Independence Day

The 4th of July is coming up….a time to celebrate our freedoms.  One of the basic freedoms that we all aspire to is financial independence.  Like our other freedoms, financial freedom does not come easily or without sacrifice.

Many people, especially since the downturn in the economy, struggle to live paycheck to paycheck.  Many have lost jobs and have been unable to find work.  If you are fortunate enough to be working, I challenge you to take charge of your finances and begin building a solid financial future. 

Your first step in achieving financial freedom is to assess how you are spending your money and create a budget that you can live with.  Destinations has online tools (Money Desktop and BudgetSmart) and free, unlimited financial counseling to help you with that.

Be brutally honest with yourself when deciding if you need to spend money.  When you buy a car, do you really need to spend $30,000 to get the car of your dreams?  Or could you get by spending $16,000 for a viable mode of transportation?  Do you need to eat fast food, or can you pack a lunch?  

Are there cheaper ways to get what you need — discounts on cell phone packages or less expensive electricity providers?  Have you gotten new insurance quotes lately?  It pays to shop around every couple of years to make sure you’re still getting the best deal.

Find ways to cut costs and begin saving that money.  The easiest way to save is by automating the process.  If you deduct a certain amount from your paycheck each week, and automatically put it into a savings account, chances are you will barely miss the cash.

Keep your credit score up…it will cost you less in the long run.  Better credit ratings get you better interest rates when you need to borrow.  Better credit ratings will save you money on other things, like insurance.  Better credit ratings may even help you get a better job!  Businesses are more willing to trust you if you show you can manage your finances and maintain good credit.  If your credit score is not as high as it could be, again, take advantage of our free financial counseling.  They can give you concrete steps to take to improve your score.

Start an IRA or put the maximum into a company-sponsored 401K, especially if they are matching your deductions.

In short, come up with a plan that will serve as a roadmap to your financial freedom.  Celebrate this Independence Day by making a commitment to your own financial independence.

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Credit Unions Vs. Banks – The Choice is Clear

Obviously, banks and credit unions offer a lot of overlapping services. Both banks and credit unions take in deposits, administer checking and savings accounts, issue credit and debit cards, and provide home loans in addition to consumer loans. 

The key difference: Ownership structure 
Banks are corporations – owned by their stockholders. Typically, and especially with larger banks, these shareholders are Wall Street institutions. However, there are many smaller neighborhood and regional banks with more local ownership. Credit unions, on the other hand, aren’t owned by stockholders on Wall Street; we’re owned by our members on the local Main Street!
True, neither banks nor credit unions are in business to lose money. We both need to make profits on our goods and services to stay in business. The difference is this: When a bank makes money, they send their profits to their stockholders. When a credit union makes a profit, on the other hand, we pass it on to our members. This can be in the form of a dividend or credit, better rates, technological investments and a variety of actions that bring greater value to members of the cooperative. And because we’re not so focused on pleasing distant shareholders through issuing a dividend every quarter, we can frequently offer services and loans with lower costs than banks.
Our mutual ownership structure gives us another advantage too: Wall Street can’t pressure us to make unwise decisions for short-term gains at the expense of our membership. Every decision we make is solely in the long-term, best interest of our shareholders.
For example: In normal economic times, credit union and bank failures are very rare. That story changed during the mortgage crisis of 2008-2009. Leading up to the crisis, publicly traded banks were under intense pressure from Wall Street to make loads of questionable loans so they could keep short-term numbers up. Credit unions were free to make sound and rational decisions that were in the best interests of members, not Wall Street. According to information published by the Federal Deposit Insurance Corporation and the National Credit Union Association, banks were failing at a rate 3 times higher than credit unions in 2008, and had a failure rate of five times that of credit unions.
In good times, credit unions have a great track record. And when times are tough, there’s no comparison.