I’m still cleaning walls. This job seems to be neverending, but one good result is that I've lost all desire to upgrade to a larger home. (I don't want any more walls to clean.) Last week I had to move the couches in the front room so that I could get to the walls. Underneath the couches was a big mess. I thought it would take me a few minutes to clean the front room, but it took several hours! My kids had shoved items under and behind the couches instead of throwing and putting the stuff away. I hadn’t realized that area was even getting cluttered because the clutter hid beneath the couch. I found broken junk, dirt, books, socks, shoes, and a lot of pens. Now I know why I can’t ever find a pen!
Like the couch, financial clutter is often unseen. It can be an overwhelming mess that we don’t want to uncover. I’ve observed so much pain result from cluttered finances. I hope the next few suggestions are helpful if you are feeling overwhelmed with finances.
To be honest, I felt like throwing away everything that was underneath the couches. I almost did but if I had, I would have caused other problems. It’s hard to know where to start when you’re in a mess. Financially, we can also feel like giving up. It’s not a fun feeling. When I help a family make a budget, the first thing we do is to sort through the bills and the income. We examine one financial item at a time and figure out how much is due, when it is due, and how it will be paid. This is such a simple idea, but I’ve seen people change from feeling overwhelmed to feeling hopeful. It’s not hard to sort through bills, but it is time-consuming so the next suggestion can be helpful.
I have had several exercising friends over the years. It helps so much to have them exercise with me. It is helpful when they know about weight equipment and nutrition. But, even when they don’t, it helps to have someone to exercise with me. Finances can be the same way. Sometimes it just helps to have someone alongside you. It could be a spouse, friend, parent, or sibling. It really just needs to be someone who cares about you. If they have financial background, it can be helpful, especially if they are working on financial goals. We can all find someone who doesn’t mind helping us because it helps them too. It helps them to be motivated. It helps them to serve. So, it’s good for everyone. My cleaning buddy was my five year old. When she stayed with me, it was helpful. When she left, it was much harder.
That was not the first time I cleaned under the couch. In fact, my husband had cleaned behind it recently. We were both amazed at how quickly it became cluttered. Unless our family changes the habits that caused the clutter, the problem can recur. Clutter can easily come back. Financially, I have seen this happen. Oftentimes, we are making big changes, so it’s going to take more than one time. Just like exercising, each day we need to find motivation to do it. We also need to do this with our finances.
No matter how cluttered your finances may seem, you can work through it and remove the clutter. It’s such a peaceful feeling that is worth the effort.
Growing up, my family loved watching sports together. My younger brother wrote down all of the players' names and kept track of their stats as the games were played. I hadn't seen a Jazz game for a decade until Ty's boss gave us tickets earlier this year. We sat on the fourth row and were so completely entertained that my kids didn't fight or complain at all! It's exciting for our Utah Jazz to advance in the playoffs and play the Golden State Warriors! But, the most important statistics to us individually don't have much to do with the NBA playoffs.
Have you seen the classic game of Family Feud? Why do the family teams care what the “survey said.” Because, if the families guess the responses that were the most common answers, they can win the prize money. In a personal finance class I just taught, we took a financial quiz. I read a lot of financial surveys to prepare for this class. Three of the statistics from these surveys impacted me the most. More importantly than finding out what the surveys said, is to find out what you think about these statistics!
Could you cover an unexpected expense that cost $1,000? We’ve had a whole lot of rainy days here in Northern Utah the past couple of weeks. We don’t know when, but we know that it will rain. I don’t mind being wet, but I don’t like feeling cold, which always follows my getting wet. We have regular financial storms too. We don’t know when they will hit, but we know that they will hit. An emergency fund protects my family from getting rained on and being left in the cold financially. There are different opinions on how much an emergency fund should be. Because of the emergencies my family has experienced, I wouldn’t feel comfortable with an $1,000 emergency fund, but it’s a great place to start. Do you agree with having an emergency fund? If you were surveyed about having an emergency fund, what would you say? Has an emergency fund ever helped you work through changes in your life? Does an emergency fund matter to you?
I am a fan of having an emergency fund for many reasons, but I’ll share the most recent experience with our emergency fund. My husband Ty changed jobs 6 months ago, and we had a two month waiting period to enroll in the new employer’s health insurance plan. Ty’s employer generously offered to reimburse us for the cost of the COBRA health insurance coverage for the two month waiting period. However, we had to pay for the insurance first before it could be reimbursed. Our emergency fund allowed us to pay for that insurance coverage. When we were reimbursed, we deposited the money back into the emergency fund so that it will be there the next time that we need it. The emergency fund relieved and prevented a lot of stress for us. I recommend an emergency fund to you because it has helped my family adjust to life's changes.
Again, it doesn’t matter whether this survey is accurate, it matters what is true for you. Do you have a retirement savings account? Are you saving regularly for retirement? Just like the rain is sure to come in springtime in Utah, retirement is going to happen as we age. If you don’t have retirement savings, or if you haven't saved as much as you wished you had, it’s not too late to make a plan and work towards retirement.
Am I saving for retirement? Yes! Have I saved enough for retirement? No, but we are making progress. With so many financial emergencies and financial pressures, I understand how retirement can slip into the background of your finances. My husband and I try to keep them in the forefront and make retirement a priority for our family, but to be honest, sometimes we have to cut back our retirement savings. Our retirement contributions increased when our income increased and decreased when our income decreased. Although I’m not retired, I have mentors and friends who are retired. They advise me to save for retirement throughout my working life, and I trust them. I believe in saving for retirement!
Do you talk about money with your friends and family? If you have children, do you give them opportunities to save, share, and spend money? Do they understand that a $20 bill is worth much more than a $1 bill? My kids may think that I talk with them too much about money. I talk about it all the time because we use money all of the time.
My 5 year old daughter and I ran a lot of errands this past week. I told her we were going shopping and encouraged her to bring her Hello Kitty purse and five dollars. On the way to the store, she told me that she wanted a ball. I let her spend her money as she wanted. At the first store, she bought some cotton candy. The price rang up higher than the price listed. It turns out that the cotton candy was in the wrong spot on the shelf. I asked her if she still wanted it. She bought the overpriced cotton candy, and she was excited that she still had money left. At the next store, she saw the bulk bins of salt water taffy in the middle of the isle and bought that. She used her last few quarters to ride the Clifford ride at the front of the store. Although it was hard for me to watch her spend money on candy, I let her experience spending her own money.
I think she learned a lot that day. By going on the Clifford ride, she learned what a quarter looks like. (The machine only took quarters.) Even though I didn’t agree with her spending choices, I felt proud of her for learning what a quarter was and being able to spend money on her own. At the last store, she saw a tiara that she wanted badly, and I explained that she had enough money at the beginning of the day to buy the tiara, but she didn’t any left. She replied, "But I didn’t know they would have this.” We talked about figuring out what she wanted and then not getting distracted by other items.
Surveys are just one tool to find out how our personal finances are going. Are the statistics from these surveys true for you?
As you cheer for your favorite NBA team, I hope you think about the most important financial statistics for your life.
Last week I went to the Nature Center with my son for his class field trip. In our first activity, we walked along a path while using a field guide to identify birds. Because the birds were fake and wooden, we could clearly see them, and we could take our time to identify them.
Later on, the first grade students were given a pair of binoculars with these instructions: “Keep the binoculars hung around your neck. Don’t walk while looking through the binoculars. Look at the object first, then try to find that object in your binoculars.” My son Tommy broke most of those rules as we walked again looking for birds. The birds we tried to spot this time weren’t wooden birds, they fluttered wildly and moved constantly. Because Tommy was focused on his binoculars, instead of seeing all of the birds, he saw his binoculars.
Having binoculars, and knowing how to use them could help us find our goal of seeing and identifying birds. When youth save for your first big goal, it can be like trying to see and identify those wild birds.
Over the past few decades, I’ve learned a lot about saving. It’s NOT easy, but you can achieve challenging goals, and I’m cheering you on! I hope these tips will help you achieve challenging goals:
On our field trip, the guide helped us to set a goal to see and identify birds. Just like there are so many things in nature, there are so many things in life.
What is important to you? You can achieve any goal, but you can’t achieve every goal. Write it down! ”I want to save for a _____ (car, senior trip to Europe, mountain bike, etc.).” Then, I suggest you hang it up where you’ll see it. When we were saving for a car, everyone who came to my house saw our car savings chart on our whiteboard.
You will also need to decide why you want to reach that goal. Is it because that goal will give you more freedom? Will it help you achieve other goals? What other reasons do you have?
I learned this with the first graders. If they focused on too many things, they missed the birds. The guide first had them focus on the birds. Then, the guide had them focus on finding turtles.
Focusing on one goal will help that goal appear closer and bigger, which will help you achieve it. It will also help tune out the distractions. You can limit all other spending as much as possible in order to concentrate on the goal that has the highest priority. Use any unexpected income towards your goal. Most adults I talk to think it’s impossible to save for expensive items, especially cars. I’ve done it though, and I know it’s not impossible. I saved for a car as an adult, but now I realize I could have saved for it as a youth if I had defined that goal and focused on it.
When we started saving for a car I wanted an SUV, but as we worked towards the goal, we realized that a van would be better for our family at that time. It wasn’t a brand new car - far from it, but it was had low mileage and was a practical vehicle for my family. When the first graders had to focus on the bird that they wanted to see, they realized that as the bird moved, they had to move. Our goal may need to move and change as life does.
My son was so excited about his binoculars that it distracted him from focusing on his goal. There isn’t a magical app, spreadsheet, or savings tool that will achieve your goal for you. Binoculars can help us to focus if we use them to zoom in on one object.
In finances, we can use tools to help us focus. Adults in your life can really help you to focus in on that goal. Our family printed a picture of the car we wanted and had a chart showing how close we were to the goal. Although the amount I spent on the car changed, and the type of car changed, the goal didn’t change.
Depending on your personality, use the tool that will help you. If you love details, use a spreadsheet. If you don’t love details, use a picture chart. Youth are so good with technology, that using an app would work great for them. As long as it helps you focus and track your progress, it will be best for you.
Focusing on one thing is a challenge for me, but I’m learning to do it because it’s essential!
Have you ever wondered about the real differences between your savings and checking accounts? Many people realize there must be more to it than just the fact that one includes checks and the other does not. However, they just don't know what those differences are. So let's look at some of the technical differences that define each account type.
Did you ever wonder how much cash your credit union keeps in its vaults? It's not all the money that members have deposited into their accounts. If that were the case, the credit union could never lend or invest money, and you could never earn any dividends on your deposits. Your credit union would simply function as a gigantic communal piggy bank.
There are laws determined by the Federal Reserve's Board of Governors, called reserve requirements, which govern how much cash financial institutions (including credit unions and banks) must hold in reserve against the accounts at that institution. The portion of federal regulations that contain these rules is called Regulation D - Reserve Requirements of Depository Institutions.
The percentage of funds that must be kept by institutions is currently 10%. But here's the catch: Only accounts that are defined as "transaction accounts" are considered when calculating this ratio. Other types of accounts do not have the same requirements. If you think about it, it makes perfect sense.
Transaction accounts, such as checking accounts, are used by account holders on a daily basis for their personal finances. That being the case, there is a great likelihood that the credit union will need to come up with a portion of those funds each day. On the other hand, non-transaction accounts, such as savings accounts and money markets, are intended more for long-term savings, so account holders usually leave the deposited funds in the account to grow over longer periods of time.
This also explains why savings accounts frequently offer higher dividend rates than checking accounts do: because financial institutions can use more of the funds on deposit to make money with savings deposits than they can with checking deposits.
What accounts fall into the category of transaction accounts? These include demand deposit accounts, also called checking accounts and NOW (negotiable order of withdrawal) accounts.
What characteristics do transaction accounts share? The depositor is allowed to make an unlimited number of payments and transfers from the account to third parties as well as to other accounts belonging to the depositor. The account holder can perform these transactions in various ways, such as by writing checks and by using a debit card and online payment services, among others.
Which accounts are non-transaction accounts? These include savings accounts and money market accounts. What characteristics do they share? Firstly, financial institutions must reserve the right to require at least seven days of written advance notice before account holders intend to make a withdrawal. This right is rarely if ever exercised, but it is included in the account agreement. Additionally, the account holder is limited to making no more than six "convenient" transfers or withdrawals per month.
These "convenient" transfers include preauthorized automatic transfers, transfers and withdrawals requested by phone, fax or made online, checks written to third parties and debit card transactions. Less convenient transactions, however, are unlimited. This includes any transactions made in person, by mail or at an ATM, and phone withdrawals requesting a check mailed to the account holder.
If a depositor tries to exceed the six-per-month transaction limit, the financial institution is required to refuse transfer privileges or convert the account into a transaction account. When this happens to them, many people are unaware of the laws in Regulation D (and never bothered to read their account agreement) and think their credit union or bank has a strange policy. But the truth is, if you don't like it, you're going to have to take it up with the Federal Reserve. Your financial institution is just following regulations.
Of course, there are simple solutions that allow savings account holders to avoid the issue. If you need to make more than six payments or transfers from your savings account, you must be up for a little more inconvenience and may need to complete the transactions in a less high-tech method than usual.
Did you ever discover, by mistake, that your savings account has limits to the number and type of transactions? What happened, and how did you deal with it? Share the experience with us in the comments.
Whether you're a regular news junkie or you rely on your better half to keep you updated on the latest, you'll get the same conflicting messages about the state of today's economy. One day you'll hear about rising wages, and the next day you'll read about the lagging growth in the GDP, or Gross Domestic Product.
The only thing certain about today's economy is that it is uncertain. While things look relatively stable now, no one can guarantee what the next few years will bring.
Fortunately, you don't have to give up on the home of your dreams because of a fluctuating economy. Read on for four steps you can take to make sure your money - and your house - are completely safe regardless of what's going on.
The magic number for down payments has been established at 20% of the home's value. Those who can't afford to plunk down that much money, though, will often put down a much smaller amount.
If you can't come up with a down payment worth at least 5% of the home's total value, you may not be ready to buy a house just yet, because having little or no equity in a home could mean taking a loss should you need to sell it. Also, not making any profit from selling your home means you won't have funds to cover the down payment on your new home and offset the closing costs. That's why it's always best to own as much of your house as you can.
If you've been hoping to qualify for a more expensive home, you may be planning to push the limits of your mortgage approval. In fact, it's best to buy a house that comes in well under your approved limit, allowing you to maintain a lower debt-to-income ratio. This will give you breathing room and keep your mortgage payments from dwarfing your monthly budget.
Also, if the economy worsens and you feel the effects, you'll have a smaller mortgage payment to scrape together each month.
Here's how to cut through the hype of the real estate market and find the Realtor that is truly best for you:
A professional inspection before signing on a home is a given, but did you take a careful look around? You don't want any unpleasant surprises after you've moved in.
Check for the following:
Don't forget to call, click or stop by Wasatch Peaks Credit Union to learn about our fantastic programs on home loans and mortgages before you start your search. We're here to help you with the finances as you find the home of your dreams!
Did you recently purchase a new home? What did you wish you'd known before you started on your search? Let us learn from your experience; share your wisdom with us in the comments!
In my blog last week, I talked about how life’s experiences provides opportunities to teach children. Almost every day we spend some time in the car. This week is our family’s spring break from school, and we have already spent 6 hours in the car. A lot happens in car rides. Some of it is good, some of it is not - there was plenty of poking and fighting on this ride. There was also some sleeping - I sleep through a lot of road trips.
Car rides are also time for storytelling and teaching. Our family loves to listen to stories on car rides. My kids really love fiction novels like Michael Vey. Right now we are listening to Treasure Island. Sometimes, I put in an audio CD about finances. We often listen to kid songs in the car, but sometimes we listen to the Dave Ramsey show on talk radio. This introduces them to financial topics. This exposure to financial topics allows them to ask questions and converse about finances. Car rides provide a lot of opportunities to talk and teach.
I drive my kids to and from school everyday. On one of these rides, my minivan was making an annoying sound and we could not get it to stop. My daughter finally screamed, “I can’t take it anymore! We need a new car.”
That opened up discussion about loans. I taught her how much cars cost and honestly told her that we couldn’t afford to buy another car, so we would have to get a loan if we were to buy another car. We talked about interest rates. After that, she didn’t complain about our car. It was a good conversation that came out of that annoying noise that almost drove us crazy.
On another ride, we discussed mortgages. Each child learns on their own timetable. One of our children understood mortgages at about age 7. Occasionally he asks us how much we owe on our mortgage loan. He also asks other people if their house is paid off. If it is not, he asks how much they owe on their house. We are working on teaching how to tactfully talking about finances.
My other son takes more time to learn financial concepts. There’s no need to worry that it takes him longer. Each contact with personal financial topics will help him learn financial principles.
We went to a gymnastics meet and my daughter cheered for BYU. They all support different schools. My son likes whatever team is winning.
Kids talk about college as they watch sporting events. This opens up opportunity to talk about how they will pay for college and teach them about their options. We have told my daughter that if she chooses to attend BYU, she will need to pay for housing and food, along with tuition and books. It is important to be informed about loans so that you know what you are agreeing to pay.
How did you pay for college, cars, or mortgage? Please tell your children your story. Children love stories! We tell them that we worked our way through school. I didn’t prepare for the costs of college. My parents and grandparents helped pay for college expenses.
Through conversation, several key concepts can be taught to children:
While kids are strapped in their seat belts, you have the opportunity to talk finances. They experience an introduction to loans, and over time they can learn and understand what a loan is and what makes up the loan. How have car rides helped you talk to and teach children?
We often hear Credit Union’s say that we need to get back to our roots. The news about Wells Fargo’s sales culture made most of us realize that we cannot bow to the almighty dollar as we try to increase income in a very competitive market.
Over the years we have seen sales cultures transform into bad selling habits, ill-conceived incentive programs, and sales goals that could take us close to repelling and antagonizing our members. We must ensure that our sales training, incentives and other sales practices don’t get us in the same quandary.
Rather than looking at our members as a short term transaction, we hope that we position ourselves as a trusted financial partner in all of your important life events. As we do this, we hope, instead of just pitching products, we will use relationship-building skills that will incorporate cross-selling of other products but at a higher level. We hope our mindset is, “How can we improve your financial well being?” and not, “How many products can we sell to you?”
As we do these things, we hope that as you live your lives and finances come into question that Wasatch Peaks Credit Union is who you think about.
Our mission statement is “Exceeding expectations one member at a time.” Hopefully, your expectations are being exceeded.
C. Blake Burrell
My 4-year-old has been warning me, “If you don’t wear green, you’re going to get pinched on St. Patrick’s Day.” Similarly, if we don’t pay attention to our finances, we can experience stress and pain. I hope that we can all be successful financially. Very few people have a chance at winning a fortune, but we can all build one. Succeeding financially doesn’t depend on luck.
I’ve been thinking about being lucky. On Saturday, my daughter went with her grandma to see a friend’s new house. She came home and told me how lucky those kids were, “They had their own room, tablets, a movie theater, and a playroom.” I agreed that they were lucky and then asked my daughter, "Are you also lucky?" After thinking, she said, “Maybe.”
That same day I had walked through my friend’s beautiful brand new house, but I know it wasn’t due to luck. My friend and her husband have worked and continue to work very hard.
How do you define financial success? If we never define it, then we’ll never know when we’ve achieved it, and we can chase other people’s definitions of success. I think this is very important because financial success is individual. You don’t have to be a billionaire to be financially successful. What do you need? What’s your purpose? Money is a tool that helps you fulfill your purpose. It’s not the purpose.
Irecently watched Letters, which is a movie about Mother Teresa. In one of the scenes, she was offered a room that more than she needed. She asked the landlord to just leave the bed & desk and take out the rest of the furniture. She knew her purpose and was successful in my opinion. She didn’t need a million dollars to fulfill her purpose. In fact, money seemed to detract from her purpose.
Depending on your purpose, you might need a million dollars and that’s okay too, but it is individual.
It is super cool to me that you don’t have to make a lot of money in order to accumulate a lot of money and to obtain financial freedom. My grandparents told me a story about their neighbor. He was a mechanic who lived financial principles. He ended up saving a lot of money. He didn’t look like he had money - financially, some people look better than they are and others are better than they look. He went into a car dealership and wasn’t treated well because the salesman assumed that this man didn’t have much money. He left and went to a competing car dealership and paid cash for a new car. I have known people like this man who have inspired me to live financial principles.
What financial principles did they live?
The character that you build is part of the success. While swimming this weekend, I thought about dedicated Olympians. As I jumped into the pool at 5 am on Saturday morning, I admired the dedication that they show to practice every day. They work so hard and sacrifice so much to be able to achieve swimming success as an Olympian.
How many people do you know became successful by chance? I can’t think of one Olympian that did. How about financially speaking? I don’t know anyone that succeeded financially without working at it.
My husband has been swimming for the past few months and is feeling frustrated about not progressing faster. He told me that he has to rest so often. I suggested that he keep swimming. I haven’t seen daily progress in my swimming ability, but over the years I have become a much better swimmer than I was 8 years ago when I started. Finances are like swimming. It takes time and practice to see progress.
When it comes to finances, there are some factors that we can’t control, but there are also so many that we can. We don’t have to leave our finances up to luck!
Last week I went to yoga, and the instructor told our class to “embrace the warming feeling in your muscles.” Embrace that burn? I didn’t want to embrace it because it felt so uncomfortable. I don’t naturally enjoy exercising. In fact, I almost didn’t graduate high school because I didn’t have enough gym credits.
So, why do I exercise regularly? Those burning yoga stretches take my mind off the worries of life. As I fight for each pose, I become stronger. Going to the gym gets me out of the house and around inspiring people. The music playing in the gym inspires me. I exercise so that I can feel good afterwards.
My dad was in his mid-40’s when he started breathing heavily going up and down stairs. This was strange because he had been active and healthy. Doctors found that his heart’s mitral valve wasn’t closing correctly. He went through open heart surgery. Although it wasn’t his fault, his health gradually declined from that point, and he died a little over a decade later. That experience really impacted me. I decided that I would do all I could to be healthy. This is a strong enough reason to motivate me to leave the house in the wee hours of the morning to dive into a cool pool and swim.
Consistently doing anything is challenging. I have to have a strong enough reason for doing it, so I can overcome the challenge. It’s uncomfortable and even painful to do financial exercises like living within your means, using a budget, and saving an emergency fund. But, it feels so good to be financially strong. Find and define your reason! During the recession, I saw the stress of finances on my dad. When my dad died, I understood firsthand the importance of having life insurance and being financially prepared. This is my reason for living financial principles and having financial health. That keeps me motivated to budget and save especially when I make mistakes. I want my family to have financial freedom and avoid pain that financial stress causes.
Consistent effort doesn’t mean that you are perfect. It means that you keep trying. We have a framed poster on our wall of our turtle that says, “Slow and steady wins the race.” I’ve read the story of the Turtle and the Hare over and over to my kids, and we talk about it a lot. I’m not sure that they are convinced yet. Recently my daughter told me that she could beat that turtle. They don’t understand how a turtle who travels at walking speed could win. A couple of friends and I did a mini triathlon this month, and I was the fastest of the three of us. This shocked me because they both run better than I do. One is a better swimmer and is more experienced. I expected them both to be faster than me. Afterwards, my friend told me that I had been the most consistent at training. Her comment really impacted me and made me realize the importance of being consistent in whatever you are doing.
There are some factors of our finances that we can’t control. I am a recovering control-aholic. I’ve realized that I can’t control the weather, the economy, or others, and I'm okay with that. I can’t prevent a financial storm, but I can commit to living financial principles. The storms still hit my family, but we’ve had financial umbrellas that have protected us. That feels so good. One of my friends has been really consistent at saving and investing. She is only forty and her dad told her that she didn’t need to be worrying about retirement, but should enjoy life more. I felt shocked that he was trying to discourage her from living her financial habits. Slowly and steadily living financial principles isn’t popular, so the only way I can do it is to have a strong enough reason for doing it. When you feel the pain that comes from financial exercise, remember how good it is going to feel later and remember your motivation for doing it.
Have you been bitten by the business bug? It’s all very exciting, but check this list first to be sure you’re truly ready to become an entrepreneur.
Are you a small-business owner? What advice do you have for those who are just starting out? Share your wisdom in the comments!