For Americans, reaching financial goals
often tops the list of their New Year’s resolutions. From saving more to budgeting better, many of us would love to have a better relationship with our finances. In this article, we’re sharing our top financial tips, with words of wisdom from Space Coast Credit Union (SCCU) Team Members, to help you improve your overall financial wellness. Many of these tips include actionable steps to help you achieve both your short- and long-term goals.
10 Financial Wellness Tips
These 10 helpful tips can help you reach your financial goals in the new year:
1. Grow your emergency savings fund.
During times of economic uncertainty, an emergency fund will give you peace of mind should unexpected income loss occur due to job loss or medical crisis. As a rule of thumb, you should set aside 3-6 months’ worth of expenses in a savings account. This budgeting worksheet can help you review your incoming funds and outgoing expenses to see where you can cut back on spending and save more each month.
SCCU Saving Cents, a round-up savings account, will help you automate your savings. Every debit card transaction is rounded up to the nearest dollar and deposited into a separate account. Plus, it earns interest too! A Christmas Club Savings account can also help you save all year for gifts during the holidays.
For business owners: As the economy outlook appears to be uncertain with fears of recession, liquidity reserves will be important to maintain sustainability during a downturn. Businesses should have enough cash on hand for at least 90 days’ worth of expenses. In the event that the economy were to slow significantly, cash reserves can be utilized to cover expenses as businesses start to see revenues decrease. – Michael McCay, Business Services Advisor
2. Build or improve your credit to get better rates and lower premiums.
Did you know that you have more than one credit score? Lenders, credit card providers, etc. can choose what they report to the three credit bureaus (Experian, TransUnion, and Equifax). Because there are so many credit-scoring models, with each having its own algorithm, you have multiple scores that vary depending on what information gets pulled from those reports for certain types of credit requests.
Check your credit reports with each of the three credit bureaus free once a year at AnnualCreditReport.com, and report any errors to the agencies. Although the reports won’t reveal your credit score, they will show you important details about your open accounts and factors affecting your credit score. FICO® Score is the baseline standard — check yours free in your Online or Mobile Banking account. If you need to improve your credit score, consider getting a Visa® Secured credit card. This article provides more ways to boost your credit score.
3. Take your time with buying a car and signing the documents.
Because a car is a large financial expense, be sure to determine your budget, get pre-approved, and research your options. Factor in the time of year too, as you’ll find good deals around the holidays and 3-day weekends. If you plan to purchase a car at the beginning of the year, look to buy a previous year’s model for a better value. Learn more about how to buy a car here.
When you’re purchasing a car at a dealership, be sure to read all of the documents that you’re signing, and ask questions about anything that they’re asking you to sign. The documents are legal and binding. This can help you avoid unnecessary and expensive service contracts, maintenance or GAP policies, and save you more money. – Jodie Kinley-Smith, AVP of Indirect Lending Sales
4. Resist using all of your savings to buy a home.
SCCU offers cost-saving home loans, such as No Down Payment home loans, No Closing Costs home loans, and FHA loans. We also offer VA loans and exclusive Hero Home loans.
There are always unexpected expenses when you purchase a home, and you want to have a cushion to cover them. Using all of your money on a down payment and closing costs can lead to having a difficult time in your first few months of home ownership. – Malik Wilkes, Manager of Express Mortgages
5. Give your family peace of mind: insurance policies and payable-on-death beneficiaries.
As a key part of maintaining your overall financial wellness, it’s important to protect your assets for unexpected situations — and for your loved ones’ futures. SCCU partners with insurance providers to provide cost-effective home/auto/life insurance, credit life & disability insurance, and vehicle coverage for members.
Space Coast Credit Union is committed to protecting you and your assets. This dedication extends to your family and loved ones in the event of your passing. To prepare for unexpected life events, we encourage you to designate one or more beneficiaries on your accounts. Having a beneficiary allows for a seamless transition of assets and can possibly evade a time-consuming and costly probate process. Having an established beneficiary on your account helps ease the stress on your loved ones during what is already a turbulent time. – Tasha Holliday, Manager of Operations
6. If you need access to cash, consider other options first before pursuing unsecured personal loans.
Personal loans often come with high interest rates, which usually results in high monthly payments and higher debt accumulation. Here are some ideal personal loan alternatives:
- Clear title loans
- These are an option if you own a vehicle out-right and have a title to the vehicle.
- Autos, motorcycles, RVs, and boats all qualify for clear title loans.
- Cash-out refinances
- Depending on the value of the collateral, you may be able to refinance your vehicle loan and get cash out.
- Autos, motorcycles, RVs, and boats all qualify for a cash-out refinance option.
- Home equity products
- These are good options if you own your home and have sufficient equity in the property.
- SCCU offers Home Equity Lines of Credit (HELOCs) and Fixed-Rate Home Equity Loans (2nd Mortgages).
Note: For the options listed above, the loan amount will partly depend on the amount of equity in the collateral (vehicle and/or home properties).
The advantage of using these options over personal loans is these are collateral loans. Since these are collateral loans and thereby less risky than unsecured personal loans, interest rates are typically lower. Also, you can often times get more cash from a collateral loan as opposed to an unsecured personal loan. It is recommended you pursue the options listed above before considering an unsecured personal loan. – Brian Jeffers, Manager of Express Services
7. For home renovations, upgrades, repairs, emergency expenses, or debt consolidation, consider a Home Equity Line of Credit (HELOC).
With a HELOC, a lender extends a certain amount of credit (as opposed to a lump sum of money) based on the amount of equity you have in your home that you’re able to access via checks or electronic transfers. The more equity you have, the larger line of credit you may be able to receive.
A HELOC can be a convenient way to borrow large sums of money at favorable interest rates, for a low cost. It’s not advisable to take out a HELOC for things like extravagant vacations, unnecessary personal expenses, or for an over-the-top luxury item. – Tim Alexander, AVP of Consumer Sales
8. Follow these best practices for credit cards:
It’s a good idea to have a couple of credit cards to diversify your credit, but it’s important to keep them active while not going over 30% of your total credit line. Having too many credit cards can also make it difficult to keep track of billing cycles. Plus, you want to make sure that you’re taking full advantage of their rewards programs.
If you’re looking for a new card, make sure you know the go-to interest rate and fees once the promotional deals end. With some credit cards, you can transfer any loan debt or credit card balances at 0% APR* for a limited time; this will allow you to chip away at that debt without accruing additional interest. If you’re planning on buying a home, car, or other big item, wait to apply for any credit cards to avoid drops in your credit score.
9. Take these crucial steps if you lose your job or source of income.
Unfortunately, some industries lay off employees during economic downturns. Or, maybe a job didn’t work out, and you’re looking for something better. Here’s what you can do to manage your finances and benefits:
- Research health insurance options like COBRA (The Consolidated Omnibus Budget Reconciliation Act) for temporary healthcare coverage.
- Research the best options for rolling over your 401(k) to avoid tax implications.
- File for unemployment: Visit the U.S. government’s unemployment page to see if you qualify, and make sure you’re getting the most current information, especially if you lost work due to a crisis. In Florida, visit the Reemployment Assistance Program page to get info and file a claim as soon as possible to allow for processing time.
- Contact your creditors (mortgage lender, utility providers, credit card providers, etc.): Most creditors are willing to work with you, and they may have suggestions to help you overcome financial hardships. Unless your creditors offer a better solution, consider only making the minimum payments on bills until you are back on your feet.
10. Look into refinancing your loans.
By refinancing your car, you could potentially lower your monthly payments if you need more cash flow every month, or you could get a better interest rate, which could help you save more money. Our auto loan calculators and this article can help you decide if it’s a good time to refinance your car. Additionally, this article can help you decide if mortgage refinancing is right for you. An SCCU Team Member can also help you explore all of your refinancing options in more detail.
Discover more financial tips with our helpful articles that cover a variety of topics.
Fight Fraud with SCCU
It’s important to arm yourself with fraud-fighting knowledge and security measures to protect your hard-earned assets. Be sure to keep your information up to date in case we need to notify you of any suspicious activity. You can also download our Card Controls app to turn your cards “on” or “off” if your cards are misplaced or stolen. The resources on our Fraud Prevention Center page will help you learn how to identify the red flags of scams to avoid becoming a victim and to report any fraud.
SCCU is Here to Help
Taking charge of your financial well-being can empower you to achieve your goals and reduce your overall stress levels. Also, be sure to take care of yourself and your family. After all, health is wealth in its own right. Whatever tomorrow brings, we at Space Coast Credit Union (SCCU) are here for you, watching out for your financial interests. If you have any questions or you’re interested in more information, feel free to fill out this form or get in touch with us.