Credit Unions are the BEST!

If you have been reading my blog for awhile, you know I am a huge credit union advocate. In fact, when I am not being a wife and mother or blogging, two days per week I work for a credit union. One of the projects I worked on recently was to compare savings and checking account rates between our credit union, two local credit unions our size, and several banks. What an eye opener! Our credit union was paying over 10 times what some of the largest banks were paying!

With lower savings rates and higher fees, it made me wonder...why would anyone want to be a customer of a bank??? Below I will list some of the reasons that I think people choose banks and how being a member of a credit union just makes more sense.

1. Convenience - many people like to "see" their bank. For what? If you sign up for direct deposit, use an ATM/debit card, is there ever any reason to go to your bank? (What about all those rebate checks you get in the mail? Take a once a month trip to deposit all of them or mail them in!) Yes, credit unions probably have fewer locations, but do you really need to "see" your financial institution?
2. ATM access - people want to have access to their money. It's true. For me, ATM's are the least important way for me to access my money. My credit union is part of a large ATM network, so I can get cash for FREE just about around every corner. Not every credit union has this feature. Use your ATM/debit card to get cash back at the store - you are going to Walgreen's anyway, right? Something else, stores like Walgreen's and Albertson's make a deposit each day for all the cash and checks they have received throughout the day. Banks actually charge merchants to deposit cash - so the less they have to deposit, the less they have to pay. Getting your cash back at the point of sale saves you time and the merchant money!
3. My parents always banked here - to that I say, so what? You have to take control of your finances, and if you are paying anything to have an account, you are paying too much. Read the fine print and find out exactly what you are paying and compare it with a credit union - you will almost always pay less or not at all!
4. I can't join a credit union. - Yes you can! Nowadays, credit union membership is open to everyone. If you cannot join a credit union through work or family, check your yellow pages for a community credit union.
5. It is such a hassle to switch. - It will take some time, especially if you have automatic payments set up, but a few minutes or hours of time will save you hundreds of future dollars, isn't it worth the hassle? Many credit unions also offer "switch kits" to help you with the process of contacting your other bank and people you pay. When you go to open your account, find out how the credit union can help!

As you can see, there really is nothing stopping your from joining a credit union but yourself! It's time to ditch the bank and get hooked up with a credit union. You won't regret it!

See my other posts about credit unions here.

Your money is safe at your credit union

If you haven’t been living under a rock for the past few weeks you know that there are some crazy things going on in our economy. The stock market, failing banks, and this $700 billion bail out…it can be a lot to worry about. You may be asking yourself, where can I keep my money safe? The answer, in your credit union!

Working in the accounting department of a credit union has taught me a lot about how financial institutions are regulated and how the share insurance works. The great news is that all credit unions are highly regulated by NCUA (National Credit Union Administration) and take measures to assist credit unions that need it. Because of these regulations, the regular auditing of the credit unions compliance to these regulations, and the assistance available, there is little chance for failure. Credit unions that are insured by NCUA must also report the financial information to NCUA on a quarterly basis. (I prepared this report for my credit union when I worked full time – let me tell you they want to know EVERYTHING!) This is a good thing! This information is also made available to the public through NCUA’s website here. Enter the name of your credit union and you can view their financial information. The bottom line, NCUA is able to read the signs of possible failure LONG before it becomes an issue and work directly with the credit unions to steer them in the right direction if necessary. Your credit union is safe!

Your money is safe in a credit union. Not only that, you will earn better interest rates on that money that you would at any bank! This is just another reason why credit unions are the best!

Have you found a credit union yet? Check out my other posts about credit unions here.

Starting your savings plan...

All of us are frugal for different reasons and in different seasons in our lives. Here are some possibilities:

1. The thrill of the hunt
2. Necessity
3. Trying to get out of debt
4. Saving for something (home, vacation, etc.)

Or it could be a combination of all of them or some of them. No matter what the reason, I think it is very important (and extremely satisfying) to set aside an amount of money - no matter how small - for yourself each month. This can be in a short term savings account (standard savings, money market) or a longer term savings (401k, IRA). It really doesn't matter as long as you are contributing something - and doing in on a regular basis (so that you form a habit, and eventually you don't miss the money). We have a plan set up with our credit union where funds are transferred automatically to savings when we get paid. It has been amazing how little we miss the money and how much it has grown over the few years we have done this. For example, we put $5.00 per pay period in an account for each of our kids - Owen (our 3 year old) currently has $438.77 in his savings!

If you feel like you can't set anything aside, start small. There is nothing wrong with saving $5.00 per month. As you become a PRO saver/couponer you will find that you have more money to save because you have lowered your budget in other areas and you will find that you can increase that amount.

Savings is important, someday you may look back at this frugal time in your life and wonder what you have to show for it. If you have had a savings plan...you won't be wondering!

Why I love Credit Unions

Each year many consumers throw away thousands of dollars to their financial institution for services that should be free. As far as banking goes, I belong to a credit union. At first I joined a credit union because my parents were members of a credit union forever. That was before I went to work in the credit union industry nine years ago and realized the dramatic differences between the philosophies of credit unions and banks.

Banks:
-Banks are for profit
-Fees are generally their largest income generator
-Banks must please their stockholders – by making as much money as possible

Credit Unions:
-Credit Unions are not for profit
-Loan interest (not fees) is generally their largest income generator
-Credit Unions must please their members – they are the owners of the credit union

Credit Unions are not for profit – this is truly a unique feature of credit unions. All income that is generated by the credit union goes back into providing lower rates on loans, higher rates on savings, and improving technology. Credit unions must generate income to stay competitive – they have to be able to provide the convenience services that banks can provide (Online Banking, BillPay, ATM/Debit cards etc.).

Fees – In general, the amount of credit union fees are much less than standard bank fees. The insufficient funds fee at the credit union where I work is $23.00 per item. At one of our local banks, the fee is $35.00 per item up to a certain number of items, then increases up to $39.00 after that number of items is reached. Many banks charge a fee to speak to a teller or to make a deposit in the branch while most credit unions do not charge a fee for these types of services.

Credit Unions must please their members – A credit union is a financial cooperative designed to fit the financial needs of a specific group of people. That is why you see Fireman’s credit unions or Postal Employee credit unions, etc. For many credit unions, that group of people is a zip code, a county, or a community. These people have a common interest (the group) and through a credit union they can help each other. Some members have borrowing needs, others have saving needs. Credit unions use the “saver’s” money to loan to the “borrowers” pay a dividend to the “savers” and earn income from the “borrowers” which in turn is used to improve the credit union. This is such an amazing philosophy.

How can you find a credit union to join? Check with your employer, friends, family members, and the internet to see what options are available. In the Boise Area, I recommend Idahy Federal Credit Union . I have worked for Idahy for the past 9 years, they truly put members' needs first! When you find a credit union in your area, compare rates, fees, and products with your bank. You will be pleasantly surprised with how much green you can save and how easy it can be to make the switch!

As you can see, I am very passionate about credit unions. They truly are the best option for everyone. Look for many future posts about ways to maximize your credit union membership and save some green in the process!