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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.