resolution

Three Questions, Then Three Questions

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As 2015 draws to a close, it’s time to figure out if you’re in your best possible financial shape.  While performing a self-audit can seem a daunting task, we’ve created a simple way to get started. Below, we ask three questions about where you are now compared to where you were a year ago. Your answers should help you understand if you made the right choices in 2015.  After that, we’ve got three more questions to help guide your 2016. 

2015:  Do you have less debt than a year ago?

2016:  Could you pay off your credit cards this year if you had to do so? 

December can be a rough month for our credit card statements, so you might already be dreading the daily arrival of the mail just as much as your kids eagerly anticipate it.  But debt is part of life, and the kids can’t unwrap a copy of the family credit score, so you grit your teeth and swipe.  Don’t let the fact that you have credit card debt be a source of guilt or shame, and definitely don’t assume that burden even if you are carrying some credit card debt into 2016. Instead, take a look at where you are now, then compare it to where you were a year ago.  Have you reduced your debt in 2015?  If not, why not?  Maybe you had an emergency you needed to cover.  Maybe this was the year you installed the home theater you’ve been wanting.  The important thing to ask yourself is whether you’ve reduced your credit card debt, and if not, is what you bought with that debt worth it to you now?

With other forms of debt, the questions can be more complicated. While you’d like to have a smaller outstanding balance on your mortgage or car note, reducing the amount you owe might not be the best idea.  After all, mortgage rates are incredibly low right now, so turning your credit card debt into a home equity loan is a smart move (provided you don’t rack up new credit card debt!). You might have a new debt balance that you didn’t have at this time last year if you bought a new car, upgraded the kitchen, or went back to school. 

If it’s time to clear up your debt, try one of our home equity or personal loans. Or, if you have higher rate credit cards, transfer the balances to a lower rate Destinations Credit Union MasterCard Credit Card.  If you reduce your rate and make the same payments, your debt will dwindle more quickly. 

2015:  Do you have more money saved than you did a year ago?

2016:  What would happen if you didn’t get paid next month? 

Again, the best way to determine your financial position today is to compare it to where you were a year ago, and savings is important.  If you have more saved this year than you did last year, it means your budget is working and you’re headed in the right direction.  If you have less saved than you did a year ago, try to determine why that is.  Did you have to dip into savings to pay the down payment on a long-term purchase?  Did you have to cover a gap in employment?  Just like with debt, figure out how much less you saved, compare it to what you bought, and determine whether or not the purchase was worth it.

Just like with debt, however, simply looking at the bottom line probably isn’t enough to tell you if you’re making the right moves.  Having an emergency fund that represents six months of your income is incredibly important for easing your family’s mind and protecting them if something unfortunate happens. But having an emergency fund much larger than that isn’t necessarily better.  You don’t want to be a dragon, sleeping on a hoard of gold simply because it’s pretty. Instead, put that savings to work for you in the form of a retirement fund, college savings or even the down payment on a second home to use as a rental property.

If you’re looking to add to your savings, check out our savings plans (hint: if you want to earn a really high rate, attach a Kasasa Saver to a Kasasa Rewards Checking and earn more every month you qualify!). To save for a child’s education, take a look at our Coverdell IRA Plan. 

2015:  Is your credit score higher than it was a year ago?

2016:  What will you do this year to improve your life? 

These questions might not look like they go together, but they do.  This is the section where you take a big-picture look at your financial world. If your credit score is improving, then you’re probably making the right choices overall.  If not, it would be good to find out why that is the case.  Make sure all of the charges on your credit report are accurate, work to tackle your debt, and try to bring in more income.  If you work to improve your credit score, you’ll almost certainly have to improve your overall financial standing. Destinations Credit Union Members can get unlimited free financial counseling to help you with this through our partnership with Accel.

But your credit score isn’t your life.  What are you going to do this year?  Are you going to take a trip to Europe?  Get started in a new career?  Buy a vacation home on the lake?  Learn a new language? What is it you’d like to actually do?

Once you know what you want to do this year, figure out what it’ll take to make it happen.  Can you save for it?  Will you need a loan?  Is your credit score too low for a second mortgage?  Whatever is in your way, make that your next financial goal.  Get your savings and debt into good positions, and then try to live your life.  After all, that’s what the money is for.  

Resolve to Keep Those Resolutions

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A month into the new year, many of us may be flagging on our good intentions to keep our New Year’s resolutions.

According to the Journal of Clinical Psychology, the third most popular New Year’s resolution for 2014 is to spend less and save more.  They also report that 34% of all New Year’s resolutions are money related.  

Getting a better handle on your money has many benefits including reducing your stress! A study by the American Psychological Association revealed that out of the eight top sources of stress, five were financial. 

Accel, a trusted partner for Destinations Credit Union, offers unlimited financial counseling at no cost to our members – Destinations Credit Union pays them to assist our members. Accel counselors help members get at the root of members’ financial trouble and provide steps for dealing with it.  In fact, we often hear from members that they feel more positive about their situation and that a weight has been lifted after speaking with a counselor for the first time.

  • Spend Less, Save More – Accel offers members FREE financial counseling with a certified counselor who can work with them to develop a budget and action plan based on their personal situation and goals.
  • Make a Big Ticket Purchase – Accel’s credit report review is great for members planning on financing, as a counselor can help them check for and dispute errors and give advice on improving their credit score.  Accel also offers housing counseling designed to help first-time homeowners prepare for their purchase. 
  • Get Out of Debt – Members have access to Accel’s Debt Management Plan (DMP) at no charge.  DMPs are an effective way to pay off debt in full.  On average, members can be debt free in 3-5 years!  


If you’re already a member of Destinations Credit Union, get started today by calling
1-877-33ACCEL (332-2235).  If you’re not a member yet, apply online and start saving money today.

 

Start Smart This Year

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It’s that time again….a new year, a fresh start, and resolutions to be made.

We all have things we’d like to improve in our lives – lose weight, exercise more, quit bad habits, or whatever.  At Destinations Credit Union, we can’t help much with those kinds of resolutions, but we can help you get your finances in order.

If you have resolved to improve your financial life this year, we’re here to help.  During the month of January, we’re offering a free financial check-in by appointment only.  One of our representatives will meet with you to get a sense of your financial goals and give you some tips to get started on the road to meeting those goals. Call 410-663-2500 ext 124 and make your appointment today!

Know the Score

Get your credit report once a year at www.annualcreditreport.com or get a copy directly from each of the three major credit bureaus.  Since you are entitled to one free report from each of the major credit bureaus each year, stagger the reports so you get one every 4 months.  That way, you can keep on top of anything that may be wrong and protect yourself against identity theft.  If you want to know your credit score, you get it at no cost through creditkarma.com.  The better your credit score, the better your loan rates, insurance premiums and more.  If you don’t have the best credit score, Destinations Credit Union can help you work on improving it.

Follow the Paper Trail

Your monthly bills probably don’t come in paper anymore, but you get the idea.  Discovering what and when you pay gives you a 100% accurate view of your financial picture.  And remember: don’t get surprised by semi-annual expenses like real estate taxes or annual expenses like license plate registration.

Create a Spending Plan

Being on a budget may sound like being on a diet, but it isn’t.  It’s a map of where your money will go each month.  Use a spreadsheet, checkbook register or an online money management tool like our MoneyDesktop.  Determine when you get paid and when you pay bills – then stick with the process that works for you.

Step Up To Savings

A healthy savings account doesn’t magically happen.  It’s the result of setting small goals and sticking to them.  Commit now to put as little as $5 or $10 or $20 per paycheck into a savings account.  By the end of 2014 that account could have hundreds in it, maybe even thousands.  Once you reach your savings goal, set another.

Tackle Debt Like a Pro

Following advice from financial gurus like Dave Ramsey isn’t the easy way out – it’s common financial sense. Be honest about what you owe and pay as much as you can on one credit card or loan until it’s paid off.  Then move to the next debt.  Before you know it, you’ll be debt-free!