SafeAmerica Credit Union

how to save

• 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.

Savings Accounts

• By Lisa

Saving Automatically – America Saves Week 2023

Do You Ever Find Yourself Wondering If There Is A Magic Formula To Saving?

Does it seem that everyone around you knows the secret to saving successfully except you? It’s not unusual to feel unconfident about saving, no matter how much money you earn. Confidence doesn’t necessarily come with having a lot of money. Rather it comes from building healthy financial habits and using the resources you know are available to you – this is your financial confidence!

A great place to start building your financial confidence is to set up automatic savings. When you are saving a dedicated amount of money every week, every month, or on some other regular interval, you can begin to feel a sense of control over your saving habits. Whether you are saving just $5 or $10 a month or more, it’s the fact that you’re doing it automatically that is important.

Saving

Saving automatically is the formula for successful saving for anyone – including you. Getting started doesn’t have to be a hurdle either. Consider which one of the following two strategies would work best for you and follow the steps we’ve outlined.

  1. Instructing your employer to split your directly deposited paycheck into two or more accounts at your financial institution with one account being a dedicated savings account.
  2. Directing your financial institution to automatically transfer money into your savings account.

For option #1, contact your employer’s payroll department to set up split deposit, telling them how much you want to save per paycheck, and follow their instructions.

If you want to use option #2, contact your bank or credit union telling them when and how much money you want automatically transferred into your savings account. As a member of SafeAmerica Credit union, you can enable automatic transfers between accounts by logging into online banking and setting up a recurring transfer within the Transfer Money tab. Just set it and forget it!

By utilizing either of these automated saving methods you can feel confident about building a healthy habit of saving. Imagine how good it will feel to see money accumulating in your savings account on a consistent basis. Instead of that voice in your head telling you that saving is hard, you’ll be able to say with confidence, “I am saving regularly!”

America Saves has a number of resources that can help you get started saving automatically: 

  1. The Spending and Saving Tool to help you get a clear view of your finances and determine a realistic amount you can save regularly.
  2. ThinkLikeASaver podcast where you can learn about making saving easier, saving in spite of inflation and many other topics designed to support your saving habit.
  3. The America Saves Pledge, which can help you make a saving plan and receive ongoing support through emails and text messages

So, remember your unique financial situation calls for you to make the choices that will work best for you and your family, which will ultimately increase your financial confidence and help you continue making informed choices throughout your saving 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
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