Financial Institutions

Choosing a financial institution takes some consideration. Consider what is important to you and what is critical for you to succeed in your financial strategy. Think about what you need and want. Do – you want to bank online? Do you use ATMs a lot? Do you need a branch close to work or home? Make a list of everything that you want and need and decide what matters most. Keep in mind cost, convenience, and service.

There are options out there: Banks, Credit Unions, and Investment companies. All have basic services and are insured to protect your money. Shareholders own Banks and Investment firms and the CU members own its Credit Union. In other words, by opening an account you become an owner. FDIC, a federal insurance fund, insures banks. Credit Unions are insured by NCUSIF, also a federal insurance fund. Both are backed by the US Government and are insured up to $250,000. Banks are for profit and earn money for their investors. A Credit Union’s profits are returned to the credit union in the form of lower loan rates and greater dividends. Redwood Credit Union is a financial leader in the areas it serves, from San Francisco to the northern coast of Point Arena.  RCU is a financial cooperative here to team with you to achieve your dreams. Learn more about Redwood Credit Union.

Savings

In order to reach your goals, you will need to have savings. As your savings grow so does your ability to make decisions. Savings allows you to prepare for future goals and possible emergencies too. There are a variety of ways to save, from basic savings accounts to certificates of deposit.

Tips for Saving

• Be honest about needs vs. wants
• Save for emergencies and “rainy days”
• Keep a savings account. Don’t put everything into checking.

Budgeting

Budgeting is important; it allows you to make a plan for what you want to do with the money you make. Budgeting creates the ability to make the most of your earnings (income) and view where your money is going (expense) using a worksheet to report all of your income and expenses. Make sure you write down everything. It is the only way to truly create a budget.

Once a worksheet is complete you will see where you stand. If you are positive, congrats! You can begin making decisions on what to do with the excess to reach your goals. If you are negative, you need to begin to evaluating where to make change to put yourself in balance.

Tips for Budgeting

• Use the last year (or couple of months) to start with a good base of information
• Conversion for income are:
  • Weekly to monthly (Pay x 4.33 = monthly income)
  • Bi-weekly to monthly (Pay x 2.167 = monthly income)

Investments

What is an Investment? Why do I need to invest now? Is investing smart?

An investment is a commitment of money to purchase financial instruments to gain profitable returns form interest income or increased value in the instrument. So what does this mean? This is the act of committing your money into an instrument, such as a stock, bond, or mutual fund, to earn money over time from that commitment.

So why invest, you ask, especially now? Well, the sooner you commit to investing the greater chance for success, control, and accomplishment of your financial goals. With investing, you have the opportunity to earn a greater return, or profit, than you would with a savings account. This gives way to the concept of risk. With investing you have an “opportunity” to earn return. The concept of investing is to leave the world of insured and guaranteed return with savings accounts and CDs. Investing can be a smart option if you make good choices, prepare, and work with trusted advisors. RCU has knowledgeable advisors that can help you assess your needs. Learn more about investing.

If you couple this concept with compounding, the numbers have potential to grow.