2021: The Year of Helping CU Members Focus on Their Finances

Tax season is upon us and it’s a great time for members to take stock of their financial health.

The last year has been incredibly challenging. The pandemic has stretched, bent and even broken us. Whether they’re dealing with a job loss, a financial hardship or are just treading water, helping your members develop an effective financial plan will enable them to move from hard times to good times, or at least in the right direction. And it happens one step at a time.

Here are four ways to help credit union members get a winning financial strategy in place for 2021:

1. Make a budget and stick to it. Budgeting is the most effective way to manage your money. Helping members create and monitor a budget allows them to pay bills, adapt to changes, and achieve financial milestones like buying a home or sending a child to college. We should also stress to our members that budgeting helps them save for emergencies. If your institution doesn’t offer an online budget building tool, there are plenty that you can find online. And a pen and paper work just as well.

2. Build your emergency savings. Unexpected expenses happen, and they can throw members into a financial tailspin. According to a 2018 Bankrate study, about half of Americans are not financially prepared to cover expenses that come with illness, job loss, or even home and auto repairs. Help members see the value of establishing and funding an emergency expenses savings account, rather than use a credit card as their only safety net.

3. Plan for retirement now. Unlike death and taxes, retirement only comes for us if we plan for it. And just like emergency savings, fewer than half of Americans take the steps needed to set themselves up for a secure retirement. Promote products that can help your members plan, such as IRAs and CDs, that take a long term look at savings.

4. Take control of your credit. Members need to understand how to effectively use their credit to their benefit. That doesn’t just mean pulling the plastic out of your wallet every time you need something. Encourage your members to check their credit score regularly, so when they’re going for that loan for a home, car or college education, they don’t get surprised. Credit unions have plenty of tools to help members understand the factors, such as payment history and credit age, that impact their credit score so they can be well on their way to building a more secure financial future.

At the same time, start helping members think about teaching their kids about how to manage money. Starting with the simple concepts of spending, saving and donating equal parts of chore or allowance money is a great way to get kids thinking about the impact that money has on their life and the lives of the people around them.

Even though money can’t buy happiness, managing it properly can help you avoid all kinds of problems.

Joe Tedesco is President/CEO of the $357.8 million Ocean Financial Federal Credit Union based in Oceanside, N.Y.