If you can answer the following question you get a “high five” from all of us: Q: How do credit unions differs from banks, especially big, mega banks? Here’s help: invest 3 minutes and 3 seconds watching Lesson 11, “Why a Credit Union is Not a Bank,” in our series of FREE lessons in personal finance. We call it FI-Q – stands for Financial IQ.
Think I’m nuts giving you help? I’m not nuts. I’m – what’s the $2 word – incenting – you to watch the FI-Q videos. I’ll be happy if you just watch Lesson 11. I’ll be ecstatic if you watch more. And you’ll be able to catch me in the Hubble telescope if you watch them all.
Look, we invest time and money in these video lessons and we want people – our members and non-members, too – to get smarter about their personal finances, saving money and protecting their identity. Believe me, there’s good stuff here.
Here’s the truth. Controlling spending isn’t hard. It takes courage and commitment. And some help, if and when you need it. That’s where we come in. Say the word and the personal finance professionals here at Creighton Federal https://www.creightonfederal.org/ will actually sit down with you, analyze your spending and work with you to get you where you need to be.
The process might not be entirely painless. But any pain will be temporary. The peace of mind and confidence you’ll gain will be worth its weight in . . . you fill in the blank.
That’s what they do, you know. When, say, you go to rent an apartment or buy a house. Or buy a sofa for your new apartment or house. Or buy a car to drive to work so you can pay for the things you buy.
It doesn’t matter what FICO stands for. What does matter is what it means when you go to buy those things. It’s your credit score. https://en.wikipedia.org/wiki/FICO And, unless you’re paying with cash, your credit score determines whether or not you get whatever it is you’re buying.
We know credit scores because we understand credit. We also know how to help our members get good credit and keep it. You might want to give us a shout to see what we can do for you. The service is free and you might be pleasantly surprised. https://www.creightonfederal.org/
You’re closing out your Creighton Federal account because you’re graduating and moving out of town? You either have a fever above 104 or some foreign government has jammed your in-box with big bank propaganda.
B. You’re just out of school and moving to a place where you have no credit. But you do with Creighton Federal. We’ve known you for years.
C. With online banking it doesn’t matter if your financial institution is five miles away or 500 miles away.
D. Get pre-approved at Creighton Federal for a car loan or down payment. You’ll know you’ll have the money when you need it, And, besides, Creighton Federal’s loan rates are probably lower than you’ll be able to swing in your new location.
Closing you account because you’re graduating and moving? What are you, nuts?
Lemme’ ask you this. How much less could you be spending
each month on your mortgage payment? Don’t know, do you. All you have to do is
ask and we’ll tell you. No charge. No obligation.
Right now mortgage refi rates ‒
interest rates on mortgage refinancing ‒
are crazy low. And if you have a mortgage that’s more than about two years old
you’re needlessly handing over to your lender too much of your hard earned
cash. Creighton Federal can probably save you a bucket load.
For you it’s a win – win. Win: we drop your mortgage payment
each month. Win: If we can’t you rest your eyelids each night knowing you’ve
got a great rate on your mortgage.
The U.S. uses a progressive
income tax system. That means higher income tax rates generally apply to people
with higher incomes. Keep in mind we’re talking about taxable income (income
after allowed deductions) not gross income (the amount you get paid). Go online
to find the new (as of Jan. 2019) brackets for married and single filers.
“Being ‘in’ a tax bracket,” notes NerdWallet, “doesn’t mean you pay that federal income tax rate on everything you make.” Here are a couple of examples:
A single (unmarried) federal income tax filer with $32,000 in taxable income. That person is in the 12 percent tax bracket but wouldn’t actually pay 12 percent of the full $32,000. Instead, s/he will pay 10 percent on the first $9,525 and 12 percent on the rest.
An individual with $50,000 in taxable income will pay 10 percent on the first $9,525, 12 percent on the chunk of income between $9,526 and $38,700 and 22 percent on the rest.
There are seven tax brackets, from 10 percent to 37 percent of
taxable income. So, why is this important? Because it’s
your money. Knowing this stuff will make you smarter about your money and where
it goes. And, while it won’t take away all the pain, knowing things like your
income tax bracket will make writing the check to Uncle Sam on April 15th
a little less painful. Not!
Ever looked right at something you needed and not seen it? Be honest. We’ve all done it. Sometimes we don’t see the very thing that will help us in a particular situation. It’s kinda’ like that with credit unions, including ours.
A friend of my wife’s was lamenting the fact she’d been turned down for a debt consolidation loan at three banks because her credit score was “iffy.” Now, she knows my wife is married to the president of a credit union. We’ve even talked banking stuff with her. Did she apply for a loan at Creighton Federal? Yes, but only after my wife reminded her who she’s married to.
Long story short, she got her loan. We upped her credit score by replacing two credit cards with our lower interest rate card and consolidating a bunch of old debt. It’s easy when you know where to look. We do. So why didn’t she come to us in the first place? “You’re not a bank. I didn’t think about you,” she said. I suggested she watch FI-Q Lesson 11 in our video education series.
Chantal saves $1 a day for 10 years. Lorenzo saves a $1 a day for 20 years.
Q: How does Chantal end up with more money than Lorenzo? A: The time value of money.
The Time Value of Money is what all investment programs are
based on. In short, it says the length of time you let interest work its magic
on your investment is more important than the amount of your investment because
of something called compounding.
In our example saver Chantal invested $1 a day for 10 years
starting when she was 20 and let compound interest (I’ll explain in another
post) build her treasure trove for the next 40 years. Saver Lorenzo invested $1
a day for 20 years but didn’t start until he was 40. Even with compound
interest after 20 years ‒ twice as long as Chantal
‒ Lorenzo’s treasure trove is still smaller than Chantal’s.
Because of the Time Value of Money.
So, the takeaway here is, start saving ‒ even a little bit each month ‒ because with time it will be a lot more than a little bit. Watch Lesson 7 in Creighton Federal’s FI-Q series on personal finance.
interest has been around a while. It is thought to have originated in 17th
century Italy. Think of compound interest as interest paid on interest. In
other words, interest calculated on the amount of money you save or invest
along with all of the interest you previously earned. Compound interest will
make money grow at a faster rate than simple interest, which is calculated
only on the amount invested or saved.
Where things really get “interesting” (lame pun intended) is when you let your investment grow for a long time. Check out the example below.
at age 25 Susan invests $50,000 over 10 years and ends up with more money at
retirement than Bill who started 10 years later and invested 3X as much over 30
years. How’s that possible? Compound interest.