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.
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.
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.
Some people mistakenly believe that you need to earn six figures, win the lottery, or strike it rich on Wall Street to create a comfortable savings account. On the contrary, anyone can save money if they follow the right tips. Here are some small changes you can make right now that will yield big results over time.
- Don’t delay: Implement these tips today. If you wait until you make more money, you’ll have to contend with the higher spending that comes with higher earnings. Start now to begin seeing the benefits sooner rather than later.
- Start small: Even tucking away 5 to 10 percent of your paycheck can help you build a “rainy day fund.” Your first goal should be to save $1,000. Once you reach that milestone, aim to save the amount you earn in one month. Again, once you reach that point, keep going! The recommended amount of savings for a rainy day is three to six months’ worth of expenses.
- Write out your budget: If you find that you’re spending more than you earn some months, think of ways to cut back. Cook instead of eating out, cancel one of your subscriptions, and stick to your shopping list to avoid impulse buys.
- Direct deposit some of your income into a savings account: Many employers offer the option to split your paycheck into different accounts. To avoid the temptation to spend instead of save, allot a certain portion—perhaps as much as 20 percent—to go straight into a savings account.
- Create an account for big-ticket purchases: Saving up for a new laptop, vacation, or down payment on a car? Create a savings account to keep these funds separate from your day-to-day spending money.
- Take advantage of employer benefits: If you have the opportunity to contribute to a 401(K), Health Savings Account (HSA), or something similar through your employer, take advantage of it! If your employer matches your contributions, your savings will grow even faster.
- Put spare change in a jar: Any time you pay with cash, put the change you receive in a jar. After several months of collecting, you may find you have enough money for a nice date night, holiday shopping, or even a weekend getaway.
- Convert loan payments into an investment account: Once you make the final payment on your car or student loan, keep writing the check, but put it in an investment or savings account instead. Choose one with a high APY, and your money will grow faster than if you simply left it in your checking account.
GCS Credit Union offers multiple personal savings account options to make your dreams of saving big come true. Ready to learn more about which account might be right for you? If so, please schedule an appointment with one of our team members today by calling us at (618) 797-7993.
If you don’t teach your children how to be financially responsible, who will? Here are some pointers for sharing money management tips with your kids at any age.
Teaching Young Children About Money
- Consider giving preschoolers or kindergarteners a small allowance. Keep the money in a small glass jar so they can watch the savings grow.
- Let your children pick out and pay for a new toy with money from their allowance jar. Explain that if they earn $1 a week, they can afford a $5 toy in five weeks. Once enough money has accumulated, empty it, take it to the store together, and have your child hand the cash to the clerk. This practical experience is much more memorable than a lecture.
Helping Preteens Manage Money
- Give elementary and middle schoolers a “commission” where every chore they perform earns them a predetermined amount of money.
- Teach your children the concept of “opportunity cost.” In other words, if they spend their money on a video game, they won’t have any left for new shoes.
- Discourage impulse buys. If your preteen wants a new $20 dress, explain that she can use her well-earned commission money, but she should think it over for a day. If she still wants it just as badly tomorrow, you can return to the store together, and she can buy it then.
Showing Teens How to Spend & Save Wisely
- Open a student checking and savings account for teens. When you remain tied to the account as the responsible parent or guardian, you can continue monitoring your child’s spending and saving habits.
- Encourage teens to save a portion of their commissions (or money from a summer job) to start saving for college.
- Help your teen sign up for a credit card. Teach them that the best way to manage their money is never to spend more than they have in their bank account. While building credit is important, you may want to start with a debit card to get your child accustomed to swiping plastic without the risk of overspending.
- Talk about how you plan to pay for college. To keep costs down, encourage your teen to apply for a community college or trade school, seek scholarships and grants, and work part-time while going to school. Loans should only be considered if you have exhausted all other options.
- Show teens the basics of creating a budget. Even if they don’t have as many bills as an adult, you can help them balance their income with their expenses, such as car payments, car insurance, gas money, cell phone bills, and clothes.
If you’re ready to help your child open an account or credit card at GCS Credit Union, schedule an appointment with a team member to get started today. We’ll help you and your child find financial success through our services. For more information, please call us at (618) 797-7993 today.
Saving money is a subject that is deceptively complicated. Of course, everyone knows that it’s important to save money. But how much money should you save? And how can you save when your budget is tight? It’s important to have a reasonable plan. If you have trouble designing a budget that allows for savings, consider talking to a financial planner at your credit union branch.
Cutting Your Transportation Costs
The transportation category in your budget likely includes allowances for auto insurance and fuel. One way to reduce your costs is by shopping around for less expensive car insurance. Talk to an independent insurance agent about this. You can also lower your current premiums by taking an approved defensive driving course. You’ll need to submit proof of completion to your insurance company. In addition, work on maximizing your gas mileage to reduce the number of times you fill up the tank. Ease off on the gas well ahead of stop signs and stoplights, accelerate slowly, and stick to the speed limit.
Planning Your Meals
Meal planning is a smart activity that can simultaneously save you money and reduce your stress. Make a weekly meal plan the day before you typically go to the grocery store. Write a shopping list based on that meal plan, and don’t give into the temptation to make impulse purchases. You can get more mileage out of your ingredients by using leftovers in the next night’s meals. For instance, if you have a rotisserie chicken on Monday, you can make chicken enchiladas with the leftovers on Tuesday. Reducing food waste is an effective way to reduce your grocery budget.
Automating Your Bills
You can set up automated bill pay through your online checking account at the credit union. Many companies offer fee reductions if you set up automated payments. These include insurance companies and phone service providers. Remember to transfer the money you save to your savings account!
GCS Credit Union can help you save more money and maximize your savings with free checking accounts, cash back programs, and savings accounts with competitive rates. If you aren’t yet a member, call our credit union in O’Fallon at (618) 797-7993 for help getting started.
When couples combine their finances, it can cause some challenges as they adapt to each other’s financial management habits. By working together toward a common goal, they can make the most efficient use of their credit union accounts and services.
Watch this video to learn how couples can have better communication about their finances. The key is to discuss things as soon as possible in the relationship and to continue to keep the door open to communication about checking accounts, auto loans, and more.
At GCS Credit Union, we have all of the financial tools you need to reach your joint financial goals, from our Visa Rewards credit card to our home mortgage loans. For more information about our credit union in O’Fallon, call (618) 797-7993.
When you’re shopping around for an auto loan, you want to be sure that you choose the best lender for your needs. It’s easy to become overwhelmed as you search for a bank, private lender, or credit union in your area that offers competitive interest rates and auto loan terms. Here are some tips for getting a great deal on your auto loan.
Be Aware of Your Credit Rating
Your credit report is one of the most important pieces of information that lenders use to determine if you qualify for an auto loan. Even if you have a large sum of money in your checking account or savings account, your lender will want to know your credit history and credit score. Before applying for auto loans, check your credit report and be familiar with your credit score.
Look for the Best Auto Loan Interest Rate
Rather than financing your new car at your auto dealership, you should shop around for the best auto loan interest rate that you can get. Credit unions and community banks often offer the lowest interest rates on auto loans. You can ask different lenders what their typical rates and fees are for someone with your credit history and credit score. They should at least be able to give you a fair estimate.
Choose a Short-Term Auto Loan
A long-term auto loan means smaller monthly payments, but you’re also going to end up paying far more money in interest and fees over time. If you can, you should try to limit the length of your auto loan to no more than 48 months. You’ll have a higher monthly payment, but you’ll get out of debt much faster and you’ll pay less in the long term.
If you’re looking for the best rates on auto loans in O’Fallon , come see us at GCS Credit Union. We offer competitive rates on new and used vehicles, and customizable auto loan terms. To talk to one of our friendly and experienced auto loan experts, call us today at (618) 797-7993.
Before you even begin looking for a home, you should investigate your home mortgage loan options. If you have a well-paying job, good credit, and a decent amount of money in your checking account, it shouldn’t be difficult for you to secure a home mortgage loan. If you’ve had some financial difficulties in the past ten years, you may need to begin looking for a loan a year in advance of house hunting.
Your lender will pull your credit report to determine whether you qualify for a loan, and at what interest rate. If you check your credit report ahead of time for potential problems, you can fix them before visiting a home mortgage loan officer at your credit union. Credit unions often have the most competitive interest rates and the lowest fees for home mortgage loans.
At GCS Credit union, we offer the most competitive rates on home mortgage loans in O’Fallon . We will help you customize your financing, secure the best rate possible, and we’ll provide educational resources to ensure you understand the terms of your loan. To learn more about our home mortgage loan services, call us today at (618) 797-7993.
The earlier you learn how to make smart financial decisions and be responsible with your money, the better off your financial future may be as you grow into an adult. You can help your children form the right habits by helping them open up a checking account and teaching them how to save. Here is a look at how to help students build good financial habits.
Many young adults have their sights on a life of luxury, but it is important that they learn about the stepping-stones that lead the way there. It is wise to help your student set up a basic checking account early on. Many modern banks and credit unions offer mobile or online banking, which can help students keep track of their funds. Teach your student to use an ATM, balance a checkbook, and maybe even open a credit card.
Would you like to help students build good financial habits? Have your son or daughter open a checking account at GCS Credit Union in O’Fallon. We offer the convenience of online checking accounts as well as online bill paying. You can learn much more about our services by visiting our website or calling us at (618) 797-7993.