• 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.