12 Steps to Financial Wellness-Step 4: Have the Money Talk with Your Partner
You’ve tracked your spending, created a budget, worked on ridding yourself of debt, and are well on your way to a financially secure life. Now you’re ready for step four, in which you’ll have the money talk with your partner. Talking finances with your partner may not be your idea of a shared romantic moment, but communicating openly about how you manage your money is a crucial part of having an honest and trusting relationship. It’s fairly common knowledge that arguing about money is the leading cause of divorce in the U.S., and no one wants to be the next statistic. Unfortunately, though, people often grow defensive when discussing the ways they choose to spend their money. How, then, can two partners have a calm, productive discussion about money? Here are six tips we’ve compiled to help guide you in this super-important conversation. It’s never a good idea to bring up a potentially explosive topic without warning. Instead, broach the topic to your partner a few days before you want to have the “Big Money Talk” and ask if you can have an open discussion about money sometime soon. This way, you’ll each have time to prepare the details you’d like to talk about, and you’ll both be ready to focus on the conversation without distractions. Instead of starting the conversation by bringing up a time your partner overspent or wondering aloud why your better half doesn’t seem to be saving enough for the future, start with a vision you can both share. For example, you can talk about how wonderful it would be to take a luxury vacation to the Cayman Islands, or how you’d love to start saving for a home. This way, you are communicating a shared dream and putting a positive spin on your money talk, which will set the tone for the rest of the conversation. You may be the more responsible, or the more detail-oriented partner, but it’s still important to listen carefully to what your partner has to say. Your partner will have their own ideas about money management, and you may be surprised at the insights they have to share into your own spending habits or expensive vices. At a certain point in your relationship, you may decide to share expenses, split them evenly and have each partner cover different expenses, and/or to pool your savings. Whether you’ve already reached that level with your partner or you plan to bring up the topic now, be sure to talk openly about the way you feel so you have a better chance of avoiding future resentment. For example, if you earn more than your partner, should you be splitting expenses evenly? Can one partner take additional financial responsibilities, such as paying the bills, in lieu of contributing an equal amount of income to the pot? If one partner goes over budget, will they be responsible for patching up the difference by contributing more money? All of these questions, and more, are important to discuss up front to help prevent future blowups and/or hurt feelings. At this time, consider linking one of your accounts or opening a shared account at SRI Federal Credit Union. We’ve got convenient checking and saving accounts to suit every preference. Just stop by and ask how we can help. Sharing expenses and a budget can be liberating in a partnership, but it can also feel constricting. Sometimes, you just want to splurge without having to explain the purchase to your partner. You may also want to spend money on a surprise gift for your partner without them knowing you’ve just dropped a large sum of money on an expensive purchase. Having a slush fund, or money set aside for your personal “just for fun” spending, can help you maintain a sense of independence and keep some of your purchases private. You can keep this fund in a separate checking account under your name at SRI Federal Credit Union. No, you don’t need to have the Big Money Talk every week, but it is a good idea to touch base about finances once a week, or once every two weeks. You can talk about recent purchases, big expenses that are coming up soon, surprise bills and more. Setting aside time to talk about money will keep the stressful money arguments out of your everyday conversations. You did it! You had the money talk with your partner, and you are closer than ever. Be sure to stick to your commitments and to bring up any money issues that may arise during your regular money talks for continued harmonious collaboration about all financial matters.
We are #1 in “Return of the member” (ROM)!
Credit unions pride themselves on offering superior products, services, and experiences. But quantifying member value is tricky. That’s why more than two decades ago, Callahan & Associates developed the Return of The Member (ROM) calculation. ROM considers three core credit union functions: SRI Federal Credit Union is rated #1 for Return of the Member in our asset group, nationwide. This is out of 704 credit unions. We also are #3 in California (out of 141 credit unions) and #25 in the Nation (out of 5,048 credit unions). Per one of the Senior Advisor’s at Callahan, being 25th nationally is a HUGE accomplishment-our members should be proud (and very happy with the great value they are receiving). A big shout out to the credit union staff for making this happen, our Asset Liability Committee for keeping the dividends high, and the Board of Directors who approve and support all the wonderful products that help keep our members happy!
Step 3 of 12 to Financial Wellness: Pay Down Debt
You’ve tracked your spending, designed a budget for your monthly expenses, and you’re well on your way to financial wellness. In this next step, you’ll create a plan for paying down your existing debt. Consumer debt can be one of the biggest challenges to realizing good financial wellness. Credit card companies design their business model in a way that makes it easy to get stuck paying off debt for years. With some intentional action and commitment, reaching true financial wellness and being financially independent is possible. At the very least, seek to be on track for paying it off shortly. Below, we’ve outlined how to pay down debt in five simple steps, along with three debt-paying strategies to avoid. Before you get started, determine how much debt you must pay off. List every credit card you own that has an outstanding balance and jot down the amount owed to each. Next, list the interest rate of each card. Do this for any other fixed installment loan debt you have as well. These numbers will help you build a debt-payoff plan in the next two steps. You can also add up the amounts owed on each account to reach your total outstanding debt amount. There are two main approaches people utilize for getting rid of their debts: Each method has advantages and drawbacks. The snowball method provides frequent motivation as debts are paid off sooner, but it may involve paying more overall interest on the debt. The avalanche method, on the other hand, generally saves the borrower a significant amount they pay in interest, but it can take a while to generate results. Choose the method that makes the most sense for your personal and financial circumstances. Once you’ve chosen your debt-crushing method, it’s time to find ways to maximize your monthly credit card payments. You can do this by trimming your spending in one budget category and channeling that money toward paying down your debt. You can also find ways to pad your pocket with extra cash for your payments, such as freelancing for hire or selling your creations on a platform, like Etsy, if you’re the crafty type. Once you’ve determined how much you can afford to pay each month, you can create a debt-payoff plan using the systems you’ve reached in Step 1. For some consumers, the most challenging part of paying down debt is managing multiple payments across several credit card accounts. With several monthly debt payments to make, it can be complicated to remember them all. It can also feel like the monthly payments are only going toward interest. A debt consolidation loan can change all that. When you consolidate debts into one low-interest loan, it’s a lot easier to manage the monthly payments. Plus, the savings on interest payments can be significant, especially if the new loan has a low-interest rate. If this approach sounds favorable, consider taking out a personal loan from SRI Federal Credit Union. The loan will provide you with the funds you need to pay off your credit card bills and leave you with a single, low-interest monthly payment. Click HERE to apply for a personal loan or click HERE to read up on our Zero % Visa Balance transfer promo. Many credit card companies are willing to lower your interest rate once you prove you are serious about paying down debt. After kicking off your debt payment plan, it’s worthwhile to contact each credit card company to discuss your options. At the very least, see if you can get the company behind the first debt on your list to lower your rate. 3 Debt-Crushing strategies to avoid As you work toward paying down your debt, beware of these debt-crushing strategies, which may do more harm than good: Regardless of the strategy you choose, or the methods you use for paying off your debt, commit to not adding more charges onto your card while paying it down. Paying off a large amount of debt will take time and willpower, but living debt-free is key to financial wellness. Best of luck on your debt-crushing journey!
The Best SUVs 1/3: The Subaru Outback 2022
The Subaru Outback at a Glance:
- Vehicle type: AWD, 5-seater SUV
- Base price: $27,145
- Engine type: Gas
- Power: 260 hp@5600 rpm
- Transmission: Continuously variable-speed (CVT) automatic
- Fuel efficiency: 22 mpg/city; 26 mpg/highway
Pros Cons Infotainment Safety features Interior Exterior If you’re looking to finance an auto loan for your new car, look no further than SRI Federal Credit Union and click here to apply! Our auto loans offer low-interest rates, easy payback terms, and a quick approval process. Call, click, or stop by to get started or discuss available options so we can help you get the right payment for your budget!
Last-Minute Tax Tips to Know Before You File
The big day is drawing near, and if you haven’t already done so, it’s time to file your tax return! Before you file, though, it’s a good idea to review your return to ensure you haven’t made any mistakes or forgotten any deductions or credits you’re eligible to claim. Below, we’ve compiled a list of last-minute tax tips to know before you file. Consider filing electronically If you still file your taxes the old-fashioned way, you may want to consider switching to e-filing this year. The IRS e-file is available to all taxpayers, and many can file electronically at no cost. Re-check your Social Security numbers Make sure every Social Security number on your return, including your own, your partner’s and each of your dependent’s, is listed correctly. Check that the SSNs related to claims for Child and Dependent Care Credit or Earned Income Tax Credit are accurate as well. Don’t forget any deductions Be sure you’ve taken every tax deduction that’s available to you before completing your return. Here are some of the deductions that many people often forget to claim: In the past, if anyone other than the student paid toward a student loan, there were no tax benefits. Now, however, any student who is not claimed as a dependent can qualify to deduct up to $2,500 in student loan interest, regardless of who has made the payment. Make sure to claim the full Child and Dependent Care Tax Credit A tax credit reduces your tax bill dollar for dollar, so it’s important to claim every credit that is owed to you. There were big changes to the Child and Dependent Care Credit this year, and it’s best to take full advantage of those changes. The American Rescue Plan, signed into law on March 11, 2021, increases the credit and makes it fully refundable, so taxpayers can receive the credit even if they don’t owe taxes. The new law also expands the eligibility requirements for taxpayers who can benefit from the credit’s highest rate. The changes to the Child and Dependent Care Credit that apply only for tax year 2021 include: Double-check your figures If you are filing a paper return, double-check that you have correctly calculated the refund or balance due. Run the numbers through a calculator again, and then again, to ensure you haven’t made any mistakes in your figures. Get your return in on time Tax day is usually on April 15. This year, the deadline has been postponed to April 18. If you know you won’t be ready to file on time, you’ll need to request an extension. It’s important to note, though, that an extension to file does not include an extension for payment. Be sure to pay up on time or you may face penalties. Don’t forget to sign your form Your tax return must be signed and dated in order to be filed. If you’re filing jointly, be sure to have your partner sign as well. Also, if you’ve hired someone to prepare your return, have the preparer sign the form and enter their Preparer Tax Identification Number (PTIN). It’s tax time! Use the tips outlined here to maximize your refund and ensure there are no mistakes on your tax return. Your Turn: Share your last-minute tax tips with us in the comments.
Save The Date For Our 65th Annual Meeting!
SRI Federal Credit Union’s 65th Annual Meeting will be held virtually on Wednesday, March 16th at noon.
Click HERE to login to Zoom
on 03/16/2022 @ 12 noon
Meeting ID: 889 9979 4696
Passcode: Srifcu333!
In addition to showcasing the Credit Union’s 2021 financial performance, accomplishments, and featured products, we will be electing Board Members.
As always all attending members will have a chance to win a Raffle prize. Winners will be picked at random.
Be sure to save the date, Wednesday, March 16th, at noon. See you on-line!
Access to the credit union continues to be limited. Click here to make an appointment.
Is it a Good Idea to Open a HELOC Now?
If you’re looking for a large sum of money to use for a home improvement project, or the economic devastation of COVID-19 has left you in desperate need of cash, consider tapping into your home’s equity. One great way to do this is by opening a home equity line of credit, or a HELOC. Let’s take a closer look at HELOCs and why they can be an excellent option for cash-strapped homeowners in today’s financial climate. What is a HELOC? A HELOC is a revolving credit line allowing homeowners to borrow money against the equity of their home. The HELOC is like a second mortgage on a home; if the borrower owns the entire home, the HELOC is a primary mortgage. Given that a HELOC is a line of credit and not a fixed loan, borrowers can withdraw money from the HELOC as needed rather than borrowing one lump sum. This allows for more freedom than a loan and is especially beneficial for borrowers who don’t know exactly how much money they’ll ultimately need to fund their venture. Borrowers withdraw funds (aka “draws” or “advances”) from the HELOC during a set amount of time that is known as the “draw period,” which generally lasts 10 years. Some lenders place restrictions on HELOCs and require borrowers to withdraw a minimum amount of money each time they make a draw, regardless of need. Other restrictions include the requirements to keep a fixed amount of money outstanding, or to withdraw a specific sum when the HELOC is first established. [At SRI Federal Credit Union, we allow borrowers to ….] How do I repay my HELOC? Repayment of HELOCs varies, but is usually very flexible. Many lenders collect interest-only payments during the draw period, with principal payments being strictly optional. Others require ongoing monthly payment toward both principal and interest. When the draw period ends, some lenders will allow borrowers to renew the credit line and continue withdrawing money. Other lenders require borrowers to pay back the entire balance due, also known as a “balloon payment.” Still others allow borrowers to pay back the loan in monthly installments over another set amount of time, known as the “repayment period.” Repayment periods are generous, lasting as long as 20 years. How can borrowers spend the money? While home improvement projects are popular uses for HELOCs, borrowers are free to spend the money however they please. Some other uses for HELOCs include debt consolidation, funding a wedding, adoption, dream vacation or the launch of a new business. Is everyone eligible for a HELOC? Like every loan and line of credit, HELOCs have eligibility requirements, which help lenders determine the applicant’s financial wellness and responsibility. Most notably, the borrower must have a minimal amount of equity in the home. Lender requirements vary, but most homeowners will be eligible for a HELOC with a debt-to-income ratio that is 40% or less, a credit score of 620 or higher, and a home assessment that stands at a minimum of 15% more than what is owed. How much can I borrow with a HELOC? HELOC amounts vary along with three criteria: the value of your home, the percentage of that value the lender allows you to borrow against and the outstanding amount on an existing mortgage. To illustrate, if you have a $300,000 home with a mortgage balance of $175,000 and your lender allows you to borrow against 85% of your home’s value, multiply your home’s value by 85%, or 0.85. This will give you $255,000. Subtract the amount you still owe on your mortgage ($175,000), and you’ll have the maximum amount you can borrow using a HELOC, which is $80,000. What are the disadvantages of a HELOC? Also, many lenders require the full payment of the HELOC after the draw period is over. This can prove to be challenging for many borrowers. Finally, if you don’t plan to stay in your home for long, a HELOC may not be the right choice for you. When you sell your home, you’ll need to pay off the full balance of the HELOC. You may also need to pay a cancellation fee to the lender. A HELOC can be a great option now HELOCs have variable interest rates, which means the interest on the loan can fluctuate over the life of the loan, sometimes dramatically. This variable is based on a publicly available index, such as the U.S. Treasury Bill rate, and will rise or fall along with this index, though lenders will also add a margin of a few percentage points of their own. The fallout of COVID-19 may impact the economy for months, or years, to come; however, there is a silver lining among the rising unemployment rates and bankrupt businesses: historically low-interest rates. The average APR for fixed 30-year mortgages has hovered at the low 3% for months now, and experts predict it will continue falling. The low rates make it an excellent time to take out a HELOC with manageable payback terms. The economic uncertainty the pandemic has generated also makes it prime time to have extra cash available for any need that may arise. Are you looking to tap into your home’s equity with a HELOC? Call, click, or stop by SRI Federal Credit Union today to get started. Our favorable rates, generous eligibility requirements, and easy terms make an SRI Federal Credit Union HELOC a great choice. For more detailed information on our HELOC products please click HERE.
A HELOC is secured by your home’s equity, which places your home at risk of foreclosure if the HELOC is not repaid. Before opening a HELOC, it’s a good idea to run the numbers to get an idea of what your monthly payments will look like and whether you can easily afford to meet them.
Step 2 of 12 to Financial Wellness: Creating a Budget
Now that you’ve tracked your spending and kept a careful record of where your money goes over the course of a month, you’re ready to move on to the next step of financial wellness: creating a budget. Budgets play a crucial role in promoting financial awareness, which then helps to facilitate more responsible money choices. This discipline will benefit you individually, as well as all who are part of your household. Let’s get started by taking a look at how to create a budget and review some popular budgeting systems and how they work. Create a budget in 5 easy steps Budgeting systems While every kind of budget involves tracking expenses and committing to a maximum spending amount each month, there is a wide range of budgeting systems to fit every kind of personality and money management style. The traditional budget doesn’t involve much more work than the steps described above. After working out a number for every expense category, you’ll simply need to track your spending throughout the month to ensure you’re sticking to the plan. You can use a spreadsheet for this purpose, or utilize one of the popular budgeting apps, like Mint or YNAB, and do it digitally. The money-envelope system works similarly. However, instead of simply committing to sticking to your spending amounts for each expense category, you’ll withdraw the amount you plan to spend on all non-fixed expenses in cash at the start of the month. Divide the cash into separate envelopes, using one for each of these expenses. Then, withdraw cash from the appropriate envelope when making a purchase in that category. There’s no way to blow your budget with this system; when the money in the “Dining out” envelope runs dry, that’s all for this month! The 50/30/20 budget is simpler but requires more discipline. Set aside 50 percent of your budget for your needs, 30 percent for wants, and the remaining 20 percent for savings. Of course, you’ll need to make sure your income and expenses will work with this kind of budget. Does 50 percent of your income cover your needs? If yes, this budget allows for more individual choices each month and less accounting and tracking of expenses. A well-designed budget can provide its creator with a sense of financial security and freedom. When you stick to a budget, you’ll always know you have enough to get through the month and save for the future. Start budgeting today!
How to Celebrate Valentine’s Day on a Budget
Love is in the air and the money is flowing like heart emojis. According to the National Retail Federation, the average American spends $221.34 on Valentine’s Day each year. That’s a lot of money to spend on a one-day celebration!
Lucky for you, there are ways to enjoy a romantic evening with your partner without going into debt. Here’s how: Work with a budget Instead of spending mindlessly and regretting it afterward, designate a budget for all your Valentine’s Day expenses, and be sure to stick to it. In addition to helping you keep costs under control, working out a budget in advance will allow you to choose how to spend your money. You may decide to spend more on a gift and less on dinner, or maybe you’d rather skip both of these and splurge on a fun activity instead. Best of all, a preplanned budget means there will be no regrets spoiling the memory of your special day. Shop smarter with a sales app Check out shopping apps, like ShopSavvy or PriceGrabber, to score deals on that dream Valentines’ Day gift. The apps help you compare prices at online and in-store retailers, locate coupons for items you’re searching for and even bring up cash-back options to put money back into your wallet. Why pay full price when you don’t have to? Save on flowers Did you know that Americans spend close to $2 billion on Valentine’s Day flowers each year? Save on those beautiful blossoms with these tips: Bring down your dinner costs Don’t break your budget on a romantic dinner for two. First, consider dining in. Yes, we know your kitchen table isn’t the hottest place in town, but you can find another area in your home and turn it into a special spot for a special meal. Consider laying down a blanket in front of the fireplace for a picnic-inspired experience, moving a small table into the living room or even setting up a cozy corner in a rarely used room in your home, such as a storage room or guest bedroom. Cook up a storm, or order in — you’ll still save on restaurant costs by forgoing beverages, gratuities and other add-ons you end up blowing money on when you eat out. If you or your loved one are really looking forward to dining out, make it less expensive by learning how to beat the psychological tricks that restaurateurs play on diners to get them to spend more: Make something homemade Make a special treat for your special someone. Check out our video HERE to see how easy it is to make chocolate-covered strawberries and pretzels. Celebrate late If you dare, postpone your Valentine’s Day celebrations by a day or two for steep savings on all related expenses. You’ll find Valentine’s Day candy and greeting cards on clearance, gifts already marked down, and you won’t have to pay inflated restaurant prices for the same meal. Use these hacks to plan the perfect Valentine’s Day on a budget.
Leaving Your Job? Make Sure Your Wallet is Ready
One of the many pandemic’s lasting effects on the U.S. economy is the so-called Great Resignation of 2021. Employees are voluntarily leaving their jobs in droves. In fact, according to data from the Bureau of Labor and Statistics, a whopping 20.2 million workers left their jobs from May 2021 through September 2021. Reasons for the high turnover range from the availability of federal economic aid to general burnout, which reached a turning point during the pandemic. If you are considering becoming a part of the Great Resignation, it’s important to make sure your finances are in order before you give official notice at your job to cover any gaps in employment. Below, we’ve outlined some important steps to take before you leave your job. Review your savings Before giving up a steady paycheck, make sure you have enough savings to tide you over until you find new employment. Ideally, you should have an emergency fund with 3-6 months’ worth of living expenses to help you survive periods of unemployment, such as when you’re between jobs. If you don’t have this kind of money saved up, consider pushing off your resignation until you can put together a nest egg to help you get by without a paycheck. Check your benefits If your job includes employee benefits, like retirement funding, be sure to review them carefully before giving notice. Here are different options to consider for the most common employee benefits: Assess your risk tolerance Before accepting a new job, make sure you can handle a possible blow to your income. Many jobs will present new employees with the possibility of better pay in the future, while initially only offering a starting salary. How comfortable are you taking a risk with a new job that doesn’t guarantee as much financial security? Adjust your budget for your new salary If your new job comes with better pay, or you’ll be bringing home a smaller paycheck for now, you’ll need to adjust your budget accordingly. You may want to increase the contributions you make toward your investments or find a new place to park your cash, such as an SRI Federal Credit Union Savings Account, for the extra income while you decide on a more permanent strategy. On the flip side, if you’ll be earning less money now, look for ways to trim your budget so your paycheck can stretch to cover all your expenses. Leaving an old job and looking for a new one can be an exciting opportunity, but it’s important to make sure your finances are in order before taking that leap. Follow the tips outlined here before giving notice at your place of employment to ensure ongoing financial security.
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Fax: 650.326.8916
333 Ravenswood Ave
Menlo Park, CA 94025-3493
Mailing Address:
P.O. Box 2284
Menlo Park, CA 94026-2284
Routing Number: 321173328
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