TCU Savers Club

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Welcome to the TCU Savers Club Blog! This blog was created to provide information about personal finance and to help you reach financial independence. TCU will share stories and articles about saving money, eliminating debt and provide tips on investing. Have your own financial tips and secrets? Share them in the message posts!

Save Money by 'Stepping Down'

If you're singing the budget blues, maybe it's time to change your tune. 

Instead of eliminating spending altogether to save money, follow what's called the "step-down principle," which offers several options to make a purchase.

Here's how it works. First, imagine a staircase with five or six steps, with the top rung representing the most expensive way to make a purchase, and the bottom rung the least expensive. For clothing, the top rung may be a high-end department store, followed by a discount store, a factory outlet, a consignment store, and finally a garage sale. If you typically purchase children's clothing at high-end department stores, move down a few steps and purchase gently used children's clothing at a consignment store.

Identified by Dr. Alena Johnson, Utah State University, the step-down principle also works with frequency. For example, you may decide to eat out five times a month instead of 10. Or, use the step-down principle to reduce caloric intake. Rather than drink whole milk, step down to 2% or skim. 

Find ways to stick to your budget without cutting out the things you enjoy. The step-down principle is a simple strategy that works. For more ideas to save money, visit the professionals at TCU or call today at (800) 552-4745. 

The Magic of Saving

 Hocus-pocus–my money grew! Well, maybe it's not that easy to save, but by teaching kids from a young age, it can be. As they grow to tweens and teens, they'll have one of the most difficult aspects of saving under their belt–being consistent.

Here are just a few examples to help teach kids of different ages about the magic of saving:

• Have young children–preschool age–sort different types of money into piles by color and size. 
• Play grocery store or credit union. Help them use a pretend cash register.
• At the grocery store, let kids of all ages help you shop. Teach them how to comparison shop–for example, show them that for every $4.99 box of cereal, there may be similar brands on sale for half as much.
• As kids get older, share sales receipts and bills that you receive for items or services you've purchased for them.
• If you decide to pay your kids an allowance, don't just establish one as parents. Sit down with them and discuss allowance amounts and what they should use their allowance for. The amount is your call, but allow them input. One idea is to have children set aside part of their allowance for spending, part for saving, and part for sharing. Clarify what you'll pay for and what they should be responsible for. For example, when you're at the movies, maybe you agree to pay for a small drink and popcorn, but the Milk Duds are on them.
• Show children what compounding interest means. Explain that as kids save, they're constantly earning dividends on their savings–on top of that, they're earning dividends on their dividends. 
• As kids reach high-school age, clarify what you will pay for and what your children are responsible for. For example, your kids may want the newest style of tennis shoes that come with a really high price tag. Establish what you'd pay for athletic shoes–say, $50. If they still want the more expensive pair, have them make up the difference. Often, once the responsibility of paying for items is on kids, the latest, greatest fashions aren't so important.
  

Get your kids started right financially and see how many bunnies–we mean monies–they can pull out of their hats. 

Deck the Halls Without Much Money

Even in tough times, consumers are expected to spend a total of over $437 billion during the 2009 holiday season, according to the National Retail Federation (NRF), Washington, D.C.

Some people may feel guilty about not spending as much time with their loved ones or friends and will compensate with a special gift. Others may feel they need to ‘keep up with the Joneses' to match what friends, families, neighbors, and even co-workers are doing. And some simply get swept away in the glitter of the season--overspending before they realize what they're doing. For all of these reasons, setting a budget and making a list--and matching the two--can be really effective at reining in the ‘over' part of holiday overspending.

Smart spending

Changing the gift-giving dynamic within your own family is one route to holiday savings, but what about the other people on your list? Brad Stroh, founder and co-CEO of Freedom Financial Network, LLC, San Mateo, Calif., and bills.com recommends: 

• Crunch the numbers. Create a holiday budget listing all expenses, including small gifts and "extras," such as cards, wrapping paper, decorations, and holiday clothing purchases. 
• Avoid money matching. Most people feel the stress of the dollar-for-dollar matching competition, so talk with the people on your shopping list about setting limits. Fill in gaps with homemade presents or offer help to the recipient with chores or services. 
• Start early. Avoid the last-minute rush so that you'll have more time to comparison shop. If you're in a rush to get out of a crowded mall or store, you're more likely to spend impulsively as a way of escape. 
• Get creative. Set up a gift exchange among friends and family. For children with big-ticket items, consider pooling resources with other family members rather than splurging yourself into debt. 
• Be a quitter. When you hit your budget limit, stop! Leave credit cards at home and put each person's budget in an envelope, in cash. When it's gone, it's gone--and you're done. 
• Spend within your means. If you run up a big bill to celebrate the holidays and then pay it off at a leisurely pace, next year you may experience financial heartburn--the sour sensation that your holiday overindulgence is taking way too long to leave your budgetary system.

Holiday traditions beyond gifts

The special feeling about the holidays doesn't always come wrapped in a box and tied with a bow. New York executive coach Alisa Cohn works to help clients live, work, and spend/save in alignment with their values. Here are a couple of ideas:

• Mark the holiday through traditions rather than gifts. Pool efforts with other family members or friends to help out another family in need. Contact churches and other organizations in your community and ask for recommendations. You can unite anonymously to buy food, gifts, and holiday goodies for the family in need.
• Make the holidays special. Talk with your friends and family about what they like and dislike about the holidays. From those discussions, build a plan that decreases the attention on gift giving.

And to avoid going in the red next year, contact TCU for help in setting up a TCU Holiday Club Account to budget for holiday shopping.

Copyright 2009 Credit Union National Association Inc. Information subject to change without notice. For use with members of a single credit union. All other rights reserved.

Shop at Home for the Holidays

Does the thought of making your way through crowded malls and shopping at 20 different stores only to wait in long check-out lines have you feeling like the Grinch? Shopping online during the holiday season can save time and minimize stress, but know a few simple rules before you dive into the world of online purchasing.

1. Only buy from familiar companies. Confirm the seller's contact information in case you have questions or problems in the future. Know exactly what you're buying. Carefully read the product description. Remember--if it seems too good to be true, it probably is.
2. Protect your privacy. Read and understand the company's online privacy policy and keep any personal information, passwords, or PINs (personal identification numbers) private. Look for these signals indicating that you have entered a secure Web page:
3. • A screen notice that says you're visiting a secure site  
   • A closed lock or unbroken key in the bottom corner of your screen 
   • The first letters of the Internet address you are viewing change from "http" to "https" 
4. Pay safely. After you review all terms of the sale, such as cost for shipping, delivery date, and return policy, you are ready to buy. Credit or charge card payments offer consumers the most protection. Finally, print all transaction records and any other useful information pertaining to your purchase.

Although online shopping allows you to virtually load your sleigh with just a few mouse clicks, practice safe browsing this holiday season. 


Source: Federal Citizen Information Center
 Copyright 2009 Credit Union National Association Inc. Information subject to change without notice. For use with members of a single credit union. All other rights reserved.

Vacations: Save Before You Set Sail

Your mind wanders to crisp-blue skies and romantic sunsets, salty ocean breezes, and sand between your toes. Then your telephone rings and you snap back to reality. There are no blue skies or ocean breezes, just your computer monitor staring you down. Do you need a vacation? 

Budgets are tight, but with some disciplined planning and money-saving tricks, that dream vacation can become a reality.

Be careful with plastic. Don't finance your entire vacation on your credit card. That doesn't mean it's off limits, but relying solely on plastic will only lead to stress and heavy interest charges down the road. 

Save, save, save. Try to set aside some of every paycheck in a TCU Vacation Club account. Decide how much you want to have on hand to start your trip. Divide that total by the number of paychecks until vacation, then save that amount in your vacation account. If you are not able to save this much, take a look at your spending habits. Are there places you can make cuts? 

Plan ahead. Booking airfare, hotels, and rental cars in advance could save you a bundle. Consider using public transportation to save cash on a rental car or taxis. And, travel midweek for the best deals. A TCU Travel Representative can also help you plan ahead.   

Talk to TCU Travel. TCU Travel Representatives have been to destinations all over the world so wherever you want to go, chances are they've been there. And don't forget, if you have a TCU Visa® Check Card, you can DOUBLE your rebate when you book travel services through TCU Travel!

Save money and secure your dream vacation. Let TCU Travel help.

Parents: How Your College Kid Uses Credit Cards

In times of economic downturn, college students are turning to credit cards more than ever before, according to Sallie Mae's 2009 National Study of Usage Rates and Trends.

Here are some of the results: 

• Undergraduates are carrying record-high balances—an average of $3,173. Seniors graduate with an average balance of $4,100;
• Eighty-four percent had at least one credit card, and half the students have four or more; 
• Less than one out of five students pay off balances each month;
• Ninety-two percent of students charge textbooks, school supplies, or other education expenses; and 
• Food (84%), clothing (70%), and cosmetics (69%) are also frequently bought on credit.

Despite high credit card usage, more than one-third of respondents have never or only rarely discussed credit card use with their parents. These same students were also more likely to charge tuition or be surprised at a high balance.

Parents: You can help. A large majority of those surveyed expressed interest in more financial literacy education. You can provide guidance throughout middle and high school to help better prepare your student to manage money in college.

Talk with them about money, and start with the basics. Focus on the importance of saving and responsible spending. Encourage them to use direct deposit for their pay checks—a savings account at TCU can help them get started.

If your student does use a credit card, stress the dangers of piling on too much debt. Put the real price tag into perspective--calculate with them how much interest piles on to that new pair of jeans if they do not pay their balances off each month. Also, remind them to keep their credit scores clean by carrying a low balance relative to their available balance, paying all bills on time, and regularly checking accounts for unusual activity. 

Responsible money management is important at all life stages. TCU Representatives can help. Stop by or call us at 800-552-4745.

Keep Your Old Car Running

Maybe this was the year you'd been planning to buy a new car—or at least a newer used one. But after the latest review of the family budget and a look around at the state of the economy, you've decided that you really need to keep that old car running awhile longer and in good condition. 

Here are some steps that will help you to keep rolling.

Make sure you have a good mechanic
With an older car where the warranty has expired, you're almost certain to get the least expensive repairs at an independent auto repair shop. In addition to asking family and friends for recommendations, one of the most stringent certification programs is run by the AAA, based in Heathrow, Fla. You can visit the Web site at www.aaa.com and click "Auto repair shops" for a list of recommendations. Membership in the Automotive Service Association is a good sign. 

If you're considering a new auto shop, start with a simple job like an oil change and see if you have a good experience.

Follow the maintenance schedule
Even if you never have paid much attention to the owner's manual for your car, it's time to give it a careful reading. It will set out what maintenance tasks should be done at various mileage levels. Whatever interval the manual stipulates for oil changes should be fine for most drivers. Stick to the lower mileage interval if you drive in harsh conditions. But don't ignore the often more expensive but less frequent changes of other fluids—brakes, transmission, and power steering. 

Drive carefully
How you drive your car also can affect its longevity. For instance, in cold weather, letting your car warm up while idling can damage the catalytic converter, says Mike Calkins, manager of the AAA-approved auto repair program. Instead, he recommends to start driving about 30 seconds after you start the car, but go easy on the gas pedal for a mile or two until the car warms up. Also, avoid sharp acceleration and sudden braking. 

If you have found an auto shop you trust, urge the staff to look over your car carefully whenever you come in for an oil change or other routine procedure. If your mechanic can spot a developing problem, it likely will cost you a lot less to fix now than later.

Consider starting a savings account set aside for potential auto repair. If you don't end up using it for repairs, it can become your down payment and reduce the size of a credit union loan for your next new car. The professionals at TCU can help you set up a savings plan for car repairs. Call us at 800-552-4745 or click here to visit our website.

Talking to Your Kids about the Economy

It's a good idea to find out what your children have heard and are thinking about the economy, and to reassure them if necessary. You may see warning signs that they're concerned. "They may act withdrawn, or different from normal," says Francie Alexander, chief academic officer at Scholastic Inc., New York.

"You can say, ‘It looks to me like you're worried; let's talk about it,' " she continues. "Start by listening or asking questions, and then share information appropriate to their ages and stages." 

It's important to be factual, and to speak at their maturity levels—which aren't always the same as their age levels, adds Rick Kahler, CFP, president of Kahler Financial Group in Rapid City, S.D. "Obviously you'll tell a teenager more than a four year old, but that's why you start by asking questions, so you can build on what they already know."

They need to know the situation and that you have a plan. You might say, "Mommy's company ran out of money and she's looking for a new job," says Alexander.

"You don't need to say much more to younger children, but they're comforted when they know what's going on, what might change in their lives—such as not going to the movies for a while—and that you're working on it," she says.

Children who are a little older and more mature may ask further questions. Answer them directly, but without complicated theoretical discussions that could cloud the issue.

Teenagers will generally appreciate more details. "I might tell them there'd been company-wide lay-offs, that jobless numbers were going up in the community, and that I was concerned," Kahler says.

Teaching children how to use money is an important skill in today's world. "If you haven't done that, take this crisis as an opportunity," advises Alexander. TCU has free resources and programs that can make it easy.

Copyright 2009 Credit Union National Association Inc. Information subject to change without notice. For use with members of a single credit union. All other rights reserved.

'Tis the Season of Weddings

Did you know in 2008 the average wedding cost around $22,000?  To some that might not seem like a lot to spend on such a special day but to others that can be a lot especially when the bride and groom are paying.  Here are some tips on ways to save when planning for that big day.

• Start off by making a realistic budget for the wedding.
• Make a list of what you want for the wedding and then rank the importance of
• Shorten the guest list.
• Negotiate; you’ll be surprised how many people are willing to negotiate price on catering, flowers, entertainment, the hall, etc.
• Get crafty!  If you like to do crafty projects then why not make your own wedding invitations, flower arrangements or programs, not only will it save money but also makes it more personalized.
• Buffet style is less expensive than a sit down dinner.
• Alcohol can get pricey, so either have a cash bar or just wine/beer.

A Penny Saved is a Penny Earned

Who really likes getting change anymore? It can be such a hassle to find a place to put all those coins, especially pennies. One place you can start putting those pennies and other loose change is in a piggy bank. It’s a great way to unload unwanted change if you don’t like carrying it around.  Just place a jar or bank in a centrally located area in your home so it can be a reminder to some one that walks by it to drop off their change. Then after an allotted period of time or when the bank gets full, take it to the nearest TCU or Coinstar to find out how much you earned. You’ll be surprised how much it can add up in the end. This can also be a fun activity for the whole family in seeing how fast or how much you get in the bank. Then with that extra money you can start a Vacation Club Account or college fund at TCU.