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In tough times, it's more important than ever to develop and maintain good financial habits. Having a household budget and shedding high-rate credit card debt are two obvious things that could benefit most consumers. But figuring out where to start can be a daunting task—especially if you feel like you're already in trouble. The thing to remember is that it's never too late to ask for help from your credit union.

Manage your mortgage

If you have an adjustable rate mortgage (ARM) and are facing a rate adjustment, refinancing your home loan with your credit union might be the break you need. If you qualify, you could:

• Refinance into a fixed-rate 30-year (or shorter-term) mortgage.
• Refinance into a new ARM that has terms better suited to your situation.

Even if you have a fixed-rate home loan, refinancing may free up some money you could use to:

• Pay down more expensive debt—credit card bills, for example.
• Build your emergency fund for unexpected expenses, such as car repairs or a new furnace.

Tap your home's equity

A home equity line of credit can be a useful cushion if you're not already overloaded with debt.

• You can set it up and never draw on it but have the comfort of knowing it's there if needed.
• If you're already tapped out, borrowing more is not the answer.

Cut credit card costs

Not all credit cards are created equal. Switch to a credit union credit card—they average more than two percentage points lower than bank credit card interest rates, and often have lower fees as well.

• Pay on time, no exceptions.
• Whenever possible, pay the balance each month. When you have to stretch payments, pay in as few months as you can manage.
• Avoid cash advances—the interest rate on these is higher than on straight purchases.

Pass up payday loans

Payday lenders promise to help when you're short on cash. You'll get the money you need, but with interest rates from 300% to 1,000%.

• See what it really costs to borrow from a payday lender, and
• Visit your credit union—Credit unions offer payday loan alternatives with fairer terms and lower interest rates, such as short-term signature loans and low-cost cash advances.

Use direct deposit

Direct deposit will help you to save automatically. You simply need to set it up to place a certain amount or a percentage into your checking account and another amount into your savings. It gives you:

• One less thing to worry about; it's the safest way to receive your money,
• An easier and more convenient way to contribute to IRAs (individual retirement accounts) and other savings vehicles, and
• More control over your money and your time—it's predictable and dependable.

Steer clear of scams

Some scammers use negative economic news to scare investors into high-risk investments. They use investor fears to promote sketchy schemes with promises of high return and no risk that leave investors with nothing but empty wallets.

• Hang up on aggressive cold callers.
• Delete unsolicited e-mails promoting investment opportunities.

As member-owned not-for-profit institutions, credit unions look out for their members' best interests. Credit unions rates and fees can save their members hundreds of dollars annually. Don't wait until you're in deep trouble to ask for a financial checkup at your credit union. In fact, the earlier you ask for a review, the better the outcome can be.

Article provided by CUNA

This article is for informational purposes only. All loans subject to approval and rate may vary depending on individual’s credit history and other factors. Refinancing restrictions apply. All Credit Union loan programs, rates, terms, and conditions are subject to change at any time without notice. Membership required. SRP is federally insured by NCUA. NMLS #612441.

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Bad Money Habits and How to Fix Them

Learning how to use money wisely is an essential skill that isn’t always taught to us as children. Some of us pick up bad money habits on our journey to adulthood. Often, we’re just not being mindful of where our money goes.

See if you have any of the following bad money habits. Then read on to learn how to break them and replace them with good habits.

1. Use credit cards to pay for a lifestyle beyond your means – It’s easy to spend wildly with a card; you don’t see the money slip away until you get the monthly bill. If you can’t pay off your credit card balance each month, then at least pay more than the minimum payment. Remember that even if you don’t use the card, the interest charges will compound, increasing your total debt. To break a credit card habit, try using cash or your debit card instead for a few weeks and look at your checking account balance every day. You’ll quickly learn to stop and think twice before making a purchase.
2. Living paycheck to paycheck – If you’re spending as much as you earn, you’ll always be short of funds by the end of the month for your rent and bills, and you’ll never be able to save. So, first, get a clear picture of your essential expenses: your rent, utilities, gas, insurance, groceries. Add them up, then deduct that total from your monthly take-home pay. Ideally, essential expenses should take up only 50% of your income. If it’s more, then you’ll need to either find ways to reduce those expenses or get another job. Of the remaining 50% of your monthly income, use at least 20% to pay down debt and add to savings and use the last 30% for everything else you want.
3. Not saving for an emergency fund or retirement – Life is unpredictable; you can’t always tell when your job may be downsized, or your car needs a major repair. That’s why it’s important to build an emergency saving account that has enough to cover at least 3 months of expenses. Relying on a credit card will only send you further into debt. It’s also important to begin saving for retirement. The younger you are when you start, the more you’ll earn through the magic of compounding interest.
4. Keeping subscriptions you don’t use – If you have an automatic recurring expense, like a gym membership or a streaming service, but you aren’t using them consistently, then why are you paying for them? Review all subscriptions and if you haven’t used them on a regular basis for 3 months, cancel them. Put the money you save into your savings.
5. Not tracking spending. Just try it one month to get a clear idea of where you are spending your money. Keep a receipt for every purchase, categorize them in a budgeting app or spreadsheet, and add them up. You may discover that buying lunch everyday instead of making your own is costing you about $200 every month, money that could be used to pay down a student loan or credit card bill.

Like any bad habit, it will take some work to change bad money habits to good ones. Just know that the peace of mind a healthy financial status brings is priceless.

Article provided by CUNA

This article is for informational purposes only. Membership required. SRP is federally insured by NCUA.

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Car title loans or “fast auto loans” are popular with people looking for quick access to cash, but they can also put you in a deep well of debt. Car title loan companies squeeze nearly $700 million from consumers each year in fees alone!

Here's how car title lenders work. They make short-term loans based on the value of the collateral—in this case, the car. Typically, there's no credit check, nor does the lender ask the borrower about their other monthly expenses or debts. The borrower must pay a monthly finance fee of about 25% of the amount being borrowed. That translates to an Annual Percentage Rate (APR) of 300%. If the borrower can't make the payment, they risk losing the car.

For example, say you want to borrow $1,000 for 30 days. The finance fee is 25% of $1,000, or $250. You give the title loan company the title of your car and they give you $1,000. Some lenders may even require the installation of a GPS and starter interrupt device that disables your vehicle so the company can find and repossess it.

At the end of 30 days, you have three choices:

1. Pay $1,250 plus any other fees the lender may charge,
2. Roll the loan over into a new one, or
3. Lose the car.

If you can’t pay the $1,250 and choose to roll the $1,000 loan over for another 30 days, you must pay another 25% finance fee ($250). This brings your total payment to $1,500, ($1,000 + $500 in fees) which is due at the end of 30 days.

Many borrowers find themselves unable to pay off the first loan and decide to roll over the loan. If they roll over the loan multiple times, the fees will sink them further into debt.

Before giving away your vehicle, keep these tips in mind:

• Focus on the APR. Car-title loan APR rates range from 84% to 300% and higher. If you focus only on the “fast and easy” aspect, you can get trapped into an endless cycle of debt.
• Shop around. Ask the credit union what other options are available for your situation. We offer many kinds of loans, with much better rates than the “quick cash” variety. We will look for the best option that can address your current financial need with the least financial stress.
• Steer clear of all predatory loans. That includes payday loans, tax refund anticipation loans, and overdraft loans. These lenders make their money by keeping you in debt. Don’t make it easy for them.
• Boost your emergency fund account. Having a special savings account just for emergencies will provide the quick cash you need for unexpected expenses. Consider automatic transfers from your checking to the savings account to make it easier. Let us know if you need help opening a savings account or setting up an automatic transfer.

Article provided by CUNA

This article is for informational purposes only. All loans subject to approval and rate may vary depending on individual's credit history and other factors. Refinancing restrictions apply. All Credit Union loan programs, rates, terms, and conditions are subject to change at any time without notice. Membership required. SRP is federally insured by NCUA.

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Life changes, such as getting married, divorced, having a child, or facing widowhood, require more than the subsequent emotional adjustment. These milestones also signal the need to review your financial situation and make any necessary adjustments.

Marriage

• Discuss your financial goals with each other — Do you want to save for a new house? Have kids? Decide if you're going to pool your assets or maintain separate share draft/checking or savings accounts.
• Review your credit histories — Order your credit reports and clean up any credit problems.
• Make name change notifications — If you're changing your name, notify your employer, credit card issuers, the Social Security Administration, the motor vehicle department, the S. Passport Office, as well as insurers and doctors.
• Create or update your wills and powers of attorney.
• Check your insurance — Review your auto, health, property, disability, personal liability, and life insurance coverage. Update beneficiaries on your policies, your IRAs (individual retirement accounts), and other investments.

Expecting a new baby (birth or adoption)

• Evaluate your budget — If you're planning on moving, buying a bigger car, or want to quit work to raise the baby, you'll need to create a budget to help you determine how to manage it financially.
• Insurance coverage — Visit your employee benefits department to find out what your policy covers, and when to add a new baby or adopted child to your policy. Research any other employment policies regarding maternity or family leave, and flex-spending accounts.
• Create or update your wills — Besides instructions about how the estate should be distributed, wills should include the name of the person chosen to be the child’s guardian. Parents may also wish to appoint a different person to be the guardian of the child's money.

Divorce

• Educate yourself — Review financial accounts and figure out where the money is. Pull credit reports to see if there are any credit cards or loans you don't know about.
• Collect information — Before your first visit to an attorney, make copies of all financial records, including statements from financial institutions and brokerage companies, tax returns for the past two or three years, mortgage, copies of financial statements on file at any financial institutions, insurance, safe deposit boxes, wills, and trusts.
• Establish credit — Open an SRP Federal Credit Union draft/checking and savings account in your own name. Get a credit card in your own name.
• Update wills and beneficiaries
• Close joint credit accounts — Debt incurred in a joint account will follow both spouses after the divorce. Talk to your lawyer about how to best close joint accounts and limit your liability.
• Get health insurance — If you have insurance through your spouse’s employment, you'll still be covered during the separation, but once you're divorced, you’ll need to get your own health insurance.

Death of a spouse or parent

• Get 10 death certificates — You'll need copies for your insurance, 401(k) payouts, Social Security, probate, and to change the title on property.
• Organize finances — Make a list of assets and liabilities; gather statements from financial institutions and brokerage companies, insurance policies, employment records, tax returns, and so forth.
• Cancel accounts and services — Check for and cancel any automatic or online bill paying services unless you'll continue to use them. Notify and cancel any accounts with health clubs, magazine subscription, online services, etc., you won’t be using.
• Contact income providers — Notify previous employers, pension fund administrators, and financial institutions holding IRAs or other retirement income accounts. Each may have a different beneficiary. Notify the Social Security Administration as soon as possible.
• Contact life and health insurance providers — Insurance companies will distribute money to the beneficiary listed on the policy. Don't cancel health insurance until all outstanding bills have been paid.

This article is for informational purposes only. Membership required. SRP is federally insured by NCUA.

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What is a Credit Union?

Credit unions and banks are two financial institutions that serve the needs of individuals and businesses alike. While they may offer similar services, there are some key differences between the two. Credit unions, unlike banks, are not-for-profit organizations owned by their members. This means that instead of earning profits for shareholders, credit unions return earnings to their members in the form of dividends and reduced fees. One way credit unions distribute earnings is through shares, also known as member shares. In this article, we will explore what credit union shares are and delve into the differences between credit unions and banks.

What are Credit Union Shares?

Credit union shares are one of the fundamental components of the credit union system. When you become a member of a credit union like SRP Federal Credit Union, you are not considered a customer but rather a shareholder. This means that instead of opening a traditional bank account, you purchase shares in the credit union, which represents your ownership stake in the organization.

The number of shares you purchase is determined by the credit union and may depend on factors such as your membership type or desired level of involvement. It's important to note that these shares do not appreciate or depreciate in value like stocks or other investments. Instead, their value lies in your membership status and the benefits that come with it.

What are the Benefits of Credit Union Shares?

By purchasing shares, you become a part-owner of the credit union and gain access to a range of financial services and benefits. These benefits can include higher interest rates on savings accounts, lower loan rates, and access to exclusive products and services.

Additionally, credit union shares provide you with voting rights. As a shareholder, you have the opportunity to participate in the governance of the credit union by electing the board of directors and voting on important decisions that impact the organization.

What are the Differences Between Credit Unions and Banks?

Credit unions and banks are both financial institutions that offer a range of services including loans, savings accounts, and checking accounts. However, there are three key differences between the two.

1. Credit unions are not-for-profit organizations owned and operated by their members, while banks are for-profit entities owned by shareholders. This fundamental difference in ownership structure can have implications for the types of services and products offered, as well as the fees and interest rates charged.
2. Credit unions often have a more localized focus, serving specific communities or groups of people. This can result in a more personalized and community-oriented experience for members, with a stronger emphasis on customer service. Banks, on the other hand, tend to have a wider geographic reach and may offer a broader range of services and products.
3. Credit unions are typically governed by a volunteer board of directors elected by the membership, while banks are governed by a board of directors chosen by the shareholders. This can lead to differences in decision-making processes and overall governance structure.

Good Things are Happening at SRP

If you would like to learn more about the function of credit unions and the positive impact they have on local communities, contact SRP Federal Credit Union. Since our founding in 1960, SRP Federal Credit Union has been dedicated to our members. The members are the heart of our credit union and the sole purpose for our existence.

If you have an immediate need that we can help you with, don’t hesitate to get in touch with us.

This article is for informational purposes only.  Membership Required.  SRP is federally insured by NCUA.