Tuesday, October 24, 2017

Steps to Take During Financial Planning Month

Did you know that October is National Financial Planning Month? Many of you are already saving for retirement, but are you planning for it? Planning for retirement and for other long-range financial goals is essential to achieving them. There are some steps you can take to make sure you achieve your goals.

1. Identify Your Goals 
What’s important to you and your family? Is it saving for your kids’ education? Traveling? Donating to a cause you care about? These things aren’t separate from the plan; they are key elements of it. Too many people save and invest money with no specific goal in mind. Identify specific goals that are important to you and your family.

2. Gather and Analyze Data 
Take stock of your financial situation. How much money do you owe? Make a list of all your creditors, your current payment schedule, and the annual percentage rate you’re paying in interest. Then list all of your savings. Estimate your monthly expenses for utilities, groceries, gas, insurance and other necessities. What goals do you want to accomplish is 5, 10, 20 years? Are you willing to accept a high relative market risk to achieve your investment goals or would a conservative portfolio be a better option for you?

3. Develop a Plan 
A good financial plan—created with the assistance of an experienced financial professional—addresses your priorities while defining your investment approach. It changes over time, to reflect changes in your life and your financial objectives.

With a plan, you can set short-term and long-term goals and benchmarks. You can estimate the amount of money you will likely need to meet retirement, college, and health care expenses. You can plot a way to wind down your business or exit your career with confidence. You can also get a good look at your present financial situation and gauge the distance between where you are financially and where you would like to be.

4. Implement It! 
Now you can put your plan to work! Many people find that implementation is the most difficult step in financial planning. The point is to make your financial strategies achievable and to consider slowly moving up to desired savings rates rather than jumping into something that may be challenging if implemented too fast for your comfort level and budget.

5. Continually Monitor Your Plan 
It's called financial planning for a reason: Plans evolve and change just like life. Your financial plan needs to be monitored and tweaked from time to time. Think of what can change in your life, such as marriage, the birth of children, career changes and more. Now think of financial changes beyond your control, such as tax law changes, interest rates, inflation rates, stock market fluctuations and economic recessions. Life changes and so will your plan.

If you are looking for help creating your financial plan but don’t know where to start contact our Investment & Insurance reps at (877) 937-2328 ext. 8868 for a no-cost, no-obligation appointment. As the saying goes, “a goal without a plan is just a wish.” Start making your financial dreams reality today!

Friday, October 20, 2017

School Spotlight: Smith Elementary and SMART Goals

The SMART Student-Run Credit Union Program is Back!

Community Financial’s award-winning Student-Run Credit Union program is back in full force again this school year! Our school partnerships have grown over the years, and we now partner with 48 schools in our neighboring communities. Our first partnership in the Plymouth-Canton Community School District was with Smith Elementary School in Plymouth in 1995. Here are some throwback photos of our partnership with Smith Elementary!

Smith Elementary Student-Run Credit Union, October 2002.  
Smith Elementary student volunteers and teachers, October 2002.  
What is the Student-Run Credit Union? 
The Student-Run Credit Union is a program operated by Community Financial where students, ages kindergarten through high school, can save their money monthly at their school. Students practice money management skills and develop a sense of ownership with their finances at an early age. Fourth grade students at Smith, under the supervision of Community Financial staff, operate the Student-Run Credit Union. Each student volunteer is assigned a job and assists young members of all grades to save their money.

Smith Elementary Student-Run Credit Union Fall Volunteers
Student volunteers working hard recording deposits and writing receipts.
SMART Savings Goals 
Our Education Partnership Coordinators help to educate students beyond just saving their money. One program highlight is helping student members have a SMART goal. SMART is an acronym for Specific, Measurable, Attainable, Realistic, and Timely.

Each student credit union member receives a goal sheet at the beginning of the year where they can track a specific savings goal throughout the school year. Here are some Smith student members receiving their goal sheets in October.

Your Turn: What types of SMART goals do you have? Tell us what you are saving for in a SMART way?

Tuesday, October 17, 2017

International Credit Union Day: Dreams Thrive Here

Are you as excited as we are to celebrate International Credit Union Day on Oct. 19, 2017?

It’s a day to share your experiences as a member and to reflect upon all the benefits you enjoy by being a part of your credit union. It’s also a day to have fun! We will have cider and donuts at all of our branches on October 19 to celebrate ICU Day so make sure you stop by!

Each year, CUNA and the World Council of Credit Unions choose a theme for ICU Day. This year’s theme, which was selected via an online poll of credit union professionals, is “Dreams Thrive Here.”

As a credit union member, you know this statement is true. Credit unions help your dreams thrive by helping to make them possible. In the spirit of ICU Day, let’s take a quick look at four factors that make credit unions the best choice to allow your dreams to thrive.

1.) Members first 
As a member of a credit union, you own a piece of the organization. That’s why it’s often referred to as a cooperative. Your credit union only wants what’s best for you. This means we can focus on offering superior service and policies that are as member-friendly as possible.

2.) Lower fees 
Banks earn much of their profit through fees and pushing unnecessary products on their customers. While a credit union will also have fees attached to products and services, these tend to be lower than similar fees you’ll find at a bank.

3.) We’ve got your back 
A credit union will be willing to work with you through rough patches. While a bank is more likely to turn down a borrower who has a poor credit history, a credit union member representative will be happy to meet with you and work to find a loan that best suits your needs. If necessary, we can also help you learn the basics of budgeting and may offer programs to help you cover unexpected expenses.

4.) Better dividend rates 
Credit unions offer higher dividend rates on savings accounts and lower interest rates on loans. We only need to cover operating costs, and all the money we save is passed down to our members in the form of favorable rates, enhanced services, community giving, increased operations and more.

As you can see, we’ve got lots to celebrate! Stop by on Oct. 19 so we can show our appreciation and celebrate everything that makes a credit union special. Can’t wait to see you!

Tuesday, October 10, 2017

7 Common Life Insurance Myths Debunked

Many of us let popular misconceptions about life insurance convince us that we don’t need it. Read on to see how seven of the most widespread life insurance myths are easily debunked.

Myth #1: I’m single and I have no dependents. I don’t need life insurance. 
Actually, you do. Every person should have funds to cover their funeral costs and end-of-life medical bills. Also, you can leave a legacy by choosing a cause to be the beneficiary of your death payout.

Myth #2: I’m a stay-at-home parent who doesn’t earn an income. 
My partner needs life insurance; I don’t. The tasks that currently fill your time will need to be outsourced to hired help should you suddenly pass on. Nannies, cleaning help, and cooks cost money. That money can come from the insurance payout of your homemaker’s policy.

Myth #3: Why would I waste money on insurance when I can invest it to earn higher returns? 
You’re better off putting your money somewhere safe with a guaranteed payout – like a life insurance policy. You don’t want to leave your dependents with an iffy source of funds when you pass on. The only exception to this rule is for the truly wealthy, who have more than $1 million in liquid assets and already have their funeral costs and medical bills covered.

Myth #4: I can’t afford life insurance. 
A recent Life Happens study revealed that 80% of uninsured people who claimed life insurance is too expensive, had overestimated its cost. In fact, a 20-year level term policy for a healthy 30-year-old usually falls in the ballpark of just $150 a year.

Myth #5: I’m too young to worry about life insurance. 
Actually, there’s no better time to purchase a life insurance policy than when you’re young. The premiums are far less expensive for those under age 35, and most people in that stage of life do not have sizable assets to pass on to their dependents. Most importantly, dependents of the 25-35 age group will be too young to be financially independent and will need the death payouts for basic survival.

Myth #6: My children are independent adults. Why would I need life insurance? 
Leaving your dependents with an inheritance that helps them purchase a home, start a business or put some money away for a rainy day will keep you in their thoughts long after you’re gone. Also, you don’t want to burden your children with funeral expenses and medical bills when they’re grieving.

Myth #7: My job offers a life insurance policy for employees. If I leave my job, I can take it with me.
Unfortunately, this is false. Most employer-offered life insurance policies are not portable. Since there’s no way to know that you’ll remain at your current workplace forever, it’s best to purchase a separate life insurance policy.

Your Turn: Which of the above myths did you always believe to be true? Do you know of any others? Share your thoughts with us in the comments!

Thursday, October 5, 2017

Fall Into Tax Planning

The leaves are changing. The nights are getting longer. There’s a cool breeze blowing, and apples are falling off the trees. Everyone knows what that means: It’s tax planning time!

While most people don’t start thinking about their taxes until February or even April, the best time to make changes is this year. If you haven’t thought about your taxes since you paid them in the spring, you’re still in good shape. For most tax matters, changes made by Dec. 31 are assumed to be in effect for the whole year. Let’s look at 3 areas of tax planning you should aim to tackle as quickly as you can.

1.) Make any necessary changes to your retirement accounts 
If there’s anything that is further off than tax planning, it’s retirement planning. Still, one of the most compelling reasons for making contributions to your retirement is preferential tax treatment. For starters, you should be contributing the maximum to either a Roth or a Traditional IRA.

From there, it gets a little trickier. If your income dropped this year, say, because you or your spouse lost your job or had a significant reduction in hours, you might not get much benefit out of the tax deduction that is presented by a Traditional IRA. You can take this opportunity to switch a portion of your Traditional IRA to a Roth IRA. Essentially, you’re “paying” the tax on a portion of your IRA in a year when it won’t cost you as much, then switching it into a tax-free growth account.

You also need to make sure you’re contributing to your employer’s 401(k) program. Those contributions are also made pretax – so you can deduct your portion of the matching funds from your tax burden. If you haven’t been contributing, see if you can make “catch-up” contributions to take advantage of the preferential tax treatment.

2.) Spend your “use-it-or-lose-it” funds 
Many employers offer plans like Flexible Spending Accounts (FSA). These programs also offer preferential tax treatment, but many of them empty out at year-end whether you’ve used the funds or not. These programs are a great way to save for unplanned medical problems, but if you were lucky enough to avoid those costs, you’ll need to spend that money before it goes away.

There are a few common tricks you can use to spend the money without wasting it. Obviously, if you’ve been putting off a minor medical procedure (a mole removal, an eye exam, new contacts) that’s the easiest place to spend. Otherwise, you may need to get creative. A few staple goods are FSA eligible. Over-the-counter painkillers, first aid kits and supplies,bb and some disaster preparedness supplies are generally eligible for reimbursement. Consider getting first aid kits as Christmas gifts for young children or donating them to community programs.

3.) Plan your charitable contributions 
If you’re going to donate to a charity, you can give in a way that maximizes your tax benefit. One of the easiest ways to do that is to give stock. Not-for-profit organizations don’t have to pay the capital gains tax, so they can sell it for the full amount. This means you get to take credit for the full value of the gift. This is also true if you plan to give real property (houses, buildings, land, etc.) or use another complex giving strategy to maximize the value of your contribution.

However you give, make sure you keep detailed records about your gifts. You want both a receipt from the organization and another form of proof, like a copy of a check or a bank record. Not-for-profit organizations are almost always overworked and understaffed, so counting on their bookkeeping can sometimes be an exercise in frustration. Keep your own records just to be sure.

Remember, no one can offer you accurate tax advice without a careful review of your finances. If you have questions about filing your taxes, you should speak to a tax planning professional. For most people, though, a little bit of knowledge is enough to get started paying less to Uncle Sam and keeping more in their retirement funds.

Community Financial Credit Union, P.O. Box 8050, Plymouth, Michigan 48170-8050;
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