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Category: Financial Literacy

Why Should I Get Preapproved for a Car Loan?

June 24th, 2022

Before you go car shopping, make time to get preapproved for an auto loan. When you know that you are already approved (and what you’re approved for), you’re transformed into a “cash buyer,” at the car lot, and that puts you in a much stronger negotiating position. You have already calculated what your interest rate and monthly payments will be, so you can walk into the dealership with confidence.

While dealer financing is convenient, a dealership finance manager may try to mark up the interest rate on the loan, so you may pay 1% or 2% more than you should. By getting preapproved, you’ll know you’ve gotten the best interest rate you can qualify for and be able to judge if the dealer is offering you a good deal.


Going in without an offer means you’ll have to play by their rules. You might believe that you qualify for 0% financing (or whatever their teaser rate is) when you actually don’t. You may spend hours looking at vehicles and negotiating with dealers, only to find out that you’re not getting the great deal you thought you were going to walk away with.

Another good thing about having financing in place is that the dealer will see you as a cash buyer, someone who has the money in hand and can walk away from negotiations at any time. Without preapproval, the salesman may ask you what monthly payment you are looking for. If you name an amount, he may negotiate on that number instead of the one that matters: the price of the car. If you’re negotiating the monthly payment rather than the car price, they may try to inflate the payment with charges or fees that often have little value to you as the buyer. As a preapproved buyer, you are able to just talk about the price of the car and avoid that trouble!

It is easy to get preapproved for a car loan with NEWFCU: Fill out the loan application in our office or online here, and turn in your two most recent pay stubs. Once you are preapproved and you find a car, tell the dealer that you are financing through North East Welch FCU, and they can fax the buyer’s order to us at 814-725-7301. The final step is simply coming in to the office to sign for your loan, and then you’re able to enjoy your new car!


Saving Practices Made Easy

June 24th, 2022

It’s easy to postpone starting to save for a later day, but a solid plan is key to success. By following some basic guidelines, you’re more likely to achieve financial security.

Pay yourself first.

Use automated transfers to get in the habit of saving. Money will be transferred from your account without you seeing it, which makes you less likely to miss it.

Save 10% of your paycheck.

The general rule of thumb is to save about 10% of each paycheck. If that seems too high, try 5% and work your way up to saving 10% of your earnings. Add 1% every year you get a raise until you reach 10%.

Know yourself.

Examine your goals to determine which savings plan will work best for you. For example, don’t invest all your money in an aggressive stock or mutual fund if you’re conservative with your money. If you’re saving for retirement, select a plan that will fit your financial needs down the road.

Realize that age matters.

Always take into consideration how much time you have to save for your goal. If you are a recent college graduate, you have several decades to ride out the highs and lows of the market and can take advantage of more high-risk investments. If you’re only a few years from retirement, less risky investments are a better option.

See the benefit of compound interest.

The simplest way you can invest your money is to leave it alone and let it “compound” over time. You earn interest not only on what you save, but also on the dividends generated. The earlier and more you save, the more your money will grow.

Use dollar-cost averaging.

This is the process of routinely investing a set amount of money over time, rather than all in one lump sum. It’s a convenient savings method, particularly for beginning investors. For example, each month transfer $25 or $50 from your share draft account directly into an investment vehicle such as a traditional or Roth IRA. You reduce your overall risk from market fluctuations because your money buys more shares when the price of a share is down, and your money buys fewer shares when the price of a share is up. Bottom line: You’ve reduced your investment risk.

Use the Rule of 72.

To figure out how long it will take for your investment to double with compound interest, use this rule: Divide 72 by the interest rate you expect to receive on an investment. For example, if your investment earns 4% interest, your money will double in 18 years (72 divided by 4 is 18).


FRESH Start

June 17th, 2022

FRESH Start

Adult Financial Literacy Program

North East Welch FCU helps give families and individuals the skills they need to get out of their financial difficulties through one-on-one counseling and workshops. Our Credit Union has been helping area residents since 1953, helping them learn to manage their debt and achieve financial stability.

With us, you’ll be able to answer these questions:

•             Where is my money going?

•             Why is it such a struggle to make ends meet?

•             Will I have to file for personal bankruptcy?

•             Is there a way to get my creditors to stop hassling me?

•             How can I prevent money problems from happening again?

•             How can I learn to budget properly?

How We Work with You

It’s easy to work with North East Welch FCU. Our counselors start by providing a complete, confidential, and professional assessment of your financial situation. Once we both understand the facts at hand (your monthly income. expenses, debts, and lifestyle needs), we start to work with you to form a plan that gives you a fresh start.

  • We give you the tools, budgeting skills, strategies, resources, and ongoing support to take control of your current and future finances.
  • We can help you draft letters to creditors explaining the situation to possibly reduce interest and fees.
  • We also help you understand how to protect your identity to make sure your information stays yours.
  • We become your partner for as long as you need us!

Everyone learns differently.

Do you learn better in a group or in a quieter setting?

Situation 1:

Workshop

Workshops are currently offered on a regular basis at the 4 N.I.N.E. Center at 105 Clay Street in North East, with plans to expand to other areas.

Are you an employer who would like us to speak to your employees? We can come to you! Our workshops enable you to gain a better understanding of how to better use your money and relieve stress.

Situation 2: 

One-on-One Counseling

One-on-one counseling is offered at both of our Credit Union locations. This choice works great for members who have their bank statements and bills ready for review. These sessions generally start with budget counseling to determine how to meet living expenses, repay debt, and meet other short- and long-term goals.

We also provide credit- and debt-counseling to help you achieve your financial goals.

Contact Us

If your or your organization is interested in North East Welch FCU’s financial education seminars or activities, please contact our Certified Credit Union Financial Counselors at MoneyHelp@newelchfcu.com


When Times Are Tough, We Can Help

June 17th, 2022

In tough times, it’s more important than ever to develop and maintain good financial habits. Having a household budget and shedding high-rate credit card debt are two obvious things that could benefit most consumers. But figuring out where to start can be a daunting task—especially if you feel like you’re already in trouble. The thing to remember is that it’s never too late to ask for help from your credit union.

Manage Your Mortgage

If you have an adjustable rate mortgage (ARM) and are facing a rate adjustment, refinancing your home loan with your credit union might be the break you need. If you qualify, you could refinance into a fixed-rate 15-year (or shorter term) mortgage.

 Even if you have a fixed-rate home loan, refinancing may free up some money you could use to pay down more expensive debt like credit cards or you could build your emergency fund for unexpected expenses (such as car repairs or a new furnace).

Cut Credit Card Costs

Not all credit cards are created equal. Make sure to review your monthly statement and follow these tips:

Pay on time, no exceptions

Whenever possible, pay the balance each month. When you have to stretch payments, pay in as few months as you can manage.

Avoid cash advances—the interest rate on these is higher than on straight purchases.

Pass Up Payday Loans

Payday lenders promise to help when you’re short on cash. You’ll get the money you need, but with interest rates from 300% to 1,000%.

See what it really costs to borrow from a payday lender

Visit your credit union—North East Welch FCU offers payday loan alternatives with fairer terms and lower interest rates, such as short-term signature loans and Better Choice loans.

Use Direct Deposit

Direct deposit will help you to save automatically. You simply need to it set up to place a certain amount or a percentage into your checking account and another amount into your savings.

It gives you one less thing to worry about and it’s the safest way to receive your money.

Direct Deposit is an easier and more convenient way to contribute to IRAs (individual retirement accounts) and other savings vehicles, and you have more control over your money and your time—it’s predictable and dependable.

Steer Clear of Scams

Some scammers use negative economic news to scare investors into high-risk investments. They use investor fears to promote sketchy schemes with promises of high return and no risk that leave investors with nothing but empty wallets.

Hang up on aggressive cold callers!

And always remember to delete unsolicited e-mails promoting investment opportunities.

Check Your Credit Report

It’s important to check your credit report at least once annually to monitor for signs of identity theft or fraud, as well as check for any errors.

The Fair Credit Reporting Act (FCRA) requires that each of the nationwide credit reporting companies — Equifax, Experian, and TransUnion — provide you with a free copy of your credit report, at your request, once every 12 months. Go to annualcreditreport.com to request your credit report instead of going to each individual company’s website to make sure you’re getting your free copy.

As member-owned not-for-profit institutions, credit unions look out for their members’ best interests – our rates and fees can save members hundreds of dollars annually. Don’t wait until you’re in deep trouble to ask for a financial checkup at North East Welch FCU. In fact, the earlier you ask for a review, the better the outcome can be.


Save at the Grocery Store!

June 14th, 2022

Are You Spending Too Much on Groceries?

How many times have you checked out at the grocery and were surprised by the total?

It’s easy to let our grocery bill get too big if we’re not careful. Yes, food prices have gone up for certain items lately, and we’re making more meals at home now than eating at restaurants, but there are ways to keep that expense under control.


  • Figure out how much you can reasonably spend on food. Financial advisors suggest spending no more than 10% of your income after taxes on food. That includes the supermarket as well as restaurants. If you want actual figures worked out for you, check out the USDA’s website for food plans based on averages for four levels: thrifty, low-cost, moderate, and liberal plans.

  • Make a shopping list. There are many grocery shopping apps available. Find one that fits your needs. These help you create digital shopping lists, including some that offer digital coupons. If you prefer going old school, make your list with a pen and paper and post the list on a board in your kitchen. As you run low on items, put them on your list. Then, when it’s time to shop, stick to that list and try to avoid impulse buying.

  • Use reward programs. If you use a major retailer, the store will likely have a store reward program. Make sure you sign up for it to get store discounts and coupons. The store may even have its own shopping app.

  • Consider ordering online. Not only does it save you a trip inside a store during the pandemic, it also keeps a running total of your expenses before you check out. If you go over your shopping limit, you simply take certain items off your list to bring down your total. Ordering online can also lessen impulse buying.

  • Buy only what you need. Avoid buying anything simply because you have a coupon or because the store offers a bulk discount. If you can’t eat 2 bags of salad greens in a week, a “buy one get one 50% off” offer will simply fill your garbage can with wasted food.

Keeping your food expenses under control is easy with a little planning. The digital tools available makes this even easier. The hardest part will be controlling your impulse to reach for a sweet treat before checking out, and for that, you’re on your own.



Financial Literacy Quiz

June 14th, 2022

How financially literate are you? Do you have the skills and knowledge to spend money wisely, save for emergencies, use credit cards sensibly, and protect your identity from being stolen?

This short quiz will help you test your financial literacy to see where you need to focus to improve your financial future.

1. A credit report is:

a. A list of your financial assets and liabilities

b. Your monthly credit card statement

c. A loan and bill payment history

d. Your credit line with your financial institution

2. In terms of credit, what does APR stand for?

a. Annual Percentage Rate

b. Annual Penalty Rate

c. Annual Payment Rate

d. Annual Payoff Rate

3. The type of car you own affects the price you pay for auto insurance.

True

False

4. If your credit card is lost or stolen and used to charge items you didn’t authorize, how much are you responsible for?

a. Up to $50

b. Up to $100

c. Up to $500

d. All unauthorized charges

5. Negative financial information (excluding bankruptcy) can stay on your credit report for:

a. 2 years

b. 5 years

c. 7 years

d. 10 years

6. By using unit pricing at the grocery store, you can easily compare the cost of any brand and any package size.

True

False

7. The “Rule of 72” tells you how long it will take to double your money.

True

False

Answers

1. (C) A credit report is a loan and bill payment history.

It is kept by a credit bureau and used by financial institutions and other creditors to determine how likely you will repay a future debt. Information in your credit report can affect your ability to get a job, a loan, a credit card, or insurance.

2. (A) It stands for Annual Percentage Rate.

The APR is a measure of the cost of credit, expressed as a yearly interest rate. Usually, the lower the APR, the better for you.

3. True.

Your premium is based in part on the car’s sticker price, the cost to repair it, its overall safety record, and the likelihood of theft. Many insurers offer discounts for features that enhance safety or prevent theft. These include air bags, antilock brakes, daytime running lights, and antitheft devices. Some states require insurers to give discounts for cars equipped with air bags or antilock brakes.

4. (A) You are responsible for up to $50.

Under the Fair Credit Billing Act, your maximum liability for unauthorized use of your credit card is $50. If you report the loss or theft before your credit cards are used, the FCBA says you are not responsible for any unauthorized charges. If a thief uses your cards before you report them missing, the most you will owe for unauthorized charges is $50 per card.

5. (C) 7 years.

Late payments can stay on your report for 7 years; a Chapter 7 bankruptcy remains for 10 years.

6. True.

While the package price tells you the cost of the whole item, the unit price tells you the price of each unit in a package. A unit can be an ounce, a pound, a square foot, or an individual piece in a package. Unit pricing helps you compare costs of different brands and various sizes without doing arithmetic.

7. True.

The “Rule of 72” tells you how long it will take to double your money. To use the “Rule of 72,” divide 72 by the interest rate you’re getting. For example, if you deposit $3,000 into an account with a 2% interest rate, divide 72 by 2. The answer—36—tells you that you will double your money in 36 years; in 36 years, you will have $6,000.