The Importance of Retirement Planning
Retirement is the finish line of your career when you enjoy the fruits of your labor. Achieving a comfortable and secure retirement requires careful planning and disciplined saving. It's easy to put off retirement or assume that it's a complex process; However, saving for retirement is easier than you think. Whether you're just starting to think about retirement or looking for ways to enhance your current retirement plan, you're in the right place. This 4-step guide shows how saving for retirement can be simpler, more achievable, and more rewarding than you might imagine.
Step 1: Set Clear Retirement Goals
Setting a clear goal is a foundational step in achieving a secure retirement plan. Consider these components of your personal retirement goal.
- Retirement age - What age do you want to retire?
- Retirement expenses - What will you be paying for in retirement? Consider essential expenses like food, housing, healthcare, transportation as well as leisure activities and travel.
- Inflation - While adding up your retirement expenses, it's important to take inflation into account. Try using a free retirement inflation calculator online to help you estimate added expenses.
- Lifestyle - What type of lifestyle do you want to be living when you retire?
- Unexpected expenses - It's important to consider unexpected expenses from things like injuries, health issues, natural disasters, and economic turmoil.
- Social Security & other incomes - While planning for retirement, you not only have to consider your expenses but also the income that will be available.
Step 2: Create a Retirement Budget
After considering the components of your retirement goal, the next step is creating a retirement budget. This step is all about calculating the estimated amounts that you're going to need to save based on your retirement goals. This will help you decipher if your retirement goals are in line with your savings. Creating a retirement budget can be difficult to do on your own. Contact 1st Community Credit Union to help guide you in creating a retirement budget that makes sense for you and your goals.
Step 3: Choose Retirement Account(s)
The types of available retirement accounts depend on your employers and/or banking institutions. Take the time to understand the different options available before making a decision. If you have access to employer-sponsored plans, they often provide valuable benefits including contribution matching (which is essentially free money). If you don't have access to employer-sponsored plans or if you are looking to diversify your retirement savings, look into savings accounts offered at your financial institution. At 1st Community Credit Union, we offer a wide variety of savings accounts including Traditional and Roth IRAs.
Step 4: Automate
Once you have your retirement plan in place, to make it easy to stick to the regime you should automate your savings. Talk with your employer to set up direct deposits so a portion of your salary automatically gets deposited into your retirement account before you can even see the paycheck. You can also talk with your financial institution or retirement provider about automated investment plans that allocate your savings into a diverse portfolio of investments. As you continue to automate your savings, monitor your accounts and increase your contributions over time. As your income grows, so should your allocated retirement savings.
Start Saving Today
You're never too young to start saving for retirement. Planning for retirement may seem complex, but with dedication and the right strategies, you can secure a comfortable and worry-free retirement. Contact us at 1st Community Credit Union and set up a meeting at our Sparta office, West Salem office, or Tomah office. Saving for retirement starts today!
Summer’s almost here and that means it’s time to start planning your family vacation. But before you hit the road, make sure you prepare by budgeting and organizing ahead of time. After all, summer is supposed to be stress-free! At 1st CCU, we thought we’d offer 5 easy tips for getting a head start on planning and budgeting for a successful summer getaway. It’s one way to help you experience an unforgettable summer escape without breaking the bank. So sit back, relax and read on…
Research Destinations, Compare Rates
You’ve been dreaming about your next vacation since your last vacation. You’ve thought of a few places you’d like to take the family and you’ve done a little googling to see what’s out there for attractions and activities. Now it’s time to dig a little deeper. For each possible destination, compare rates and look for discounts and packages to get the most bang for your vacation buck. Weekdays may be cheaper than weekends. Certain times of the season may have a better price. If you’re flexible and not afraid to put your research hat on, you can find the perfect vacation that fits your budget and your expectations.
Set a Realistic Vacation Budget with Potential Costs
Setting a budget can seem like a daunting task, but with a little bit of planning and discipline, it can be the key to a successful vacation. It’s crucial to consider all potential costs - including those that may not immediately come to mind such as splurging on a special dining experience, extra transportation like Uber or Lyft or a surprise expense that may occur while you’re on vacation. Nobody likes unexpected surprises like that, but they happen. By factoring in these expenses from the outset, you’ll be able to better manage your budget. A budget based in reality can help make a dream vacation more attainable.
Start Saving Now
If you haven’t already started saving for your vacation, now’s the time. The earlier you start setting aside a bit of money each paycheck, the more you’ll have in your vacation fund. Whether you’re planning a beach getaway, a hiking adventure or a trip to a major metro, saving and budgeting can help you avoid financial stress later. The best part? Saving up for your vacation can actually be a fun, rewarding experience. So why wait? Start putting aside some cash today!
Consider Credit Cards with Reward Programs
Credit cards and reward programs can be powerful tools if you’re looking to save money. By using credit cards that offer cash back or points for purchases, you can earn rewards that can be used towards future expenses. By taking advantage of these programs, you can stretch your budget even further and make your hard-earned dollars go the extra mile. Of course, it’s important to use these tools responsibly by paying off your balances in full each month and avoiding the urge to overspend. With a little mindfulness and planning, credit cards and reward programs can be great ways to boost your savings and enjoy some extra perks along the way.
Utilize The 1st CCU Anywhere Mobile App
Planning a vacation is a thrilling experience, but often the actual execution of our budgeting plans can become a tedious task. This is where the 1st CCU Anywhere Mobile App comes in handy. With just a few clicks on your phone, you can keep track of your saving progress, your budgeting goals and your vacation spending while you’re enjoying some fun in the sun. We want you to enjoy your vacation. But if you ever need to check in on your finances, our 1st CCU Anywhere Mobile App makes it easy. Anywhere, any time, any device.
Hopefully these 5 tips to get a head start on summer vacation planning and budgeting have you thinking it’s time for a vacation. So get to planning, get to saving and start your budget early. Just like we can help with home mortgage loans and auto loans, at 1st CCU, we’re here to help you grow financially. Smart planning can allow you to do the fun things while preparing for your future. Contact 1st CCU in Sparta, West Salem and Tomah for more information.
When it comes to teaching smart money management for teens and kids, the more education they have at an early age, the better prepared for life's financial challenges they'll be in adulthood. We're all familiar with the concept of saving from an early age but providing young people with a solid foundation of budgeting, understanding credit scores and building wealth can seem daunting - especially if you haven't been taught these principles yourself! Luckily, 1st Community Credit Union is here with tips to provide parents and their kids the knowledge necessary to make smart decisions with their finances so your children will have beneficial financial habits for their future.
Smart Money Management for Teens and Kids
As a teen or kid, it can be difficult to understand the basics of money management and saving for the future. Fortunately, the internet has several free resources to help teach kids (in a fun way) the importance of saving and spending wisely. There are also books for all ages available at your local library, or consider playing board games such as Monopoly or Payday as a family.
Understanding the value of each dollar is an important part of setting financial goals. This understanding helps with making and sticking to a budget, tracking expenses, and utilizing every resource available. Other impactful tactics include investing in yourself through responsible spending practices, creating an emergency fund, planning for a rainy day. Teaching your young ones steps to get their finances in order now will be sure to pay off late
The Benefits of Good Money Habits
Teaching children and teenagers the importance of good money habits at a young age is essential for helping them make responsible and informed decisions as adults. Developing healthy relationships with money through understanding how to save, budget, and spend wisely can help teenagers avoid future debt, build beneficial financial confidence, and create a more secure future. 1st CCU always encourages smart money management at any age. Making wise monetary decisions now plays a role in ensuring financial well-being and stability in the long run. Not only will these lessons enable teens to become financially independent while they are still young, but they will also provide peace of mind in terms of security later in life.
Strategies to Teach Kids and Teens about Saving
Teaching kids and teens about the importance of saving is an essential part of their financial education. Kids should begin learning about budgeting and smart spending as early as possible so they can develop lifelong saver habits. There are a few key strategies to teach kids and teens about saving: start small, reward good behavior, provide clear examples and make it a team effort. With the help of 1st CCU, parents can suggest savings goals for their children and provide guidance through the process. By recognizing the efforts their children make toward these goals, parents can empower their kids to become smart savers.
Developing a Budget for the Whole Family
Taking a family-oriented approach to budgeting can help everyone in the family learn how to become financially savvy. Developing a budget as a team helps instill good money-managing habits that can be carried over into adulthood. A joint budget not only teaches teens and children to value good financial decisions, but it also encourages collective responsibility for spending and saving habits. Putting together a budget for the whole family is easy, practical, and beneficial for future financial well-being.
Tips to Help Kids and Teens Stick to their Budget
Teaching kids and teens how to budget is essential when it comes to smart money management. But how do you help them make it a habit that'll stick long term? 1st CCU has several tips that will help! For starters, setting up a monthly budget specifically for a teen or kid's spending money can give them the autonomy they require while helping them to stick to an allotted limit. Secondly, encouraging tracking and setting reminders can also keep them on track with their budgeting goals. Most importantly, making sure your kids or teens understand why having a budget is important and the benefits of being financially responsible will go a long way in establishing good habits early.
Encouraging Smart Spending Habits for Life-long Success
As your children take their first steps into adulthood, instilling good money management habits will be paramount in ensuring their long-term success. 1st CCU is a great resource for introducing teens and kids to fiscally sound practices. Enabling them to quickly understand the importance of budgeting and learning how to handle unexpected expenses can empower them with the knowledge needed for longevity when it comes to mastering their personal finances. Start off small by having your kids keep track of daily expenses so they can visualize the difference between instant gratification purchases and building a sustainable financial plan that yields long-term rewards. By creating savings goals that are achievable, your children will also learn how powerful setting aside a certain amount each month or week can be when working towards future goals. Teens may be resilient but providing guidance towards sound spending habits early in life will ensure smart decision making for years to come!
Smart money management for teens and kids starts at home. It’s truly an investment worth making. Help your kids achieve their financial goals with confidence. Just like we can help with home mortgage loans and auto loans, at 1st CCU, we’re here to help the next generation of smart savers start early. Contact 1st CCU in Sparta, West Salem and Tomah for more information.
The new year is a time for resolutions. Many people resolve to get in shape, spend more time with family, or save more money. If you're looking to save money in 2023, we have some tips that can help! Follow these simple steps and you'll be on your way to saving more money without making any big changes to your lifestyle.
Make a Budget
One way to save money is to make a budget and stick to it. This means knowing how much money you have coming in and what your regular expenses are. Once you have an understanding of your finances, you can start making adjustments to spending in order to free up more money to save.
Cut Back Unnecessary Expenses
There are plenty of ways to cut back on unnecessary expenses. This could mean things like eating out less often, buying fewer clothes, or reducing your entertainment budget. When you take a close look at your spending, you may be surprised at how much money you're wasting on things that aren't really necessary.
Utilize Coupons and Discounts
A third way to save money is to start utilizing coupons and discounts. Whether it's clipping coupons from the newspaper or looking for deals online, taking advantage of sales and discounts can help you save a significant amount of money over time.
A fourth way to save money is to get rid of debt. If you have high interest debt, such as credit card debt, it can be costing you a lot of money in the long run. By paying off your debt, you can free up more money each month to put towards savings.
Budget Some Savings
Finally, another way to save money is to simply start setting aside some money each month into savings. Even if it's just a small amount, over time it will add up and you'll have a nice nest egg built up that you can tap into when needed.
Start Saving Today
Start the new year by resolving to save money in 2023 with 1st Community Credit Union in Sparta, West Salem and Tomah. To save even more, let us help with a service that’s right for you. And if it’s time for a home loan or auto loan that makes sense, we can help you with that too - just contact us! Let 1st CCU be your partner in building a solid financial future.
Setting aside cash can give you peace of mind when unplanned situations happen. After all, unforeseen payments for medical bills, home repairs, and other emergencies can set you back and lead to financial losses.
Reserved money for unexpected expenses can help you feel more secure and confident about the future. So, it’s best to have enough cash stored. To help you understand the concept better, here’s everything you need to know about emergency funds:
Why Is an Emergency Fund Important?
Financial stability is beneficial to enjoying and maintaining your lifestyle. Therefore, an emergency fund can keep you on track and protected when unforeseen situations occur. Consider your emergency fund a safety net, reducing the need for high-interest credit cards and personal loans.
How Much Is Enough for an Emergency Fund?
There is no set amount required when it comes to saving for unplanned expenses. It usually depends on your lifestyle, income, costs, and dependents. However, keeping three to six months’ worth of monthly fees can be a good amount to start with.
What Are the Ways to Save for Unplanned Expenses?
Reaching the ideal amount for emergency funds might be challenging to accomplish, especially if you’re living paycheck-by-paycheck. To help ease the process, the following are some practices you can do:
Keep a Budget
Monitoring your income and expenses is a good rule of thumb when you’re saving for emergencies. If you track your spending habits, you’ll be able to calculate how much you can set aside without making drastic changes to your lifestyle.
For example, you’ve noticed that much of your money goes to unnecessary apparel. You can cut back a portion from your usual clothing expenses and allot them to your emergency fund.
Set a Goal
Rather than instantaneously putting a significant amount in your savings account, you can aim for a more feasible goal like a month’s worth of expenses. This mindset will lessen the pressure of saving and help you develop a habit. Once you reach the initial amount, you can gradually increase your goal.
To determine your monthly expenses, you must combine every factor you spend based on your budget. Your calculations may include costs for housing, food, transportation, and other necessities.
Save Excess Income
If you receive more money than you usually do, it’s best to allocate it to your emergency fund. It may be tempting to spend your tax refunds, holiday pays, and other sources of income, but taking advantage of these bonuses can jumpstart your savings.
Secure Your Money
A good way to keep your emergency funds intact is to deposit them in a separate account. If you need a place to store your savings, you can contact us at 1st Community Credit Union. We can keep your money safe for unexpected situations. Get in touch with us today so we can discuss your financial plans.
Saving money is an essential life skill that everybody, regardless of age, should learn about. However, managing finances can be a challenge if you don't have a strong foundation in financial literacy. It’s important to teach kids and encourage them to form healthy money habits right away. When they start early in life, these practices will stay with them and eventually shape them into becoming financially responsible adults.
Parents know that a lot of work goes into teaching children about savings, more than just encouraging them to set aside a portion of their allowance. Kids need to stay motivated and be consistent, but it’s quite a challenge when they don’t understand what they’re saving for. One good way to go about this is by setting short-term and long-term money goals.
Do they want to buy a new toy, or do they just want some spending money on vacation? Regardless of your child’s motivation, we’re here to guide you in teaching them how to achieve it. Here are some smart tips on how your child can raise funds for both short-term and long-term savings goals:
Differentiate Wants and Needs
The first and most important step of teaching kids about healthy money habits is to identify the difference between wants and needs. Start by citing examples of needs (food, shelter, clothing, healthcare, and education) and wants (toys, electronics, etc.).
Then, you can quiz them to test if they can already grasp these two concepts. Doing this can teach them to prioritize spending on necessities over luxuries.
Teach Kids To Track Their Expenses
Being a better saver means being mindful of your expenses as well. Let your kids keep a journal where they can log and see their purchases. Have them add up everything so they can keep track of where most of their allowance is going.
By doing this, you can help your children grasp how important it is to create a balance between their expenses and their savings. This may prompt them to change their practices so they can achieve their goals faster.
Provide a Safe Storage Place
For younger kids, having a piggy bank may be enough. But when your child gets a little older, it may be wise to open a savings account at a local credit union.
Build a Financially Secure Future for Your Child
Saving doesn’t have to be hard work when you have reliable financial professionals by your side. Let our team at 1st Community Credit Union be your partner in ensuring a bright financial future for your kids. Get in touch with our staff to find out how you can open a children’s savings account.
It’s hard to think about saving for the future with expenses due today, coupled with shopping for non-essentials or spending money on other things, such as eating out or going on vacation. While those things are important too, it’s also a smart strategy to think about saving for the future to be able to enjoy life and still meet day-to-day expenses many years from now.
Also, important to consider is that life doesn’t always go as we plan. Job losses, cut hours, injuries, the car goes kaput, major appliance breaks, or an event, such as a pandemic, occurs. Strategically planning for the future with the money we have now is one of the best investments we can make.
Create a Budget
The first order of business is to create a budget. Sit down and make a list of all current income and expenses. Then list fluctuating expenses. Once you see your cash flow situation, it’s easier to take a realistic and honest look at your financial health. This is a true test of the ability to learn the difference between want and need. Once you do that, you can cut out any non-essentials being spent. Designate anything cut from the budget and divert it to savings or investments.
Build an Emergency Fund
Setting an emergency fund is one of the earlier steps to take when planning for our financial futures. This fund, which should only be touched in the event of a true financial need, will safeguard against dipping into any savings designated for the future. Ideally, saving for three to six months expenses is a good-sized emergency fund.
Start Saving Early
Whatever our financial goals, it’s always best to start now. In life, it is inevitable something will always come up that requires us to spend money. The earlier we start saving, the less of a negative financial impact will be felt when the unexpected occurs.
Tackle High-Interest Debt
Debt has an awful tendency to snowball if we’re not on top of it. As you make a commitment to savings, also commit yourself to pay down high-interest debt. The quicker you can eliminate high-interest payments, the better position you’ll be in to meet your financial goals for the future.
Every time you get paid, you should set aside a portion to go towards your savings. Whether the money is sent to a savings account, 401(k), IRA, CD, 529, or other investment, try to make it consistent. You’d be surprised to see how quickly savings for the future accumulate once you make a commitment. Talk to your local bank or credit union about options where you can have money directly deposited from your paycheck.
Start Saving Today
Many people wonder when the right time is to start saving for the future. Putting money aside is one of those tasks people always seem to fall into the mindset of, “I’ll start that tomorrow.” However, our answer to this question is always. The time to start saving is right now. The earlier you start, the more financially secure you’ll feel down the road. You’ll also be able to handle any unexpected expenses life throws at you. If none occur, then you can enjoy your financial stability and spend without worry.
For more financial advice and ways to save money, give the team at 1st Community Credit Union a call at 888-706-1228.
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. When you enroll in 1st CCU Anywhere it's easy to set up and monitor your automatic transfers between accounts.
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%.
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).