TCU Savers Club

Welcome!

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!

Get Fit on a Budget

It can be easy to get in shape without feeling the financial burn of expensive equipment and gym memberships. Here are ideas for getting a low-cost workout:

• Walk or jog. Walk or jog outside—or, if the weather’s against you, walk in your local shopping mall.
• Play with your pup. Taking the dog for a walk is a great way to get some exercise. Playing catch or Frisbee with your pooch also will get your heart pumping.
• Buy a training stand for your bike. Turn your outdoor bike into a stationary bike with a training stand. Look for a deal on eBay, Craigslist, or at discount sporting-goods stores.
• Use a workout DVD. Browse Amazon.com for inexpensive exercise DVDs, or check out the free selection at your local library. Another alternative is to swap DVDs with a friend to change up your routine.
• Find cheap equipment. Items like dumbbells, resistance bands, and jump ropes can be inexpensive—check discount sporting-goods stores. For items like exercise bikes or treadmills, try eBay, Craigslist, or your local classifieds to find affordable used equipment. Just be sure to inspect closely for condition and safety before you buy.
• Use community resources. Many high-school or middle-school swimming pools offer low-cost open swim sessions for community members. Local high-school or college fitness centers may offer affordable rates to residents. You also can often find discounted fitness classes through your local recreation department.
• Join a fitness group. Do a Web search to find a club in your area that focuses on an activity you enjoy—whether it’s hiking, biking, or running. For a free alternative, organize an informal group with friends, family members, or neighbors.
• Look for deals on gym memberships. You may be able to get a discounted rate through your employer or organizations you belong to. Some health insurance plans provide reimbursements for gym memberships. Many gyms also offer their own deals, so ask what’s available.

Emergency/Security Fund— Start Small, Think Big

Beefing up your emergency fund isn’t as hard as you might think. The strategy is to start small. The payoff is priceless: a healthy finan- cial picture for you and your family.

So how do you go from $600 in savings to six months of living expenses? Change your mindset, and change a few habits.

One question that pops up frequently is, “How can I build an emergency fund when I’m try- ing to pay off my debts?”

If you’re starting from scratch with your emer- gency fund, build it up to one or maybe two months of living expenses, and then acceler- ate credit card payments above the minimum payments required. Once you have paid down your debt, go back and boost payments to your emergency fund so you don’t go into debt again.

Here are six ways to boost your emergency/se- curity fund and change savings habits for life:

• Treat savings as a bill. Figure out what you can afford to save each month and stash away $75, $50, $25, or even $10 a month. No matter the amount, it adds up, and it’s habit-forming. As your situation improves, increase the amount.
• Round up. Let’s say your monthly utility payment is $76.26 year-round. Budget for $80. If your mortgage payment is $967.89, budget for $1,000. These amounts make budgeting easier, and you’ll have a buffer at the end of the month to apply to your emergency fund.
• Live one raise behind. Budget using your old income and apply the extra amount to your emergency fund.
• Automate it. If it’s not in your wallet or your checking account, you’re less likely to spend it. Use automatic transfers to savings. Out of sight, out of mind, but you know it’s there if you really need it.
• Give savings a garage-sale boost. Schedule an emergency-fund-dedicated spring-clean- ing event. Go from room to room and purge stuff you no longer want and need. You’ll clean house, feel refreshed, and boost your savings.
• Think of it as a freedom fund. If you can’t find that initial “spark” to get started, ask yourself how you’d pay your bills if you got a pink slip tomorrow, or if your car needed major repairs. If you know the money is there when you need it, the burden of worry is lifted.

The professionals at TCU are ready to help with all your savings needs. Call us at your local TCU office to set up short-term and long-term savings vehicles that fit your needs.

 

Shopping for a Low Interest Rate? Here’s What You’ll Need to Ask!

If you’re in the market for a mortgage loan, chances are you want to get the best rate possible. You open the yellow pages and call lots of mortgage brokers. You check with the credit union and other financial institutions you already have a relationship with. You keep a record of the rates they’ve quoted, and apply for the loan with the lowest in- terest rate. Logical way to go about it, right?

Wrong! There are several problems with this story. One, the rates change every day. Sometimes they change more than once a day. So if you don’t get everyone’s rates on the same day, the comparisons are meaningless.

Another problem is that many mortgage brokers employ sales people who work on commission only. Desperate to get the loan, they’ll quote a rate they can’t really give you...because they hope you won’t lock in today anyway. Knowing that the rates change every day, they can later tell you “Yeah, that was the rate then. Now, it’s gone up.”

And then there are things you wouldn’t even think of ask- ing. Questions about fees, some legitimate required ex- penses and other “extra” expenses. Unless you’ve done lots of research and are well versed in mortgage lending, it’s easy for a mortgage broker to paint a rosy picture of their programs and rates when in reality it may not be the best thing for you.

The solution? Work with a lender you know and trust – like Teachers Credit Union! In spite of the Mortgage industry’s turmoil, TCU continues to be a strong Mortgage lender and has been since 1931. We offer competitive rates and the lowest fees. We will find the best Mortgage to fit YOUR needs, not the one that fits OUR needs.

 

Polish Your Credit Score

Your credit score is a three-digit number that reflects how well or poorly you've been using credit. It matters—a lot—because it affects how much you'll pay for credit. MSN Money columnist Liz Pulliam Weston did the math and concluded that bad credit habits can cost someone as much as $200,000 more for credit over a lifetime. 

The calculation is simple: A good score pays off in lower rates for future borrowing; a poor score means you'll pay more for the privilege of borrowing, if you can borrow at all.

So it literally pays off to keep your score bright and shiny, or to restore its luster if it's become tarnished. You're in charge of your money management habits.

Polish your score:

• Pay your bills on time—Use online bill payment or automated transfer to make sure you never miss a due date.
• Pay down balances on all your cards—Chip away at all of them, even if it you can't pay one or more off entirely. The key is to show steady progress. Two schools of thought: Pay off cards with high balances first, because they cost you more, or pay off small balances first, to achieve small successes that keep you focused on your goal. The truth is, use whichever strategy you can stick with. Just always pay at least the minimum on all of your obligations.
• Pay down overdue balances first—Creditors will report late payments to credit bureaus, and that will surely ding your score. So if you are not up to date on one or more cards, catch up now.

Tarnish your score:

• Miss payments—As above, a missed payment results in a report to the credit bureau, which in turn will result in a diminished score.
• Max out your credit limits—When you charge up to the limit on one or more of your cards, you raise what's called your utilization ratio; your credit score will punish you for this. Say you have four cards, each with a $5,000 limit or a combined credit line of $20,000. Your goal is to maintain a utilization ratio of less than about 25%. So, in this example, try not to bump up to more than $1,250 on any single card, or $5,000 on all cards combined.

If you're concerned about your credit eligibility, talk to TCU at (800) 552-4745 or visit your nearest TCU Service Center. We can help you identify strategies that will keep your borrowing costs low for a lifetime.

Emergency/Security Fund—Start Small, Think Big

Beefing up your emergency fund isn't as hard as you might think. The strategy is to start small. The payoff is priceless: a healthy financial picture for you and your family.

So how do you go from $600 in savings to six months of living expenses? Change your mindset, and change a few habits.

One question that pops up frequently is, "How can I build an emergency fund when I'm trying to pay off my debts?" 

If you're starting from scratch with your emergency fund, build it up to one or maybe two months of living expenses, and then accelerate credit card payments above the minimum payments required. Once you have paid down your debt, go back and boost payments to your emergency fund so you don't go into debt again.

Here are six ways to boost your emergency/security fund and change savings habits for life:

• Treat savings as a bill. Figure out what you can afford to save each month and stash away $75, $50, $25, or even $10 a month. No matter the amount, it adds up, and it's habit-forming. As your situation improves, increase the amount.
  
• Round up. Let's say your monthly utility payment is $76.26 year-round. Budget for $80. If your mortgage payment is $967.89, budget for $1,000. These amounts make budgeting easier, and you'll have a buffer at the end of the month to apply to your emergency fund.
  
• Live one raise behind. Budget using your old income and apply the extra amount to your emergency fund.
  
• Automate it. If it's not in your wallet or your checking account, you're less likely to spend it. Use automatic transfers to savings. Out of sight, out of mind, but you know it's there if you really need it.
  
• Give savings a garage-sale boost. Schedule an emergency-fund-dedicated spring-cleaning event. Go from room to room and purge stuff you no longer want and need. You'll clean house, feel refreshed, and boost your savings.
  
• Think of it as a freedom fund. If you can't find that initial "spark" to get started, ask yourself how you'd pay your bills if you got a pink slip tomorrow, or if your car needed major repairs. If you know the money is there when you need it, the burden of worry is lifted.

Remember: The professionals at TCU are ready to help with all your savings needs. Call us at 800-552-4745 to set up short-term and long-term savings vehicles that fit your needs.

Track Spending to Reach Your Goals

You can't make progress on your budget goals until you know where your money is going. That means it's time to track spending.

Get a grip
Recruit the whole family to help keep track of all expenses for at least a week or two - longer if you can manage it. You'll see patterns and how routine mindless spending can mean death by a thousand cuts to your budget.

You may decide to use a small notebook and record each expense. Or you may prefer to use software such as Quicken or Microsoft® Money. It might work for you to collect all receipts and bills as you pay them. Whatever your choice, try to be consistent and pick a system you think you'll use and not abandon.

If that sounds too taxing, try this: Collect all your receipts for several days, then review each receipt. Put a plus sign or minus sign next to each expense - plus for on-budget, within your goals spending, and minus for off-budget, working against your goals spending. One red flag: being unable to even recall making a purchase.

Get a goal
You also won't make much progress unless you're monitoring spending for a reason - weighing your expenses against a larger goal or goals.

Give whatever tracking exercise you use a rest for a month and then repeat it. Do you see improvements? Or have the leaks just shifted to other categories? Use credit union tools - direct deposit and automatic deposits into savings - to help you on task.

The money experts at TCU can help you review your budget. Contact a TCU Representative today with any questions.

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.