By Al Strawn
We are constantly bombarded with advertising and promotions designed to make us want things we may or may not need or can afford. This is particularly true as the holiday season approaches. Even your credit union gets into the act by offering special “skip-a-pay” and “Holiday” loans. We are a people consumed with debt, and for some of us this can be a difficult cycle to break.
This is why I want to suggest to you an old fashioned idea that makes good sense even today. Why not open a Christmas Club account? Start saving money today for next fall and have what you accumulated over the year automatically transferred into your checking account at the end of October 2019.
It is amazing to me how easy it is to save money if you set up a process to deposit automatically and have an incentive to leave it alone. After a few months, you begin to forget about the extra cash that is now going into your savings. Then when next fall comes you have what you need to give gifts to your loved ones and truly celebrate, rather than being stressed out and going deeper into debt.
Some of us may want to use this same method to save for a special event such as a wedding or vacation. Others may save for taxes or annual insurance payments. Whatever the purpose, a Christmas Club account is a convenient way to pay yourself first and earn interest, rather than the typical pattern of using your credit card and going deeper into debt.
Credit unions exist to promote thrift and provide access to credit for worthwhile and productive purposes. We try to be as efficient as possible to keep fees on services low and to be a low-cost source of borrowing. But possibly our greatest success comes when we help people learn to save for their future. Saving is not an accident; it requires discipline and good habits. However, for most of us, it is essential to our financial health and well-being.
If you would like more information on starting a Christmas Club account please check it out at www.mvfcu.coop, call the Contact Center or stop by any of our community offices. We want to be your trusted financial partner and help you build a better financial future.
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Jumpstart January 2019 with a bang!
By Kathy Y. Morris, CCUFC
The first rule of money basics when it comes to giving – if you know you are going to overspend before you spend, look for other ways to show your love and generosity. Frame pictures you have taken over the year, design a 2019 calendar and include significant events and birthdays, or send cards with a heartfelt appreciation for their presence in your life and ask them to join you making a good start at financial freedom for 2018! You just might inspire someone!
Here are a few ways to avoid big holiday bills in January 2019.
- For starters make of list of those you want to buy a gift for. Include yourself. Put some ideas next to their name, so you will know what you are looking for before you walk into the store.
- Decide how much you want to spend. This is difficult but must be done! Also, then stick to your budget. Stress-free shopping beats stressful regrets on December 26 any day!
- Consider gifts of time – Help your friend with a project they have been talking about all year. Gifting to others can include our time, energy and skills to help with projects.
- Buy gifts that people actually need. This does require some thought, but it will be worth it.
- If you can, whenever a “three-paycheck-month” comes up, take that money and use that as your budget. Once it’s gone, remove yourself from the shopping premises and step away from the computer. By the way, if November is a three-paycheck-month for you, take advantage, and plan accordingly.
- There is still time to decrease stress for holiday spending. Start putting a little aside into a holiday fund to get you started on the right path towards enjoying the holidays debt and stress-free. Save a specific amount every month and deposit into a separate bank account or hidden envelope. Then the damage won’t be so painful.
By Chris O'Shea
It’s not easy to save for retirement, especially if you’re on a fixed income. It can be daunting to look at estimates of what you need to have saved by what age. How are you ever going to get there? One trick that could help you is to think small.
According to a recent study from the investment company Acorns, you can boost your nest egg by focusing on little contributions instead of large ones. As Yahoo reports, Acorns researchers asked one group of 1,772 Acorns users (with incomes from less than $25,000 to more than $250,000) to save $5 a day. Then they asked another group of 1,774 users within the same income brackets to save $150 a month. The amount is exactly the same. However, the findings were quite surprising. Thirty percent of the people who were asked to save $5 a day began stashing away the cash, versus only seven percent of the people who were asked to save $150 a month. While it makes sense — $5 a day doesn’t seem like much — it’s still a notable finding. What’s even more interesting is that among the $5 a day group, those who made less than $25,000 per year were just as likely to put money aside as those who made $250,000 per year or more. The key, explained lead study author Shlomo Benartzi, was shifting reframing the obstacles that keep people from saving. “By making big and difficult decisions, such as saving $150 a month, feel small and easy, such as saving $5 a day, we were able to completely eliminate the income gap in savings behavior,” Benartzi told Yahoo.
If you’re having trouble building that savings account, consider the Acorns study findings and start small. Go over your budget and see where you can trim a few dollars, then add that to your automatic savings deposit. Don’t let the big picture keep you from your savings goals.
2018 Holiday Loan
Instead of charging holiday gifts to a high-interest credit card, consider applying for an MVFCU Signature Holiday Loan. Save yourself some cash by heading to MVFCU. We offer rates far below the average credit card, allowing you to make the holidays bright, for less.
Is a Holiday Loan Right for You?
We never recommend spending beyond your means. As Scrooge-y as it sounds, “the holiday spirit” is no excuse for financial negligence. However, if you have to go over budget and don’t want to damage your credit score, a holiday loan from MVFCU is a good compromise. Stay away from similar loan products at check cashing and payday advance companies; these often have crazy-high interest rates (some as high as 100% or more) and stricter payment deadlines. Credit unions are not-for-profit and member-focused, which often allow us to offer the lowest rates in town, and the best financial counseling for low-income and middle-income families.
November 19-December 31
This year's Holiday Loan promotion will run from November 19 through December 31, and our official rates for this year will be announced early in November, so stay tuned to mvfcu.coop and our MVFCU Facebook page!