Why Your Budget Isn’t Working

Creating a budget that works for you and your family is the first step in living a financially healthy life. We talk a lot about budgets. If you’re a regular reader of our MoneySmarts blog, you know we frequently offer “budget friendly” tips  and easy ways to “stick to the budget.” But what does all that mean if you don’t know anything about the way you or your family spends money?

Odds are you probably have at least some kind of budget for your family—whether it’s just monitoring your accounts and keeping a general idea of how much money goes in and out, or a totally itemized spreadsheet. Is how much you spend each month reasonable while leaving room to save or invest? How do you find out?

While there’s no perfect budget that will work for every family every month, experts agree that the best way to ensure you live within your means is to follow a percentage based plan. The most common suggestion is the 50/30/20 plan:

50% of your income should go towards required expenses. This includes housing, food, utilities, transportation (including car payments), insurance, etc. These are NEEDS.

30% of your income goes towards optional expenses like clothing, vacations and gifts–the little things that help you enjoy life. These are WANTS.

20% of your income should be allocated for paying off debts (like student loans and credit cards) and saving/investing.

These guidelines are helpful, but keep in mind that they’re not the end-all-be-all of budgeting. You’ll have to make adjustments based on your family’s needs. A recent college grad living at home is going to have a wildly different budget than a family of five with a mortgage and a baby on the way. Where you live, how far you commute, the size of your family, etc. will all play a role in how you make the budget work for you. Whatever adjustments you make, just make sure it all adds up to 100%.

If you’re not the spreadsheet type, you may benefit from online services that make keeping a budget less tedious. Try IHMVCU’s budgeting and saving calculators to find out what would happen if you changed your money habits. IHMVCU members also get free access to FinanceWorks, a budgeting tool within Online Branch. FinanceWorks tracks your income and expenses, allows you to set realistic spending goals, and even alerts you when you meet or exceed your spending limits.

Now that you have a place to start, calculate your current spending and see how it compares to the recommended percentages. No matter what adjustments you need to make, keep in mind that every month will be different. The most important thing is to be diligent.

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5 Ways to save money on your first apartment or dorm

Skip paying for movers--have your friends move your stuff.

Skip paying for movers–have your friends move your stuff.

Venturing out on your own for the first time? Whether you’ve just signed the lease for your first apartment or you’re heading off for your freshman year in a college dorm, the prospect of moving into your own place can be overwhelming.

Moving into your first place means starting from scratch, and that can be expensive! There’s a lot to buy, and a lot of expenses you’ve probably never considered before (like a shower curtain and cleaning supplies). Never fear—there are plenty of ways you can make it on your own and save some dough.

1. Don’t do it all at once.
There are a few things you’ll definitely need to get through your first night in your new place—like a shower curtain and a mattress (or at least something soft to sleep on). But you don’t have to move in with everything you’ll ever need.

After spending some time in your place, you may realize that you have no need for things other people claim they can’t live without. This rule is especially true when it comes to décor. Your place doesn’t have to be fully decorated on day one, and will have a more authentic feel if you take time finding the perfect pieces to complement your space and your stuff.

You might get there and realize you already have way too much stuff, especially if you’re in a dorm. Save your parents the trouble of hauling your excess stuff back home and wait to buy furniture and other big stuff until you’ve spent some time inside the apartment or dorm you’ll actually be living in.

2. Ask for help.
Chances are your parents, grandparents or other relatives have a basement or attic full of stuff that’s perfect for your new place. Even if it’s not perfect, it’s probably going to be free (and that’s hard to beat). Most people have too much stuff, but don’t want the hassle of selling it. Let everyone know you’re moving and you’ll be amazed at how much stuff people are willing to give away to a good home..

3. Buy used.
While we don’t recommend you thrift your mattress or bath towels, not everything in your apartment needs to be brand new. Thrift stores, garage sales, and Craigslist are all excellent places to find gently used electronics, lamps, dishes and furniture.

True story: I once bought the exact same juice glasses used on Seinfeld for $10 at a thrift store. I saved money, and I have an (almost) interesting story.

If you really want to save some dough, try FreeCycle or the free section on Craigslist. People are giving away all kinds of things, and usually all you have to do is haul it.

4. Master the art of spray paint
Ok, so maybe that dresser Grandma gave you is a little ugly or it just doesn’t match the rest of your stuff. With a little colorful spray paint even the grungiest thrift store find or hand-me-down can look fabulous. If you’ve never refinished furniture before, this tutorial from Centsational Girl is perfect for beginners.

5. Do it yourself
Anything someone else can do, you can probably do for less money. Even if you’re not handy, there’s plenty you can do yourself to save some cash. Make your own coffee, cook your own food, clean your own house, bag your lunch and (gasp!) drink tap water. Make your own budget (try FinanceWorks, a free budgeting tool in Online Branch) and measure your spending before and after you start doing things for yourself. Try not to faint when you see how much money you’ve saved.

Have some other great ways to save money on the big move? Share them in the comments!

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4 fall projects to get your home ready for winter

house_fallSummer is coming to an end and it won’t be long until temperatures start to drop. Winter may still be a few months away, but it’s never too early to start preparing. The best way to have a warm and cozy winter is to start winterizing your home while the weather is still nice. These fall home-improvement projects will get you outside on the last warm days of the year, and help keep you toasty when winter finally rolls around.

$ = inexpensive
$$ = moderate
$$$ = expensive

1. Replace or seal old and drafty windows
Are there windows in your home you avoid sitting by in the winter? Do they let air in or even get frosty when the temperatures are low? If you said yes, you just found your first project. Installing new windows with multiple panes, spacers or filler gasses like argon or krypton can help keep the cold air out. If you aren’t ready to take on the cost of total window replacement, take care of just the problem areas first. Before you buy new windows, check with your energy company to see if purchasing certified energy-efficient windows will qualify for a rebate or financing assistance.
Estimated Cost: $$ – $$$

Looking for something a little easier, and a lot less expensive? Caulking and weather stripping is a good, temporary solution. Caulk any visible cracks around windows and doors and add new weather stripping. If you really want to keep the air in, seal your windows with plastic for the winter to lower energy costs and prevent drafts.
Estimated Cost: $

2.Fix exterior paint
Peeling or bubbling exterior paint is the first sign that the paint film is compromised and it can no longer protect the siding underneath. If that’s the case, it’s a good idea to look into repainting the outside of your home before snow and wind damage the siding. You can do this yourself, but a professional will have all the appropriate tools and knowledge to get it done quickly and correctly.
Estimated Cost: $$$

If there are only a few trouble spots, you can do touch-ups yourself. Resealing those spots will help keep the winter weather from eating away at your paint and making the problem worse.
Estimated Cost: $$

3. Install or maintain exterior walkways
If you’ve been walking through the grass and mud all summer to get from your car to your house, now may be a good time to install a safer walkway before the snow and ice comes. Use one of the last nice weekends to install a brick walkway. It will be easier to keep snow-free come winter, and any holiday guests you might have will appreciate a safe path.
Estimated Cost: $$

Check your driveway and any existing paths or sidewalks for cracks. Filling them now will prevent the winter freeze from making them any larger.
Estimated Cost: $

4. Tune-up your furnace
Living in the Midwest, your furnace is one of the most important parts of your home come November. It’s worth the occasional visit from a professional to keep it running efficiently and prevent any catastrophic damage down the road.

Check with your energy company to see if they offer rebates for HVAC tune-ups and repairs. If your furnace needs to be replaced, you may even qualify for a significant rebate when you purchase certified energy-efficient models. Most energy companies offer free home assessments and will let you know exactly what to replace or repair, and how you can save money doing it.
Estimated Cost: $$

If you have a forced air system, changing the air filter will create a noticeable difference in air quality and will keep your furnace from overworking to push air through.
Estimated Cost: $

If your home needs a little more work than a fresh coat of paint and caulk can cover, consider a home equity loan from IHMVCU. Visit us at any branch or online at ihmvcu.org/homeequity to get started.

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Skip the waiting room

How do you fit a doctor’s appointment into your schedule when you’re getting sick, but can’t take time off work? If you’re an IHMVCU member, the answer is simple. Members now have access to a special new benefit: Telehealth.

Our Telehealth plan offers diagnosis and treatment for a variety of non-emergency health conditions anytime, anywhere. According to a recent study by the Affiliated Workers Association, as many as 70 percent of doctor visits can be handled over the phone, so there’s no need to drag yourself out of bed or take time off work to get treatment for most common health conditions.

With a just phone call or secure video chat, you can talk to a Board Certified doctor and receive prescriptions, if necessary. When your consultation is over, Telehealth will even inform your primary care physician of any prescriptions or medical advice you’re given.

Telehealth isn’t meant to replace your doctor, but it’s an easy way to save both time and money. It’s estimated that a Telehealth call can save you $100 or more compared to the cost of an in-person doctor visit. Not to mention users save two to three hours of time on average compared to a traditional doctor’s office.

Interested? IHMVCU members can enroll in Telehealth for only $9.99 a month for individuals, or $14.99 a month for families. To learn more or enroll, visit IHMVCUtelehealth.com.

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IHMVCU Newsletter – Summer 2015

Your copy of the Summer Newsletter will be arriving in mailboxes next week! cover

Featured articles:
Chip-enhanced cards: Coming to a Wallet Near You
CEO Announces Retirement
2015 Cash for Class Scholarship Winners

Click here to read the entire newsletter early.






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Take the stress out of student loans

You just graduated from college. Now what?

Well, in addition to finding a job and a place to live, you can probably look forward to your student loans entering repayment in the next couple months.

Entering the “real world” after college can be stressful. The good news is that while paying back your loans isn’t going to be fun, it doesn’t have to be complicated. IHMVCU now offers private student loan consolidation. Students from 2 and 4 year private and public institutions whose loans have entered repayment can consolidate multiple private student loans (with one or more lenders) into a single new loan.

Consolidating with us means you can rest easy knowing you only have one monthly payment. Plus, our competitive rates could save you a lot of money in interest.

IHMVCU consolidation loans feature

  • No origination or pre-payment fees
  • Extremely competitive rates
  • Standard and graduated 15-year repayment terms
  • Online application and approval process

Federal student loans, like Stafford, Perkins and ParentPlus, are not eligible for consolidation through IHMVCU.

For full details, or to apply online, visit ihmvcu.org/studentloans.

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Last minute tips for a frugal Fourth

Throwing a party for the Fourth is a great way to get friends and family together, but if you’re not careful those party costs can stack up quickly. If you’re looking to have a festive bash without bashing your budget, we’re here to help. Check out our suggestions for frugal festivities, and share yours in the comments!

Skip expensive decorations
Fourth of July is all about outdoor fun, and usually the great outdoors is decoration enough. Instead of splurging on expensive décor that you’ll just throw away or forget about next year, get creative. Try hollowing out bell peppers as a colorful way to serve condiments, or arrange a tray of pineapple, watermelon cubes and blueberries in the shape of a flag. Edible décor is far more popular with hungry guests than fancy flag bunting.

If you absolutely must decorate, grab some miniature flags from the dollar store. You can get a flag for every guest and pay less than $20. If you’ve got some extra cardboard lying around, cut it into stars and cover it with aluminum foil. You can hang them around the yard or use them underneath bowls of fresh fruit for centerpieces.

Stick with solid-colors
It can be tempting to go crazy at the party store and buy all the star-spangled cups, plates and napkins. It’s also crazy expensive. Save some green and stick with solid red plastic plates and white napkins. It’s still patriotic, and any leftover plates can be used for Christmas or Valentine’s Day.

Make it a potluck
Having everybody bring a little something is the best way to cut costs. As the host, you should provide the bulk of the meal—like hotdogs and hamburgers to throw on the grill. Ask guests to bring buns, side dishes and desserts to round it out. It might feel like cheating, but chances are your guests will enjoy the opportunity to share their family’s top secret potato salad recipe.

Provide a cooler of waters or sodas, but ask guests to bring their own alcohol.

Do something different
If your friends and family usually get together for the local parade, mix it up and have everyone over for brunch afterwards. Eggs and bacon are an inexpensive way to feed a crowd. Plus, you’re free for the rest of the day.

If you usually go to a local park to watch the fireworks display, why not host a picnic? Meet there early enough to get a good spot and enjoy some snacks in the grass. Bring sandwiches or other finger foods and ask guests to bring a dish to share.

. . . but don’t make your own fireworks display
Seriously. This can’t be stressed enough. Fireworks are expensive and more importantly, dangerous. Host your bash before or after your community’s annual extravaganza, or provide sparklers and check out your crazy neighbor’s display instead. When the day is done, your wallet will thank you and you’ll still have all the limbs you started with.

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How to save for college

Experts estimate that the average college tuition cost for the 2014-2015 school year was $31,321 at private colleges, $9,139 for students attending a public college in their home state, and $22,958 for out-of-state residents at public universities. That’s a big price tag, and it’s likely to go up every year. Creating a plan to pay for college ahead of time will save you time, money and a lot of stress. Check out these tips to make the most of your savings plan.

Don’t sacrifice your retirement
If you plan on footing the bill for your child’s college education, don’t do it at the expense of your own retirement. There are more sources of college funding available for your kids than you’ll have for your nest egg.

If you start early enough, however, the tax benefits and flexibility of a Roth IRA can help you hit both goals. Your money will grow tax free, and you can avoid a penalty fee if you use the money for educational expenses. The maximum annual contribution limit is $5,500 if you’re under 55. If you and your spouse contribute the max over 18 years, you’ll have $198,000 in contributions alone. Assuming an 8% annual return, you’ll have over $400,000—enough to fund a college education and still have a plan for retirement.

Sound like the right plan for you? IH Mississippi Valley Credit Union can help! Click here to learn about the benefits of an IRA, or visit us at any branch.

Explore investment opportunities*
The cost of college tuition goes up every year. So in addition to starting to save early, it’s a good idea to look for the highest rate of return. According to CNN, an investment portfolio tilted toward stocks could be a great way to build savings long-term. You can adjust your investments and shelter your returns as your child gets closer to college age by switching more money into bonds and other low-risk investments.

If you’re not one to watch the stock markets, investing in mutual funds will put a professional in charge of your savings.

Read CNN Money’s “Best investments for college savings” to learn more about educational investments.

Want to know more about your investment options? Our financial advisors at IH Mississippi Valley Credit Union Investment Services will help guide your management decisions. For more information, visit ihmvcu.org/invest.

Start saving now
A modest savings is better than no savings at all. Putting away just $100 a month for 18 years will yield more than $20,000, and that’s without calculating the added interest. It may not seem like much, but that’s enough to pay for two years of in-state tuition.

If you want more of a return than a simple savings account can offer, education savings accounts (ESA) offer tax-free earnings. The two most popular options are the Coverdell Savings ESA and the 529 College Savings plan.

Coverdell accounts are similar to IRAs, with the exception that the funds must be used for qualifying educational expenses. The funds can be used for education at any level (elementary through college), but contributions can only be made to the account until the beneficiary turns 18. Like a Roth IRA, Coverdell accounts have income and contribution requirements.

529 College Savings Funds can be opened for anyone regardless of annual income or age, and there’s no contribution limit. The funds in a 529 can only be used for college expenses. This account functions similar to a mutual fund—contributions are invested into many companies and its gains/losses fluctuate with market conditions. 529 College Savings Funds are best when you have plenty of time to save.

Other options
If you’re unable to save the entire cost of four years of college, federal, state and private grants and loans can bridge the gap between your savings and the cost of school. We recommend using the “free” money, like scholarships and grants, and “cheap” low-to-no interest Federal Direct loans before looking for other sources.

If you still have a gap after using your savings, grants and federal loans, consider a student loan from IHMVCU. We offer smart, responsible student loans that won’t leave you in a mountain of debt. For more information, visit ihmvcu.org/studentloans.

Saving for college is a big deal. Though it’s best to start early, it’s certainly never too late. Visit ihmvcu.org/calculator to see how you’ll need to save to reach your goals.

Not sure what’s best for you? Visit any branch today and speak with a member of our financial services team to help you weigh your options.


*Our advisors are securities licensed in IA, IL, and WI. Securities offered through Broker Dealer Financial Services Corp., Member FINRA & SIPC. Securities are not are not federally-insured; are not obligations of the credit union; are not guaranteed by the credit union; involve investment risk, the value of the investment may fluctuate, the return on the investment is not guaranteed and loss of principal is possible; may be offered by a dual employee who may accept deposits on behalf of the credit union and may sell non-deposit investment products on behalf of a third-party securities broker-dealer.

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IHMVCU CEO Announces Retirement

Hall_Dennis_1214 croppedDennis Hall, President and CEO of IH Mississippi Valley Credit Union, announced his retirement today. Hall has been with the credit union for 28 years, serving as President for the past 18 years.

“I’ve had the pleasure of working with a talented group of colleagues throughout my career,” said Hall. “Together, we’ve built an institution that’s improving the financial well-being of our members and returning value to those who need it most.”

During his tenure, the credit union grew from $200 million in assets and 25,000 members to nearly $1 billion in assets, more than 110,000 members, and 17 locations. Hall was recently inducted into the CEO Hall of Fame by the Illinois Credit Union League.

Hall was also named Executive of the Year in 2005 by the CUES (Credit Union Executive Society) Illinois Council. He served as League President from 2010-2012, and has been active in legislative committees, the Illinois Quad Cities Chapter of Credit Unions, Junior Achievement and United Way. In 2013, IHMVCU and Hall were awarded the Better Business Bureau Integrity Award.

“Credit Unions were founded on the philosophy of ‘People helping People’. Throughout his career, Dennis has lived that motto. He has shared his knowledge and expertise with credit unions throughout the region, regardless of their asset size,” said Connie Adkison, President of Moline Municipal Credit Union. “It’s been my pleasure to know and work with him. I look forward to the next chapter at IHMVCU.”

Moving Forward
Laufenberg_Brian 0415IH Mississippi Valley Credit Union Board of Directors elected Brian Laufenberg as the new CEO. He will continue to serve as Executive Vice President of Support and COO in the interim.

“On behalf of the board of directors, we’d like to congratulate Dennis on his retirement and recognize his many contributions to the credit union. When we started the search for his successor, we didn’t need to go far. The board feels that Brian will continue to lead the credit union in fulfilling our mission,” said Megan Early, Chairperson of IH Mississippi Valley Credit Union.

Laufenberg has been with IH Mississippi Valley Credit Union for 10 years, and has worked in the financial industry for 32 years. He’s a Certified Credit Union Executive (CCUE) and recently completed the CUES CEO Institute. Previously he served as Vice President of Finance for Ascentra Credit Union.

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