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Fixed vs. Variable Expenses

Fixed vs. VaRiAbLE Expenses

How to budget for fixed and variable expenses

Putting together a budget requires looking at a range of expenses; some that are expected and others that are not. Expenses generally fall into one of two categories — variable and fixed. Understanding how they differ can help you handle current bills as well as future ones.

 

What is a fixed expense?Fixed vs. variable expenses

 

Expenses that stay the same (or close to the same) each time they are paid fall into the fixed expense category. The stability or repetitive nature of fixed expenses provides a good foundation for your budget.

 

According to Paula Pant, personal finance expert and contributor to The Balance, expenses like your mortgage or rent, car loan or other loan payments, real estate taxes, insurance premiums, utilities, and childcare expenses all fall under the fixed expense umbrella.

 

Knowing how much you are going to pay is not the only benefit of fixed expenses. You will also know exactly when you have to pay them, which is another booster in your budget-planning efforts. In an article for Forbes, freelance financial journalist Rebecca Lake explains that fixed expenses can be paid through automatic bill payments, thereby avoiding late payments and the fees that accompany them.

 

What is a variable expense?

 

Any expenses that aren’t regular or that change amounts by a lot are considered variable. That includes things like medical bills, home or car repair, entertainment, meals out, personal care expenses, and even gas and groceries, according to Lake.

 

A lot of times, your variable expenses will consist of your “needs” instead of your “wants.” For example, you don’t need to eat out one a week, but if that is important to you then you need to include a set amount in your budget and stick to it.

 

Ways to budget and reduce expenses

 

Budgeting for fixed expenses is definitely easier than variable expenses, but even fixed expenses offer a little wiggle room. If you are trying to pay less on a fixed expense, do some research and sharpen your bargain-hunting skills. Paula Pant recommends shopping around to see if you can get a better deal on your internet or cell phone bill or to see whether there’s a cheaper option out there for car or home insurance.

 

Lake recommends looking into refinancing your mortgage or other loans, as well as consolidating your consolidation, or signing up for a credit card with a lower interest rate to help you save on fixed expenses.

 

Variable expenses may seem easy to trim in order to save money, but they require you to make decisions each day about where you should spend your money, which Pant notes can be difficult. Lifestyle adjustments like eating out less, forgoing shopping sprees, and using coupons and meal planning may help you save on variable expenses, according to Lake.

 

When you take the time to understand how every bill and cost affect your life, you can create a successful budget and even save money on your fixed and variable expenses.

 

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Big Game Auto Loan Special

Big Game Auto Loan Special!

To celebrate the Big Game, we are offering an auto loan special!

Big Game Auto Loan


When you secure your auto loan between February 1 and February 13, 2022, you may be eligible to score:

  • 1.99%* APR on NEW and USED auto loans
  • $200 cashback
  • No payments for 60 days

Already have an auto loan with another bank or credit union? Check with our loan officers on moving your existing loans to AGCU. You could add another $100 for each loan!

Have a question or want to get started with an application? Connect with an AGCU Video Banking Representative or apply online today!

Start a Call Video Banking
Speak face-to-face with an AGCU Video Banking Representative from anywhere.
Give it a try today! Video Banking Hours (CST): Mon – Fri: 8:30 a.m.- 5:00 p.m.

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*APR=annual percentage rate. Note: the current APR is described as a “as low as” rate. You may or may not receive the “as low as” rate advertised because all loans and rates are subject to your own personal credit history. This rate is on New and used vehicles.  The minimum loan amount is $5,000. Subject to credit approval and the credit union’s eligibility requirements. Cashback funds will be deposited into the member’s checking account 30 days after loan closing. Cashback funds will be reported to the IRS as interest. Existing AGCU loans are not eligible. Promotion is effective on auto loans applied for between 2/1/2021 – 2/13/2022. The loan must close by 2/28/2022. Not valid with any other offer.

Hidden Costs of Owning a Car

The Hidden Costs of Owning a Car

There’s so much more to owning a car than monthly payments on a loan or lease! Also, consider these costs when it comes to owning a car.

The Hidden Costs of Owning a Car

Gas

The amount you spend on fuel will fluctuate along with gas prices and varies by vehicle, location, and how much you drive. Expect to spend $150-300 a month on fuel.

Insurance

This also varies according to a number of factors. The average cost of auto insurance in the U.S. is $140/month. It’s a good idea to review your insurance policy every year. Let AGCU Insurance help you find an affordable insurance plan for auto, home, motorcycle, life, pet, and more! Plus, AGCU Insurance is for everyone, not just AGCU members!

Maintenance

New cars cost an average of $1 in maintenance for every 10 miles. Older cars can cost an average of $1,000 a year in maintenance costs. This, of course, varies by vehicle and its condition when purchased. Maintenance includes oil changes, tire rotations, brake pad replacements, and more.

 

Are You Ready?

After you’ve considered all the costs involved with buying a car, we’re here to help! Whether your dream is to cruise the open road, enjoy the lake, or head out on the trails, we offer great rates on loans and refinances for new and used autos, RVs, boats, jet skis, motorcycles, and even ATVs. We look forward to helping you finance your next set of keys!

Car, Boat, RV, Motorcycle & More

Get the car you want at a rate you can afford with AGCU. Our auto loans come equipped with perks to meet your needs.

  • Competitive, low rates
  • Flexible terms
  • Optional GAP Coverage and Extended Warranty
  • Optional Debt Protection Coverage including Credit Life, Disability, and Involuntary Unemployment

Click to view AGCU loan rates.

Have a question or want to get started with an application? Connect with an AGCU Video Banking Representative or apply online today!

Start a Call Video Banking
Speak face-to-face with an AGCU Video Banking Representative from anywhere.
Give it a try today! Video Banking Hours (CST): Mon – Fri: 8:30 a.m.- 5:00 p.m.

 

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When Should You Start Banking Online With Your Kids?

When Should You Start Banking Online With Your Kids?

Here is a guide to help you start talking about finances with your kids. When to start teaching your kids about saving, spending, and online banking.

Online Banking with kids

Part of your job as a parent is to prepare your kids for the future. One important component of their future is learning how to handle money. Yes, financial literacy can seem daunting and complex, but you can start small by introducing your young kids to simple concepts like saving money in an online savings account. Here is a guide to help you start talking about finances with your kids.

Younger than six

If your little one is less than six years old, they may not understand what an online banking account is even if they are tech-savvy like many kids today. But, they will understand a physical representation of their saving efforts, aka the traditional piggy bank, according to Spencer Tierney, writer for NerdWallet. You can even let them pick out the bank — it doesn’t even have to be a pig! They will love dropping the coins or dollars they receive from birthdays, holidays, or from completing age-appropriate chores. Plus, they will be able to see their savings grow until you allow them to buy something special for themselves at the store.

Ready for the next step

Once the piggy-bank-savings method has lost its appeal or your child’s interest, it could be a good time to go high-tech. Online savings offers 24/7 access, so you can set the time that’s convenient for you and your child to discuss money. No need to wait in a crowded lobby or deal with an appointment time that puts stress on your schedule and your kid’s nerves.

Kid-focused accounts

Most likely, the financial institution you trust with your grown-up money offers a kid-friendly savings account. If not, a little research should help you find a suitable source for your child’s hard-earned money. “Whether you want to help build your child’s balance or your child needs an account to bank their income from an allowance or part-time job, a youth savings account provides an opportunity to earn some interest, while also learning how to bank and build a savings habit,” explains Sabrina Karl, writer for Investopedia.

What to look for in an online savings account

The interest rate isn’t the only thing you should weigh when choosing an online savings account for your child. Although, a high-interest rate is an attractive feature and may inspire your child to save as much as possible! Check to make sure that the high-interest bearing account does not require monthly maintenance fees or a minimum balance before committing. “Children should see saving as a good thing and not have fees diminish what they put into their accounts,” Tierney says.

Kids have limited attention spans. To keep their focus on their money-saving habits and make your lessons enjoyable and fruitful, you should choose an online savings account that is easy to use, see, and access. Tierney suggests looking for features like mobile apps and electronic statements; other features worth noting are goal-oriented budgets, spending trackers, and a prepaid debit card. “Show your child how to create their own secure password, which will help them learn money management and internet safety,” he advises.

According to Margarette Burnette, writer for NerdWallet, some apps will offer parental controls so you can help monitor how much your child spends as well as let you transfer money directly into their account.

By talking to your children about money, saving, and accounts early, you’ll inspire them to make smart money moves throughout their lives.

Ready to open a youth account for your kids or grandkids? You can open one online!

Start a Call Video Banking
Speak face-to-face with an AGCU Video Banking Representative from anywhere.
Give it a try today! Video Banking Hours (CST): Mon – Fri: 8:30 a.m.- 5:00 p.m.

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12 Steps to Financial Wellness-Step 1: How to Track Your Spending

12 Steps to Financial Wellness

12 Steps to Financial Wellness-Step 1: How to Track Your Spending

Step 1: How to Track Your Spending

Are you ready to join us on a journey toward financial wellness?

Each month, AGCU will focus on one step of a journey of financial wellness. We’ll tackle the topic in detail and help you learn all you need to know about this step. Follow along, and at the end of the year, you’ll have mastered the tools for a life of financial wellness.

Tracking your spending is the first step toward greater financial awareness and, ultimately, toward financial health. However, mastering this skill is easier said than done. How can you track every dollar you spend when you make multiple purchases each day?

We’ve outlined how to track your spending in 3 easy steps.

1. Choose your tools

Tracing every dollar’s journey isn’t easy, but with the right tools, you can make it quick and simple. Choose from one of the following money-tracking techniques:

  • Budgeting apps. AGCU has helpful budgeting tools with online banking. just log on to your account through our web portal and click on the “My Finance” tab. If your life happens on your phone, you use budgeting apps like YNAB or Mint to help you track your spending. Both apps allow you to allocate a specific amount of money for each spending category for each month and will enable you to track your spending with just a few clicks. It’s important to note that YNAB is not a free app, but that it may be worth the price for users who want to take on a more active role in their money management.
  • Spreadsheet. If you like to see everything spelled out clearly, a spreadsheet might be a better choice for you. You’ll need to record every transaction, but if you prepare the sheet with all the spending categories you think you’ll need, this step shouldn’t take long at all.
  • The envelope system. If you’re a big cash spender, consider withdrawing the cash you think you’ll spend in a month (or in a week) and keeping it in an envelope designated for each category. When you need to make a purchase, just use money from the envelope.
  • Receipts. Hold onto every receipt from the purchases you make this month to help you track your spending.
  • Pencil and paper. Recording each purchase the old-fashioned way can help you make more mindful money choices throughout the day. Be sure to keep a steady supply of both writing instruments handy at all times so you never miss a purchase.

2. Review your checking account and credit card statements carefully

Along with one of the tools listed above, you can track the purchases you make using plastic by reviewing your monthly checking account and credit card statements at the end of the month. You may receive these in the mail, or you can access them online by logging into your account and downloading.

3. Review and categorize your purchases

At the end of the month, use your chosen tool to review all the purchases you’ve made throughout the month. If you’ve used an app or a spreadsheet, adding your purchases to find the total amount of money spent will be simple. The app or spreadsheet may have already helped you divide the money spent into separate categories as well. Similarly, if you’ve used the envelope system, you should know how much you spent on each kind of purchase this month. However, if you’ve chosen another method to track your spending, you’ll need to crunch some numbers to get an accurate picture of your spending habits.

When completing this step, don’t forget to include any automated payments you may rarely think about, such as subscription fees and insurance premiums.

Tracking your spending and identifying your money drains is the first step toward greater financial awareness and responsibility. Use the tips outlined here to successfully master the skill of tracking your spending.

 

Read Step 1: How to Track Your Spending

Read Step 2: Creating a Budget

Read Step 3: Pay Down Debt

Read Step 4: Have the Money Talk With Your Partner

Read Step 5: Practice Mindful Spending

Read Step 6: Pay It Forward

Read Step 7: How to Pay Yourself First

Read Step 8: Know When and How to Indulge

Read Step 9: Build and Maintain an Excellent Credit Score

Read Step 10: Plan for Retirement

Read Step 11: Start Investing

Read Step 12: Review and Tweak

 

 

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Beware Tax Filing Scams

Beware Tax Filing Scams

It’s tax time! Unfortunately, that means there are thousands of scammers looking to steal your information and your tax refund by posing as authentic tax preparers. Here’s all you need to know about these scams and how to keep safe.

Beware Tax Scams

 

How the scam plays out

In a tax filing scam, a victim will hire an alleged tax preparer to do their taxes. The scammer then uses the victim’s information to file a tax return in the victim’s name. They’ll change some important details on the tax form, such as a checking account number or mailing address, and then collect the victim’s refund. By the time the victim realizes what’s happened, they’ve lost the money owed to them by the IRS and are now vulnerable to deeper identity theft.

Protect yourself

The best way to stay safe from a tax filing scam is to do your research carefully before hiring a tax preparer.

First, avoid pop-up ads when choosing a tax preparer, especially those that are riddled with typos. Research any preparers you consider hiring by asking for references of previous clients and by looking for a physical address on their website. Be suspicious, as well, if they promise a large return without knowing anything about your finances.

Second, before hiring an individual or an agency to do your taxes, ask to see their Preparer Tax Identification Number (PTIN). If the “preparer” refuses to share their PTIN, you’re being scammed.

Finally, if you’ve already hired a preparer but you’re suspicious about their authenticity, look for these red flags:

  • The preparer inflates numbers that affect your tax liability.
  • The preparer claims ineligible individuals as your dependents.
  • The preparer asks you to sign a blank form and promises to fill out the remainder after you sign.
  • The preparer refuses to sign your form.

If your tax preparer follows any of the above practices, terminate your relationship with them immediately.

If you’ve been targeted by a tax filing scam, report it to the authorities as quickly as possible. Let the FTC know about the scam and alert the IRS. If you’ve shared personal information with the scammer, you are now vulnerable to identity theft. Check out the federal government’s page on identity theft recovery to learn what steps to take next.

Stay safe!


IRS ISSUES ANNUAL LIST OF TAX SCAMS

The IRS recently issued its annual list of tax scams. The list highlights various scams that taxpayers may encounter, many of which occur during tax filing season. Here are some of the scams that are highlighted on the list.

PHISHING

Phishing scams usually involve unsolicited emails or fake websites that pose as legitimate IRS sites to convince you to provide personal or financial information. Once scam artists obtain this information, they use it to commit identity or financial theft. The IRS will never initiate contact with you by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media.

PHONE SCAMS

Phone scams typically involve a phone call from someone claiming you owe money to the IRS or that you’re entitled to a large refund. The calls may show up as coming from the IRS on your Caller ID, be accompanied by fake emails that appear to be from the IRS, or involve follow-up calls from individuals saying they are from law enforcement. Sometimes these callers may even threaten you with arrest, license revocation, or deportation.

IDENTITY THEFT

Tax-related identity theft occurs when someone uses your Social Security number to claim a fraudulent tax refund. You may not even realize you’ve been the victim of identity theft until you file your tax return and discover that a return has already been filed using your Social Security number. Or the IRS may send you a letter indicating it has identified a suspicious return using your Social Security number.

RETURN PREPARER FRAUD

Sometimes scam artists pose as legitimate tax preparers and try to take advantage of unsuspecting taxpayers by committing refund fraud or identity theft. It’s important to choose a tax preparer carefully since you are legally responsible for what’s on your return, even if it’s prepared by someone else.

INFLATED REFUND CLAIMS

Taxpayers should be wary of anyone promising an unreasonably large or inflated refund. These scam artists may ask you to sign a blank return and promise a big refund without looking at your tax records or charging fees based on a percentage of the refund.

FAKE CHARITIES

Groups sometimes pose as charitable organizations in order to solicit donations from unsuspecting donors. Be wary of charities with names that are similar to more familiar or nationally-known organizations. Before donating to a charity, make sure that it is legitimate. The IRS website has tools to assist you in checking out the status of a charitable organization.


Banking With A Purpose

Much more than a catchphrase, our tagline is our passion, our reason why we do what we do. This is the impact of your membership with AGCU. Learn More About Banking with a Purpose

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6 STEPS TO JUMPSTART YOUR RETIREMENT JOURNEY!

6 STEPS TO JUMPSTART YOUR RETIREMENT JOURNEY!

By Breanna Johnston, AFC® Candidate

6 steps to jumpstart YOUR retirement journey

Retirement is one of those endeavors that fall into the “someday” category. When living your day-to-day life as a person in their 20s, 30s, and even your 40s and those everyday expenses pop up, it’s more difficult to save for something that is seemingly so far away.
But as we all know — life comes at you fast. A 2020 survey by Charles Schwab of currently employed 401(k) plan participants found that saving enough for retirement continues to be a leading source of significant financial stress for all generations.

While studies show that 71 percent of Americans are adequately prepared for retirement, much of that includes receiving Social Security benefits under the current law. With Social Security payouts only scheduled to be paid at the full benefit amount through 2035, Millennials and Gen Z have to approach retirement from a different perspective — one that is diverse and doesn’t rely on Social Security benefits, if you can help it. The good news is that starting early allows you to reach your retirement goals more easily.

In today’s economy, we can’t overlook the fact that there are some people who are not making a fair living wage, making it difficult to save. But for those of us with the ability to save it’s important to understand that it’s never too late to start saving for retirement. Your future self will thank you!

So what are the steps to take when you’re ready to jumpstart your retirement journey? Glad you asked! Here are our six steps below.

1. GET IN THE “RETIREMENT READY” MINDSET.

The first step is getting in the right mindset, meaning-making your new savings goal a priority. We encourage you to “Start Small, Think Big” and take advantage of retirement solutions available to you like your employer’s 401K or 403 B plan or IRA options you can open on your own.

If you’re starting your retirement savings journey early, you have time on your side! However, if you’re closer to retirement age, then prepare to be a bit more aggressive in order to achieve your retirement goal. Research how to make catch-up contributions to your retirement savings, ultimately jump-starting a stalled plan.

The good news is this: it’s never too late! It is important to remember that saving anything is better than saving nothing. Even increasing your retirement savings by one percent can make a huge difference in the long run.

 

2. DEFINE WHAT RETIREMENT WILL LOOK LIKE FOR YOU.

Your retirement years will be as individual as you are! Have you visualized how you’d like your retirement to look and feel? Think about where you want to settle down. Will you stay put and have sweet tea and lemonade on the front porch most days or do you intend to travel far and wide? Most importantly, how much “annual income” will you need to achieve this envisioned lifestyle? Asking yourself these questions will help determine a rough estimate of how much to start saving now.

Someone who plans to travel and or have an active lifestyle when they retire may need to save more than someone who has a home that is paid off with no grand plans of world travel.

You will also need to consider exactly when you want to retire. This will help determine how much you should be saving annually. In the modern age, people pre-retire, half-retire or even never leave the workforce at all.

 

3. CALCULATE HOW MUCH YOU’LL NEED TO SAVE.

Once you have an idea of what type of retirement you want to have, estimate the annual retirement income needed. You want to ensure you are saving for the future you want. Most Americans are not putting enough money into their retirement fund every year in order to afford the life they want for themselves in the future.

What each person needs will vary widely based on a number of factors, including your current age, the age at which you plan to retire, if your partner or spouse has an income, your spending habits, and different sources of retirement income. There are also circumstances beyond your control, like how long you can expect to live based on family history.

While there is no hard and fast rule to determine how much to save by a specific age, many personal finance experts recommend having saved an amount equal to your annual salary by age 30, three times by age 40, and five times by age 50. While this can be overwhelming if you haven’t hit those milestones in your retirement savings yet, one small step you can take is to increase your contribution rate with each pay raise. Remember, building a savings habit and taking control of your finances, like you’re doing now, is worth celebrating.

 

4. TAKE THE AMERICA SAVES PLEDGE.

Now that you have a better idea of what exactly you’re saving for and how much, it’s time to consider how you’ll achieve your dream retirement. The America Saves Pledge is a tool that helps you make a simple plan to meet your savings goal while offering you long-term accountability and support along the way. Take the America Saves Pledge and visit AmericaSaves.org for tips, resources, and support on your journey towards retirement. Remember: savers who make a plan are twice as likely to save successfully!

 

5. DO YOUR HOMEWORK.

Consider what type of accounts to deposit your retirement savings into. Your employer may offer a retirement plan such as a 401K, 403B, or SEP-IRA and match your contributions up to a certain percentage. The most important consideration here is to take advantage of any employer benefits such as matching your contributions up to a certain percentage. Find out if your employer offers a match and contribute at least enough to maximize that benefit.

Individual Retirement Arrangements (IRAs) are also an option, and you can open one anytime through financial institutions or financial services providers. There are several different IRAs including the most common: Roth and Traditional. Roth IRAs can be withdrawn at anytime without penalty and are tax-free. Traditional IRAs may be tax-deductible and your earnings grow tax-deferred until you start making withdrawals. You’ll need to determine which is best for you — or maybe a combination of both. The IRS has put together a great comparison tool to understand the differences between the two accounts and decide which may be better for you.

 

6. PRIORITIZE MAKING YOUR CONTRIBUTIONS AUTOMATICALLY.

Now that you can visualize the type of retirement you want, have determined approximately how much you’re saving for, and have a plan and support in place, the best thing you can do is to set it and forget it! Set up automatic payments and contributions either through your employer or from a financial institution to stay on track.

The point of retirement savings is to keep it invested for the long term. This means avoiding dipping into your retirement fund for emergencies. Instead, create an emergency savings fund that you are also contributing to consistently.

Research by the Employee Benefit Research Institute shows that it typically takes 13 years or more of contributions to an account before you begin to reach a level of savings that is enough to fund a number of years of retirement as a supplement to Social Security. So don’t become discouraged if you feel you do not have enough savings in your retirement fund just yet.

Whatever path you choose to take toward retirement, the biggest step to take is being consistent. Retirement savings is a long-term commitment, but today’s work will pay off in the long run, literally. Take the America Saves Pledge and let us help you reach your goals, no matter what they are. Your future self will thank you!

 

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Much more than a catchphrase, our tagline is our passion, our reason why we do what we do. This is the impact of your membership with AGCU. Learn More About Banking with a Purpose

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Consumer Credit Cards Winter 2022

Cozy Up With New Rewards

Choosing the right credit card is easier than ever. Whether you want to pay down balances faster, maximize cash back, earn rewards or begin building your credit history, we have the ideal card for you!

No matter which card you choose, you’ll enjoy important features like:

• Convenient and Flexible Purchasing Power. Accepted at millions of locations worldwide.
• Mobile purchasing capability for added convenience.
• Zero Fraud Liability.* You won’t be liable for fraudulent purchases when your card is lost or stolen.
• Cardmember Service available 24 hours a day/365 days per year.
• Plus much more!

 

Learn More

*Elan Financial Services provides zero fraud liability for unauthorized transactions. Cardholder must notify Elan Financial Services promptly of any unauthorized use. Certain conditions and limitations may apply. The creditor and issuer of these cards is Elan Financial Services, pursuant to separate licenses from Visa U.S.A. Inc., and Mastercard International Incorporated. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

Teaching Financial Responsibility

How do I Raise my Kids to be Financially Independent Adults?

Raising Financially Independent Adults


It’s commendable to try raising your kids today with an eye toward their future. Teaching your children how to be financially independent will help smooth the transition into adulthood. It will also give them the tools they need to achieve and maintain financial wellness throughout their life.

Here are some tips for raising kids to grow into financially independent adults.

Start with basic budgeting

Successful budgeting is the foundation of every financially independent household. You can introduce your children to the concept of earning money and spending it mindfully when they’re still young and then build upon that knowledge as they grow older. Preteens can watch you work on an actual budget, and teens can even assist you in creating a budget for a large expense, such as a family vacation.

Another way to bring this lesson home is by showing kids how to budget their own money. Help them create columns for “income” and “expenses,” listing their allowance, occasional gift money, and income from any jobs they may have in the income column, and the ways they’d like to use their money in the expense column. Show them how to divide their money across their expenses in a reasonable fashion and talk to them about setting aside money for the future.

Finally, you can allow your older kids to make some spending decisions on their own, provided they don’t later complain about the choices they made. For example, you can give your preteen a specific amount of money to spend on a fall wardrobe, and then let them choose to spend more on a jacket and less on a pair of sneakers, or vice versa. They may make some mistakes, but you’ll be teaching them a lesson they’ll carry with them throughout life.

Split the costs of “must-have” items

If your kids are like most, they’ll likely be asking you for all sorts of trending items they claim they absolutely need; from a pair of designer jeans that all the in-kids are wearing, to the latest fad toy they insist their entire class already has. As a parent, you may be inclined to bend and give them what they want more often than you’d like. Or maybe you play hardball by refusing most of these requests. Neither approach is likely to leave both you and your child feeling happy with your choices.

A great way to compromise on just how often to say yes to kids, and to teach them a fantastic financial lesson at the same time, is to have your child pay half the cost of expensive trending items. They’ll quickly realize that what seems like a “must-have” really isn’t when you’re the one footing half the bill. Or, they may go ahead with the purchase and either come to regret it as they learn this lesson later or enjoy the gratification that comes from paying your way toward an important goal.

Teach them about credit cards

To a child, a credit card is a magical piece of plastic that makes everything possible. If your child observes you using a credit card or debit card often, you owe it to them to teach them what’s behind that little card. Show them your credit card bill when it arrives in the mail and talk about how you need to pay for all those expenses you swiped during the month, plus the interest you may incur. Teach them about debit cards, too, explaining how money is withdrawn from your checking account when you swipe the card. It’s also a good idea to give older kids a quick rundown on credit scores, how they work and why they’re so important.

Open a checking account for your child 

Experience is the best teacher, and giving your child their own checking account can be an excellent way to teach them how they manage their own money. At AGCU, you can open a youth account, or a regular checking account under both your names to help your child learn all about money. They’ll make their own deposits (with your help), check on their balance, and may even enjoy a debit card to use as appropriate, so long as they have enough funds in their account to cover the purchases. This first account opened and managed under your watch will help them transition easily into truly handling their own money as financially independent adults.

Talk openly about what they can expect in terms of support for the future

When your child is mature enough to talk about their college years and beyond, it’s time to have a conversation about their transition into financially independent adulthood. The more you communicate about your plans now, the less room you’ll leave for misunderstandings and upset feelings in the future.

Be open and specific about how much financial support you plan to offer while they attend college, immediately after they graduate and further into the future. Ask about their plans as well, paying attention to when they anticipate being financially independent and whether you believe they are being realistic in their planning.

When speaking to your young-adult child about the future, it’s a good idea to bring up the topic of career paths and earning potential as well. You can help your child determine a basic budget for the lifestyle they plan to lead, and then assist them in narrowing down their career choices to just options that can support their future desired lifestyle. Talk to your child about student loans too, and explain how crippling debt can be.

It’s a scary world when you must step up to manage your money on your own, but it’s also a world filled with wonderful opportunities. Use the tips outlined above to help raise your child to be a financially independent adult.

 

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8 Ways to Protect Yourself From Holiday Fraud

8 Ways to Protect Yourself From Holiday Credit Card Fraud

8 Ways to Protect Yourself From Holiday Fraud

Fraudsters and scammers are always on the prowl, but experts say fraud attempts increase about 30 percent during the holiday season. So while you’re taking advantage of holiday shopping deals, fraudsters are looking to take advantage of you to steal your identity and run up charges on your accounts. Follow these tips to help protect yourself from fraud during the holidays.

1. Keep a close eye on your transaction history

It’s always important to review your account information regularly, but it’s especially critical during the holiday season when you’re likely spending more than usual. In the event of unauthorized transactions or discrepancies in your account, continual monitoring of your account will help if you need to flag suspicious activity to your bank or credit union.

2. Go mobile

Use Apple Pay, Samsung Pay, or other digital wallets as you cross things off your shopping list. Add your debit and credit cards to your digital wallets to take advantage of the latest forms of encryption protection so no matter if you’re in-store or buying online, your personal information is secure.

3. Ask yourself: Is this legit?

Be aware of scams when purchasing items online or even donating to charities. Does the deal look too good to be true? Is the site asking for irrelevant personal information? Ensure you are purchasing from legitimate and secure sites, and make sure you have the most updated anti-virus software just in case.

4. Verify site security

Before handing over your credit card information to a retailer, always verify that checkout is secure by confirming the URL starts with https://. This means the site is using an SSL certificate to secure data as it passes from the website to the server and keeps it safe from hackers.

5. Set account alerts

Most financial institutions offer customizable transaction alerts via email or text. Setting alerts can help you better manage your account (no more overdraft fees!) while also giving you peace of mind that no one else is accessing your accounts. Want to be alerted about any transaction over $50? Easy. Want to get pinged for every transaction you make with a debit card? Done.

6. Understand your credit card’s fraud protection offerings

Many credit cards offer something called “Zero Liability,” which applies to purchases made in the store, over the phone, online or via a mobile device. If your credit card offers Zero Liability, you won’t be held responsible for unauthorized transactions if you reasonably protected your card and promptly reported that your card was lost or stolen. Check your credit card agreement for more details.

7. Protect your PIN

Pay attention to your surroundings when using your credit and debit cards in public. The best way to protect your PIN is to shield the keypad anytime you enter your PIN. Also, be on the lookout for ATM skimming devices. Learn how to spot ATM skimming devices

8. Watch out for other scams

Following recent breaches, scammers are taking advantage of holiday shoppers by claiming to be from financial institutions, asking for your personal information so they can “make sure your information isn’t compromised.” In reality, anyone who contacts you directly asking for your information over the phone, via email or via social media is likely not authorized to do so. Err on the side of caution, do not respond, and proactively reach out to your financial institution to confirm if the call or message you received was legitimate.

Banking With A Purpose

Much more than a catchphrase, our tagline is our passion, our reason why we do what we do. This is the impact of your membership with AGCU. Learn More About Banking with a Purpose

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