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• By Kevin Alvarez

Thinking About Splurging On A Vacation Using Your Tax Refund?

It’s that time of year: Many who are receiving a tax refund are weighing what to do with it. Will you use your tax refund to plan for a summer getaway? Put it away for the holidays? Splurge? Spend? Save? GreenPath counselor Kathryn Bossler discusses the pros and cons of using your refund for a spring or summer getaway:

Is it okay to use your tax refund to pay for a vacation?  There is nothing necessarily wrong with using your tax refund to take a vacation but first ask yourself if the vacation is the best way to use your refund?  Many times, a vacation falls under the “wants” category of expenses, not the “needs”.

So, I would suggest taking time to review your entire financial situation before putting your refund towards a vacation.

What’s a better approach?  Ask yourself a few more questions:

  1. Do I have any high interest debt (credit cards, loans, etc.) that I need to pay off? 
  2. How much do I have in emergency savings? 
  3. What other major expenses are coming up and how will I pay for them? 
  4. Do I have money saved in case of a home repair, car repair, medical emergency? 
  5. Were there expenses last year that came up that I struggled to pay for or that I regretted not setting some of my refund dollars aside for?

If you decide that the refund is really better spent on paying down debt and saving for emergencies, consider reviewing your budget and work towards saving for that vacation out of your paycheck.

For example, if you want to take a vacation in August that will cost $2000, consider that $2000 by the number of paychecks that you will have until August and work to save that.

Even consider having funds go directly into a savings account specifically for a vacation.

How much of a tax refund should go towards debt and how much towards vacation ideally and how much towards savings?  This is really hard to answer.  The key here is that there needs to be a plan.  For example, if you do have debt, is there a clear plan to pay that debt off?  Do you have a system in place for building savings and are you sticking to it?  The vacation is something that needs to be considered, in relation to these other issues.

What’s the danger of splurging on a vacation with your tax refund?  The danger is that it could be a blown opportunity.  A tax refund can be used to really make a significant difference in someone’s entire financial situation.  It could be a way to make a major dent in credit card debt, or a way to be able to build some emergency savings that many struggle to build throughout the year with a paycheck.

So, take some time, weigh the pros and cons and see how you can put together a vacation plan wisely.

This information is brought to you by our partner, GreenPath Financial Wellness

GreenPath FInancial Wellness

• By Kevin Alvarez

The Importance Of Keeping Your Apps Updated

Keeping Your Apps Updated

It happens to us all.  We’ve become more and more dependent on our smart phones and devices. The responsibility of owning one is nearly similar to that of owning a vehicle. While you won't be changing your spark plugs every 100,000 miles, you do need to update your operating system and apps to continuously keep your information safe and apps running smoothly.

Did you know that 82% of the United States' population owns a smart phone? That's 270 million people! And one of those people probably includes you.  That’s why we want to stress the importance of keeping your financial information secure with the latest app updates.  At SafeAmerica Credit Union, we’ve recently updated our mobile banking app with even more security and new app features.  Without an update to your app, those features don’t get pushed out to you.

Here Is Why You Should Keep Your Apps Updated:

  • Updating your app keeps your personal information protected by improving the security of your smart device. Having an outdated version allows for hackers to find areas which are vulnerable.
  • When enough users report the same encountered issue to their respective device's app store, developers will look to immediately eliminate and introduce a bug fix to keep their app user's happy.
  • The older an app is and the longer it has gone without updates will typically result in the same app running at a much slower pace. Updating your app will immediately improve it's performance, meaning faster load times. 
  • Over time developers notice what does and does not work for their user base. From tools that make accessing information much easier, to an updated design, new features are always a nice change of scenery.

Here Is What iPhone and Android Users Can Do — Set it And Forget It

Both Apple and Android recommend turning on your "Automatic Updates" in your system and app store settings. When app developers release updates, they are patching different vulnerabilities to protect users from security threats. Think of this similarly to vehicle recalls, but the "fix" happens rather quickly and through an internet connection.

  • Go to Settings.
  • Tap App Store.
  • Turn on or turn off App Updates.
  • Open the Google Play Store app .
  • At the top right, tap the profile icon.
  • Tap Settings  Network Preferences  Auto-update apps.

Select an option:

  • Over any network to update apps using either Wi-Fi or mobile data.
  • Over Wi-Fi only to update apps only when connected to Wi-Fi.

Helpful Links and Sources

Cybercrime Numbers From Around The World.

Total Apple Users In the USA

Apple Security Vulnerability

Android Security Vulnerability Bulletin

Android Security Vulnerability Article

5 Reasons To Keep Your Apps Updated 

Glue and Tap ATM Card Scam

• By Kevin Alvarez

Steps To Take To Figure Out Your Finances

According to most definitions, the term financial literacy refers to understanding how to effectively manage household finances, handle debt, create a budget, and build savings.

Working toward financial literacy is the foundation of your relationship with money and can set you up for a lifetime of financial health and wellness.

As a trusted national nonprofit, GreenPath Financial Wellness can be part of your lifelong journey to financial literacy, especially in the areas of managing personal finances, budgeting, saving, and managing debt.

Figuring Out Your Finances – Part of Financial Literacy

A situation we see here at GreenPath Financial Wellness when we talk to clients – a gradual increase in credit card debt balances over time with high-interest rates and the ability to make only low minimum payments each month.

A recent client shared with GreenPath about her journey to overwhelming credit card debt. After moving to a new home, she faced expensive purchases such as window blinds, new kitchen appliances, bathroom fixtures and other essentials. She used both her bank-issued credit card and a store credit card to make the purchases. Unfortunately, she experienced a sudden drop in household income during this time, and on top of it all, had to replace a faulty water heater – so it was a quick journey to maxed out, high interest credit card balances.

Many of us can see ourselves in this situation. Perhaps your cards are maxed out, and you are experiencing calls from collection agencies.

The average credit card interest rate is 16.04% according to Creditcards.com. A recent study has shown that about 23% of existing credit cardholders have added to their current debt because of the pandemic.

For people utilizing credit more and having problems making payments or meeting the minimum payments on credit cards, a high balance and accruing interest make it more difficult to get out of debt.

Start Here to Figure Out Your Finances

Figuring out your finances can be tricky. While each person’s situation is different, some steps to take to figure out your finances include:

  • Monitor your bills regularly. If your creditor has granted a payment deferment or waived fees, interest could still be accruing. Annual fees could also still apply. It pays to examine each creditor’s terms and fees, to understand where to start paying down first.
  • Monitor your credit report to ensure your credit history is accurate. Studies show 1 in 3 Americans never check their credit report yet knowing credit history is key to financial literacy.  Regularly monitoring your credit can alert you to errors, protect you from fraud, and provide you important information to strengthen your credit score. GreenPath’s NFCC-certified credit counselors can walk you through a free review of your credit report. You’ll understand how to read your report and how credit scoring works.
  • Pay attention to interest rates. If you must utilize credit, try to use credit cards with low interest. Or request a reduction in your interest rate as a hardship option. Not sure how to open the conversation? GreenPath’s caring counselors can help you plan to connect with your creditors for the best options.
  • Take action. Don’t ignore the problem! Don’t delay in speaking to your creditors to see what hardship assistance programs are available.
  • Review your income and your expenses. Set a simple spending plan. It can be eye-opening when you start to track how much you spend on essential things, like bills, rent/mortgage, and food. A simple budget helps you stay on top of what you are spending. It also shows your progress in setting aside money to manage debt payments.
  • Don’t do it alone. Having a fresh set of eyes to review your situation is never a bad idea. Talk to a trusted national nonprofit like GreenPath, who can contact your creditors with you, and ensure you understand your options.

Your Total Financial Picture

For those facing financial challenges, credit cards are typically only part of the picture.

Counselors can help focus on your total financial situation and make a personalized plan to address the debt moving forward.  Having a clear strategy for handling your credit card debt can help you feel more in control of the situation and reduce stress.

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

• By Kevin Alvarez

Financial Well-Being For Our Youth – National Credit Union Youth Month

Kids can learn a lot watching their parents. What they see can set a pattern for life. The key is to not run away from the conversation, but look at it as an opportunity to set our kids up for success.

You might feel comfortable talking to kids about their favorite video game, fashion, or trending Tik Tok video, but maybe not about money. As everyone is looking forward to new beginnings after the pandemic, it’s always a great time for the whole family to establish new habits and that includes with the younger ones at home.

What have we learned and what do we want to pass on to be ready for another major crisis, if it comes?

Some parents may need help passing on a financial literacy mindset to their children. However, once you decide to have the conversation, it’s important to start as soon as possible. Money is a tool that is very powerful, when mixed with the right knowledge.

Start Talking About Money Early

Experts say children as young as five or six can understand the basics of money and saving. With that in mind, we can start sharing financial literacy skills early to ensure our children are set up for success.

As grown ups, we know money is important to buy groceries, keep a roof over our heads, buy things we want, and much more. Even before they are in first grade, children can understand what money is and how to use and save it. Be proactive talking about money and modeling good spending behavior yourself.

The conversations may vary depending on your child’s age, but the general idea is the same – teach them early and often about money and finances. This will help them become comfortable talking about money and find solutions instead of having a financial misstep and ignoring it.

Learn the Importance of Saving Money

Learning how to save is just as important as learning what to spend money on. As their savings grow, parents can reinforce the good money management habits they are putting into practice. Having financial reserves can protect against hardship and give the saver power to decide how to spend or invest the money. Being financially literate is important at any age, but especially for young people just starting on their financial education journey.

Talk About Wants Vs. Needs

It is always important to make every dollar count. Part of the money education for children is helping them understand the difference between things they want and things they need.

That differentiation can be challenging for adults too. Financial literacy means understanding the difference between a “nice to have” (a want) and something they cannot live without (a need).

Sometimes a family challenge may move the “wants” to the back burner temporarily, while the “needs” become more important. If a challenging financial situation requires the family to adjust their lifestyle, make sure kids understand what is going on and why. This is a great opportunity to teach the importance of planning, budgeting and the fact that it’s ok to wait.

Create A Budget Together

Next time when you create a budget for the household, include your kids. Include them as you talk about how, where, and why you spend your money. Start small and slow, be honest, be patient, and encourage questions. Remember to talk in a way that doesn’t upset them or make them worry about finances.

Help Kids Understand Where You Are Financially

Being honest about your current situation can be a great opportunity to educate young people about money and how to handle it. A great start is getting a free financial health assessment and then, involve them as you work through the financial process for the entire family.

Incorporate Money Into Daily Activities

One way to increase your child’s financial I.Q. is to incorporate learning into everyday activities. Here are some tips:

  • Play games involving money
  • Help kids make a wish list for things they want
  • Teach while you shop
  • Link their allowance to chores around the house
  • Teach them to split money into categories like saving, spending, and giving
  • Have them “save up” for something they want

Wrapping It Up

It’s important to remember money plays an essential role in all of our lives.

Consider starting early to share the right information and lead by example. If you need help getting your own financial house in order, connect with a caring, certified GreenPath counselor.

GreenPath Financial Wellness

• By Kevin Alvarez

Message From Your Interim CEO: Your Accounts Are Safe With Us

Dear valued SafeAmerica Credit Union member,

The recent development regarding technology-based Silicon Valley Bank may have brought concern and questions regarding your deposits here at SafeAmerica Credit Union. This development does not affect the security of your accounts here at SafeAmerica Credit Union.

As a credit union, we operate under a different model than big banks. SafeAmerica Credit Union does not invest with or do commercial lending with any businesses such as technology start-ups or Crypto. We were founded in 1953 with the core principle of people helping people, and our focus has continuously been to help our members reach all their financial goals.

Most importantly, we want our members to feel safe with us. We understand that in times like these, consumers may feel uncertain about the safety of their money. I want to remind you that SafeAmerica Credit Union deposit accounts are insured to $500,000 per account through American Share Insurance (ASI). ASI is the credit union equivalent of the Federal Deposit Insurance Corporation (FDIC).

SafeAmerica Credit Union is 100% member-owned. Through our 70 years in serving the Bay Area and surrounding communities, we have successfully and responsibly managed our financial integrity and continue to work diligently for the safe keeping of our future.

We value your continued trust and assurance in us. We remain committed to providing you with security for all your deposits. We will continue to provide you with the friendly and knowledgeable service needed to answer any of your questions.

Thank you for allowing us to be your financial partner for 70 years and counting. Should you have any questions or concerns, don't hesitate to contact us at (800) 972-0999 or by visiting a branch.

Best regards,

Frank Zampella

 

 

 

Interim President/CEO

• By Kevin Alvarez

How Your Credit Score Is Calculated and How To Improve It

Understanding Your Credit Score.

Ever wonder how your credit score is calculated? It is a common question and can be helpful to explore.

Your credit score is a number based on a formula using the information in your credit report. The result is an accurate forecast of how likely you are to pay your bills.

Your Credit Score Considers Five Areas of Your Credit History.

As the video explains, your credit score is calculated using five major components, with varying levels of importance. These credit score factors, with their relative weights, are:

Payment history (35%)
Amount owed (30%)
Length of credit history (15%)
Credit mix (10%)
New credit (10%)

All of these categories are taken into account in your overall score. No one factor or incident determines it completely.

Why Credit Scores Are Important.

Credit scores are especially important if you are considering applying for any type of loan. If you’ve gotten a loan, a credit card, or even auto insurance, the rate you paid was directly related to your credit score.

The higher the score, the better you look to lenders.

People with the highest scores get the lowest interest rates.

Credit Score or Fico Scores?

Your credit score communicates the idea of “risk.” That’s because credit scores are used by lenders to determine the risk involved in doing business with a borrower.

Credit scores look at the information that can predict your future behavior.

If you’ve been paying your bills on time for the past 25 years, you’re likely a low-risk person to lend to. In contrast, imagine you got your first credit card two years ago and have had four late payments during that time. Your balance on the card is at the credit limit. You have applied for new credit four times in the last six months. Based on these facts, you will have a lower score and are considered a higher risk.

Credit scores can and do change. Often, a negative item on a credit report can result in a quick and sudden decrease in the score. However, improving a credit score usually takes time and patience. There is no “quick fix” for damaged credit.

Here's How To Improve Your Credit Score.

1. Be Punctual With Payments.

Paying your bills on time is the biggest single factor used to calculate your credit score. Late payments, past due accounts, and accounts in collections have a negative impact on your credit. Always aim for consistent, timely payment (even it’s the minimum amount). Punctuality pays off: a positive payment history across 18 months or longer increases the likelihood that you’ll receive more favorable loan terms from lenders.

If you’re falling behind, be proactive in your financial planning. Create a realistic monthly budget that accounts for bills and everyday expenses like gas and groceries. Struggling to keep track of multiple bills? Consider automation. Automated payments can minimize late fees. If you know you will miss a due date, call your credit card company or lender. They may be able to help by moving your due date out.

2. Pay Down Your Debt.

How much you owe is another big factor when it comes to credit score calculation. If you have a large amount of debt or are carrying balances on credit accounts for extended periods of time, it can negatively affect your score.

Make it a goal to pay down your debt. Take inventory of any categories where you can reduce non-essential spending so that you pay a little extra on your credit accounts. A credit counselor can walk you through different options for dealing with debt and may be able to help you pay it off more quickly.

3. Don't Max Out Your Credit Limit.

The amount of credit you use (also called credit utilization) also affects your score. Our financial counselors suggest using less than 30 to 40% of your available credit. Spending above that threshold or carrying high balances relative to your credit limit will cause your score to fall. If you are using more of your credit limit than you would like, consider making adjustments in your budget and spending choices to reduce your overall reliance on credit.

Keep in mind that regularly utilizing small amounts of credit (and paying it off) will increase your score. People without established credit history typically receive lower credit scores.

4. Maintain Good Habits.

Your credit score is built on patterns over time, with an emphasis on more recent activity. Improving credit and rebuilding a credit score that has fallen will take some patience, but it can be done! Credit scores can and do change.

A history of timely payments and accounts that you have held for five years or longer have a positive effect on your credit score. Quickly opening multiple accounts, carrying high balances for a sustained period, or even closing unused accounts have a negative effect on your score.

Events like foreclosure and bankruptcy, while they serve an important purpose for those with severe debt, have a significant and lengthy impact on your credit score. (We are not lawyers, and this is not legal advice. If you are considering one of these options, we encourage you to consult a legal professional and to investigate other alternatives as well.)

5. Chat With A Credit Counselor.

While talking to a credit counselor won’t have a direct effect on your credit score, you can gain valuable insight and information. We will work with you to understand your financial situation, explore different options, and make a personalized plan. We can help you review and understand your credit report. If debt is preventing you from making progress, we can help you explore debt management plans and other options that can accelerate your path forward.

Free Credit Report Review

Now that you know how your credit score is calculated and the ways to improve it, speak with a GreenPath NFCC-certified credit counselor who can walk you through a free review of your credit report. They will explain how to read the report, how credit scoring works, and answer your questions.

Together we’ll make a plan for managing your credit score to support your goals.

Greenpath Financial Wellness

• By Kevin Alvarez

Saving At Any Age — America Saves Week

Saving. Do you view it as an ongoing journey? Or do you consider saving as someplace you arrive at? At America Saves we are in the camp that saving is a habit, not a destination. And it’s a habit that can be formed at any age. Whether you are a parent trying to instill this habit in your children or you want to change your own saving behaviors, there are strategies that savers of all ages can develop.

Research tells us that children’s money habits are often formed by age seven so starting early to teach them about saving can have a huge impact. Many parents are accustomed to hearing frequent requests from their children about a toy, game, or piece of clothing that they “just have to have.” Sound familiar? Using these wants is a great way to help children learn to save.

Children can learn to set a saving goal and figure out how long it will take to save enough money for their goal. Create a fun system to track progress, provide regular encouragement, and use incentives such as matching funds. Talk about how it feels to see your money grow. And don’t forget to lead by example – show children how you are saving.

Saving at any age

You can also give children the opportunity to make some decisions about their money. Empowering children from a young age to make choices about money they earn or receive as gifts is a great way to build that confidence.

For young adults, as they begin to earn a regular and potentially higher income, a strong foundation begins with basic understanding of the difference between needs and wants. The America Saves Spending and Saving Tool is an easy-to-use resource that provides a clear view of your finances and can be insightful in identifying essential and discretionary spending. The system of automatic saving, especially through paychecks with split deposit, can set young adults on the path to a lifelong saving habit.

It can be hard to stay motivated when setting aside money for something in the future no matter what your age. It’s easy to focus on what you want in the moment — we don’t want to wait to purchase that expensive pair of sneakers. We want to take a trip in the next three months. Retirement is so far off that it feels OK to spend more of your current income right now and catch up later. In each of these scenarios, we aren’t thinking about our future selves, just who we are and what we want today.

Thinking of our future self – what we will want, what we will be doing, what we will believe – is one way we can develop a saving mindset. Asking questions about our future selves helps us create a vision for our future. For example, consider:

  • Where does your future self live?
  • What does a typical day look like for your future?
  • What hobbies does your future self enjoy?
  • How much money does your future self earn?

Later go back and read your answers to see how they compare to the present. Having the ability to look ahead, even if it’s a short time in the future, is a great way to reinforce saving today for tomorrow. This exercise can be done at any age, even with children.

Journeys can take us on many different paths and saving journeys are no different. So stay with America Saves as you and your family embark on a new journey or resume one that encountered a detour. It’s never too late to #ThinkLikeASaver.

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

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