complete the process of paying off your previous lender.

Is a balance transfer the right financial resource for me?

A balance transfer can be very beneficial for those who have manageable debt with high interest rates. The objective is to take advantage of any promotional 0% periods to pay down as much debt as possible which in turn, is going towards paying down the principle rather than any interest.

SafeAmerica Credit Union can help. If you're interested in transferring a balance you have at another financial institution, we're currently offering 0% APR on purchase and balance transfers through September 30, 2021 when you open a new credit card through March 31, 2021.

How SafeAmerica Credit Union's balance transfers work:

  • Balance transfers often take 2-3 days compared to industry standard of 14 to 21 days.
  • We're currently offering 0% interest through September 30, 2021 on balance transfers done from January 1, 2021 to March 31, 2021
  • We charge no balance transfer fees on our balance transfers.

To learn more on how you can take advantage of balance transfers and start paying less interest on your debt, click below.

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• By Lisa

New Year, New Money Habits!

The New Year is a time for powerful new beginnings. It also presents an opportunity to look at our everyday habits – whether those habits relate to our health and fitness or our money habits as we manage any financial challenges.

What is a habit? A good working definition is that a habit is a routine behavior that is repeated regularly and tends to occur without a lot of conscious thought.

Many of us already have healthy habits that we do by routine – like brushing our teeth or washing our hands.

We might also have healthy money habits. Carefully reviewing your credit card statements each month could be a habit you already have in place, for example.

As the year gets underway, there are opportunities to reinforce healthy money habits that already work for you. And it’s an opportunity to create new habits like
writing down financial goals or building savings.

Make It a Habit

Building positive money habits can affect your entire well being. Here are a few ideas to try as the New Year gets underway.

1. Make a Goal (and Write It Down)

Goal-setting gives you direction. You can decide on your destination and make a plan to get there. This action might seem small, but it’s not. Make it a habit to look at monthly finances and jot down one or two goals. The goal could be taking a bite out of your credit card balances or setting aside a small amount each month for a large purchase.

2. Set it and Forget It

You likely have many of your outgoing bills set to “automatic payment,” which is a positive money habit. Setting up “auto pay” on monthly utilities, cable, and other bills lets you be sure bills are paid on time. Consider setting up “auto save” as well. If you set a goal to save for a big purchase, like the down payment for a car, automate monthly savings to help you achieve your goal. Set up automatic transfers or use direct deposit from your paycheck to automatically place funds in your goal account.

3. Spend with Care

Mindful spending is a powerful financial habit to build. If you don’t already have one, build the habit of using a monthly spending or budgeting plan. You’ll learn how much money you have to work with, the amount that is going out each month for bills and expenses, what you need to set aside for other bills and living expenses, and how much you can devote to your goal from each paycheck.

4. Deal with Debt

Think about your habits when using your credit card and when considering your total debt situation. Are most of your purchases made with consumer credit cards? What are your current credit card balances and other debt balances? Listing out all your monthly debt payments helps you stay aware and act if needed. If you are in the habit of only making minimum payments on your credit card balances or experiencing collection calls, consider learning about how a Debt Management Plan can get help support healthy money habits.

5. Celebrate Your Progress

As we noted, you likely have many positive habits already. That’s something to be proud of, as you can apply those lessons to building new money habits. Make it simple. Tackle one habit at a time and celebrate your wins. The New Year is sure to be a success when you tackle one habit at a time and make it work for you.

Ready to build new money habits?

Our partner GreenPath specializes in helping people improve their financial wellness.

Learn more about building healthy financial habits here:

Redesign Your Financial Habits

• By Lisa

Pay Off Your Debt

Information brought to you by our partner, GreenPath Financial Wellness

If you are dealing with debt, you aren’t alone. The average American household has an average balance of about $6,600 in credit card debt,  and that’s not taking into account home, auto, and student loans. Paying off your debt isn’t always easy, but having a plan can go a long way in achieving your financial goals.

Two of the most popular strategies for paying off debt on your own are the snowball method and the avalanche method. Both methods require making the minimum monthly payments on all but one debt, which you put extra money towards.

The Snowball Method

With the snowball method, you begin by paying off your smallest debt first. This method creates a sense of motivation and accomplishment from being able to pay off smaller bills at a higher frequency.

How it Works

Let’s say you have the following debts:

  • Credit Card A: $3,500, 17.99% APR
  • Credit Card B: $7,500, 15.00% APR
  • Personal Loan: $1,000, 10.05% APR

Using the snowball method, you would pay the minimum monthly payments to the credit card debts, and pay any extra that you can to the personal loan until it is paid off. You would then apply the extra payments to Credit Card A until it is paid in full.

Pros and Cons

With the snowball method, you are able to see progress faster. Quick wins can help you stay motivated to keep going. However, with this approach, it will take you longer to pay off your largest debts—and those are often the ones that carry the highest interest, so you’ll likely end up paying more overall.

The Avalanche Method

The avalanche method takes into account the fact that high-interest debts cost you the most money over time. Using the avalanche method, you pay off your highest interest debts first.

How it Works

Let’s look at the same scenario as above.

  • Credit Card A: $3,500, 17.99% APR
  • Credit Card B: $7,500, 15.00% APR
  • Personal Loan: $1,000, 10.05% APR

With the avalanche method, you’d pay the minimum monthly payment on Credit Card B and the Personal Loan, and pay extra towards Credit Card A, since it has the highest interest rate. Once it was paid off, you’d move on to Credit Card B.

Pros and Cons

This is the fastest way to eliminate debt and save on interest payments. However, it can take years to eliminate this debt while other smaller bills still trickle in.

Which option is best for you?

It comes down to what you feel most comfortable with. Ultimately the best method is the one you can stick to. If you’re motivated by quicker victories, the snowball method may be the right option for you. If you want to pay the lowest amount of interest, you’re likely better off choosing the avalanche method.

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