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Savings
Family is what your credit union is all about - we want to make your financial dreams a reality!! 8 Keys to Becoming Financially Independent Most people aspire to become financially independent, but few actually think about or take the actions necessary to reach independence. Financial independence means having sufficient financial resources to comfortably choose whether to work or not work, or perhaps work in a highly desirable job that otherwise couldn’t support your standard of living. It means being able to withstand the inevitable financial storms along the way. But what key steps does it take to achieve financial independence? 1. Set specific goals. Goals define what financial independence will look like for each of us. Goals, particularly specific goals written out with timetables, can motivate us to initiate and stick with the other keys to financial independence. 2. Consistently spend less than you earn. Yes, your mother probably taught you this when you were receiving an allowance as a youngster, but so many of us forget this basic principle. Unless you spend less than you earn, it’s impossible to become financially independent — short of winning the lottery. Consistent saving is even more important than the investment rate you might earn with that savings. Aim for saving at least ten percent of your pre-tax income. If you’re unable to save ten percent now, saving a smaller percentage will help you — especially if you start saving while you’re younger and can let the power of compounding work for you. 3. Create a spending plan. The key to spending less than you earn is to create and follow a spending plan. In general, if you subtract your expenses from your earnings, the amount left should be your savings. Another way to view your savings, though, is to treat savings as an expense item and put it at the top of your budget. Simply have the money deducted from your paycheck and deposited into your savings account. You won’t miss it, and you won’t be tempted to spend it. 4. Invest. To build financial independence, you’ll need to earn a reasonable return on your savings. A savings account alone is not enough. Invest in stocks, bonds, and other assets that involve an acceptable level of risk. Yes, there’s the risk of some loss of principal, but understand that investing is for long-term goals that are at least five years away. When you are closer to reaching your goals, shift the invested funds into those lower-earning but less risky savings accounts and money markets. 5. Stay invested. One of the big mistakes many investors make is waiting to invest until the market is really strong — and then bailing out when it sinks. In short, they buy high and sell low. Get in and stay in — and make adjustments if necessary. Keep in mind that the bulk of the returns of a bull market tend to come early in the upswing, and people often miss out on them because they’re waiting for the market to turn “hot.” 6. Diversify. It’s important to diversify your assets. Overloading on company stock, on stock in the industry in which you work, or on other higher-risk investments is an open invitation to trouble. By spreading your investment money among several asset categories, you minimize the impact of the downturns of a particular segment. 7. Use tax-favored accounts. Retirement plans and individual retirement accounts are the most efficient way to build toward financial independence because you get more bang for each invested buck, especially if your employer matches your contributions. 8. Bulletproof your independence. As you accumulate money for financial independence, you need to protect it. The primary way is insurance — not just life, health, auto and homeowner’s insurance — but disability and liability coverage. Disability insurance helps offset the loss of income if you can no longer work due to a disability, and liability coverage is a cushion against lawsuits. Another form of insurance is a cash-reserve emergency fund where dollars are kept in a savings or money market account to see you through emergencies or a stretch of unemployment, so you don’t have to dip into retirement accounts or other investments. RegularShare/Savings Account - A Regular Share/Savings Account with a $5.00 minimum balance establishes you as a credit union member. This entitles you to take advantage of ALL the products and services offered by Clinton County Federal Credit Union and qualifies you to VOTE in all credit union elections. Money Market Share/Savings Account - Looking for an enhanced share/savings account to meet your special financial needs? This account earns a higher APY (Annual Percentage Yield) without tying your money up like a certificate of deposit. Christmas Club Account - Make your holidays brighter! Open a Christmas Club account. It's easy to watch your money grow as you payroll deduct for the upcoming holidays. You are in control - you decide how much and how frequently you want to deposit into this account. Christmas Club dollars are available for your holidays on November 1st. Youth Share/Savings Account - This account is geared towards the development of your child's savings habit. The qualifying ages for this account is zero to 18 years of age. There is NO minimum balance fee or service charge on this account, and their dollars starting earning dividends once the $5.00 minimum balance is met. Miscellaneous Share/Savings Accounts - These accounts are perfect for the something special you are saving up for. There are NO minimum balance requirements and NO monthly service fees to worry about. These sub-accounts are opened under your main account number and will appear right on your regular monthly and/or quarterly statements. Yet the funds are in a separate account making it easy for you to put money aside for a special occasion like a vacation or to pay taxes or for new furniture. IRA (Individual Retirement Account) Share/Savings Account - Put aside money for your retirement with an IRA from Clinton County Federal Credit Union. You can choose from several IRA options, including Roth and Educational. Certificate of Deposit (CD) - Certificates provide higher yields on your funds deposited with terms ranging from 6 months up to 60 months.
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