Financial Health Tips to Help You On Your Way
What does financial health mean to you?
Is it paying bills on time, robust savings, retirement fund, affording a new car? Whatever financial health means to you, it starts with getting your finances in order.
It’s easy to think that keeping track of your account balances is all you need to do to stay on top of your finances. But that is no longer true. Today, accounts are spread across multiple financial relationships.
Where is your money going? To figure that out, you need to include savings and checking accounts, and credit cards. You also need to look at things like your Starbucks app, Apple / Samsung Pay, Amazon Prime, Netflix, Venmo, PayPal, and your retirement account. Suddenly you realize how challenging it can be to really stay on top of your finances.
Sustainable financial health requires a holistic approach – putting all the pieces of your finances together.
Financial Health Tips to Help You On Your Way
- Create a workable budget – look at how much is coming in and how much is going out.
Look at the full picture of your income by including salary / wages, bonuses, alimony, interest, etc.
Now you need to fully know your expenses. Start by adding up your childcare, credit card, payments, mortgage / rent, food, utilities, insurance, etc. Remember to include your automatic payments!
With that done, you’ll have a better understanding of your finances.
- Track your spending habits – it goes without saying that most of us need to pay attention to what we spend. Being mindful of spending habits can help keep us on track to meet goals for retirement, savings, vacations, and even that new fridge.
Beyond your essentials, what do you spend on? Eating out, movies, travel?
Understanding your spending habits will help you plan your budget. It also helps you make sound decisions the next time you’re craving take-out.
- Build an emergency fund – it’s not always easy to make savings a priority, even when we know how
important it is.
Even a small amount put away each pay period can add up over time. Even better, set it up as an automatic withdrawal. An automatic withdrawal into an emergency fund means you don’t see it and don’t need to touch the money – until you need it.
- Plan for the future – with your finances organized, planning for the future comes next. What do you need for your new car, home, or retirement? How do you get there?
With your budget fully in mind, start looking at how you can make saving for your future your priority.
- Success step-by-step – you aren’t alone if you dread thinking about your finances. Trying to look at the big picture all at once can seem overwhelming, so start by taking one step at a time. Step 1. add up income; step 2. figure out expenses; step 3. create a budget; step 4. set up alerts and more to help track your spending.
Financial health is a process and there is no silver bullet – even winning the lottery doesn’t guarantee it! Taking steps to really know where your finances stand is the best way to a healthy, and happy, relationship with your finances.
So, what does financial health look like to you and how can we help you get there? Mid American Credit Union's online banking can help you get financially healthy.
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Use the Mid American Credit Union app to take control of your debit and credit cards.
HOW FAMILIES BUILD TRUE WEATH - ONE HABIT AT A TIMEThis short read helps parents teach kids the difference between active and passive income - with simple examples, hands-on ideas, and kid-friendly ways to build strong earning and saving habits early.
Read the article HERE
HOW TO TEACH KIDS ACCOUNTABILITY
This article helps parents teach kids how everyday choices, including spending, lead to real outcomes and learning moments.
Read the article HERE
RAISING FINANCIALLY INDEPENDENT KIDS AND WEANING FINANCIALLY DEPENDENT ADULTS
Raising independent kids is the dream of every parent. It starts at a very young age with tying shoes, progresses into turning in homework on time, and ultimately culminates with a fully functioning adult somewhere close to 18 (plus or minus 10 years – mostly plus).
Read the article HERE
SNEAKY SHRINKFLATION
Have you ever opened a bag of chips and thought, Wait… didn’t there used to be more in here? You’re not imagining things. Many snacks really have gotten smaller—even though the price stayed the same.
This has a name: shrinkflation.
Read the full article HERE
Take Action
If you've been a victim of identity theft, here are ways you can take action:
- Report the identity theft to the Federal Trade Commission online at identitytheft.gov or call 877-438-4338.
- Contact the three major credit reporting agencies — Equifax, Experian and TransUnion — to put free fraud alerts and credit freezes on your accounts. With a fraud alert, creditors must verify your identity before opening a new account. With a credit freeze, you can still use your accounts, but no new accounts can be opened in your name. To lift the freeze temporarily (if you’re applying for a loan, new job or other reasons), you need to contact each credit bureau and follow the instructions to verify your identity.
- Notify your financial institutions, credit card issuers and any other entity where you have accounts that you’ve been a victim of fraud.
If you have a checking account with Mid American Credit Union, you have extra protection through our free victim resolution service. - Monitor your credit reports. You’re entitled to one free report every year from each of the three credit reporting agencies. Annualcreditreport.com is the only federally authorized source for those free reports. If you make a request to a different agency every four months, you can get year-round monitoring.
Ways to Protect Yourself
To help reduce your risk of identity theft, here are some things you can do:
- Don’t share your bank account numbers, Social Security number or other types of account and personal information to someone who calls, texts or emails you. Your credit union or bank already has that information, so they wouldn’t call, text or email you for that. Avoid responding to emails that ask you to click on links to verify information. Don’t give in to callers who make high-pressure demands for that information.
- Store documents securely at home. Don’t carry your Social Security card in your wallet; if you need it for a specific reason, put it back in a secure place after you’ve used it.
- Limit which credit cards you use for online purchases. It’s easier to track activity on one or two cards.
- Check your banking and credit card statements regularly to monitor activity. If you get statements by regular mail, note when they are delivered; if they don’t arrive on time, follow up with the company. Choose paperless or e-statements to reduce the risk of paper statements being intercepted.
Many financial and credit institutions have apps where you can get quick, real-time access. Some even allow you to put restrictions on using your debit or credit cards, like Mid American’s Card Manager app. - Shred receipts, unsolicited applications for cards or loans, bank or medical statements or other such documents.
- Use unique, strong passwords for each online account and a two-factor authentication process for online accounts. To track passwords, use an online password manager or app. With two-factor authentication, you’ll need to provide a second type of verification, like a code sent to your email or phone.
What do you want to learn about today?
Budgeting & Saving
Creating a Budget that Works
- A budget is one of the backbones of a healthy financial life. Having one sets you up for financial success.
- A budget should:
- provide freedom.
- shows me how much I can spend on the fun things in life.
- helps me reach my long-term and short-term savings goals.
- gives me direction to keep my financial life in order so that I can do the things I want to do.
- A budget should:
Building an Emergency Fund
- According to a recent report, 56 percent of American adults have dealt with a “surprise expense” within the last year. The average cost of that expense was a whopping $5,500. What does that mean? It means a healthy emergency fund is necessary.
Setting and Reaching Savings Goals
- Short Term Goal
- Set a Budget. Make sure you have a solid budget in place. It’s hard to obtain any financial stability if you don’t know how much money is coming and how much is going. If you have a budget already, make it a habit to review it every six months.
- Pay Down Debt. Create a plan to pay down your debts. While we recommend the avalanche method (paying down the higher-interest debt first), use whatever works best for you.
- Create an Emergency Fund. Set up a savings account for emergency expenses. You want to save at least six months’ worth of fixed expenses.
Tips for Cutting Everyday Expenses
- Cancel Subscriptions
- Go through your subscriptions and cancel any that you haven’t used recently.
- Cut back
- Once you have canceled subscriptions, comb through your budget for areas where you can reduce additional spending. Example: Entertainment, Eating out and Travel
- Make it automatic
- One easy way to increase your savings is to set up an automatic deposit into your accounts. Each paycheck, make sure a certain amount goes into your savings before you even have a chance to spend it. Out of sight, out of mind.
Credit & Debt Management
Understanding Your Credit Score
- Your credit score is a three-digit number that shows how well you manage borrowed money. It’s based on things like your payment history, how much debt you have, and how long you’ve had credit. Scores usually range from 300 to 850 the higher, the better. A good credit score can help you get approved for loans, lower interest rates, and even better job opportunities. By paying your bills on time, keeping your credit card balances low, and checking your credit report regularly, you can build and maintain a healthy credit score.
Smart Credit Card Use
- Using a credit card wisely can help you build good credit and avoid debt. Always try to pay your balance in full each month to avoid interest charges. Keep your spending within your budget, and use only a small portion of your credit limit. Making payments on time and keeping track of your purchases are key to staying in control of your credit.
Debt Consolidation Options
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Debt consolidation is a way to combine multiple debts into one monthly payment, often with a lower interest rate. This can make managing your bills easier and help you pay off debt faster. Common options include personal loans, balance transfer credit cards, or working with a credit union like Mid American to find the best solution for your situation.
Student Loan Repayment Strategies
- Paying off student loans can feel overwhelming, but with the right plan, it’s manageable. Start by knowing your loan types, due dates, and interest rates. Consider setting up automatic payments to avoid missed due dates, and pay a little extra when you can to reduce interest over time. If you’re struggling, look into income-driven repayment plans, deferment, or refinancing options. Mid American Credit Union can help you explore strategies that fit your budget and long-term goals.
Avoiding Debt Traps
- Debt traps happen when borrowing becomes hard to manage, often leading to more debt over time. To avoid them, borrow only what you truly need and understand the terms before taking out any loan or credit card. Make a budget and stick to it, keeping track of spending and payments. Avoid relying on high-interest options like payday loans or only making minimum payments.
Home & Auto Financing
Buying vs. Renting a Home: Buying a home offers loan-term financial and personal benefits.
- Building equity
- Potential tax advantages
- Increased flexibility
Understanding Mortgage Basics
- Main types of mortgage loans: Conventional, FHA, VA and USDA Loans
- Types of interest rates on a mortgage: Adjustable-rate or Fixed-rate mortgage
- Most common mortgage loan terms: 10,15, and 30 years
- For any questions, contact our mortgage department:
Using Home Equity Wisely
- You can use the equity in your home to take out a loan that uses your property as collateral. You could use the funds to provide additional monthly funds for living expenses, pay for repairs to your home, home improvements, or debt consolidation. If you fail to make payments or meet other loan requirements, you could be at risk of losing your home through foreclosure.
- Set a Budget
- Check your credit score
- Get Pre-Approved for a loan:
- Shop around
- Negotiate the price
- Review contract carefully
Investing & Retirement
Investing 101
- Investing for Retirement. If you’re saving for retirement, one rule of thumb is to save between 10 and 15 percent of your yearly income.
- Workplace Retirement Plan. If you have a 401(k) at work, make sure you are maxing out your contributions. That’s especially true if you have an employee match (which can count toward your 15 percent). That’s free money and you don’t want to miss out.
- Other Investment Goals. If you’re saving for something like a house, consider how much you’ll need and work out a budget that will help you get to that goal in the timeframe you’ve set for yourself.
How Compound Interest Works
- Compound interest is when you earn interest on the money you’ve saved and on the interest you earn along the way.
Planning for Retirement
- If you haven’t started saving for retirement, do so immediately. Also, save as much as you can, while you can.
- Here are some ways to help you save money, starting today:
- Go through your budget and trim excess spending.
- Funnel that money into your retirement savings accounts and investments.
- If you have an employer match on your 401(k), make sure you contribute enough to get the match, if not more.
- If you don’t have a 401(k), open an IRA as a retirement savings vehicle.
- Aim to save between 10 to 15 percent of your pretax income. If you can go higher than that, all the better. The main point is to start saving now and save as much as you can.
Risk vs. Reward
- Starting with a simple investment, like an S&P 500 ETF, can help you gain confidence and experience.
