2012 Personal Finance Tips from America First Credit Union

Jan. 20, 2012 - PRLog -- 1.   Freedom from checking fees is a must-have. Check and double check with your financial institution that the free checking you originally signed up for is still indeed free. Free checking isn't as common as it used to be. According to Bankrate's 2011 Checking Survey, just 45 percent of noninterest checking accounts are free of monthly charges, down from 65 percent in 2010. Be bold enough to take a stand against paying fees and switch to a free checking institution. Most have a kit or process for helping you make the move.

2.   Use and apply budgeting. You need to have a handle on your spending in order to determine your budget. The two main benefits of budgeting are finding where you can cut back and how you can improve your savings efforts. Begin by tracking your spending for a two-month period. Then, build a realistic monthly budget or spending plan and continue to track all of your expenses for 30 days. Compare your spending against your plan and see where you did well and where you didn't. If you spent less than planned, move the excess into your savings account or use it to pay down debt.

3.   Look to refinance your major assets. You keep hearing it—interest rates are at all-time lows. Take advantage of this fact by researching who is offering the best rates and refinance your home, car, RV, ATV and boat. You should do this after you’ve confirmed your good credit rating and payment history. It will feel great to know you are free of higher interest and can pay off your loans sooner.

4.   Use credit cards to your advantage. First, try discipline and don’t keep your credit card in a deep freeze to control your spending. Inactive cards don’t contribute to recent payment activity, which makes up the largest part of most credit scores. Remember that the age of the active credit account boosts your score as well. Second, never get a card that requires an annual fee. Third, use a lowest-interest, cash back or rewards card.

5.   Focus on your savings. If a disaster or even mild rainy day comes up, you’ll be happy you were prepared. What about that vacation or big-ticket item? If you don't have dedicated savings accounts for each of your goals, set them up. One of the best ways to start or restart your saving activities is to have the money taken directly from your paycheck, so you'll never miss it. Only about 20% of workers split their paycheck among multiple accounts, though many employees with access to direct deposit can do so, reports electronic-payments industry group NACHA. The association found that those who take advantage save $90 more a month than those who don't. Not an option? Set up automatic transfers from your checking account so that the money is moved on payday.

6.   Sign up for flexible spending, cafeteria plan or health savings accounts. Costs for medicine, prescriptions, and health insurance copayments are a given. If your employer offers a flexible spending account as part of your benefits, sign up and use pretax dollars set aside from every paycheck for these common expenses. A Health Savings Account (HSA) is also a pre-tax or tax-advantaged product which gives people with high-deductible insurance plans the ability to build a financial cushion for medical expenses they face for themselves and their families without a use-it-or-lose-it penalty.

7.   Keep your good credit golden. In this tight lending economy, you need good credit to get the best interest rate. Don't forget to pay your credit card bill in the months prior to applying for a mortgage refinance or other loan. Check your credit history to make sure there are no errors or any credit issues you need to resolve. After you submit your application and begin the loan process, don't do anything that could impact your credit scores, such as opening new credit lines.

8.   Revisit you retirement goals. Many surveys report that people who have even a rudimentary plan for reaching retirement goals are ending up with three times the amount of money as those without one. A solid tactic is putting money into an IRA, 401(k), or taxable investment account, and stay with your investment plan regardless of what the economy is doing.

9.   Keep important information safe from disaster.  According to the American Red Cross’s Scientific Advisory Council, the majority of U.S. residents haven't included financial documents in their disaster plan. The best practice is to scan documents onto two CDs and keep one at home and one in a safe deposit box. Key documents include driver's license and passport, Social Security card, health insurance card, insurance policies, mortgage and other loan papers, property deeds, car title and registration, marriage license, wills, last few years’ tax returns, key account numbers and passwords.

10.   Help the next generation. If you have children of the GenX or millennial generations, your good example of personal finance can pay dividends with them. In return, your family can be the best support for keeping your personal finances on track. Teach children the value of money. Open savings accounts for your children when they are young. Seek out other resources to help you teach them to manage their money and continue your legacy of thrift.

ABOUT AMERICA FIRST
America First Credit Union was founded at Fort Douglas in Salt Lake City on March 16, 1939 by a small group of people determined to form their own cooperative to promote their collective economic well-being. In its 72-year history, America First has become one of the largest, most stable and most progressive credit unions in the country, and has remained a member-owned, not-for-profit cooperative financial institution. Today, America First has 101 branches, and is the 11th largest credit union in assets in the United States with over $5 billion, and the 7th largest credit union in membership in America with more than 540,000 members. http://www.americafirst.com