RFCU Riegelwood Federal Credit Union Financially Fit


You did it! You survived the holidays. If you’re like many people, you spent a little more than you planned and now you need to get back on track. Follow these seven steps to help get your finances in shape for 2016

1. Eliminate old records

Just because it’s the digital age doesn’t mean we’ve eliminated paper. Sorting through piles of documents now will save you stress when you do your taxes. The Internal Revenue Service recommends that you keep records relating to income, tax-deductible expenses or investment losses for as long as seven years in case you’re audited. If you owe additional taxes after you’ve filed a return, related records should be kept for three years.


2. Track and budget spending

Programs such as Mint and Quicken let you link your bank and credit accounts and categorize purchases. These apps can make it easier to know how much you put toward key areas such as groceries and utilities – and to look for places to trim the fat. Make sure your spending habits are aligned with your values and priorities. Because financial worries can lead to health problems, your physical well-being may improve along with your financial picture.


3. Save for emergencies

If you don’t already have a cash cushion to see you through an emergency, this should be a top priority. When faced with a financial emergency, 36% of Americans meet the challenge by whipping out the plastic, according to recent research. But credit cards shouldn’t replace your emergency fund. If possible, you should save enough to help you survive a job loss, a medical emergency or a large repair to your home or car. Many experts recommend having enough savings to cover six months of living expenses. That’s can be a daunting number, so start with a goal of saving one month’s expenses and go from there. If you don’t already have a savings account, financial institutions such as Riegelwood Federal Credit Union offer a lot of options.


4. Reduce debt

Paying off debt is a win-win. In many cases, your monthly expenses will go down if you reduce required minimum debt payments by whittling down what you owe, and that makes it easier to save for emergencies. This can help you avoid going deeper into debt, too. Pay off high-interest accounts first, leaving things such as subsidized student loans or fixed-rate mortgages for last. If you’re only paying the minimum on credit card balances each month, use an online calculator to see how much more quickly you’ll be debt-free if you pay more. Once you have a basic emergency fund saved up, consider using some monthly savings to reduce your debt. Transferring balances onto credit cards offering no interest for an initial period can also help reduce costs. The interest holiday lets you cut down the balance more quickly.


5. Rebalance investments

U.S. stocks soared last year, which may be good news for invested retirement account assets. But don’t forget to review your allocations regularly. As some sectors of the market outperform others, it’s easy for your investments to get out of whack. For example, perhaps you’d like to have 20% of your 401(k) retirement fund from work invested in emerging-markets stocks. If those shares or funds do relatively well, you may wind up with more of your account invested in that segment than you had planned, exposing you to more risk than you want to take. Checking your holdings regularly can help you spot and correct such imbalances.


6. Lower your costs of financial services by providing you with free and low-cost programs

Riegelwood Federal Credit Union is funded and supported by its members.  As a non-profit, the savings get passed along to you.  The sole purpose for a credit union’s existence means that it should have your best interests at heart and not the bottom line of the institution. Big banks, on the other hand, are there to turn a profit and will seemingly do whatever it takes to meet their numbers.  How about a free consultation with a customer service representative from Riegelwood Federal Credit Union to see how we can lower your costs of financial services?

7. Reduce the amount of interest that you are paying on loans and credit cards

Refinancing higher-rate loans that you have at other lenders can put you on the fast-track to financial fitness. According to the National Credit Union Association, as of June 27, 2015, the average interest rate on a 48-month new-car loan was 2.64 percent at the credit union, compared with 4.78 percent at major banks.  The NCUA also indicated that the average interest rate for credit cards was 11.55 percent for credit unions and 12.89 for banks. So there isn’t much of a difference in terms of APR, but the plastic from credit unions are usually less costly in terms of fees.  Click here for current interest rates, or to apply online.

Make this the year you get your financial house in shape. You’ll enjoy the added security of lower debt, higher savings and more orderly finances.

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