Skip to main content
Money Mentor Banner Image

Members First Money Mentor

  • Pay Yourself First: How to Save More Money the Easy Way

    by Jill Thomas | Aug 13, 2018

    One of the oldest rules of personal finance is the simple lesson to pay yourself first. All the money books tell you to do it. All the personal finance blogs say it, too.

    But it’s hard. That money could be used someplace else. You could pay the phone bill, could pay down debt, could buy a new DVD player. You’ve tried once or twice in the past, but it’s so easy to forget. You don’t keep a budget, so when payday rolls around, the money just finds its way elsewhere.

    And besides: What does “pay yourself first” even mean?

    To pay yourself first means simply this: Before you pay your bills, before you buy groceries, before you do anything else, set aside a portion of your income to save. Put the money into your 401(k), or your savings account. The first bill you pay each month should be to yourself.  This habit, developed early, can help you build tremendous savings foundation.

    If you’re just getting started, saving may seem impossible. You have rent, a car payment, groceries, and maybe student loans. Sure, you’d like to save, but there’s just no money left at the end of the month. And that’s the problem: Most people save what’s left over — left over after bills and after discretionary spending.

    But if you don’t develop the saving habit now, there are always going to be reasons to delay: you need dental work, you want to go to Mexico with your friends, you aren’t making enough to pay your bills. Here are three reasons to start saving now instead of waiting until next year (or the year after):

    You’re prioritizing saving

    When you pay yourself first, you’re mentally establishing saving as a priority. You’re telling yourself that you are more important than the electric company or the landlord. Building savings is a powerful motivator — it’s empowering.

    You’re developing good financial habits

    Paying yourself first encourages sound financial habits. Most people spend their money in the following order: bills, fun, saving. Unsurprisingly, there’s usually little left over to put in the bank. But if you bump saving to the front — saving, bills, fun — you’re able to set the money aside before you rationalize reasons to spend it.

    You’re prepared for money emergencies

    By paying yourself first, you’re building a cash buffer with real-world applications. Regular steady contributions are an excellent way to build a nest egg. You can use the money to deal with emergencies. You can use it to purchase a house. You can use it to save for retirement. Paying yourself first gives you freedom — it opens a world of opportunity.

    How to pay yourself first

    The best way to develop a saving a habit is to make the process as painless as possible. Make it automatic. Make it invisible. If you arrange to have the money taken from your paycheck before you receive it, you’ll never know it’s missing.

    Part of your savings plan will probably include retirement, but you should also save for intermediate goals too, such as buying a house, paying for a honeymoon, or purchasing a new car. Here are three easy ways to begin doing this yourself:

    • If your employer offers a retirement plan — such as a 401(k) — enroll as soon as possible, especially if the company matches your contributions. Matched contributions are like free money.
    • Starting a IRA is one of the smartest moves a young adult can make. These accounts allow your investments to grow tax-free. Because of the extraordinary power of compound interest (and compound returns), regular investments in a IRA from an early age can lead to enormous future wealth.
    • Open a savings account. Set up automatic transfers into this account, either directly from your paycheck or from your regular bank account. Treat these transfers like you’d treat any other financial obligation. This should be your first and most important bill every month.

    How to overcome the challenge of saving

    The real barrier to developing this habit is finding the money to save. Many people believe it’s impossible. But almost everyone can save at least 1% of their income. That’s only one penny out of every dollar. Some will argue that saving this little is meaningless. But if a skeptic will try to save just 1% of his income, he’ll usually discover the process is painless. Maybe next he’ll try to save 3%. Or 5%. As his saving rate increases, so his nest egg will grow.

    If you’re struggling to find money to save, consider setting aside your next raise for the future. As your income increases, set your gains aside for retirement and savings. Once you’re contributing the maximums to your retirement (and you’ve built emergency savings), you can begin to use your raises for yourself again. Sure, this means your effective salary will stagnate for a year or three or five. But it also means you’ll force yourself to develop the saving habit.

    I’ve never met anyone who does not wish they had started saving earlier. Nobody tells themselves, “Saving was a mistake.” No matter what your age, begin saving now. And if you already save, consider boosting how much you set aside each month.

  • Saving Basics

    by Jill Thomas | Aug 06, 2018

    Throughout your life, you will be faced with many decisions about saving and spending. Your goals can vary from smaller purchases such as a new smartphone to larger purchases, such as a car or a house to long-term savings for retirement and any unknowns. There are some life events that you can plan and save for, like higher education or starting a family, but it’s impossible to foresee unplanned expenses. That’s what makes saving important — so you’ll be prepared for any type of expense by having money set aside.

    Man holding piggy bank and coin

    Many Americans spend more than they save, and nearly one in five people are saving less than 5 percent of their income (according to a 2015 Bankrate survey). If you’re reluctant to start saving or believe it isn’t possible, think of it as a path to exciting opportunities rather than a burden. Chances are you’ll need the funds for unexpected situations throughout your lifetime, good and bad. Here are some basic steps to get you started.



     

    Create a budget and stick to it. When you make a monthly budget, overestimate your expected costs. This way, you’ll likely end up with leftover funds, which can go right into savings.

    Pay yourself first. Determine a set amount of money to put away every month and treat it like any other bill. Put away part of every paycheck — ideally 10 to 12 percent — and watch your savings grow.

    Save wisely. Choose the right savings methods to match your goals.

    Be ready for the unknown. Create an emergency fund with three to six months’ worth of living expenses in case unexpected costs arise.

    Set financial goals to keep you on track. Use SMART goals so you know exactly how much you want to save and how long it will take to get there. When you set clear goals, it’s a lot easier to track your progress.


    SMART Goals

    Real-life reasons to save are good motivators. After you have secured an emergency fund and have enough saved to support yourself for three to six months, you can start saving for what you really want. Think about short-term (current month or year purchases) and long-term goals (for important life events and big expenses), using this SMART guideline:

     

    SPECIFIC goals inspire. Setting a clear goal will help you focus on saving for it.

    Example: Save enough for a summer vacation.

    MEASURABLE goals let you see the real task at hand. By using real numbers, you can measure your progress along the way.

    Example: A summer trip costs $3,000, and I have $800 saved.

    ATTAINABLE goals pay off. When setting your goal, ensure that it is realistic and within your reach.

    Example: I know I can save enough money each week to pay for that trip.

    RELEVANT goals make good sense. Set a goal only if you know it will be meaningful in the long run.

    Example: I am saving for a home-share because it’s cheaper than staying in a hotel.

    TIME-RELATED goals have a real deadline. Setting a time frame for your goal will help you stay committed to reaching it.

    Example: I want to go on a vacation by next summer.


    August 6, 2018

  • Open your Eyes to the Credit Union

    by Jill Thomas | May 14, 2018

    Open your Eyes to the Credit UnionMore and more savers and borrowers are looking into other options aside from big banks, and this is where credit unions come in. 
    Similar to banks, credit unions also allow its members to have savings and loans. They also enjoy other bank account facilities, but these are non-profit organizations. The money that credit unions earn is being used to lend to members. 
    Credit unions are operated by its members and are run for the members, which is why they are called member-centric institutions. There are no shareholders to earn from its profits, and members are the ones who are considered to be part owners. 
    Credit unions also do not offer fees for arrangement deals. The system for loans is easy and fair. They even look at how affordable these loans are for the members. This means that for members whose credit history are not very good, they can still be eligible for loans and are also qualified for an appraisal, depending on their ability to pay it back. 
    Many Americans trust credit unions better than banks because of the fact that banks are for-profit institutions. With credit unions, there are fewer fees, and members get higher interest rates, and they are provided with better customer service. Here is a breakdown of the advantages and disadvantages of both credit unions and the banks: 


    ·         Accessibility

    When it comes to accessibility, big banks offer the accessibility factor because they are the ones with more branches open, even on the weekends. It is easier for customers to make a quick withdrawal or deposit. Banks also offer online mobile tools, which make banking a lot easier. On the other hand, credit unions are, most of the time, not available outside the area because they are really meant to serve communities. They really don’t have the so-called ATMs. What credit unions do in order to compensate is that they reimburse customers for ATM charges if they have to utilize other networks. Credit unions also have mobile banking options. At Members First, mobile and online banking services are FREE for all members!  Also, we return up to $15 in ATM fees!

    ·         Checking account fees

    When it comes to all major fees, big banks are popular for charging their customers for practically everything from overdraft fees to maintenance fees. Credit unions, on the other hand, are able to carry on their overhead savings to customers because they usually have just smaller operations. This means that they have fewer fees charged to their customers. Most of the largest credit unions offer free checking, in fact, 70 percent of them, whereas only 39 percent of banks practice this, according to Bankrate.com.  The Members First Free Checking account requires no minimum balance, no monthly service fees, courtesy pay, Visa debit cards, and so much more!

    ·         Interest rates

    There is really no assurance these days when it comes to interest rates because they fluctuate all the time, even the savings accounts in banks do not generate as much interest for their customers and account holders. It is always advised to compare banks’ interest rate offers to make the right choice. When it comes to credit unions, they usually are known for having higher interest in terms of savings and checking accounts. We pay you interest on any amount in our checking and savings accounts! 


    In the end, it is clear to see that credit unions offer more advantages compared to banks. Big banks may be attractive; they may have so much to offer, showing off their wide array of credit products and services, flashy advertisements and logos. For the majority of the criteria, it’s easy to say that credit unions are hard to defeat. If there is only one thing that banks can offer and credit unions cannot, it is only the lack or the unavailability of branded ATMs everywhere. But if this is something you do not really look after, then credit unions are the best option by far. The fee structure alone is more than enough to open a checking or savings account. Aside from fewer fees, you also get to enjoy personalized services and excellent customer service from the organization.


    May 14, 2018

  • Budgeting Basics

    by Jill Thomas | May 07, 2018

    (Click on images for downloadable files to help you along the way!)



    What comes first?

    An account!

    If you do not have an account, do your research and find what is best for you and your needs!  Making sure that your financial institution meets your needs is crucial to sticking to your budget and making things as simple as possible. 


    What do you need?

    Online/mobile banking?
    Convenience?
    Access?
    Support?
    How much to start?


    Choosing a financial institution

    Choosing a Financial Institution  


    What now?

    The first step is to write everything down!
    Budget

    Writing everything down will help you get an exact idea of where your money is going each day/month/year!  Always know your minimum payments as well!


    Day to Day

    Day to Day Spending


    Saving

    Make sure that saving is an option!  It is not always possible at certain points in life! 
    Set goals!  Start small!  Set smart goals to start with and when those are reached, reward yourself!  Always have a long term goal in mind!  You will still feel accomplished!

    FinancialGoals

    Fun!

    We all deserve to have fun!  Make sure that you are rewarding yourself for your hard work!  Saving for fun is the most rewarding because you feel accomplished that YOU are the one fund thing fun!  By doing this, you will not feel guilty because you have worked for the funds you saved!


    Long Term

    Remember that long term goal we talked about?  It's time to think about it!

    Adding to that Savings Account?
    A new car?
    Down payment on an apartment?

    Whatever it is, make sure to have a time frame to reach it by!  That means it needs to be reasonable!

     

     May 7, 2018



6 Ways To Teach Your Kids About Saving Money

6 Ways to Teach Your Kids About Saving Money

Saving money is one of the most important aspects of building wealth and having a secure financial foundation.  Yet many of us have learned the importance of saving money through trial and error, and more importantly, experience.

In school, we aren’t really taught about the importance of saving and many of us find that as adults, we have to fend for ourselves.

But there are ways to empower the next generation, and that starts by teaching children the importance of saving from a young age.  If you are a parent, here are 6 ways to teach your children about saving money.

START WITH A PIGGY BANK

A piggy bank can be a great way to teach your kids the importance of saving, while giving them an easy way to do it.  Tell your kids that the goal is to fill up the piggy bank with dollars and coins, until there is no room.  Illustrate that the piggy bank is for saving money for the future and that the more they save, the more their money will grow.

OPEN UP A BANK ACCOUNT

Once the piggy bank is full, take your child to the bank to open up a savings account for them.  Have them count how much money is going to be deposited, so they can have a physical understanding of how much money they have.  Show them the final number and reinforce the idea of interest.

It can provide a great source of motivation for your kids if they understand that their money will grow over time as long as they don’t touch it.

USE SAVINGS JARS

When your kids really want the latest and greatest toy or a new action figure, let them know they will have to save up for it.  Give them a jar for each of their desired purchases and offer them a small allowance each week in a denomination that encourages savings.

For example, if you give your child five dollars a week, give it to them in one dollar bills.  They can save all their cash for one purchase, or they can contribute to different “jars” for various savings goals.

To encourage saving up for their short-term goals, put a picture of their desired toy or item on the jar, so they have a visual reminder of what they are working towards.

CREATE A TIMELINE

As a kid, the concepts of money and time can be hard to grasp. Research has shown that the impact of a one hour financial lesson wears off after about five months. In order to make the message stick, money education should be timely and ongoing.  If you know your child receives a $50 check for their birthday each year, the moment to talk about budgeting is right before receiving that check.

One way to keep money lessons ongoing is to create a timeline so that your child can visualize when they will reach their goal.

Let’s say you give them five dollars a week and they want to save up fifty dollars.  If they saved one hundred percent of their allowance, they’d reach their goal in ten weeks, or roughly three months.

Start by getting a long piece of paper and a marker.  Have $0 on one side and $50 (or whatever goal amount) on the other side.  Create checkpoints on the paper for when they reach 25%, 50% and 75% of their goal.

Every time an amount is saved, draw a line illustrating how much was saved.  Let your kids know that they will get small rewards at each checkpoint. Small rewards can encourage kids to keep going.  Visuals are also helpful in illustrating their savings goals and how their money is growing.

LEAD BY EXAMPLE

Children learn by example, so the best way to teach your child about saving money is to save money yourself.  Have your own jar of money that you put funds in regularly.  When you’re out shopping, show your children how to discern between various prices and explain why buying one item makes better sense than another.

Reiterate the message that every time you get paid, you save a portion of your check to help prepare for the future.

START A CONVERSATION

One of the most important things you can do is to start a conversation about money and the importance of saving. Money doesn’t have to be scary or a taboo.  Use financial discussions as teachable moments. An innocent question such as “Are we rich?” can be answered in a way that emphasizes family values, such as hard work and responsible spending.

Let your children know they can have an allowance, but it’s up to them to save up for things they really want.  In addition, illustrate how much their money can grow over time if they save.

Also discuss the difference between needs and wants and tell your children you are always open to talking about money and new ways to save.  Ask them about what they want to save up for.  Ask them what they want their future to look like.

Asking good questions can get them to think long-term and have a positive relationship with money.  Letting them know you’re always open to have a conversation about money can encourage them to ask questions of their own to keep learning.  The graphic below from the JumpStart Coalition for Personal Financial Literacy can provide you with learning benchmarks based on your child’s age.

Teaching kids how to save money may seem like a tough task.  It has even been said that parents are more likely to talk to their children about sex than about money.  But using these tips, you can make your child’s understanding of money fun and accessible.  It’s an investment in knowledge which truly pays the best interest.



Planting Seeds for a
Healthy Financial Future

10 Money Mentor Financial Tips

 

1.       When paying off debt: start with the small debts first then move to the bigger ones.

2.       Maximize your employer benefits.

3.       Review your credit report regularly, and keep an eye on your credit score.

4.       Make savings a part of your monthly budget.

5.       Don’t keep applying for new credit. A good rule of thumb is not to have more than 2 inquiries per year.

6.       Create a budget and stick to it. For help creating a budget see our Money Manager Tool inside of our online banking.

7.       When shopping for credit cards: make sure you research the annual fee, transaction fees, and interest rate. Our Visa platinum credit card has no annual fee, no special transaction fees, and offers rates as low as 8.99%. Apply Today!

8.       Did you know that even if you pay your loan on time at a payday lender it still affects your credit negatively?

9.       Never charge more than 40% of the limit on your credit card.

10.       Save your self time and money by getting preapproved for a vehicle loan.