How to Get By In an Emergency: Personal Loan or Credit Card?

Unexpected expenses, by nature, can come out of nowhere. Your check engine light comes on, and your car demands you put another thousand dollars into keeping it on the road. That cough that just won’t go away turns out to be more serious than you thought. No matter what causes these personal catastrophes, they all have one thing in common: they’re expensive.

The best financial advice suggests a rainy day fund for situations like these. However, for many people, that’s just not practical. An emergency fund is one of those things it’d be nice to have, but sometimes there’s just no room for it after the bills have been paid.

If you feel the pressure of not knowing where your emergency spending could come from, you’re not alone. A Federal Reserve survey found that 47% of Americans would not be able to come up with $400 in an emergency. So how would they cope with that emergency? They’d borrow.

As a credit union member, you have options when it comes to borrowing. Two of the most popular choices for emergency funding are a personal loan and a credit card. There are pros and cons to both, so let’s take a look at a few.

1.) Limits 
Credit cards have credit limits in the thousands, enough to cover a small emergency. The value of credit cards is their convenience; there’s no need for a new loan each time you incur an expense.

However, many people don’t have sufficient credit to cover major financial emergencies and instead choose to utilize a personal loan. Your personal loan approval amount depends on several factors: income, credit score and other assets. For borrowers with good credit history and a strong ability to repay, these loans could be $50,000, enough for serious unexpected expenses.

2.) Repayment Options 
Credit card repayment is handled monthly. There’s a minimum payment and no fixed term to repayment; if you continue charging and only pay the minimum, paying off your loan could take forever.

In contrast, a personal loan, includes a fixed monthly fee that lets you repay the loan in a set amount of time. It’s amortized so you’re making equal payments of both interest and principal over the loan’s life. There’s also no penalty for early repayment.

3.) Usability 
Credit cards only work at a merchant terminal; they’re difficult to use for paying back friends.

A personal loan is deposited directly into your checking account. You can withdraw it as cash, write checks or use auto draft features.

If you’re negotiating a reduced price for a major expense, many businesses offer a cash discount. They pay for processing fees and prefer cash. If you’re paying a hospital, they may also accept a lower fee if you pay cash.

4.) Interest Rates 
Credit card interest rates can be high; the global average is 15%. Some credit cards fluctuate their interest rates based on the prime interest rate and can alter your rate if your credit score changes dramatically, making it difficult to plan your financial future.

A personal loan has a fixed interest rate that never increases if you don’t miss a payment. You can make a future budget that involves paying a fixed amount over approximately 5 years. Interest rates on personal loans are usually lower than on credit cards. For people with average credit, interest rates can be 5% lower; for those with better credit it can be even lower.

As a member of Community Financial Credit Union, you have access to competitive rates for personal loans. If you’re in a hard place, we can help. For more info, visit cfcu.org/personal. What’s your emergency financial plan for unexpected expenses?

Prevent ID Theft: Destroy Those Documents!

Protecting oneself from theft used to be as basic as securing the doors and windows of your home. But in today’s modern age, an enterprising thief can take control of your assets without breaking a window. Identity theft continues to be one of the fastest-growing crimes in the United States. According to the Federal Trade Commission (FTC), approximately 10 million Americans have their identities stolen each year.

So how do you secure your identity? 
Clues to your personal and financial information are often buried throughout your personal paperwork and mail. One search through your mailbox or trash could garner enough evidence for a thief to take control of your identity — and your finances. Thieves use credit cards, financial statements and utility bills to obtain and exploit that personal information.

The first line of defense is to destroy documents that contain your personal information before anyone can access it. Private documents and credit or debit cards, which contain sensitive information, should be destroyed once you no longer need them. Here are four suggestions for properly destroying those personal documents:

Fire 
Reducing your documents to a pile of ash is a surefire (pun intended!) way to destroy them. Use documents as kindling, or add them to a fireplace, wood-burning stove, or bonfire. You can add other scrap paper to the fire to confuse anyone who may be looking through the ashes for pieces of documents that may not have fully burned.

Water 
A good soaking will render any document illegible. Simply immerse a stack of junk mail in a tub filled with water before dumping it.

Confetti 
This option is more time-consuming, but it can be a great rainy day activity. If only a small area of a document contains sensitive information, hole punching that area will make the document useless, and you’ll get lots of homemade confetti.

Expired credit cards still contain important data and need to be disposed of properly. Rubbing a magnet across the card a few times will disable the magnetic strip on the back. You should also cut the card into pieces, making sure that each set of four numbers is cut in at least two places. Then smash the chip (if applicable) and dispose of the pieces in different garbage bags

Shredding 
A paper shredder will transform your documents into unidentifiable strips of paper. If you don’t have a shredder, but there’s one at your workplace, check with your management to know if it’s okay for you use it for your personal paperwork.

Or… bring your documents to Shred Day! Community Financial is offering a community Shred Day event on Saturday, September 17 from 2 - 4:30 p.m. Bring your confidential documents to securely shred at three of our branch locations:

Livonia Branch 

 34000 W. Seven Mile Road 

Canton Branch 

6355 N. Canton Center Road 

Gaylord Branch 

1360 W. Main Street

Using these basic steps to destroy your personal documents can protect your information, and your finances. As a general rule, it is better to have as few physical documents on file as possible. Switch to online banking, and opt-out of paper statements. Keeping your finances digital will help simplify your daily chores and help protect you from fraud.

Three Easy Ways to Make Your Dorm Room Feel More Like Home

The first few weeks in a dorm room can be tough. Between adjusting to a new roommate and being in a new place, you might dwell on how nice mom and dad’s house is compared to your dorm room. 

Don’t despair! There are a few low-cost hacks that can turn the institutional discomfort of your dorm room into the comfort of your parents’ home. Make a list, pop down to the home improvement store, and check out these three quick fixes:

1.) Soften your bed 
Most people don’t get a good night’s sleep in college. Part of it is staying up all night to study, but part of it is the terrible institutional mattresses. Dorm mattresses are somehow simultaneously too rigid and too squishy. Compared to the nice mattress you had at home you may notice your dorm bed is kind of lame.

You don’t need to break the bank on a new mattress. A memory foam mattress topper can give you endless comfort at a fraction of the price. For less than $100 you can sleep on an inch and a half of pure bliss.

2.) A shower landing place 
One of the worst parts of dorm showers is stepping out of a warm shower onto cold tile floors. Your parents fixed this problem with a cushy bathroom rug, but that’s not an option for you unless you want to share it with the whole floor (ick!). What’s a student to do?

Consider a pair of bathroom slippers to complement those sandals. Slippers can help you step out of the shower and onto a cloud. Look for footwear with moisture-wicking soles. Hang them up to dry when you’re not using them.

3.) Fix the lighting 
Institutional lighting is the worst. The hum and flicker of institutional lighting is obnoxious. That’s why your parents put concealed, indirect lighting in every room but yours. How can you recapture that feeling?

A table lamp or clamp lamp can get the same charm of indirect lighting without breaking the bank. An LED bulb will last forever and the fixture can be had for as little as $20. Put it on your desk, on your headboard or on your dresser for all-year class.

There are plenty of ways to make a door room feel more like home. Check out DIY sites like Pinterest for ideas on decorating on a budget. With a few small changes you can make your space your own and focus on your studies and making it a great school year!

It’s Back to School Time for Our Student-Run Credit Union Team

Julie Blaylock, Erin Ilg, and Jeremy Cybulski hold their
awards from the NYIB Conference.

It’s hard to believe that summer is almost over and the school year is about to begin! Back to school time means another busy and productive year for our Student-Run Credit Union Team.

Each year we partner with Michigan school districts to operate student-run credit unions and expose thousands of students to money management skills. Selected students learn the banking business as credit union tellers, branch managers, marketing representatives, computer operators and accountants. Between our north and south districts, we are currently up to 47 school partnerships!

Our Motivation 
We continue to invest a lot of time and energy into teaching financial education because we believe children are the future of our communities. Community Financial is very serious about our commitment to education and as the credit union grows, so will our number of school partnerships. Whether it is through new classroom presentations, student credit unions, or some form of financial education event, we are always looking to break new ground and further our efforts in the communities we serve.

“The most important things I think students take from their volunteer experience is learning about the process of getting a job (applying, interviewing, training, etc.) but also the expectations and responsibilities that come with having a real job,” said Senior Education Partnership Coordinator Jeremy Cybulski. “We know that not all of the students will go on to have careers in finance, but our program teaches them skills that are important for whatever professional path they choose.”

New Programming 
In addition to running the student-run credit union program, our Education Partnership Coordinators give classroom presentations on financial topics throughout the school year. This year our team will introduce fun new lessons to teach students about managing their money.

We’ve incorporated a number of new curriculum based, in-house presentations at the elementary and middle school levels. Most are interactive, mental math lessons with different, fun themes like “Teddy Bear Picnic” and the “General Store.” We even have one that involves surviving a zombie apocalypse! Our classroom presentations reached over 21,000 students last school year. We’re aiming for at least 24,000 this year!

National Recognition 
Recently Community Financial received some national recognition for our youth outreach. The National Youth Involvement Board (NYIB) annual conference was held in San Antonio, TX from July 25-29th and brought together financial educators, marketing and youth experts from all over the country. At the awards ceremony, our team members were recognized for their financial education efforts in two different categories:

• For Students Reached ($500-$999 million asset category)  
• Julie Blaylock- 1st place (3930 students reached) 
• Erin Ilg- 2nd place (3629 students) 
• Jeremy Cybulski- 4th place (3290 students) 
• Suzanne Sundberg- 5th place (3148 students) 
• For Presentations Given ($500-$999 million asset category) 
• Jeremy Cybulski- 2nd place 
• Julie Blaylock- 3rd place 

We are proud to lead the way nationally in financial education! If you know a school that is looking for financial education or some other form of partnership, please let us know. We also work with libraries, scout troops, church and other community organizations to offer assistance with financial education. To learn more about our school credit union program visit cfcu.org/scu.

How to Build Your Emergency Fund on a Budget

At this point, you're probably sick of hearing about the importance of an emergency fund. Yes, you get it: It's important to set aside money for the rainy days. But if you can barely save a month's worth of expenses, how can you possibly save up enough money for six months?

Luckily, you don't have to tighten the proverbial belt until you choke. By the time you're done with this list, you'll learn not only the specifics of starting an emergency fund, but also how to keep that fund nice and healthy.

Start Small, Think Big 
It's okay to aim for a specific goal, like saving up $1,000 in six months, but if you're not a habitual saver, that large goal might discourage you. Instead, set "micro quotas" and "macro goals" when you start building your emergency fund.

For example, let's say you need $600 six months from now. That's $100 per month, or $25 per week. Factor those figures into your weekly and monthly goals, whichever works better for you. The idea is to have a "macro goal" ($600 in six months), and break it down into smaller, more manageable "micro goals" ($100 per month or $25 per week).

Dial Back on Your Monthly Subscriptions 
Once you set your goals, your next step is determining how to achieve them. Your monthly expenditures are a good place to start.

How about your cable TV subscription? Assuming you're on the expanded basic package, you probably shell out around $65 per month. Since it's likely you don't even use half of your subscription, it may be a good idea to let it go. Services like Netflix and Hulu are often priced at a tiny fraction of cable TV services.

Use Your Credit Cards Wisely 
Don't be afraid to negotiate with your credit card company. Ask the credit card company if your annual percentage rate (APR) be lowered and always use your card (or cards) wisely. That means paying down those balances each and every month and only charging what you can afford to pay off when you get your statements. It's also wise to shop around, do some research and find the best credit card for you. That means looking into the benefits that come along with some cards, like receiving cashback offers for groceries and gas purchases, and what the APR is for each card.

It's smart to shop around, read objective customer reviews and decide which card best suits your needs.

Save, Save, Save 
Think about it: If you save a dollar a day, you'll have $365 by the end of the calendar year! Now, imagine doubling or tripling that number. The results put things into perspective.

Sift through your daily expenditures, and decide where you can cut back. For example, instead of buying coffee from your fave coffee shop every day, try every other day or a few times a week. Instead of buying separate insurance coverage for your car, try purchasing combined coverage packages for both your car and renters insurances. You'll be surprised at how small discounts can add up when you look for opportunities to reduce monthly bills.

Automate Your Emergency Fund 
Sometimes you’ll forget you have an emergency fund. Considering all the other things you have to worry about, who can blame you? However, you still need a way to stash extra cash without too much effort.

One solution is the automatic savings plan. As the term suggests, it automatically funnels cash into your emergency fund account on a regular basis. Ask your financial institution if this is an option you can utilize. "Set it and forget it" is always a handy feature.

Get Creative 
Building an emergency fund can be stressful. The temptation to dip into it ahead of time is overwhelming, and there's always the feeling that you're depriving yourself in some way. But believe it or not, saving money can be fun!

With careful planning, perseverance and patience, you can have adequate cash for the rainy days or those big financial goals in your future before you know it.