Financial Literacy

Prepare Your Home for Winter

As the Winter season approaches, a little prepping can go a long way! On average, homeowners and renters can save up to $300.00 on their power bill by preparing for Winter months8.

  1. Seal Windows and Doors – Windows and doors are the biggest losers of heat. Sealing them can help save! 
  2. Furnace and Chimney Check-Up – A checkup can help your furnace and chimney work more efficiently. 
  3. Turn down your heat during the day – Turning down the heat during the day or at night may be able to cut your heating costs by 20%.
  4. Ensure Proper Insulation – If you have an attic, be sure to check if it is properly insulated.
  5. Payment Plans – Check with your utility company to see if there are any special plans that will help you budget your winter heating costs over a 12-month period.
  6. Look for ways to cut costs – Take some time now to analyze the cell phone, cable, satellite radio, and other plans that fit into the budget when you signed up but may not make sense now.
  7. Dress in Layers – If you can dress in layers while watching TV or working from home, you may be able to keep the heat at a minimum during certain times of the day.
  8. Use that Ceiling Fan – Flip the switch to reverse the spin of the fan and turn on the lowest speed to blow warm air down from the ceiling.
  9. Use Energy from the Sun – During the day, open drapes and blinds to allow sunlight to help warm the house, and then close them at night to hold the heat in.
  10. Do not heat unused rooms – Close the door to the unused room and shut off the radiator valve or close the vent.
  11. Save on Hot Water – Lower the thermostat on the hot water heater to 120 degrees or below.

Top 5 Fraud Trends this Holiday Season

As the holidays approach here are some of the fraud trends we’re watching: 

  • P2P scams: Per Javelin Strategy & Research, 18 million Americans were defrauded through scams involving digital wallets and person-to-person payment apps in 2020. That number has not declined—if anything, it’s increasing as P2P grows in popularity. In fact, half of the respondents to a recent survey from Allstate say that P2P scams concern them, and 29% say either they had been a victim or know someone who has. 

    One of the latest scams in this arena is the “flip.” In this scheme, the victim receives a direct message or views a social media post requesting that they send a certain amount of money—typically small dollars—in return for a promised larger sum. The victim, sensing a quick payday, sends the money and never hears from the requester again. 

  • E-commerce scams: As supply chain issues captured the world’s attention, shipping fraud increased nearly 800% worldwide in the past year— making it one of the biggest threats to consumers. 

    One common type of e-commerce scheme is the “pre-sale” scam, where fraudsters pose as sellers on social media platforms and offer lucrative student discounts. The victim, lured by attractive deals, submits payment upfront, and the fraudster vanishes without delivering the items purchased. Easy targets include students looking to purchase college textbooks at a discount, as well as consumers in the market for pricey, highly desirable items like concert merchandise. 

    The “giveaway” scam is another common method used by fraudsters, whereby they entice unwitting consumers to provide their personal credentials in exchange for “free” stuff. 

  • Employment scams: The industry has seen a rise in employment-related scams and phishing attempts since the pandemic. According to the 2021 BBB Scam Tracker Risk Report, employment scams were the second-riskiest type of fraud behind online purchase scams for the 18-24-year-old demographic and third-riskiest for those in the 25-34, 35-44, and 55-64 brackets. 

    LinkedIn holds the top spot as the most impersonated brand used in phishing scams, accounting for 45% of phishing emails observed in the second quarter of 2022.

  • Scholarship/financial aid scams: Scams aimed at students, prospective students and recent graduates are a seasonal problem in the fall, as the deadline for financial aid approaches in October. Following the Biden Administration’s recent loan forgiveness announcement, there has been a sharp increase in education and student loan scams. 

  • Romance fraud: As Americans increasingly go online looking for love, the fraudsters follow. According to Bloomberg, fraud losses on social media ballooned in 2021 to $770 million. Of the most popular types of fraud conducted over social media, 24% were romance scams, behind only investment scams in volume.

Tips for Addressing Fraud Risk 

Payment fraud is on the rise, but credit unions have several tools at their disposal to stay one step ahead of the fraudsters. To effectively navigate and respond to today’s dynamic fraud environment, it’s best to take a flexible, multi-pronged approach.7


My Money Five

Making the most of your money starts with five building blocks for managing and growing your money, and it’s helpful to use The MyMoney Five7. Keep these five principles in mind as you make day-to-day decisions and plan your financial goals.


THE FIVE PRINCIPLES

EARN – Make the most of what you earn by understanding your pay and benefits.

SAVE & INVEST – It’s never too early to start saving for future goals such as a house or retirement, even by saving small amounts.

PROTECT – Take precautions about your financial situation, accumulate emergency savings, and have the right insurance.

SPEND – Be sure you are getting a good value, especially with big purchases, by shopping around and comparing prices and products.

BORROW – Borrowing money can enable some essential purchases and builds credit, but interest costs can be expenses. And, if you borrow too much, you will have a large debt to be repaid.


Understanding Your Credit Card Statement

A credit card statement is a summary of how you’ve used your credit card for a billing period. Use this interactive credit card statement6 to familiarize yourself with the terms and general information commonly included on a credit card statement seen below. 

1. Summary of Account – A summary of the transactions on your account

2. Payment Information – Your total new balance, the minimum payment amount (the least amount you should pay), and the date your payment is due.

3. Late Payment Warning – States any additional fees and the higher interest rate that may be charged if your payment is late

4. Minimum Payment Warning – An estimate of how long it can take to pay off your credit card balance if you make only the minimum payment each month.

5. Notice of changes to your interest rate – If you trigger the penalty rate, your credit card company may notify you that your rates will be increasing.

6. Other changes to your account terms – the credit card company must notify you at least 45 days before the changes take effect.

7. Transactions – A list of all the transactions that have occurred since your last statement.

8. Fees and Interest Charges – Credit card companies must list the fees and interest charges separately on your monthly bill.

9. Year-to-Date Totals – The total that you have paid in fees and interest charges for the current year.

10. Interest Charge Calculation – A summary of the interest rates on the different types of transactions, account balances, etc.


Student Life

Going to college is an exciting adventure, but it comes with new responsibilities and newfound independence. Here are some tips to help along the way:

1.  Open a college or student checking and savings account – Unlike that first school ID photo, your first banking relationship could last long after you graduate. Making a smart decision now will mean fewer surprise fees that can add up later. Check out Carolina Federal Credit Union’s Checking Accounts Here.
2.  Shop around for textbooks
3.  Create a budget and stick to it – Check out this Personal Budget Worksheet to help manage your finances.
4. Decide what is a need versus a want
5. Understand student loan debt – If you have already taken out student loans, be sure to get familiar with your loans. Whether they are private or federal loans, the interest rates, and what that can mean for future repayment plans.

Managing finances can be stressful for anybody, but it can be overwhelming if you are a young adult just starting to learn about real-world responsibilities. Students who practice good money management skills, such as making a budget, tracking their spending, and managing loan debt will be better prepared after graduation5.


Planning for the Unexpected

A solid emergency fund is perhaps one of the most important tools in developing and sustaining financial security. It is recommended to save $1,000 up to three to six months of living expenses.

The best way to go about saving for an emergency fund is to make small contributions each month. First, build towards a $500.00 savings, then $1,000.00, then $2,000.00, and so on. Creating a personal budget can also help in knowing how much you can contribute to your emergency savings each month.

Six Reasons to Save an Emergency Fund4:

1. Car Repairs
2. Job Loss
3. Relocating
4. Death within your close circle
5. Home Improvements or Repairs
6. Medical Expenses


Financial Spring Cleaning Tips

  1. Review Your Credit Report – By law, you’re entitled to order one free credit report yearly from each of the three major credit bureaus. Carolina Federal Credit Union members who have secure checking may also check their updated credit score per month. Don’t have a Secure Checking Account? Contact us for more information.
  2. Organize and/or Shred Old Financial Documents – Sort through your statements, pay stubs, bills, and other financial records, and keep only the documents that are absolutely necessary. Since the IRS has up to six years to audit you, keep your tax returns, canceled checks and receipts, and any records supporting your tax deduction for at least six years. If you’re unsure about whether you should get rid of certain types of receipts, scan them, or make a copy, then go ahead and shred the rest. But don’t simply toss paperwork in the trash. Leaving important documents in the trash without properly shredding them is a bad idea. They are just waiting to be picked up by an identity thief.
  3. Record Your Financial Passwords and Store Records in a Safe Place – Make sure you’re not using the same password and log-in information for all your online bank accounts and other financial accounts. Even though you might be logging in over a secure Internet connection, there’s still a risk that someone who figures out your password will attempt to access other accounts with the same log-in information.
  4. Review your Budget – Is your budget up to date? Have you incorporated any increases or decreases in your income? Take a close look at your budget to see if you need to make any modifications. Make sure you’re reporting expenses accurately and have made some room for savings account contributions.
  5. Set up Automatic Bill Pay – Spring cleaning isn’t only about de-cluttering – it’s also about making things more efficient. Set up automatic bill pay, and link it to your primary checking account. Automatic bill pay will eliminate the chances of missing a payment and paying late fees.
  6. Pay off Holiday Debt Once and for All – What does your current debt load look like? Spring is a good time to look at your total outstanding debts and see which loans or credit cards you could pay off entirely this year.3

Empowering Youth to Save

1. Develop healthy financial habits early – Long-term healthy money habits begin to develop in childhood, as early as preschool.1
2. Create opportunities to save regularly – Access to financial education programs and savings accounts provide opportunities to develop positive long-term financial behaviors.2
3. Taking a hands-on approach – Youth who at an early age participate in financial education programs that include real-world financial experiences are more likely to develop positive attitudes about money.


5 Ways to Spend Your Tax Return

  1. Pay off high-interest debts – Paying off high-interest debt may allow you to save money long-term by not paying as much interest and paying off your loan quicker.
  2. Build an emergency fund – Building gives you security in an emergency such as a blown tire or a medical expense. Some people save $500.00 for an emergency fund, while others save 3-6 months of expenses. It’s up to individuals to find what they think is best with their current financial situation.
  3. Invest in ‘YOU’ – Investing you may mean investing in a new skill or education. This unique skill or knowledge may come in handy in the future.
  4. Give back to your community or local charities – Not only is giving towards your community or local charity a great thing to put your money towards, but it will go towards next year’s tax deductibles as well.
  5. Don’t forget the future you… invest in a retirement account – Investing into a 401K, Traditional IRA, or Roth IRA, no matter your age, helps out future you! CFCU offers traditional, Roth, and CD IRAs; reach out to us today for more information.

Calculating Your Net Worth

Total of Assets – Total of Liabilities = Net Worth

Examples of Assets:

  • Value of Home
  • Value of Vehicles
  • Checking, Savings, and CD Accounts
  • Retirement Accounts

Examples of Liabilities:

  • Balance of Loans
  • Credit Card Debt
  • Student Loan Debt
  • All Other Debts

Calculating and recording your net worth each year can show your growth financially. There is no specific number your net worth should be. Your net worth is for you to set a personal goal of your own. 


Setting Long-Term Financial Goals

Long-term financial goals look different for everyone. These goals may include saving for retirement, education, or a down payment for your dream home. It’s best to start with a plan: write down your goals, and achievable dates and then put your plan into motion. A great way to measure these goals is to write your monthly contributions and review them throughout the year to ensure you’re still on track to reach your savings dates and amounts. 

Carolina Federal Credit Union is able to help in achieving your long-term goals, whether it may be opening a 5-Year CD to earn interest on top of your savings or if you are looking for a retirement account. We have what you need and are happy to help you along the way!


The Importance of Pre-Approval!

Preparation is a crucial factor in saving money when you’re shopping for a new or used vehicle. Carolina Federal Credit Union can help you find the best deals by offering fantastic pricing guides that are up-to-date and easy to access. Not only will you be ready to handle price negotiations at the dealerships, but you can also be sure to stay within your budget and narrow down your choices before venturing out.

For vehicle pricing information, contact our loan department, and they will help you find the best price for any new or used vehicle. We offer the NADA retail value.

Once you’re ready, we can Pre-Approve your loan based on your auto loan budget and credit history. Apply Online or Contact Us!


Personal Budgeting Worksheet:

A personal budget worksheet is a great resource to kick off your financial wellness journey. Identifying your Fixed and Flexible expenses will allow you to see where your funds are being used. Do some categories need to increase while some can decrease? Please use this personal budgeting worksheet to help you begin your journey. CFCU is always here to help you and your path to financial wellness; if we can help you during your process or if you have any questions, please get in touch with us!

Fixed Expenses

Fixed expenses are items you have little or no control over. You will pay a fixed amount for these expenses each month. Remember, you have some control over certain expenses before you sign a contract, for example, a short-term or payday loan, car loan, or home mortgage.  It would help if you shopped for the best value before committing to the payments.

Examples:

  • Health insurance, car insurance, life insurance, and homeowners or renters insurance
  • Rent or mortgage
  • An auto loan or lease payment

Flexible Expenses

Flexible expenses are expenses that you can control. When thinking about flexible expenses, think about what you need and what you want. Is it a necessity or a discretionary expense? This will help you control your spending in this category. What are some ways that you could control the costs of these expenses? Also, make sure to pay yourself first. Set aside money from each paycheck and put it towards your savings.

Examples:

  • Groceries, coffee or restaurants
  • Utilities
  • Gasoline, internet, cable, phone or cell phone
  • Car or home repair
  • Activities or hobbies
  • Savings
  • Emergency Savings

Link to mycreditunion.gov article: https://www.mycreditunion.gov/financial-resources/personal-finance-worksheets/budgeting

1 Youth Personal Finance Pedagogy (2016) – Consumer Financial Protection Bureau
2 Assessing Financial Capability Outcomes (AFCO) Youth Pilot (2014) – U.S. Department of the Treasury
3 Link to mycreditunion.gov article: https://www.mycreditunion.gov/financial-resources/calendar-events/financial-spring-cleaning
4 Link to https://www.mycreditunion.gov/life-events/planning-unexpected 5 https://www.mycreditunion.gov/life-events/college/student-life 6 https://www.mycreditunion.gov/life-events/checking-credit-cards/credit-cards/statement 7https://www.mymoney.gov/mymoneyfive 7https://insights.co-opfs.org/blog/top-5-fraud-trends-as-holiday-season-approaches?utm_medium=email&utm_source=newsletter&utm_campaign=000100-fraud_story3 8https://www.farmersalmanac.com/winter-home-prep