WINTER Tips to Keep Debt in Check. at Any Age. SchoolsFirst FCU has my back. I know I m always going to get friendly, personable service.

Transcription

1 WINTER 2018 Tips to Keep Debt in Check c at Any Age with a Yo ge t ay to av c SchoolsFirst FCU has my back. I know I m always going to get friendly, personable service. STEVE G. MEMBER SINCE 2006

2 Tips to Keep Debt in Check Do you know the warning signs of carrying too much debt? If you ve gotten off track with your credit card usage, or want to ensure your borrowing habits stay in good shape, consider these tips to help you manage your money wisely. CALCULATING YOUR SCORE Your credit or FICO score is comprised of five components: the amount of money you owe; your payment history; new credit you ve applied for; length of credit history; and your credit mix, which is the types of credit you have, such as credit cards, auto or mortgage loans, and student loans. WARNING SIGN: DEBT LEVEL RISING The amount you owe lenders makes up 30 percent of your score. Generally, experts suggest you spend no more than 36 percent on all your debts, including housing, car loans and other debts. If you re carrying a high balance on your credit card or struggling to make other loan payments, it s time to get a handle on your debt. THE FIX: Revisit your budget and monitor your spending to cut costs. If you have good credit but consistently carry a balance, switch to a credit card offering a low interest rate to reduce what it costs to finance your debt. Another option might be a balance transfer from your existing card to one that offers a zero percent APR for a set period, such as 18 months. Just make sure you know what it will cost, including any balance transfer fee and the interest rate when the transfer period ends. Consider refinancing your auto, mortgage or student loans to reduce your monthly payments. If your credit score is lower than you d like, paying down a high balance even if it s not all paid off will improve it. WARNING SIGN: THE MINIMUM PAYMENT TRAP If you make minimum monthly payments, you are paying too much in interest charges, which can really hurt your finances. For example, if your card has an annual percentage rate, or APR, of 15 percent, your average daily balance is $3,000 and you re only making minimum monthly payments of $60, you ll pay between $400 and $450 in interest charges annually. That same amount could go toward building your emergency savings. THE FIX: Work toward paying your balance off each month. If you can t, pay as much as you can and be consistent about it. If you carry several credit cards, pay down the card with the highest interest rate first, and pay at least the minimum on all the others. If you don t have an emergency fund, start one. Make every effort to save at least $1,000 so you can use this cash and not credit when the unexpected occurs. WARNING SIGN: MAKING LATE PAYMENTS If you make a late payment on your credit card, you ll incur a fee costing from $25 to $35 per instance. If your payment is at least 30 days past due, it will be reported to the credit bureaus. THE FIX: If you re simply forgetful, set up automatic payments so you never have a late payment again. If you re struggling to make ends meet, consider getting expert financial guidance to help you figure out a debt management plan. Read the full article in the Featured Content section on extracredit.schoolsfirstfcu.org. We re Here to Help At SchoolsFirst FCU, you re more than just a credit score or checking account balance. We are committed to providing you personalized advice, the most competitive rates, and low fees on our financial products. If you need help managing your loan payments or credit cards, give us a call or visit us at your local branch. We can help you find the right solutions for your situation. ci Works L rn re b ut pl i g for yo r fi i l future by atte di g of r o pli ntary worksh p LAN LOYE J 0, Fe 17, rch anta An J 1 Fe 10, rch ivers iverwa k REGISTER TODAY AT schoolsfirstfcu.org/workshops Workshop dates are subject to change.

3 Build College Savings with a 529 Plan As a parent, you want to do the very best for your children, including helping them find ways to save and pay for college. A 529 College Savings Plan may be the right solution as your family works toward this important goal. WHY A 529 PLAN? There are many ways to save for college, and a 529 is a wise investing option because the plan can be opened by anyone parents, grandparents, other family members, friends and contributions limits are much higher than most other college savings plans. Annual after-tax contributions can be as much as $70,000 per individual or $140,000 per married couple. Annual contributions over $14,000 per individual and $28,000 per married couple fall under federal gift tax rules. The 529 plan invests in mutual funds or similar investments. 2 TAX ADVANTAGES The good news is that earnings on 529s grow tax-deferred and withdrawals are tax-free as long as you use the money for qualified education expenses, such as fees, tuition, books, supplies, and room and board at most accredited colleges, graduate schools, community colleges and vocational schools. Keep in mind that for withdrawals used on anything other than qualified education expenses, the earnings portion will be subject to both income tax and penalties. 3 START SMALL, THINK LONG TERM You can open a 529 Plan with as little as $250 and set up automatic contributions as low as $50 a month then increase that regular contribution anytime you want. Your friends and family can contribute to the plan, too. The key is to start early and invest consistently, because the money will earn interest and eventually interest on that interest. That s compounding at work, and it s a powerful way to build savings. ENCOURAGE YOUR KIDS TO SAVE Many young adults end up with too much student loan debt because they don't realize how much college actually costs and didn't plan accordingly. For instance, the average cost for tuition and fees for state residents at public colleges is $9,650, compared to $33,480 for private colleges, according to the College Board. If you establish a 529, encourage your children to contribute to their own college savings. Earning good grades, and being involved in school and community activities can help your children earn scholarships, and many private schools offer grants and scholarships to offset the high tuition. Because college costs vary significantly, decide what you can afford to contribute. Then you can figure out how much to save monthly to reach that goal, using an online college savings calculator. RETIREMENT FIRST, THEN COLLEGE When it comes to saving for retirement or college, experts agree that retirement comes first, because there are no loans for retirement but plenty of options to pay for college. Yet it doesn t have to be an either/or scenario. A SchoolsFirst FCU financial advisor can help you explore both your retirement and college savings options and work with you to figure out how best to allocate your money. QUESTIONS ABOUT 529s? For more information about 529 College Savings Plans, please schedule an appointment with one of our financial advisors. If you have investing questions, call , ext. 4116, option 2, Monday through Friday, 9 a.m. 5 p.m. or visit your local branch. Real Estate Workshops Securities sold and advisory services are offered through CUNA Brokerage Services Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor. CBSI is under contract with SchoolsFirst FCU to make securities available to Members. Not NCUA/NCUSIF/ FDIC insured, may lose value, no financial institution guarantee. Not a deposit of any financial institution. REGISTER TODAY AT schoolsfirstfcu.org/workshops Get expert advice about buying, selling or using the equity in your home to your advantage. HOMEBUYING ESSENTIALS Jan. 18 6:30 8 p.m. Tustin Jan. 25, Feb. 8 6:30 8 p.m. Ladera Heights Feb. 13 6:30 8 p.m. Redlands Feb. 15 6:30 8 p.m. Garden Grove Feb. 21 6:30 8 p.m. Palmdale Feb. 27 6:30 8 p.m. Riverside University March 1 6:30 8 p.m. Irvine March 8 6:30 8 p.m. Torrance March 15 6:30 8 p.m. Riverside-Riverwalk March 22 6:30 8 p.m. Downey March 29 6:30 8 p.m. Anaheim Hills

4 INDEPENDENCE Here are some simple steps to create lasting financial security no matter your age. Financial experts suggest paying yourself first by putting 10% percent of your of income your income into savings. into savings. If you set If you up set automatic up transfers automatic to transfers your account, to your you ll account, get used you ll to get living used on to less. living on less. To invest for retirement, take advantage of your company s retirement plan because it'll match at least a portion what you invest typically from 2 percent to 8 percent of your salary. For example, if your annual salary is $50,000 a year and your company offers a 6 percent match, invest at least 6 percent. Your company will match that 6 percent, which means an extra $3,000 a year for your retirement savings. Over time, you should earmark at least 10 percent of your pretax earnings for retirement. 1 If you have student loan or credit card debt that is affecting your financial well-being, establish a budget and look at ways to cut spending. You may be able to refinance your student loan to one with a lower interest rate, or if you have more than one loan, consolidate them into one loan. If you have a federal loan, you may qualify for a repayment plan offering lower rates. Visit studentaid.ed.gov to learn more. For credit card debt, read Tips to Keep Debt in Check featured in this issue. Experts Depending suggest on where you spend you live, no keep more your than housing 36 percent and of auto your loan expenses monthly gross in the income range of on 36 housing. percent Also, to 40 consider percent of spending your monthly no more gross than income. 20 percent of your monthly income for not just one but all the cars in your household. An insurance review is the best way to know if you re protected for life s setbacks. Our insurance specialists will help you find the right insurance at the right prices. If your estate is simple, you can create your own will, and there are plenty of online resources and software programs to help you do that. If you need assistance, or your personal situation is more complex, you ll need an estate lawyer to ensure your wishes are honored.

5 President s Message The start of a new year is a great time to put new resolutions into action. As American author and humorist Mark Twain once said, The secret of getting ahead is getting started. It s a simple truism, to be sure, but making small, incremental changes to how you save and spend can make a real difference in your life. For example, one of the surest ways to establish savings is to set up automatic transfers. If you time those transfers with your paychecks, it becomes easier to save consistently. And making simple changes to your spending habits, such as reducing your cable TV channels, skipping a few coffee runs, or bringing your lunch to work, can help shore up your budget. For more ways to help you be moneywise and financially healthy, we ve added an Advice tab on the home page of the SchoolsFirst FCU website. Our advice section provides a wide range of educational resources, including Money iq, a new feature offering short, interactive learning modules on topics such as credit and debt, saving, retirement and investing. We also encourage you to take advantage of our in-person and online workshops to learn more about buying and selling a home, and financial and retirement planning. If you have questions about saving, budgeting, lending, insurance or investments, our licensed financial advisors provide complimentary consultations to help you review your choices and come up with strategies that are right for you and fit your budget. Small steps can be life-changing the key is to start now. We re always here to help provide guidance when you need it. Together, we re building a strong family, to be there for one another in both good times and challenging ones. Thank you for being a SchoolsFirst FCU Member. It s truly an honor and privilege to serve you. Bill Cheney PRESIDENT/CEO America Saves Week Is Feb. 26-March 3 this year, but saving for the future happens all year long. Join other Americans who are setting a financial goal, making a plan, and saving automatically. Visit americasaves.org to take the pledge. r, avi gs SchoolsFirst FCU has my back. I know I m always going to get friendly, personable service. Steve M b r Si e 2006 When educator Steve needed a large loan to pay off a previous home, his experiences with some other financial institutions were quite discouraging. However, once he started working with SchoolsFirst FCU, his situation turned around. After meeting with teammembers who assessed his financial situation, they advised him to apply for a home equity line of credit, or HELOC. Throughout the process, I had a personal connection with everyone, Steve says. They were all very gracious and helpful. He also refinanced his car loan at a highly competitive rate. Now a longtime Member, Steve appreciates his checking and savings accounts with the Credit Union, along with products designed specifically for school employees, including a Classroom Supplies Loan and a School Employee Mastercard. He can t help but boast about what makes SchoolsFirst FCU so different. I like the personal service and how the tellers take a genuine interest in me. He often shares his experiences with friends and tells them, If you are tired of corporate fees and looking for a competitive loan then check out SchoolsFirst FCU. CHAMPIONING EDUCATORS AND STUDENTS As redit i n focused serving scho l ployees nd th d ati l o ity, we re pas i ate b ut pp rting i ovati i d ati l progra We have re h d re th 9 06 stud nts thro gh r P rtn rs i d ati progra whi h provid fi i l literacy pre ntati d worksh p i th l ro re th 96 stud nts p rti ipated i r interactive Bite of Re lity events, to h lp th l rn b t gi g ey wi ly.

6 WHAT TO KNOW ABOUT A HOME EQUITY LOAN Home equity loans offer many advantages over personal loans and other kinds of debt: They typically have lower interest rates and are easier to qualify for. Interest payments are tax-deductible in most cases. 3 The loan amounts can be high, depending on home equity available. HERE ARE SOME WAYS TO USE A HOME EQUITY LOAN: COLLEGE TUITION LARGE MEDICAL BILLS HOME IMPROVEMENTS OR MAJOR REPAIRS DEBT CONSOLIDATION If you use a home equity loan to consolidate debt, be sure you have and follow a budget to avoid racking up debt again. Failing to make payments on a second mortgage can lead to foreclosure. For free guidance on debt management, visit BALANCE, our financial fitness partner, at schoolsfirstfcu.balancepro.org. A counselor can help you explore your options. INTERESTED IN LEARNING MORE ABOUT A HOME EQUITY LOAN? We offer loans for single-family residences and condominiums with no lender origination fees. CALL: , ext Monday through Friday, 8 a.m. 7 p.m Saturday, 9 a.m. 3 p.m. We re Here For You Go Online schoolsfirstfcu.org Call Us Emergency After-Hours Card Support Available 365 days a year from 5 a.m. to midnight. Find Us Visit schoolsfirstfcu.org/branches or use our Mobile Banking app to find a branch or ATM near you. TellerPhone Download our Mobile Banking App Available in the App Store and Google Play. ATM Locations Visit our website or Mobile Banking app for a complete listing of more than 28,000 fee-free ATMs. Holiday Notice In observance of these holidays, our branches, in-store branches, service centers and Member Contact Center will be closed. Get Social With Us! Monday, Jan. 1 New Year's Day Join our communities and be among the first Monday, Jan. 15 Martin Luther King Jr. Day to learn about new products, services, video Monday, Feb. 19 Presidents Day workshops and special promotions. Plus, share your Federally Insured by NCUA story with us; we would love to hear from you! 1. Securities sold, advisory services are offered through CUNA Brokerage Services Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor. CBSI is under contract with SchoolsFirst FCU to make securities available to Members. Not NCUA/NCUSIF/FDIC insured, may lose value, no financial institution guarantee. Not a deposit of any financial institution. CUNA Brokerage Services Inc. is a registered broker/dealer in all 50 states of the United States of America. 2. CUNA Brokerage Services Inc. is a registered broker/dealer in all 50 states of the United States of America. Pursuant to the Economic Growth and Tax Relief Reconciliation Act of 2001, qualified distributions from a 529 college savings plan are tax-free. 3. This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.