Financial Tips | Community First Cooperative Credit Union Ltd (CFCCU)

Open a Savings Account

It is important to start your own interest-bearing savings account. Do not let your money sit in your drawer or checking account, you will spend it. Instead, put some amount in the savings account each month.

At Community First Credit Union we advise our members to save at minimum 5% of their salary each pay period. By doing this, you will save a good amount of cash over a period of time. E.G. If you earn $2000.00 monthly you should save a minimum of $100.00. each month.

We provide several saving options to our member designed to help you save.

Pay yourself first

If you’re like most people you probably wait until your paycheck hits your account, you pay the bills and buy the weekly groceries before deciding how much you can afford to deposit into savings. By then the amount may be small and you’re worried you might need those few dollars later in the week so you avoid putting any money into savings at all. Big mistake.

You need to think of your savings just like you would any other bill. When your electric bill comes each month what do you do? You make sure it gets paid, right? That’s how you need to treat your savings account. If your goal is to save $100 a month then think of that as a $100 bill that needs to be paid. If you are thinking about this in terms of a bill you’re more likely to make that deposit and build up your savings.

Be a conscious consumer

When you go to the grocery store, do you have a list? Do you look at prices? Do you use your reward cards?

Don’t “sleep walk” through life. Be aware of every single cent you spend! When people don’t do that, their money tends to just evaporate.

It takes a bit of effort to make lists, examine the prices at the stores where you shop, but it’s worth it in the long run. And, it makes a BIG difference.

Make a budget and stick to it

Do you know where all your money goes? Do you know how much money you spend on things like going out to eat, seeing a movie, buying beer, etc.? Most people don’t.

Are you guilty of just hoping that you don’t overdraw your savings/chequing account? If so, make your budget.

Go back through your checkbook or statements for the three months and write down how much you spent in each category. You will probably be surprised at how much of your money is “wasted” on things you weren’t even aware of.

Budgeting is something we should all be doing to stay in control of our finances.

This is because having a budget brings a lot of clear benefits, including:

Greater control over your finances
Increased visibility of your expenses
Greater ability to find gaps and differences in your spending:

The basic budget formula for after-tax income is:

50 percent for fixed expenses, such as housing expenses, mortgage, car loan, child support and any other debt that requires monthly payment.
30 percent for financial goals. This would include extra debt payments, a cash cushion, retirement, etc.
20 percent for variable expenses, such as dining out, entertainment, and travel.

An effective way to begin your budget is to start on the first day of a new month, get a receipt for everything you purchase. Stack and review receipts at the end of the month, and you will clearly be able to see where your money is going.

Be aware of emails requesting personal information

Your financial institution would never contact you via email for information about your account such as your PIN, Identification number, online password, etc.

If you receive an email asking for this type of information do not reply to it. Delete the email and notify your financial institution as soon as possible.

Use debit and credit cards prudently

To minimize interest charges, try to limit credit card purchases to those you can pay off in full at the end of the month. If you use a debit card, don’t rely on an overdraft feature to spend money you don’t have. With either approach, you’ll have more money available for emergency savings.

Avoid stress-spending

It’s easy to justify spending money just to wind down from a stressful day at work. However, it is not a good idea.

Instead of buying things you don’t need to make yourself feel better, it might be wise to find other ways to de-stress instead.

An exercise is always a good option, as is meditation and even a good old-fashioned nap. Read, watch movies, or work in your yard if you’re stressed out.

Spending money won’t reduce your stress in the long run.

Develop a back-up plan

In today’s economy, no job is 100-percent secure. Create a list of steps you would take if you were to lose your job, even though you hope never to have to use it.

For example, you love kids and hand have room in your home that you could use to provide after-care services.

Having a Plan B can give you peace of mind as well as a practical “to-do” list if you ever face the shock of an unexpected job loss.

Start and Emergency Fund

You should have enough money saved to cover 3-6 months of living expenses. If you calculate that your monthly expenses is $1,000.00, you should have an emergency account that has between $3,000.00 to $6,000.00 in it.

This is recommended so in the event you are laid off from work or you become ill you can still cover your living expenses such as utilities, groceries, health care, transportation cost, etc., during that period where you will not be earning a salary.

Aggressively Pay Down Debt

The longer you hold onto debt, of any kind, the longer you keep yourself in shackles that prevent you from working toward your other financial goals.

In your early 20s, it can be hard to pay down debt very aggressively; you’re often working an entry-level job, struggling just to pay the bills and find your footing. But now that you’ve settled into your career and gotten some of the preliminaries out of the way, it’s time to clear the stage for the rest of your life.

If you have student loan debt, credit card debt or a car loan you’re paying off, throw everything you can at paying those balances down pronto. Every extra month you make payments, you’re accruing interest and tying up money you could be spending on other goals.

Get debt off your back as soon as possible.

Pay attention to your Online Accounts

With more members managing their money through online accounts, mistakes that lead to vulnerability are also more common.

Don’t “friend” strangers online and beware of sharing any personal information publicly that could be used to guess your passwords.

Take care when entering passwords on smartphones, too, because such devices generally lack the anti-virus software that’s more common on computers. If you do notice anything suspicious, contact your credit union right away.