AFCU Money Matters - Fall 2007 - (Page 15)

money smarts “Money is one of the most important subjects of your entire life. Some of life’s greatest enjoyments and most of life’s greatest disappointments stem from your decisions about money. Whether you experience great peace of mind or constant anxiety will depend on getting your finances under control.” —Robert G. Allen AFCU Helps You BALANCE SM American First offers a comprehensive financial education and counseling service called BALANCE. Certified BALANCE counselors are available to answer questions, explain your credit report, suggest ways to improve your score and help you set up a budget. If needed, a bill consolidation, credit negotiation or bankruptcy prevention program may be arranged at no cost. The credit union pays all BALANCE fees, saving you the expensive start-up costs and monthly fees charged by other agencies. All sessions are completely confidential. To access the BALANCE Money Management Planner, go to www.balancepro.net. Under Client Worksheet, click on forms to download and print. For more information, visit www.balancepro.net or call 888/456-2227. Five Common Money Mistakes and How to Avoid Them The average savings rate in the U.S. is at a negative 1 percent — the lowest level since the great depression — and the average American household has over $7,000 in revolving debt. As Americans continue to spend more than they are saving, there’s never been a better time to examine your own financial situation. By avoiding common money mistakes, you can learn to effectively manage your money and help secure your financial future. Five common money mistakes include: 1. Not Setting Financial Goals. So you just have to have that new cell phone everyone’s talking about, or that adorable outfit on the department store mannequin. But when you buy on impulse, you’re sacrificing your ability to purchase the more important things in life, like a college education or a new home. To set financial goals, think about what’s important to spend your money on in the short-, intermediateand long-term. Short-term: Paying off credit card debt or saving for holiday gift-giving. Intermediate-term: Saving to make a large purchase, like a car or college tuition. Long-term: Planning for a home or retirement. 2. Not Saving Money. Simply put, people who don’t save money can’t reach their financial goals. Consider paying your savings account like you pay a monthly bill. Set an amount and deposit it each month to watch your savings grow. Take advantage of employer offered 401(k) plans and employer-paid contributions, or open an Individual Retirement Account to secure your money for the future. You can also find easy ways to save money every day by avoiding that $4 cup of coffee or throwing your change into the “take a penny, leave a penny” dish at your favorite lunch spot. 3. Not Setting a Realistic Budget. Not having a realistic budget can throw you off each month and cause discouragement if there is a shortfall. Many interactive budget calculators are available on our website at www.amerfirst.org. These valuable tools help you evaluate where your money is going each month and help you reach your short-, intermediate- and longterm goals. 4. Not Controlling Debt. If you’re in a downward debt spiral, you need to gain control of the debt before it gets out of hand. Simple things like using your next bonus check to pay off a credit card can make a big difference. 5. Not Being Prepared for Financial Emergencies. In 2005, seven out of 10 low- and middle-income households reported using their credit cards as a financial safety net, (i.e. to pay for car repairs, rent or housing repairs and medical expenses) rather than relying on their savings. Don’t be caught off guard. Have an emergency savings fund of three to six months’ worth of living expenses for a medical situation or job loss to help create a cushion for these unexpected life events. FALL 07 15 http://www.balancepro.net http://www.balancepro.net http://www.amerfirst.org

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Money Matters - Fall 2007 Contents e-Statements e-Waste Live a Greener Life! Motley Fool: Hybrid Cars Looking More Attractive Jean Chatzky: Reduce, Reuse and Simplify Saving Energy, Saving Money It’s Easy Being Green Five Common Money Mistakes

AFCU Money Matters - Fall 2007

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