financial education

Taking Steps Towards Financial Improvement For The New Year

The start of a New Year is a wonderful time to make important changes in your financial life. And you don’t have to go it alone. Here are some tips on financial improvements you can make starting now. And know that Freedom Federal Credit Union will be here with you every step of the way.

We’ve broken down some of the most popular financial resolutions into concrete steps and outlined the ways Freedom can help you implement each change into your life.

Build a Budget

Why it’s crucial: Creating and sticking to a monthly budget will force you to be accountable for your spending while giving you a clear idea of your financial reality.

In 3 steps:

  • Track your spending over three months.
  • Using a spreadsheet, or a personal finance app like Mint, divide your expenses into categories, such as mortgage, auto, groceries, entertainment, etc. Use an average of the last three months to set a reasonable spending limit for each category.
  • Going forward, track your spending and be sure to stick to your preset limits for each category.

If your budget reveals your monthly income doesn’t cover your expenses, or you find you’re overspending in any area, look for ways to cut back.

How Freedom can help: Stop in at any time to speak to a Financial Service Representative for help with managing your money. We also offer our members great online budgeting software and financial educations tools, absolutely free.

Get Out of Debt

Why it’s crucial: Carrying long-term debt can often mean paying extremely high amounts of interest for years on end. It can also devastate your credit score.

In 3 steps:

  • Make a complete list of all your outstanding debts, in order, from smallest balance to largest.
  • Review your monthly budget and look for ways to cut back. Alternatively, you can look for ways to increase your monthly income.
  • Work on paying off your smallest debt with the money you trimmed from your budget. Once you’ve paid off that debt, move on to the second-smallest. Repeat until you’re completely debt-free.

How Freedom can help: If you’re carrying multiple high-interest rate debts, consider taking out a debt consolidation loan to simply things. This way, you’ll only have one low-interest loan payment each month. It may even reduce the total amount you’ll pay each month.

Start (or Increase) Savings

Why it’s crucial: According to the Federal Reserve, 40% of Americans can’t cover a $400 expense. Living without a safety net means a relatively small, unexpected expense can throw off your finances and force you into debt. Aside for paying for emergencies, savings can help fund your long-term plans, goals and dreams.

In 3 steps:

  • Review your monthly budget to identify your biggest spending traps. Then, find ways to cut back, such as shopping with cash only, cancelling subscriptions you never use or initiating a “financial fast” one weekend each month, in which you spend no money.
  • Use all money saved to open an emergency fund and a long-term savings fund at Freedom Federal Credit Union. It’s best to focus primarily on your emergency fund until you have 3-6 months’ worth of living expenses stashed away.
  • Set up an automatic monthly transfer from your Freedom Checking account to your Freedom Savings account(s) so you can focus on your savings without thinking about it.

How Freedom can help: Freedom offers several options for Savings and Checking Accounts that provide excellent opportunities for growth. You can open an account today with an initial deposit as low as $1.00.

Maximize Your Retirement Contributions

Why it’s crucial: Many workplaces offer to match 401(k) contributions. These contributions aren’t taxed and they come off your paycheck, which is taxed, making participation an excellent decision.

In 3 steps:

  • Speak to an HR representative at your workplace to find out about your current 401(k) contributions.
  • Identify how to best maximize your 401(k) contributions going forward.
  • If you have any other retirement funds, such as an IRA or a Roth IRA, also review your contributions to determine if you are making the maximum funding allowed.

How Freedom FCU can help: Our Financial Service Representatives will be happy to help you determine the best course of action for planning your retirement. Let Freedom help you meet your financial goals this year.

On behalf of everyone at Freedom, we wish you a very Joyous and Happy New Year.

 

About Freedom Federal Credit Union

Freedom serves and is open to anyone who lives, works, worships, attends school, volunteers, or has family in Harford County, MD. As a credit union, we are committed to putting you first, not shareholders, and helping you achieve your financial goals. Learn more at freedomfcu.org or call us 800-440-4120 to see how we can help.

Freedom CEO Appears on WMAR-TV to Share the Difference Between Banks and Credit Unions with Midday Maryland

 

What is the difference between banks and credit unions? This is a question that comes up often around credit unions. President and CEO of Freedom Federal Credit Union, Mike MacPherson, joined Elsa M. on a recent Midday Maryland segment, produced by WMAR-TV, to explain not just the difference, but the advantage to becoming a credit union member.

In the interview, MacPherson explains the member-owned structure of credit unions and how these not-for-profit organizations deliver the same services as banks with fewer fees and better rates, combined with superior customer service, and a focus on supporting the communities they serve. The members of the credit union are also the owners, not outside shareholders aiming to make a profit. Because of the not-for-profit structure of credit unions, “after we pay the bills, our objective is to put our money back into the community, into the credit union, and to the members”, MacPherson states during the five-minute interview.

MacPherson touches on the history of credit unions in the United States, including their role in helping to maintain financial stability during the 2008 financial crisis. The segment covers the structure of credit unions, how consumers are eligible, and the focus on being the “heart of the community”. “[For Freedom], we believe in giving back…we have a focus on volunteerism, on philanthropy, doing more for our members, and making the community better”, states MacPherson.

How does someone become a member of a credit union? Every credit union has eligibility requirements. For example, Freedom is community chartered, so if you live, work, worship, volunteer or have family in Harford County, Maryland, you are eligible to join. According to MacPherson, all it takes is one dollar, placed in your own savings account, to become a member and have full access to all the services and benefits of credit union membership.

To learn more, watch the full segment above.