News Flash: You’re Stealing from Yourself and Giving it All Away.

Tom Kjar

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.

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So, What Income Tax Bracket are You In? This is Not a Trick Question.

Tom Kjar

You pay too much in taxes not to read this.

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!

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Open Your Eyes to a Credit Union. No, really. Take a look.

Tom Kjar

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.

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Here’s a Little F M for You. Oh, That’s Financial Magic, Not . . .

Tom Kjar

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.

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What’s the Difference Between Compound Interest and a Compound Fracture?

Tom Kjar

That’s a dumb question but it got your attention.

Compound 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.

Starting 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.

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Remember the Clown Car and All the Clowns that Climbed Out of it?

Tom Kjar

You’d never guess all those big noses and giant feet and exploded hair could get stuffed in that tiny, little putt-putt, but somehow they did. Looks can be deceiving.

It’s that way with us, Creighton Federal. You’d never guess, standing outside our main branch at 25th & Dodge or any of our other branches, so much free help and money saving wisdom for members is packed inside, weighting to be put to work. But it is.

I sure hope those clowns showered before they stuffed themselves in that little car.

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Attention Class. The Lesson for Today is Debt Consolidation. You Over There. Wake Up!

Tom Kjar

Debt consolidation is not something likely to come up in conversation over your next double half-caramel- half-gooseberry-upside-down whipped latte. But it’s something that should be on your radar and here’s why.

There’s a good chance you’re spending more money each month than you have to. And there’s an easy way to find out. Ask us. It’ll cost you nothing but a few minutes of your time and a call to 402/341-2121 ‒ I know, it’s SO ‘90s old school!

Either way ‒ you’re spending more money each month than you have to or you’re not ‒ you’ll know. And if you are we know what to do about that. We’ll start by looking for ways to consolidate and lower your debt burden ‒ how much your pay out each month. That part will be free, too. It’s one of the things we do for members that we don’t charge for.

So … Make the call.

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How to Decide Whether or Not to Buy That Expensive Whatever-It-Is.

Tom Kjar

Deciding whether or not to make an expensive purchase and go on the hook for a lot of money is one reason Tums are so popular. Big ticket decisions involving lots of zeros after the dollar sign shouldn’t be decided on a whim.

There are tons of online lists of “Dos & Don’ts” to help you, so help yourself. But also think about it. Give yourself the time and mental space to make a good decision. A good decision for you and your situation, not just now but in the time frame it’ll take you to pay off the debt you’ll carry.

Five years to pay for a new truck or SUV? Well, is your job secure? An unplanned pregnancy, maybe? An aging parent or a dependent child with health complications that could turn your financial world upside down?

Should you stop spending. Absolutely not. Should you understand credit and how to manage it and be aware of what you’re getting yourself into? Absolutely.

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The Powerful Life Saver You Probably Never Think About

Tom Kjar

You can sense the pent-up power throbbing away in your backpack or purse. Feel it? It’s on your smart phone and it’s waiting for the next opportunity. The next chance to spring into action. To do for you what few other things in this world can do.

It’s the SecurLOCK Equip app that gives you dominion over your Creighton Federal debit card. With it you control your financial destiny! Or, at least, where and when you spend your money. It protects you from little sister Emma, who’s authorized to use your card, from spending $1,000 on a new iPhone because it’s over the limit you set for her. And that’s just the beginning.

Don’t you love power?

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Fear Insurance

Tom Kjar

The insurance we normally think about protects us from the bad things that can happen. A car crash, damage from a storm, getting sick.

But we provide a very different kind of insurance. It’s insurance that protects people like you from fear and uncertainty about your finances ‒ your credit score and what affects it. Mounting credit card bills. Over-spending on things you really don’t need. And just plain feeling dumb about your money and how to manage it. We have insurance for that.

It’s good, old-fashioned peace of mind insurance. It comes in the form of a free review of your credit and personal finances and, where needed, debt consolidation and restructuring. It’s all free. We offer it with every Creighton Federal Credit Union account. All you have to do is ask.

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