Money. Management 101

Money

Management 101

My

Contents

Table of

1 …… My Savings

6 …… My Checking

9 …… My Credit

12 … My Identity

A …… Resources

B …… Resources

C …… The Credit Union Difference

• Goal Setting & Financial Planning • Wise Money Management

• Savings Accounts

• Checking Account & Debit Cards • Using Credit Wisely

• Credit Scoring • Identity Theft

• How Credit Unions & Banks Differ

Learn about…

Savings

My

Smart Goal Setting

S

M

A

R

T

—

Specific

—

Measurable

—

Attainable

—

Realistic

—

Time-Bound

Assignment:

3

Short Term

Specific Goal:

Goal Date for Achievement: Estimated Cost:

Amount to save per paycheck:

Intermediate Term

Specific Goal:

Goal Date for Achievement: Estimated Cost:

Amount to save per week:

Long Term

Specific Goal:

Goal Date for Achievement: Estimated Cost:

4

Compound Interest

An intro. to

Credit unions call interest earnings on your account “dividends.” The money you put in your credit union account works for you. That’s because your credit union pays you interest. When you leave your money in your account, you earn interest on the interest, as well as on the original amount. This is called compound interest.

In the example below, the earnings from periodic investments are about half the

earnings from one lump-sum investment. That’s because:

The periodic investments $7/week earn interest on small amounts that slowly grow larger.

The lump-sum investment ($3,650) earns interest on a large amount right from the start.

Compound Interest is my FRIEND

Over 10 years, there is more interest to earn interest on!

Investment Type

_{10 Years}

Total in

Account Balance

_{in 10 Years}

_Earnings

Total

$1/day in Cookie Jar $3,650 $3,650 $0

$7/week in your CU $3,650 $4,069 $419

$3,650 lump-sum at CU $3,650 $4,547 $897

Different accounts “compound” interest in different time periods. Depending on the institution and account, it can be compounded daily, weekly, monthly, quarterly, or annually.

The more frequently compounding occurs, the faster your money will grow.

HACU’s Regular and Secondary Savings/Share Accounts compound monthly and pay dividends quarterly. Our other Savings accounts compound and pay dividends monthly.

5

Don’t wait - - decisions you make today will have impact on your tomorrows.

1. Always have some money saved in case you need it. It is a good idea to get into the habit of “paying yourself first.” When you earn money, receive an allowance, or receive a gift of cash, put a portion of that away in your emergency fund. Make it easy with payroll deduction

2. Find ways to earn extra money. Whether it is dog walking, baby-sitting, making jewelry, creating websites or doing odd jobs, once you have a good idea, make sure to let people know about your new service or product. Be sure to keep good records of your expenses and what you earn, keeping in mind that the idea is to make a profit.

3. Invest your money so that it will earn money for you. See page 4 about compound interest. 4. Don’t spend more money than you actually have. Just because you have checks doesn’t mean you have money in your account.* 5. Choose wisely when deciding if something is worth using a credit card. That $300 iPad®

or purse could end up costing much more, and you could still be paying for it long after you’ve stopped using the item.

6. Always know where your money goes. Use an expense tracker for a few weeks to see what you’re spending your money on - you may be surprised. Use that information to make a budget and stick to it as closely as possible.

How to be

* Use an account register to keep track of the money in your checking account. Even if you don’t write checks, debit transactions take money from your checking account. See page 6 for more information.

Reconciling your account against your credit union statement at least each month is also important to catch any fraudulent activity that could occur.

6

My Checking Account &

Benefits of a Checking Account

•

Safe-keeping of cash

•

Convenience of cash

•

Easy bill-paying and online access

•

Record keeping/budgeting

—

easy online access

•

Earn Rewards Points on signature based transactions

Safe-Keeping of Cash

•

Deposit paycheck, allowance or other funds

•

Pay reoccurring bills with check or debit card

—

or online

Bill Pay

•

Free text fraud alerts when you sign up for SMSGuardian

Access Funds

Shopping

•

Online Bill-Paying

•

Online Purchases

•

Telephone Teller

•

ATM

Convenience Methods

•

Check

•

Mobile Banking

•

Remotely Deposit checks with DeposZip

•

ATM/Check Card

—

make cash withdrawals, or make purchases at stores,

restaurants, etc. by electronic access to your account

•

Shared Branching

—

a network of credit unions you can use. See hacu.org

under services for more details

Many financial institutions offer programs that will cover an amount (up to a limit) for a purchase or withdrawal even if you do not have funds in your account. However, beware! While this could be helpful in an emergency situation, there is a large fee associated with each transaction. Example, you have no funds in your checking account when you swipe your card at a vending machine. That $1 can of cola when the fee is added just became $40 (assuming $39 fee).

The $40 can of soda pop

Money-wise

7

Check Card

Two Types of Transactions

—One Type Withdrawal

No matter if you choose “credit” or “debit” when asked, the money will always be

withdrawn from your checking account.

“Debit”

When you choose “debit” you will need to enter your PIN. This method most often

withdraws funds immediately from your account.

Steps:

•

Verify the amount of purchase

•

Record your transaction

•

Enter

PIN

•

Save your receipt

“Credit”

When you choose “credit” you will need to sign for your purchase. This is also when

you earn Rewards Points which are redeemable for gift cards.

Steps:

•

Verify the amount of purchase

•

Record your transaction

•

Sign your merchant’s receipt

•

Save your receipt

or electronic signature pad

•

Rewards Points are credited to your account

Special Note

Some merchants may authorize for more or less than the actual purchase amount. This typically occurs at restaurants (allowing for tip), gas stations, hotels and car rental compa-nies to name a few. It is often better to use your lower-rate credit union credit card for hotel and car rentals to make sure your cash is available when you need it.

Use Internet Branch & mobile banking to keep up to date on your

available balance.

8

Keeping My Money

If your check card is lost or stolen, you think your card has

been compromised, or there is unauthorized activity on

your account, contact your financial institution immediately.

You can find the phone number to report your card lost or

stolen on the financial institution’s website or by calling the

main phone number.

Keep your card number confidential!

•

A thief doesn’t need the actual card to steal

your money

Report the loss or theft even if there is no money in

your account

Thieves can be very creative with fraudulent deposits and withdrawals. You can

lose more money than you had in your account and be responsible for the loss

if you don’t report promptly.

Take the Pen vs. PIN challenge.

Pen vs. PIN

When you use a Debit Card should you say “Credit” and sign or “Debit” and use your

PIN number?

9

Pen (Signature transactions)

PIN (Debit transactions)

Signature transactions go through a

major credit card network and guarantee

that you will not be liable if you report

fraudulent activity.

These transactions do not offer additional

liability protection, and if you fail to

report the fraudulent activity you may be

liable for some if not all of the activity.

Signing your name guarantees no fees.

The merchant is responsible for these

fees.

Entering your PIN may cause you to incur

fees. At this time HACU pays the fees

for our debit card members. But other

financial institutions may not.

If you choose to sign you can not receive

cash back at the checkout. Fees may

apply.

If you want to receive cash back you must

use your Pin number at the checkout.

10

Using Credit

Credit Scores

• Your credit score is a combination of several types of data. In short, it shows a potential lender how you have handled debt in the past and how much debt you have in relation to your income.

Get and Keep a High Score!

High Score = Low Interest Rate

Low Score = High Interest Rate

• Pay on time, every time!

• Don’t open too many credit cards or other loans

—Beware of department store credit cards. Don’t be tricked into “saving” 15% on your purchase if you open one of their cards. Most store credit cards have sky-high interest rates much higher than the amount you think you saved, and also make it “easier” to spend more in that store than you would if you had to pay cash.

Myth: Credit inquiries drastically

lower your credit score.

The truth is it doesn’t. Inquiries alone won’t be a reason to turn down a loan. Poor payment history and/or too much debt are the major contributors to loan denials.

Order of Impact

Payment History

_{Amount Owed}

Credit History

New Credit

Types of Credit

The Purchase that Broke the Bank

That $1,000 designer bag or gaming system wasn’t in your budget, but you thought that new credit card needed some use, so you swiped the card. When the bill came, you saw you could make a minimum payment that wasn’t so bad. But what you didn’t realize was...

At 18.9% APR and minimum payments, that $1,000 fun item

took

nearly 9 years to pay off

and ended up costing a

whopping

$2,035

NOTE: When making payments on credit cards, there is no “paying ahead.” If your May payment is $25 and you pay $75, you will still have to pay June and July. You should always pay more than the minimum, but it doesn’t count towards next month’s bills

11

Using Credit

Minimum Payments v. Paying Extra and

Low Credit Scores v. High Credit Scores

Credit Cards

Current Balance $1000 APR 14.89% Monthly Payment $25.00 Minimum Payment

Percentage 2.5% Minimum Payment

Amount $10

Decreasing minimum payments as a percent of balance requires: 6 years more to repay and cost $365 more in total interest

Computations are projections only. Precise amounts will vary slightly due to rounding and timing of payments.

Time to Repay 4 Yrs 8 Months

10 Yrs 8 Months

Total Interest Paid $390

$747

Consumer Loan Comparison

“Excellent” Credit “Damaged” Credit 5 Years at 2.69% APR 5 Years at 17.9% APR

Amount Borrowed $15,000 $15,000

Payment $268 $380

Interest Paid $1048 $7,805

Total Amount Paid $16,048 $22,805

Wisely

12

Keeping my identity

Why Criminals Target Young People

• Your good credit sits unused until you are old enough to obtain credit. A criminal could steal your social security number and impersonate you by applying for and obtaining credit in your name. Unpaid bills would be associated with your social security number.

This type of fraud could go undetected for years, and by then it will take a lot of time and effort to repair and restore your credit.

Your Social Security Number (SSN)

• is a unique identifying number assigned at birth or when your application is accepted, in the case of non-citizens applying to work in the United States.

• It is used throughout your life to prove your identity

You’ll need a SSN to:

•

Apply for a job

•

Obtain a driver’s permit

•

Obtain health care

•

File an income tax return

•

Receive social security benefits

•

Open a retail account

•

Obtain a credit card

•

Check your credit rating

Don’t carry your card with you

- memorize your number and

keep the card in a safe place.

13

• Be STINGY with your personal information

• Never CARRY your Social Security Card with you

• Never give your PIN to ANYONE

• Never SHOW your friends how to use your ATM or Check/Debit Card

• BLOCK others from ‘shoulder surfing’ - looking over your shoulder when you enter your PIN

• Never give your SSN via EMAIL (most email is not secure)

• Never give out personal information via the PHONE unless you initiated the call

• Never respond to EMAILS requesting personal information

• Choose STRONG passwords -

combinations of letters, numbers, capital and lower case and symbols when allowed. Don’t make it easy to guess.

• Install a FIREWALL on your home computer

• Keep all software programs updated

• Use VAGUE profiles and email addresses and don’t include your year of birth or other personal information in them. What interests your friends interests criminals too!

• Be LEERY of sweepstakes, contests and giveaways. If you haven’t entered, you haven’t won. Legitimate contests won’t ask you for payment to receive your prize.

• SHRED old statements and bills - anything with personal info.

• Report lost or stolen checks, debit cards, credit cards IMMEDIATELY. If checks are stolen, insist on closing the account, not just stopping payment.

• File a police report if your driver’s license is stolen.

How to Protect Yourself

While not always sinister in nature, beware of those “get to know

me” posts that friends post on your social media. Often these contain

questions that if answered may inadvertently give away answers to

security questions, such as your kindergarten teacher’s name, your

first pet, your mother’s maiden name.

14

Keeping my identity

I suspect someone

is using my identity,

what do I do?

1. Go to www.annualcreditreport.com to find out. This is the ONLY source for free credit reports, other sites may seem similar, but may be scams.

2. Obtain a FREE copy of your credit report. Available once a year from each major credit bureau—Equifax, Experian and TransUnion.

3. If you are told there is no report available, that’s good news! It means your social security number hasn’t been used to obtain credit.

4. If you haven’t applied for credit and there is a credit report available, indicators of Identity Theft are:

—Alias name never used by you —Incorrect residential address —Unauthorized accounts open

Hint: To save money, and stay on top of your credit, get a free report from one bureau at a time, spread over the year - such as Equifax in January, Experian in May and TransUnion in November.

If you are a

victim:

1. File a police report and keep a copy with you

2. Contact one of the credit bureaus to place fraud alerts on your account (one call does it all).

3. Place passwords on all financial accounts 4. Contact the Federal Trade Commission 5. Contact the Fraud Department at your

financial institution

6. See Resources - next page for important contact information

A

Federal Trade Commission

www.ftc.gov

FILE A COMPLAINT ABOUT:

• Identity Theft

• Credit and Debt

• Unwanted Telemarketing, Text or SPAM

• Mobile Devices or Telephones

• Internet Services, Online Shopping, or Computers

• Jobs and Making Money

Free Annual Credit Report

www.annualcreditreport.com

Request your FREE credit reports Topics to view:

• Spot Identity Theft

• Good Credit

• Don’t Be Fooled

• More than a Score

Report fraud or Inaccuracies on Your Credit Report:

• Equifax—www.equifax.com

• Experian—www.experian.com

• TransUnion—www.transunion.com

Resources

HACU is not a partner of any of these businesses. They can change their policies/procedures at any time. Please be aware.

B

More

BALANCE Financial Counseling

We have already

paid for this

service, so our

members can bank

the healthy way

for free!

BALANCE is a financial education and counseling service committed to helping

individuals and families nationwide take control of their finances and reach their

goals.

One call, article or online class can change your financial perspective. A financial

fitness program that makes it easy for you to get on top of your situation.

•

Budgeting

•

Personal Money Management

•

Understanding your credit report and how to improve your score

•

And much more

hacu.org

facebook.com/bankhealthy

twitter.com/bankhealthy

linkedin.com/company/healthcare-associates-credit-union

Call BALANCE toll-free:

888.456.2227

or

hacu.org under resources

Resources

The Credit Union

Credit unions are cooperatives

—

not-for-profit financial institutions chartered by the

state or federal government. They are owned and controlled by their members, and

organized to promote thrift and provide credit to those who belong.

Credit unions only serve members in the fields of membership — usually associations,

employee groups, or communities named in their charters. As not-for-profit financial

services cooperatives, credit unions return earnings to their members in higher saving

rates, better services, and lower borrowing rates, while the boards of directors are

volunteers elected by members.

Banks (or Savings and Loans) are financial institutions chartered by the state or federal

government, which accept deposits and make loans for a profit. They are owned by

groups of stockholders whose main interest is to earn a profit on their investments. In

contrast, credit unions exist to serve their member-owners, the people who save and

borrow there.

At HealthCare Associates Credit Union we believe in helping our members to bank

healthy.

•

We promise to anticipate you needs and exceed your expectations

•

We promise to make it easy to do business with us

•

We promise to take ownership of your requests

•

We promise to recommend solutions that will improve your financial health

•

We promise to treat you with respect

•

We promise to thank you for being a member

C

Rev_01.23.15

Difference

The healthy way to bank

Internet Branch

hacu.org

Pay bills, check balances and learn more

Telephone Teller

630.276.5726

or 800.213.6445 (out-side Chicagoland)

Call Center

630.276.5555

or 800.942.0158 (out-side Chicagoland)