Financial BasicsMade easyTake control of your finances with simple, powerful steps that help you stress less, save wisely, and reach your goals.

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savings, credit, retirement, budgeting – financial basics can feel overwhelming sometimes, and it’s tough to know where to start. Fortunately, you don’t need accounting classes to learn simple strategies that can help you take control.

in this financial literacy e-book, we’ll guide you through easy steps that will help you master topics like budgeting, credit, and more.

leT’s geT sTarTed!

TaBle oF conTenTs – click To juMp To a speciFic Topic

Financial goal seTTing

BudgeTing how-To

Building a savings Fund

crediT Basics

insurance needs

reTireMenT savings

With a stronger financial foundation, you can manage debt, save for that big

purchase, or just put yourself in a more comfortable position for spending

more wisely.

“Financial goal setting is a great way to establish responsible money management. It’s never too late to start.”

karen guy Business & Marketing Analyst at SAC Federal Credit Union

every adventure begins with a plan. a financial journey is no exception – goal setting is a crucial first step that can help you set your course in the right direction.

Financial goal

seTTing

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Determine what you want to work toward, then

break down your goals into short-term and

long-term categories.

step

step

step

talk to an associate at sAC Federal Credit

Union to learn more about available resources.

Review your plan every month or so to check

your progress toward your goal.

Getting Started 1-2-3Goals can include paying off a car loan, creating an

emergency fund, eliminating credit card debt, or saving for a

down payment on a house. Setting a goal creates motivation

and momentum, and gets you in the habit of creating

financial milestones that can be easily reached with time

and persistence.

SAC Federal Credit Union’s Karen Guy suggests breaking

down your goals into short-term and long-term categories:

shorT-TerM goals

• Can usually be achieved in three years or less

• Include goals that can fit in that time frame, such as paying off a high-interest credit card or creating a vacation fund

• Provide a sense of accomplishment

• Can be blended with long-term goals

long-TerM goals

• Follow a three- to five-year time frame or longer

• Include larger, more complex goals like establishing a retirement plan, creating a college fund, or saving for a new home

Once goals are set, review the plan periodically to get a

picture of your progress. If you’ve gotten off track, recalculate

what you need to save going forward. If you’re close to

achieving your goal, start planning for your next one.

Financial goal

seTTing

wiTh FirMly seT goals, iT’s Much easier To Take on The nexT sTep: BudgeTing.

after setting goals, it’s time to tackle budgeting. here’s the good news: it’s easier than you think.

“You’ll want to make sure that each dollar spent will fit into one of the categories you’ve created. You can also look to future expenses (like holiday gift purchases) that may only occur once during the year and create categories for those items.”

BudgeTing how-To

karen guy Business & Marketing Analyst at SAC Federal Credit Union

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Creating a budget is all about ensuring you’re living comfortably and well within your means. It all

starts with taking a careful look at your current monthly spending – on day-to-day essentials as well

as miscellaneous costs – and determining what you’d like to spend, given your income. In creating a

budget, the majority of categories will be spending or expenses. These might include:

Food

cloThing

vacaTion expenses

Medical expenses

MorTgage payMenT or renT

chariTaBle donaTions

enTerTainMenT

sTudenT loans

uTiliTies

BudgeTing how-To

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step

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step

Getting Started 1-2-3

take a close look at areas in the budget

where extra spending seems unnecessary; for

example, a pricey daily takeout lunch versus a

brown bag lunch from home.

Go through receipts and bank statements to

put each expense into one of those categories.

Create spending categories for daily, weekly,

monthly, and yearly expenses.

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Karen Guy from SAC Federal Credit Union offers some top

tips for creating a budget that works:

• Figure out how many total dollars you spend every month. Take some time to really understand where your money is going. Many people know generally how much they spend on bills, but expenses like dining and entertainment can be more than they think.

• Compare costs when planning your everyday spending. For example, it’s cheaper to bring a bag lunch from home versus getting takeout from a restaurant near the office, so take that into consideration when budgeting for meals.

• Factor saving into your budget. Guy notes that even putting $5 or $10 aside every day can add up quickly and help you meet your financial goals.

• Save receipts and enter those amounts into the budget. Nonessential items are often bought with cash, so they tend to be overlooked when using bank statements to create a budget.

• Get the whole family involved in the budgeting process. Set aside 15 minutes every week for a family meeting to discuss the budget. This also helps children to establish good money habits from an early age.

BudgeTing how-To

on The nexT page, we provide a saMple worksheeT To kick-sTarT your new BudgeT.

Monthly budget breakdownincoMe

Take-home pay

Other income sources

Fixed expenses BudgeT acTual spenT

Mortgage or rent

Loans: home equity, student loans, other

Car payment

Insurance premiums: life, health, auto, home

Other

savings

Emergency fund

College fund

Additional retirement savings (SEP, IRA, etc.)

Other investments

variaBle expenses

Utilities (electricity, gas, water, etc.)

Phone/cell phone

Transportation (gasoline, bus fare, etc.)

Credit card payments

Car repairs

Clothing

Dining/takeout

Entertainment and recreation (movies, live entertainment, etc.)

Groceries

Noninsured medical or dental

Charity

Miscellaneous

Total budgeted: $ Total spent: $

now that you’ve determined your budget, you’ll be able to launch a strong savings plan that helps you reach your goals.

“It’s difficult to get started with savings if you don’t have something in mind that you’re saving for. It helps to have that goal in order to be motivated.”

keli wragge Vice President of Consumer Lending at SAC Federal Credit Union

Building a savings Fund

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step

step

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Getting Started 1-2-3

Revisit your goals and savings amounts

periodically. this will give you a sense of

forward momentum and can recharge

your enthusiasm.

Determine how much you can save without

sacrificing too much. Make sure that you’re not

putting so much aside that you’ll have to draw

from it for monthly expenses.

save according to a goal, like a major

purchase, a vacation, a college fund, or other

targets. that will give you more motivation,

instead of saving just for the sake of it.

Keli Wragge from SAC Federal Credit Union suggests some

tactics for putting more oomph into your saving efforts:

• Don’t be afraid to start small. Ease yourself into the habit of saving – even putting aside just a few dollars per day or even per week can help kick-start a savings fund.

• Consider certificates. In addition to paying interest on the money you save, another benefit of a certificate is that it “locks in” your money for a certain time frame so you’re not tempted to withdraw those funds.

• Choose a savings account that fits your goals. For example, a vacation fund or holiday savings account from SAC Federal Credit Union offers a higher interest rate and, like a certificate, you can’t withdraw the money early without penalty.

• Create an emergency savings fund. Ideally you should shoot for an amount that is equal to three to four months of expenses. You can determine this by looking at your budget to understand what you typically need on a monthly basis.

wiTh goals seT, a BudgeT deTerMined, and sTeady savings deposiTs arranged, iT’s TiMe To Take a look aT

your crediT score To Make sure you’re sTaying on Track.

Building a savings Fund

part of any robust financial management plan is making sure that credit and debt are being handled wisely.

“You need good credit so that when you want to make a purchase like a home or a car, you can get a low interest rate. At SAC, your score won’t necessarily determine approval or denial, since we take many factors into consideration, but it will factor in to the interest rate.”

julie Bruning Vice President of Consumer Lending at SAC Federal Credit Union

crediT Basics

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step

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Getting Started 1-2-3

establish a strong credit score by getting a

share secured loan or a share certificate loan

with your credit union, or even just a single

credit card – it only takes one line of credit to

build your score, whereas opening multiple

lines may actually be detrimental if you’re just

getting started on building your credit.

thoroughly double-check your credit report to

make sure there are no errors that could be

affecting your score.

Find out your credit score by visiting the

website of one of the credit reporting agencies,

or talk to a sAC Federal Credit Union advisor

about obtaining a credit report.

A credit score is determined by the three major credit

reporting agencies: Equifax, TransUnion, and Experian.

Often, lenders will take these agency scores and combine

them to get an idea of creditworthiness. The scores are

calculated based on:

• Payment history. Do you pay bills on time? Do you pay in full or only the minimum amount due?

• Amount owed. Do you have a large amount of outstanding debt?

• Length of credit history. Have you shown financial responsibility over a number of years, or only just recently?

• New credit. Have you applied for more credit cards or loans lately?

• Types of credit used: Do you carry multiple credit cards and loans in addition to a mortgage and auto loan?

When a credit score drops due to factors like bankruptcy,

debt collection, late payments, too many credit accounts,

and other challenges, it can take years to repair the damage.

A major credit hit like bankruptcy can take seven to 10 years

to be cleared from your credit score.

“It’s critical to have healthy credit habits from the start,

because it takes so long to recover from any damage to your

credit score,” SAC Federal Credit Union’s Julie Bruning says.

crediT Basics

“It’s critical to have healthy credit habits from the start because it takes so long to recover from any damage to your credit score.”

julie Bruning Vice President of Consumer Lending at SAC Federal Credit Union

The best scenario with insurance is to pay for coverage and never need to use it. no one enjoys thinking about situations like house fires, long-term disability, and fender benders.

“Insurance is a smart and necessary expense because it acts as a safety net: Ideally, you won’t need to use it, but if something unexpected happens, you’ll be glad it’s there.”

karen guy Business & Marketing Analyst at SAC Federal Credit Union

insurance needs

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Proper insurance coverage can save you from financial

disaster – rather than emptying out an emergency savings

fund or going into debt in the wake of a natural disaster,

accident, or theft, insurance provides assurance that you’ll

be protected throughout a challenging situation.

But it only works if the coverage is appropriate for your

needs. Determine what type of coverage is most appropriate

for you, such as health insurance, renter or homeowner

insurance, and auto insurance, and then begin to look at

more options like long-term disability or life insurance.

Here are some tips for major types of insurance that often

get overlooked.

hoMeowner or renTer insurance

• Consider coverage that includes Guaranteed Replacement Cost coverage for the structure of your home, which ensures that if your house is destroyed in a tornado, for example, you’ll be paid for the reconstruction cost of your home, regardless of the limit on your insurance policy.

• If you have an older home, ask your insurance agent about Building Code Upgrade coverage, which protects you in case you need to repair your home to meet new standards.

• Make sure your policy comes with Replacement Cost coverage for your possessions, so you can recoup losses from damage or theft. Some policies only cover “actual value” of items, which might not be enough to replace your possessions.

liFe

• If you have children, a spouse, a parent, or a sibling who depends on you financially, life insurance is advisable to make sure they’re covered if anything should happen to you.

• Many employers offer life insurance, so be sure to ask about basic policies and whether you can purchase more to include in your benefits package.

insurance needs

See more insurance options

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step

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Getting Started 1-2-3

Contact sAC FCU Wealth Management to set

up an appointment to talk about your options

and find an insurance solution that fits within

your budget.

Determine what makes sense for you at this

point in your life and set some time aside to

compare policies.

Make a list of insurance types like health, long-

term disability, homeowner coverage, assisted

living, and car insurance.

insurance needs

long-TerM disaBiliTy

• About one in four of today’s 20-year-olds risk becoming disabled before retirement, according to the Council for Disability Awareness. Those odds alone should make you consider this type of insurance.

• Short-term disability coverage, which is also a good option to consider in your insurance mix, generally expires after three to six months.

• Long-term disability insurance pays a percentage of your salary, usually about 50 to 60 percent, for as long as you’re disabled, up until age 65.

• SAC FCU partners with a third-party vendor to offer Accidental Death & Dismemberment insurance to its members. Talk to a SAC representative to learn more and to activate your coverage.

long-TerM care

• These policies help those in assisted living facilities or receiving at-home care to cover costs that aren’t covered by Medicare or other health insurance plans.

• When evaluating policies, make sure to find out whether pre-existing conditions are covered. This can significantly impact coverage.

now ThaT you have a handle on Basics like goal seTTing, BudgeTing, crediT, savings, and insurance,

you’re in a greaT posiTion To Take a look aT reTireMenT.

creating a nest egg for retirement is a key part of everyone’s financial future, and it’s never too late – or too early – to start planning and saving.

“How much to save for retirement is a personal choice based on what you want to do when you retire. You should put some thought into options that you want available to you when you choose to retire.”

Margie johnson Vice President of Quality Assurance & Compliance at SAC Federal Credit Union

reTireMenT savings

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As you start mapping out your retirement plan, ask yourself

what you want your retirement to look like. For example, do

you want to travel? Do you want to own your home or will you

be renting? At what age do you expect to retire? Even if you’re

just starting out in your professional life, taking time to consider

questions like these will help set a robust retirement plan.

SAC Federal Credit Union’s Margie Johnson offers these tips

for developing a plan that’s flexible and able to accommodate

changes that occur throughout your life:

• Start early. In today’s economic environment, it’s critical to think about retirement even in your 20s. It’s smart to invest a little when you’re first starting your career so it becomes a habit.

• Take your planned retirement age into consideration. Keep in mind that if you retire early, your money will have to last longer.

reTireMenT savings

• Take advantage of employer retirement accounts. These benefits usually include matched funds or contributions from employers.

• Be responsible with extra income. When you get a pay increase or bonus, deposit some of that financial boost into your retirement account. And after a pay raise, adjust your retirement contributions to reflect the percentage increase.

• Establish an additional savings account. Retirement funds often have early-withdrawal penalties if you draw from them before retirement, so having an additional account will allow you to have access to funds if you need them before you hit retirement age.

• Explore your options. Talk with a SAC FCU Wealth Management advisor about investment choices, and get detailed information about their recommendations for pursuing your financial goals for the future.

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step

step

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Getting Started 1-2-3

set up a direct deposit from your paycheck to

your employer retirement account or Individual

Retirement Account (IRA). When you get a pay

increase, adjust your contributions accordingly.

Look at the length of time until you retire to

determine how aggressive you should be in

your savings plan.

Consider your standard of living for today and

what you want to maintain when you actually

retire. this will help you set an initial goal.

reTireMenT savings

iT’s never Too laTe To sTarT.

When it comes to saving for retirement, the earlier you

get started, the better off you’ll be. But that doesn’t mean

you can’t start saving at 50! The table below shows a

breakdown of what your savings would look like if you set

aside $200 a month at different interest rates.

age 20 age 30 age 40 age 50

2% $174,931 $121,510 $77,764 $41,943

4% $301,894 $182,746 $102,826 $49,218

6% $551,199 $284,942 $138,599 $58,164

8% $1,054,908 $458,776 $190,205 $69,208

Source: 360financialliteracy.org

Yes, you’ll have more money in the long run if you start

saving in your 20s, but there can be time to build up a

sizable chunk of money to supplement your other income.

at this point, you’ve set goals, determined your budget, evaluated insurance and retirement, and mastered credit basics. you’re well on your way to taking control of your financial future.

as you continue to organize your finances, sac Federal credit union is always here to help, with experts who can offer insight and tailored solutions that support you, no matter where you are in your financial journey.

conTacT us:

saving: crissy hayeschayes@sacFcu.coM402-829-6659

crediT: julie BruningjBruning@sacFcu.coM402-829-6257

leT’s Be Friends:

reTireMenT: Beverly hoBBsBhoBBs@sacFcu.coM402-829-6345