• How to Get Your Finances in Order After Buying Your First Home

    Homeownership is something many individuals, couples, and families aspire to. If you just bought your first house, congratulations! Your money is now going toward building equity instead of lining a landlord’s pockets.

    Still, you may need a little time to recover your finances after funding a down payment, paying closing costs, and renting a moving truck. Here’s how to get your money situation back in order now that you’re a homeowner.

    Update the Household Budget

    Revising your budget isn’t as simple as changing “rent” to “mortgage.” You have many other new expenses to plan for as well, such as property taxes, homeowner’s insurance, private mortgage insurance, HOA fees, and higher utility bills. Be prepared to cut back in other areas, at least initially, until your savings account recovers.

    Keep Saving for Retirement

    Yes, you have some new expenses to juggle now, but don’t forget to continue funding your retirement. If you already have a 401(k) through your employer, you’re on the right track. If not, consider opening an Individual Retirement Account (IRA). You don’t receive an employer match, but you benefit from competitive dividends above standard savings account rates and deferred taxes.

    Check Your Credit Score

    You probably kept a close eye on your credit score before buying a home, but don’t stop monitoring it just because you were approved for a home loan. Now the task is to recover from the dip that occurred after taking out a mortgage so you can qualify for low interest rates on a new car, credit card, or personal loan you might need in the near future.

    Wait for Coupons in the Mail Before Furnishing Your Home

    Many new homebuyers are “house poor” for a little while. To help you furnish your new space and complete home improvement projects without breaking the bank, wait for valuable moving coupons to arrive in the mail. These trigger automatically when you submit a change of address to the post office.

    Get a Homeowner Discount on Your Car Insurance

    Owning a home can qualify you for a discount on your car insurance, especially if you obtain homeowner’s insurance from the same company. However, don’t simply tack this new coverage onto your existing policy—take an afternoon to shop around and compare rates. You might be surprised by how much you can save.

    Set New Financial Goals

    You just checked off a huge milestone from your financial bucket list, but buying a home shouldn’t be your only investment. Once your bank account is used to this change, start exploring other ways to invest your money. Working with a financial advisor is the best way to learn about your options and garner tips to meet your short- and long-term financial goals.

    GCS Credit Union offers banking solutions to help get your finances in order after buying your first home. Contact us at (618) 797-7993 to learn how we can help you save, invest, and fund purchases for your new home.

  • What Happens After You File for Bankruptcy?

    If you’re swimming in debt and looking for a fresh start, declaring bankruptcy has probably crossed your mind. Just be aware that bankruptcy isn’t an “easy way out.” It may be better than having your wages garnished or your home foreclosed, but you should only consider it as a last resort. Learn more about what happens after you file for bankruptcy so you can go into the process feeling more informed.

    Your Creditors Leave You Alone

    When your case enters the court, you are immediately protected from the aggressive collection efforts of your creditors. This bankruptcy benefit, known as the automatic stay, prevents creditors from harassing you over the phone, at your door, via email, or by sending letters.

    Your Credit Score Takes a Hit

    Bankruptcy leaves a big black mark on your credit history that lasts up to 10 years. Of course, if you’re considering this option, your credit score is probably mediocre to begin with. Once you file and get creditors off your back (and out of your bank accounts), you can begin rebuilding your score.

    You Could Lose Your Property, Including Your House

    If you file for Chapter 7 bankruptcy, the process includes working with a trustee to liquidate (sell) your non-exempt items—which may include your house, car, family heirlooms, and other valuable assets—to repay your creditors. If the sale of these items doesn’t cover your entire debt, the remainder is discharged (forgiven).

    You May Still be Required to Repay (Some of) Your Debt

    If you file for Chapter 13 bankruptcy because your income is too high to qualify for Chapter 7, you will work with a trustee to reorganize your debts into a feasible payment plan based on your income. Your assets aren’t liquidated, meaning you get to keep your house, but you must stick to a strict repayment plan for three to five years. After this time, your remaining debt is discharged.

    Not All Debts are Forgiven

    There are some significant exceptions regarding which debts can be discharged by filing for bankruptcy. For instance, student loan debt, child support, alimony, taxes, and fines and penalties most often won’t be forgiven. In the case of recent expensive purchases, such as jewelry or a new car, you can either reaffirm the debt, which means you remain responsible for paying it off, or you agree to have it repossessed and sold to help pay off your other debts.

    The Details of Your Bankruptcy are Made Public

    This negative consequence of filing for bankruptcy means that family, friends, and future landlords, lenders, or employers can find out the details of your court proceedings, including how much money you owed and whom you owed it to. The loss of privacy could be a deal-breaker for some people.

    GCS Credit Union offers banking solutions to help you rebuild your credit and get your finances back in order after declaring bankruptcy. To learn how you can become a member, please contact us at (618) 797-7993 today.

  • How to Prepare for a Financial Emergency

    how to prepare for a financial emergency

    While you can’t predict emergencies by their very nature, there are certain things you can do to prepare for if and when one comes your way. Financial emergencies are actually easier to prepare for than you might think. While you might not know when they’ll happen or how much money you’ll need to handle them, you can be adequately prepared as long as you start now and stick to it.

    Creating an Emergency Fund

    Emergency funds can be used for any true financial emergency. The more you have, the more prepared you’ll be, but experts recommend saving up about six months’ worth of living expenses in your emergency fund. This should give you enough of a cushion in the event that you lose your job or become injured or ill and cannot work.

    Living Below Your Means

    Spending less than you make is the key ingredient in building wealth and that includes saving for an emergency. If you spend 100% of what you make, losing your income will hurt you worse than if you only spent 50% of your income. Using a budget is a great way to see where your money is going and if you really need to be spending as much as you might be.

    Being Covered by Insurance

    You never know what life has in store, but insurance can help you prepare for the worst. Disability insurance can cover your income and a life insurance policy is recommended for couples who are dependent on one another’s income. Check with GCS Credit Union to find out the best insurance options for you.

    Having a six-month emergency fund, spending less than you make, and having insurance just in case are just a few ways to prepare for a financial emergency. GCS Credit Union has a variety of financial products and services designed to help you save money and prepare for your future. Give us a call today at (618) 797-7993 to learn more.

  • How to Prepare for a Big Life Event with a Budget

    how to prepare for a big life event with a budget

    Many of life’s big events will stick in your memory forever, but the problem is that many of these same events can cost quite a lot of money. Planning ahead can help you prepare for a big life event financially, and a budget is the best tool to help you do exactly that. No matter what your big event might cost you, a budget can help you get on track and find out how long you’ll need to save money for.

    Going to College

    College is expensive, but there are ways to get an education without piling up a mountain of debt. Most teenagers aren’t very responsible, so it’s your job to help them budget for college. Scholarships are the best way to go and choosing a more affordable college like a junior college can also help. Encourage your kids to get a summer job and put all their earnings into a savings account from GCS Credit Union. While in college, budgeting is also very important, so you don’t spend or borrow more than you need to.

    Your First (Real) Job

    Now that you’ve graduated college without too much debt, the next step is to get your first real job. You might not be making as much as you’d hoped right away, but a budget can help you live below your means. Be sure not to pay too much for a place to live and don’t go out and buy a more expensive vehicle than you can afford. Be sure to budget for every category including housing, utilities, food, and gas among others.

    Getting Married

    Getting married can be a fabulous event, but a crazy wedding can put you in debt for years to come. Start budgeting for your wedding in advance, and it’ll take some getting used to when you combine finances with your spouse. Make a budget for your big day and stick to it.

    Having Kids

    You’ll never forget the first time you laid eyes on your little bundle of joy, but kids are expensive. You’ll need to pay for diapers, formula, child care, schooling, and so much more over the years. Budgeting can be a bit tricky with your first kid, but you’ll get the hang of it over time.

    Buying a Home

    Buying your first home is an exciting event, but it’s certainly costly. It’s best to put down as much of a down payment as you can so that you can lower your monthly mortgage payments to make them more affordable. Find a house that you can realistically afford according to your budget and do your best not to go over that amount. GCS Credit Union can help you determine how much house you can afford, and we can get you on your way to homeownership.

    Retiring

    Once you retire you’ll no longer be receiving your paycheck to live off of. You’ll be living off your savings and investments including your 401(k), money market accounts, and more. Hopefully you’ve put enough away for retirement, and that amount will determine how much you have to work with every month. Your budget will come in handy every step of the way, but especially when you retire.

    At GCS Credit Union, we’re here to help you get through life’s big events. Contact us today by calling (618) 797-7993 to learn how to become a member and take advantage of our great financial products and services.

     

  • The Top Five Factors That Contribute to Your Credit Score

    factors contributing to credit score

    Whether you like it or not, playing the credit score game is sometimes necessary to get the things that you want in life. Even if you have enough money to make major purchases like a home or car, your credit score is actually a bigger factor than whether or not you can afford them. The good news is that even if your credit score isn’t high enough now, there are some things you can do to boost it up. In order to learn how to improve your credit score, you need to know which five factors contribute to that credit score the most.

    Payment History – 35%

    Making all your payments on time every month is the most important thing you can do to improve your credit score. The good news is that it’s easy to do as long as you have the money, but the bad news is that it takes time to build up your score by paying on time. Some ways to make sure you pay on time include automatic bill pay and/or using a detailed budget. If you think a payment may be late, contact your creditor to try to work out an arrangement. Over time your score will improve based on making on-time payments.

    Credit Utilization – 30%

    Your credit utilization ratio is defined as the amount of credit you’ve used vs. the amount you have available. That means that if you have a credit card with a limit of $5,000 and a balance of $500, you’re using 10% of your available credit on that particular account. The best way to increase your score in this area is to pay down your debts so you have more available credit. Another trick is to request an increase on your credit lines so that you have more available to you and can lower your utilization ratio. This means asking for more credit without actually using it.

    Length of Credit History – 15%

    Like your payment history, the best way to build up the length of your credit history is simply by playing the waiting game. You may not want to close your oldest credit account which is factored in as well as the average age of each of your accounts. Paying off the balance of a relatively new account and closing it can help your credit utilization and shouldn’t hurt, and may actually help, the average length of your credit history.

    Credit Mix – 10%

    Your credit mix score benefits from having a diverse mix of open accounts including credit cards, a mortgage, an auto loan, etc. Just be sure you don’t go crazy opening new accounts because this is only 10% of your credit score, and too many inquiries may hurt you (see next entry).

    Inquiries – 10%

    The amount of new accounts that have been opened, or applied for, in the last six to 12 months makes up 10% of your credit score. Avoid applying for too many new accounts in a short period of time. You can try asking for an increase on your line of credit on an existing credit card rather than opening a new one, for example.

    GCS Credit Union is here to help you improve your credit score. We invite you to become a member and meet with one of our representatives who can help you with a customized solution. Just give us a call at (618) 797-7993 today to get started.

  • Four Brilliant Money Moves to Make in Your 30s

    saving money in your 30's

    Getting your finances in order has always been a good idea, but it wasn’t until the debut of Cardi B that “makin’ money moves” became a thing. While she may have ended up being a one-hit wonder, making brilliant money moves during your 30s is something that positively impacts you for the rest of your life. Now’s the time to get your financial house in order to propel you to wealth and security during your 40’s and beyond.

    Getting Out of Debt

    If you’re still in debt, it’s time to get serious about cleaning up the mess. The good news is that you’re not alone, the average 30-something in America has about $40,000 worth of debt. A lot of that debt comes from student loans, which is a hot button issue for the 2020 presidential election. Credit card debt is also a serious issue in America and is one of the biggest obstacles in growing your wealth. The average interest rate on credit cards is 16.7% which means you’re paying way too much to rent money.

    One effective way to get out of debt is to make a list of all your debts from smallest to largest and work the snowball method. That means paying off your smallest debt first and paying the minimum on all the rest. Once the first debt is paid off, you can now apply what you were paying on that debt to the next smallest until that one is eliminated, and so forth. Continue to do this until you’ve paid off all your credit cards, student loan, auto debts, etc. You don’t need to pay off your mortgage, but if you can, that’s always a plus. Another way to help manage and get out of debt is a consolidation loan from GCS Credit Union.

    Cleaning Up Your Credit

    Somewhere along the line, someone decided to create credit scores to determine how worthy you are to borrow more money. The problem is, one of the only ways to increase your credit is to borrow more money, which doesn’t help you get out of debt. The first thing you should do is to sign up for a free credit report and score and then enroll in a credit monitoring service. Assess the damages and report any incorrect information to the major credit bureaus. If you don’t have enough open accounts you can open a credit card through GCS Credit Union, even if you don’t plan on using it (be sure to pay off the balance each month if you do use it). Paying down your open credit card balances will also raise your credit score so the previous tip for getting out of debt can also help you here.

    Building Your Emergency Fund

    Once you’ve paid off your debts and cleaned up your credit, the next step is to build up your emergency fund. Hopefully, you already have something in there, but if not, it’s not too late. Some experts claim you should have three to six months’ worth of expenses saved, but others recommend up to a year’s worth. More than 60% of Americans don’t have enough to cover an unexpected $1,000 emergency, so you can see why this is so important. The fewer payments you have, the easier it is to squirrel away money. A savings or money market account from GCS Credit Union are great places to save money so you can access it in case of an emergency while accruing interest.

    Planning for the Long Term

    Your 30s is the time that you’re supposed to be all grown up, and that means planning for your future. Getting out of debt, having a good credit score, and building an emergency fund are all good steps to take. After that, it’s time to focus on your future which includes making retirement plans and investing your money wisely. If your company offers a 401(k) match, you should take advantage of that as much as you can. Owning a home can be a good investment in your future as can increasing your income by advancing your career. It may be a good time to adjust your insurance coverage including adding life insurance to take care of your family after you’re gone.

    If you’re in your 30s it’s time to get serious and make money moves to get you where you want to be in the next decade and beyond. GCS Credit Union can help you get to where you want to go and get your finances in order. Visit your nearest location or give us a call today at (618) 797-7993, we would be happy to discuss all your options with you.

  • Key Differences Between Credit Unions and Banks

    Banks vs. Credit Unions pros and cons written on a blackboard.

    Managing your finances can be confusing. In fact, even knowing where to store your money can seem like a quandary, especially if you are new to banking. You may have heard people talking about how much they love their bank, or how much better it is to use a credit union, but is there really that much of a difference? The answer is yes, there are several differences between credit unions and banks, which we will explore here.

    First, let’s look at how they are the same. Banks and credit unions are similar institutions in that they provide checking accounts, savings accounts, certificates of deposit (CDs) and investment accounts, as well as mortgages, auto loans, and small business loans. Additionally, both banks and credit unions are insured by the United States government for up to $250,000 per deposit account. However, the way banks and credit unions are structured is very different, and so are the benefits they provide their customers.

    • Banks are for-profit, while credit unions are not-for-profit organizations. Banks invest the money you put into their care and the interest they take in from loans, and they use that money to grow the company, passing dividends to the owners. Credit unions, on the other hand, are structured differently. Because they are non-profit, the dividends they earn are passed along to their members. In addition, credit unions are member-owned, and members have the opportunity to vote on things like who should be elected to the board of directors.
    • Credit unions pay higher interest rates than banks. Because they’re member-owned, credit unions make higher interest rates on checking accounts, savings accounts, money market accounts and CDs a priority. In contrast, because banks are profit-driven and have a higher overhead, their bank accounts pay lower interest rates.
    • Often, the fees on credit union accounts are lower than those on bank accounts. For the same reason that they provide lower interest rates, banks often have higher fees. While banks often charge monthly fees and high overdraft charges, credit union fees are typically lower, with many offering free checking and savings accounts.
    • Loans through credit unions typically have better terms than loans from banks. If you’re a credit union member, you can typically get a lower loan rate on a car loan, mortgage loan, personal loan, or small-business loan than the customers of big banks. What’s more, credit union officers are often willing to work out loan options for people with low credit scores, while banks are likely to reject applicants who have low scores, because they calculate risk based on credit scores alone.

    Judging from the information so far, it may seem that credit unions are a no-brainer. In truth, banks have some advantages as well.

    • Banks offer better rewards programs than credit unions. Bank credit cards may offer rewards points or cashback, and opening a bank account will often score you a sign-up bonus. Credit unions don’t typically have these options.
    • Banks tend to have more locations than credit unions. Credit unions are often local or regional, while banks have physical locations across the United States. This makes it easier if you tend to move on a regular basis, and it’s more convenient for accessing funds in person or at ATMs.
    • Banks generally have better technology. This is because big banks have more resources, so they have better websites, mobile apps, advanced card technology, mobile check deposit, and mobile wallets. Credit unions are gaining on banks in this area, but for now, banks tend to have the advantage.
    • Banks are easier to join. Credit unions typically limit their membership, so that you can only join through your employer, place of worship, physical location, or membership in a specific organization. Banks, on the other hand, see you as a source of revenue and are eager to have you open an account.

    So with the benefits fairly evenly distributed, how do you choose between a bank and credit union? First, determine which options are most important to you. Then, look into specific banks and credit unions to see what they have to offer. Include online banking services in your research, and look for the organization that gives you the most of what you need. Still can’t decide? There’s nothing that says you can’t have more than one account, in more than one institution.

    Since 1941, GCS Credit Union has been serving customers in Illinois, providing loans, basic savings, and other banking services. Having started as a single location, we’ve spread throughout the area, and now support Sangamon, Logan, Macon, Marion, Jefferson, Perry, Jackson, Williamson, Jersey, Macoupin, Montgomery, Madison, Bond, Clinton, St. Clair, Monroe, Washington and Randolph counties. Dedicated to focusing on our members’ financial needs, we’re a not-for-profit, member-owned financial cooperative. If you’d like to know more about the benefits of a credit union, call (618) 797-7993, or contact us through our website.

  • How to Invest When You Have No Idea Where to Start

    investment savings

    Are you interested in investing? Whether you’re saving for retirement, college for your kids, a vacation home, or something else entirely, investing is a great way to create wealth. The only problem is that investing can be frightening if you don’t know what you’re doing. How do you gather your courage and take the plunge? Investing doesn’t have to be scary if you understand the basics and follow a few simple guidelines.

    Investing allows you to earn money passively because once you’ve set up your investment account you don’t really need to do anything to keep earning interest. What’s important for you to understand, however, is the different types of investment options that are available to you.

    • Stocks, or equity investments, are what you probably think of first when you think of investing. These are shares of publicly traded companies, and their value increases when the companies do well. Shareholders benefit when the company is earning profits, but are vulnerable when the market takes a downswing. Mutual funds and ETFs are grouped under stocks, but they’re actually pre-built pools of investments which can include bonds and securities.
    • Fixed-income investments, like bonds, have a prearranged, fixed interest rate. These investments pay at regular intervals or after a certain amount of time has elapsed. Government bonds, for instance, are loans you give the government, which it agrees to pay at maturity at a set interest rate. Because they’re not vulnerable to market shifts, bonds are typically considered
    • Money market or cash equivalent investments can be converted to cash very quickly. This category includes short term investments like certificates of deposit (CDs) and short-term debt securities like U.S. Treasury bills. There’s not much growth with this kind of asset, but there’s also not much risk.
    • Property, including real estate and other tangible assets, can grow in value over time. Some property, like cars, trucks, and SUVs, depreciates quickly, which means it loses value. Real estate, however, is fairly low-risk.

    For our purposes, let’s primarily focus on the stock market. While it’s true that stocks are vulnerable to market fluctuation, it’s also true that no investment is risk-free. Overall, the stock market is generally the most rewarding and accessible place for average investors to grow their money. As long as you don’t panic at every shift in the market, and understand that investing is about playing the long game, you’re likely to make money in the stock market.

    To get started, decide which type of investment account works for you. You might be investing for retirement, in which case a 401(k) or an IRA will allow you to make tax-deferred contributions while you build your retirement fund. Roth IRAs are a little bit different, in that they’re funded with money that’s already been taxed, so they’re tax-free when you retire. There are also investment accounts designed for a specific goal, like paying for health care costs or educational expenses. Then, too, you can open an individual investment account, which allows you to make withdrawals whenever you need to do so. Note: it’s smarter to keep your money in the account, without withdrawing any, for as long as possible.

    If your employer offers a 401(k), that’s a good place to start investing. Then you can consider creating an auxiliary investment fund, perhaps by investing in an IRA or opening a brokerage account. You can hire a full-service brokerage if you want, and let their investment advisers manage your money for you. However, it’s also possible to open a DIY brokerage account, for which you’ll do your own research and make your own trades. There are also investment apps that let you invest right from your cell phone, even if you have very little cash to invest.

    It’s important to diversify your investments, which makes mutual funds appealing. These funds invest in a set of assets make it easy to diversify your portfolio. They’re typically managed by a financial professional or firm and have traditionally required a rather substantial minimum investment. Today, however, there are some mutual fund companies that offer fairly low minimums for those just beginning to invest. Exchange-traded funds, or ETFs, are similar to mutual funds, but they’re not managed by a person. This makes them less expensive and easier to access directly, without an expensive minimum buy-in.

    The specific type of investment you choose is subjective, but there are a couple of important things to remember. First, keep putting money into your account, because regular contributions can help grow your investment more quickly. Your 401(k) will be automatically deducted from your paycheck, but if you have a brokerage account, it’s smart to set up automatic withdrawals. The other thing to remember is that the money needs to stay put once it’s in your investment account. Keep an eye on your portfolio, so you can keep track of what it’s doing and make adjustments when you need to, but for the most part, leave the money alone and let it grow.

    If you’re looking for a reliable place to keep your money, look no further than GCS Credit Union. Since 1941, GCS Credit Union has been serving customers in Illinois, providing loans, basic savings, and other banking services. Having started as a single location, we’ve spread throughout the area, and now support Sangamon, Logan, Macon, Marion, Jefferson, Perry, Jackson, Williamson, Jersey, Macoupin, Montgomery, Madison, Bond, Clinton, St. Clair, Monroe, Washington and Randolph counties. Dedicated to focusing on our members’ financial needs, we’re a not-for-profit, member-owned financial cooperative. If you’d like to know more about the benefits of a credit union, call (618) 797-7993, or contact us through our website.

     

  • Roth IRA Vs. 401K

    Roth IRA vs. 401K

    Do you have a retirement fund? You’re sure to need one, but if you have the option of choosing a Roth IRA or a 401(k), which do you choose? It’s easy for people to advise you to do both, but unless you’re already fairly well off, that may be a daunting proposition. If you have to choose one or the other, how do you decide between the two?

    • A Roth IRA is an individual retirement account. An individual can open the account and decide how investments are allocated. Roth IRAs differ from traditional IRAs and most 401(k)s in that they are funded with money that’s already been taxed. Therefore, once you reach the right time to withdraw it, the money is tax-free. Another benefit of Roth IRAs is that you can withdraw the contributions you’ve made at any time, though you will have to wait to access your earnings. Of course, it’s better to leave your retirement account alone, but it’s good to know that you have that money in case of a dire emergency.
    • 401 (k)s are retirement accounts sponsored by an employer. This means that, unlike with Roth IRAs, you can’t open a 401 (k) on your own. They also differ from a Roth IRA in that a 401(k) is tax-deferred. This means you can invest pre-tax income and not pay any taxes on that money until after you retire and withdraw your funds. Perhaps the most appealing thing about a 401(k) is that many employers match either part or all of your contribution, which essentially means your employer is giving you free money for your retirement account.

    Now that you have a basic understanding of each fund, are you any less confused about which one is right for you? Probably not, because it’s all still pretty confusing. Let’s break it down further, to see how they compare.

    • Your eligibility is a major factor. To open a Roth IRA you need taxable income, but to open a 401(k), you need to work for an employer that offers this kind of account.
    • Limits on how much you can contribute are different for Roth IRAs and 401(k)s. Both types of accounts have limits, but the limits are much higher for a 401(k).
    • Taxes vary depending on which type of account you choose. Remember, if you keep your Roth IRA account for at least five years and don’t withdraw it until you’re at least 59 ½ years old, your money will be tax-free. With a 401(k), you can expect to pay taxes when you withdraw the money.
    • Roth IRAs give you some flexibility with your investments. You can set up a Roth IRA through a brokerage firm or using software, at a physical location or online, and invest it however you wish. You can make your own decisions or consult with a financial advisor, or you can set up a robo-advisor to manage your investments for you. With a 401(k) there’s less flexibility. While you’ll be able to change how much you invest and your investment allocations at any time, your employer will limit your options as far as where the money is invested.
    • Withdrawing money from a retirement account can be complicated. You’re supposed to leave your money alone when it’s in a retirement account, but typically, you’re allowed to withdraw from both types of account without penalty if you face a hardship like a permanent disability or extremely high medical bills. However, as mentioned previously, you can withdraw the money you’ve contributed to a Roth IRA, and you can even withdraw your earnings early in some circumstances without penalty. On the other hand, early withdrawals from a 401(k) typically come with income taxes and an additional ten percent penalty.
    • Both 401(k) accounts and Roth IRAs have required minimum disbursements (RMDs). However, with a Roth IRA, you don’t necessarily have to take money out of your account. When you die, however, your beneficiaries will be subject to the RMD. With a 401(k), the IRA typically requires you to take disbursements at age 70 ½ unless you’re still working.

    So the question remains, which type of retirement account is right for you? If your employer offers a 401(k) and matches funds, then that may be your best bet, because it involves free money. Once you’ve maxed out what your employer will match, if you have excess retirement funds, you might want to put them in a Roth IRA. It’s good to know you’ll have money that won’t be taxed when you’re living on a retiree’s fixed income. If you don’t have access to a 401(k), it’s obviously in your best interest to have a Roth IRA. The important thing is to make sure you start putting aside retirement money early and put aside as much as possible.

    Since 1941, GCS Credit Union has been serving customers in Illinois, providing loans, basic savings, and other banking services. Having started as a single location, we’ve spread throughout the area, and now support Sangamon, Logan, Macon, Marion, Jefferson, Perry, Jackson, Williamson, Jersey, Macoupin, Montgomery, Madison, Bond, Clinton, St. Clair, Monroe, Washington and Randolph counties. Dedicated to focusing on our members’ financial needs, we’re a not-for-profit, member-owned financial cooperative. If you’d like to know more about the benefits of a credit union, call (618) 797-7993, or contact us through our website.

  • Budgeting For Back To School

     

    back to school budget Back-to-school season is upon us again, even though it seems like the summer barely got off the ground! Unfortunately, with the back-to-school season comes the dreaded back-to-school shopping, which most parents find stressful because it’s so expensive. According to the National Retail Federation, the average U.S. household will spend almost $700 on getting ready for the school year, and for parents of college kids that number is even higher: it’s a whopping $976.78. How do you get your kids back to school without breaking the bank? It takes a little bit of planning, but you can create a budget for back-to-school and maybe even save yourself some money.

    • First, determine what you need. Take the list provided by the school district or teacher, and then look around your house. You probably have a pretty healthy inventory of school supplies at home, so if you organize those, you may be able to reduce your shopping list. While you’re at it, review your child’s wardrobe and make note of additional clothing he or she will need to start the school year. It’s probably not necessary to buy a lot of new clothes, but it’s nice to have a “first-day” outfit, and there are some essentials that may need replacing. Consider less tangible back-to-school items as well, like a new haircut or a physical. Once you’ve compiled your list, estimate what each item on the list will cost, so that you can have a good idea of your projected expenditure.
    • Set your spending limit. It’s important to do your back-to-school shopping with a spending limit firmly in place, or impulse purchases may derail your budget. Be fiscally conservative, estimating the cost of items at their regular price and not the current sale prices, so that you’ll have a bit of leeway when you actually go to the store. If the projected expenditure exceeds your limit, take a hard look at the list and see if there’s anything that can wait until later.
    • Try to find some extra cash to pad the budget. You might be able to work a few extra hours, or find a temporary side job, just to give yourself some breathing room. On the other hand, if your children are preteens or teenagers, you might talk to them about contributing toward their own expenses. Especially if they want some trendy items that are a bit pricey, they should be expected to help pay for them. This is helpful for you, but it’s actually good for your kids as well, because it helps them learn about financial responsibility.
    • If you’ve got a few paychecks between now and the first day of school, divide the expenses between them. Set aside money from each paycheck, and it won’t feel like as much of an expense as it would if it all came out of one check. Look for different ways to set aside money, perhaps challenging yourself to set aside all of one denomination of cash, or round up your purchases and put the extra into your back-to-school fund. You might even put yourself on a discretionary spending freeze, in order to save up for your school shopping.
    • Shop wisely. Before you head out for school shopping, study several ads, and determine which store has the best deals. You might even consider hitting more than one shop, in order to cut down on your spending. Look for ways to save even more, by shopping consignment stores, taking advantage of your state’s tax holiday, using coupons, and buying generic. Allow your child a couple of splurge items, but save money wherever you can.

    Need to set up a savings account so that you have a place to safely stash your back-to-school cash? Look no further than GCS Credit Union. Since 1941, GCS Credit Union has been serving customers in Illinois, providing loans, basic savings, and other banking services. Having started as a single location, we’ve spread throughout the area, and now support Sangamon, Logan, Macon, Marion, Jefferson, Perry, Jackson, Williamson, Jersey, Macoupin, Montgomery, Madison, Bond, Clinton, St. Clair, Monroe, Washington and Randolph counties. Dedicated to focusing on our members’ financial needs, we’re a not-for-profit, member-owned financial cooperative. If you’d like to know more about the benefits of a credit union, call (618) 797-7993, or contact us through our website.