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A Shift In Savings Strategies

July 29, 2020

A woman reviews her finances from her home.Forming New Spending and Saving Habits

COVID-19 has caused shifts in many of the things we do that make up our daily lives. One major shift has been with money management. 

What have you noticed about your spending habits in the past few months? With stores, restaurants, venues, attractions and so many other places closed during lockdown and beyond, the options to spend money outside of our home, other than online shopping, or for essentials, were few and far between. In that time at home, away from our usual daily stops, we were given the opportunity to reflect upon our past spending habits.

We’ve been able to look at that daily cup of coffee we used to get on the way to work, the places we’d go to on our lunch breaks, and meeting friends out on the weekends with a different view. All of a sudden that money wasn’t being spent. It was being, more or less, saved. People are now spending less, saving more, and planning ahead. 

Statistics show that over the past 5 months, including both during quarantine and post quarantine, entertainment, social activities, traveling (even gasoline) and impulse buying are all down. That’s just the tip of the iceberg. According to CUNA Mutual Group’s Trends Report, indicating COVID-19 impacts, personal spending fell 13.6% while savings balances in credit unions rose 4.7% in April. Consumers, it seems, have been sticking to purchasing essentials only- and only when needed.

This shift in spending, along with stimulus checks and relief loans, have helped to ease the financial burden of furlough and layoffs, enabling many of us to get by. Even for those that may have been fortunate enough to continue working in an essential industry, we still see those consumers driving less, eating out less, traveling less, shopping less, etc. This has helped increase the balance of their savings. 

If you have been able to create some pockets of extra funds, now is the perfect time to consider looking at your budget and deciding more strategically on what it is you really need. It is a time to scrutinize your own past habits and channel those funds to what is really important. Use our Budget Calculator to find out your net monthly and yearly income.

Paying owed bills is certainly a great start. Paying off loans is yet another. Once loan payments are more manageable, or possibly gone quicker than you were expecting, you can take the money you were using to make those payments and use it for something else- like building up your savings again. 

If this experience has taught us anything about our spending habits, it’s to consider planning ahead with serious, realistic goals of saving. 

To help you get going on starting a new savings strategy, try a Term Share Certificate or Money Market Account. These are great places to save that can earn higher dividends.

Can you refinance and consolidate your debt? Rates are very low right now on car loansmortgageshome equities and more.

Use this helpful Savings Goal Calculator to find out how long it will take you to reach your savings goal.


Save Smarter

We are here to help you plan for the future with our Savings Account Options. If you have any questions, give us a call at 315-735-8571. If you are ready to get started click below.

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Making Smart Choices: Experienced Investors

May 9, 2019

Experienced Investors review their finances.New choices for the future

There are many reasons an experienced investor might seek out investing consultation. If you already have investing experience but aren’t happy with your current situation or results, have questions you aren’t getting satisfactory answers to, want better attention and service, or possibly have additional funds you want to invest, we are here to help.

A big part of continued investing is evaluating your current situation, and making adjustments based on market changes and any changes to your financial life. As a seasoned investor, you can always learn more, improve your investments, and consider new options. We’ll discuss your current level of investment and risk, your goals, and any changes you’d like to make to your portfolio. First Source and Choice Investments invite you to take advantage of our superior experience and Member service.

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Stock Market / Stock Funds, Securities, and Advisory Services are products of Choice Investments LLC and offered through Cadaret, Grant & Co., Inc., a Registered Investment Advisor and Member FINRA/SIPC. Choice Investments LLC and Cadaret, Grant & Co., Inc. are separate entities. You can check the background of these financial professionals through FINRA’s BrokerCheck. First Source Federal Credit Union is not a registered broker dealer and is not affiliated with Choice Investments LLC. 

NOT FEDERALLY INSURED    •    MAY LOSE VALUE    •    NO CREDIT UNION OBLIGATIONS    •    NO CREDIT UNION GUARANTEE 

Funds invested through Choice Investments are not federally insured, may lose value, and are of no way obligations of First Source FCU. Involves investment risk and may involve loss of principal. First Source has no guarantees of securities and annuities products offered through Cadaret, Grant & Co., Inc. Licensed to offer securities in the states of AZ, CO,CT, FL, IA, MA, MD, ME, MI, NC, NY, PA, SC, & VT.

Starting Out: New Investors

May 9, 2019

Begin your journey with smart choices

If you’re young and just getting settled in your career and adult financial life, you may feel you’re finally earning enough to consider investing some of your money. Our first piece of advice is to make automatic deposits from your paycheck into an employer-sponsored 401K or other retirement plan (if your employer makes one available). If your employer matches contributions, it’s an even more attractive investment choice. You'll want to take full advantage of this wonderful investing opportunity. Once you’ve done so and are ready to consider other investments, we will be happy to guide you with some prudent recommendations about your savings. 


Investing Your Savings

Investing always starts with saving. Since there are inherent risks in stock market investing, and greater gains and losses are possible, we encourage beginning investors to set aside enough for their immediate and emergency needs before putting money into the stock market.

When we meet with you, we’ll start with a thorough conversation about your financial standing, well-being, and current needs. We’ll look at your needs for the future, as well as your risk tolerance, and create a unique plan just for you. Part of that plan is working with you to decide how much you can comfortably invest initially, and each month. Investing is a dynamic process that you should adapt to changes in your financial life, so you can increase, decrease, or stop the amount you invest at any time without penalty. We can show you projections of how those changes could affect your future funds.

When investing, think diversification over the longer term. It is recommended to give yourself a minimum of 3-5 years to see how your investments do. Since funds do fluctuate over the short term, longer is better.

Let us and our friends at Choice Investments help put investing principles to work for you, and make a smart start to your investing.

Learn More


Stock Market / Stock Funds, Securities, and Advisory Services are products of Choice Investments LLC and offered through Cadaret, Grant & Co., Inc., a Registered Investment Advisor and Member FINRA/SIPC. Choice Investments LLC and Cadaret, Grant & Co., Inc. are separate entities. You can check the background of these financial professionals through FINRA’s BrokerCheck. First Source Federal Credit Union is not a registered broker dealer and is not affiliated with Choice Investments LLC. 

NOT FEDERALLY INSURED    •    MAY LOSE VALUE    •    NO CREDIT UNION OBLIGATIONS    •    NO CREDIT UNION GUARANTEE 

Funds invested through Choice Investments are not federally insured, may lose value, and are of no way obligations of First Source FCU. Involves investment risk and may involve loss of principal. First Source has no guarantees of securities and annuities products offered through Cadaret, Grant & Co., Inc. Licensed to offer securities in the states of AZ, CO,CT, FL, IA, MA, MD, ME, MI, NC, NY, PA, SC, & VT.

Posted in: new investors

It Pays to Save Early

May 2, 2019

A great saving strategy for the long term can be summed up as, “Save early and often.” Why do we hear the advice so often that it pays to start saving early? The key: compounding. Dividend or interest compounding is simply the idea that, as our savings earn interest or dividends, those earnings are added to our total, and the next dividend is calculated on our new total. As a simple example, say you invested $100 at 2.5% interest. When your interest is earned, you’ll add $2.50 to your $100, for a new total of $102.50. Then your next 2.5% interest is on $102.50, which is $2.56, added to $102.50 is now just over $105, and so on. If your account compounds monthly, the total is updated every month, and you earn more as you go. 

To add to this strategy, we recommend in addition to your initial savings, that you add to your savings every month. Once again, the earlier you start the more months you have to save, and the more your savings will grow. As your life and career progress, the more you might earn enabling you to save more every month. All these factors can add up over time, with positive results. 

Our graphical example shows that if you start at age 20, with even with a small initial deposit and relatively small monthly contributions, a smaller investment can yield you more over time than if you waited until you were 40, with a much larger deposit and twice the monthly contributions. 


When Should You Start?

Everyone’s life is different, but the rule is to save as much as you can, as soon as you can, and keep up with your savings. Over time, compounding will reward you. Learn more about our Savings Account Options, and Save Smarter. 

Get Started
 

Dollars and Sense For Kids

April 12, 2019

Young girl making a purchase and learning the importance of moneyMoney experiences to teach your kids

Our friends at Balance Financial Fitness provide some helpful opportunities for teaching your kids financial lessons.

If you’ve been meaning to talk to your kids about money, April is the perfect time to start. In addition to Credit Union Youth Month, April 12th marks National Teach Children to Save Day.

This special day was created by the American Bankers Association to promote financial literacy among children. In the spirit of the occasion, here are three real-world experiences that parents can use to introduce kids to personal finance.


Have Your Children Make Purchases

Buying something is maybe the most direct way to understand how money works. That makes it a great opportunity for your children. Try including them the next time you make a purchase. 

Whether it’s at the supermarket or movie theater, give your kids cash to hand to the cashier, and then have them collect and count the change. (Note: This works best for cash purchases. Using a card may be a little too abstract.)

Lesson: Money is used in exchange for goods and services.


Open a Savings Account With Them

There’s no better way to explain saving money to a child than to open an account in their name for this specific purpose. It might be tempting to save time and do it online, but make it tangible by taking your child to your financial institution in person. Show them the physical building, point out the ATM, and have them meet the people behind the counter. Reinforce the roles that financial institutions play in managing your money. After the account is open, make a plan together for making regular contributions to it. 

Lesson: While piggy banks are cute, savings accounts are the best option for stashing your cash.


Inspire Them to Start a Business

There’s a reason why lemonade stands have stood the test of time. These micro businesses represent many children’s first exposure to earning money. If lemonade’s not their thing, encourage them to offer pet sitting or yard work to your neighbors. 

Lesson: Money is earned through work.

Source: Balance Financial Fitness March 2019


If you’d like help opening a savings account for your kids, just ask.


Learn more about the benefits of savings accounts for kids on our Youth Accounts page.

About Youth Accounts

 

Posted in: children, club, kids, money, saving

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