Money Saving Guide

Money Saving Tips

After reading the following, we hope you will be better equipped to negotiate a vehicle purchase, enter into a loan with suitable terms, cut costs when you're shopping and much more.

Spending money is part of life; you just don’t need to spend more than necessary.

Saving on Auto Purchases

Purchasing a vehicle can be time-consuming and costly if you’re not prepared. Below are some valuable tips to avoid traps and to become better equipped when purchasing your next vehicle.

Stay In Control When Searching For A Vehicle

Buying a new or used vehicle is a huge financial transaction. You’ll need to be prepared to enter your search with a clear head and resist the temptation to let emotions control your decisions. Yes, the color and upgrades are amazing, but what will it cost you in the long run?

Staying in control likely will keep you from spending too much money at a car dealership or used-car lot.

Starting Your Search

• Determine what you want in a car.
• Determine what you can afford and what a loan will cost you.
• Learn where to find reliability ratings and current retail values on the vehicle you're interested in, prior to arriving. (Resources include Consumer Reports and Edmunds.)
• Prepare to negotiate the price.
• Consider the total cost of car ownership with monthly payments, operating and maintenance expenses.

Your best deals on a vehicle likely can be found from private sellers, but make sure you get a mechanic’s inspection before you buy. Dealerships often certify their vehicles, but you can expect to spend more.

Tips When Buying From Individual Or Used Car Lot

• Insist that vehicle have a clear title
• Insist that vehicle pass your mechanic’s inspection before you purchase
• Use problems your mechanic finds to renegotiate the selling price

Tips When Buying From A Dealership

• Consider the timing of your purchase. The end of the year is the best time to get a good deal because the year is ending and dealerships are more likely to haggle to clear the lot for new inventory.
• Ensure the title is clear, ask for maintenance records and a vehicle history report.
• Set a target price and an upper limit, but be prepared to walk away from anything higher.
• Keep your trade-in transaction separate to track the true price of each transaction.
• Resist financing through the dealership. Better deals on loans likely are available from PrimeWay Federal Credit Union.
• Before purchasing an extended warranty, see if any part of the car is still covered by the original warranty.
• If you’re interested in a warranty, read the contract and determine the length of coverage, where servicing is done and exactly what is covered.
• Recognize that extended warranties are a profit center at some dealerships.

Reduce Costs on Your Checking Account

Avoid unnecessary fees on your checking account by keeping tabs on your spending and account balance.

Balancing: Diligence Pays Off

Balancing your checking account is vitally important. If you don’t keep an accurate record of money coming in versus money going out, you risk bouncing checks and losing credibility with people when you’re unable to carry through on a promise to pay. That’s a costly habit that damages your credit rating, too.

At the same time, you may miss out on great deals and valuable purchasing opportunities if your checking register shows you have less money than what is available in your PrimeWay account.

Either way, your life will be easier when you balance your account on a regular basis.

Tips To Achieving Balance In Your Checking Account

• Put money in before taking it out
• Keep track of every transaction
• Fill your transaction register with anticipated electronic transactions and fill in the dates as they occur
• Keep transaction receipts wrapped around your debit/ATM card to record in your register

Along with your paper register, you can also check your balance by calling PrimeWay, visiting one of our ATMs or logging into your account through our secure online banking system.

Investments: Saving Costs and Being Diligent

Whether it's college, retirement or life savings, due diligence before you invest is key--this includes your choice in a financial advisor.

Start Building Wealth

Buy low, sell high. That’s about as basic as you can get when it comes to investing. But what does that mean and how does it apply to your life?

When you’re starting out with investments, you must first determine your risk tolerance. Do you enjoy the wild fluctuations that come with stocks or would that keep you awake at night? Do you want steadier growth in exchange for lower returns?

Whatever you decide, it’s important to understand your investments—where your money is going and what risks, fees and costs are associated with your choices.

Investment Variety Creates A Cushion

Keep diversification in mind, too, and not just with stocks, bonds, etc. in the U.S. market. In this global economy, there are multiple markets around the world where your money can be invested. As a rule of thumb to reduce risk, it’s prudent to limit any single stock or bond to no more than 10 percent of your portfolio, especially with employer stock. Too much reliance on a company for your employment and long-term savings goals can be disastrous if that company falters.

Mutual funds are an especially popular investment instrument because they pool investors’ money and concentrate on a variety of stocks, bonds and other securities. So when one stock dives in value, the mutual fund usually offers enough diversification to offset that loss elsewhere.

Ask Questions Before You Invest

A fund manager is responsible for the actual investments, and those services come with a price. Keep costs in mind when choosing a fund manager or an investment advisor. Find out how that person is compensated and what expenses are tied to your investment. When returns are low, high costs can really eat away at your gains.

Remember, it’s your money and your future. Take control of your investment strategy. Contact the investment experts at PrimeWay Federal Credit Union today.

Loans: Avoid Financial Pitfalls

Some loans could lead to disastrous financial results if you’re not careful. Know what to avoid before you sign on the dotted line.

Don’t Get Soaked With Your Next Loan

A loan certainly can benefit you and your family when the terms are right, but many people get trapped in loans that drain their finances.

Don’t let that happen to you. When you’re shopping for a loan, always be on the lookout for loans that feature balloon payments (a large payment required to pay off the loan at the end), high-interest rates and penalties for early pay-off of the loan. And always be certain you can afford the monthly payments. Steer clear of these.

Other Tips For Avoiding High-Cost Loans

• Always shop around and don’t take the first loan you’re offered.
• Ask questions.
• If you don’t understand the loan terms, ask someone you trust to look at the documents.
• Don’t trust advertisements promising “No Credit? No Problem!”
• Ignore high-pressure sales tactics.
• Always look at the total cost of the loan. Low monthly payments aren’t always a “deal.”
• Be wary of promises to refinance the loan to a better rate in the future.
• Never sign a blank document or anything the lender promises to fill in later.

Visit PrimeWay Federal Credit Union’s Loan page to start searching for a loan that’s right for you. And check out our loans calculator that explains how different payment frequencies affect your payment or loan amount.

Saving While Retail Shopping

When you analyze your shopping habits you can find out if you’re consistently over-spending, and how it may be affecting your credit.

Don’t Pay More Than Necessary

This is a common problem between most, but is completely avoidable. Make a list of needed items, head to the store and don't stray. If you stick to your list, you won't walk out of the store spending more money than you intended or needed to spend. Now is the time to develop better skills when shopping.

The biggest temptation is the impulse purchase. This is when you make decisions with your emotions and not your critical-thinking skills. Resist impulse buying by taking these steps when shopping:

• If you see something appealing, wait 24 hours.
• Calculate how many hours you must work to pay for it.
• Determine how the item will improve your quality of life.
• If you still want it, shop around for the best price and create a plan to pay for it.

Friends Don’t Let Friends Waste Money

Sometimes you’re in situations with your friends where you feel pressured or compelled to show off by spending a lot of money and just throwing purchases on your credit card. Recognize these moments and avoid regrettable decisions. You – not your friends – are responsible for your own debt.

• Leave your credit card at home.
• Invite friends over instead of heading out for entertainment.

Credit Card Costs

When you do choose to pay with credit, your minimum payment due typically will be 3% to 4% of your total balance. Making minimum payments on your debt extends its life while the interest charges pile on. You could end up paying 133% or more of the cost of the item based on the interest.

• Pay the full balance each month. If you can’t, create a plan to pay it off.
• Pay on time to avoid raised interest rates.
• Watch the interest rate. Most cards offer a variable rate, which fluctuates.
• If you lose your card, contact the issuer immediately.

Saving Tips for Young Professionals

Balancing the present and the future is important, and PrimeWay covers some financial ground to make you think about how to manage your finances.

Budgeting

Smart financial decisions early in your career will pay big dividends later.

More Money Means More Responsibility

Welcome to the real world! Now is probably the time when you’re truly independent and you have to really deal with the consequences of every financial decision you make!

You’re probably also earning more money than ever before, and this feeling of freedom can lead to some poor spending choices that undermine current and future plans.

Track Your Weekly Spending

Costs at this time in your life likely are lower than they ever will be because you don’t own a house yet and you haven’t started a family. Make this work to your advantage by keeping detailed records of how you spend your money relative to what you earn. Devise a chart that shows what you earn per week and tracks your spending each week to get a sense of what expenses you can reduce.

Relying on a debit card connected to your PrimeWay Federal Credit Union checking account for everyday purchases can keep you from spending more money than you have at any particular moment.

We also provide calculators that show you how spending less can really pay off, including the benefits of even just bringing your lunch to work versus eating out every day.

Savings and Compounding

Part of financial success hinges on your savings and investment strategy. Here’s how you can take advantage of interest rates at the start of your professional career.

Money Gets Better With Time

You’ve got a good job paying a steady salary, and now you want to make that money do more for you.

There are several options for investing money for your retirement, and it’s never too early to get started.

Are you eligible for your employer’s 401(k) plan? Consider contributing to start building for your future. The best, and easiest, way to invest is through an automatic deduction from your paycheck. That eliminates any temptation to spend your money on things you may not really need.

And all investments in a 401(k) are made before taxes, meaning you will have less tax liability every year.

Building On Successful Investments

The earlier you start, the better the results over the long haul. If you start a savings account with PrimeWay Federal Credit Union at age 25 instead of age 35, you have an additional 10 years when your money is growing and earning additional returns for you. The interest compounds, meaning your account earns money on the principal plus the interest.

See the results for yourself using our compounding calculator.

Another option is establishing an Individual Retirement Account through PrimeWay.

The two most common types of IRAs: Traditional and Roth. The difference is in how they’re taxed.

• Contributions to a Traditional IRA occur before taxes, and you’re not taxed on the money until you withdraw it at age 59 ½.
• With a Roth IRA, you’re taxed on your contributions now, but that means you can withdraw the money tax-free once you hit retirement age.

Which investment instrument is right for you? Contact us at PrimeWay so we can help explain the differences and how they fit you.

Start building for retirement as soon as possible, and remember: it’s never too late to start!

Being a Savvy Shopper

Take a close look at how you spend your money and see if there are areas where you can cut back to keep more in your pocket.

Pay Attention To Every Penny

Financial freedom means increasing your awareness of retailers’ motivations, friends’ influences and any circumstance where you feel the urge to spend a lot of money.

It’s important to develop the skills of a savvy shopper. You have access to money, but you should realize how you use it all of the time. The biggest temptation is the impulse purchase when you’re making decisions with your emotions and not your critical-thinking skills. Resist impulse buying by taking these steps when shopping:

• If you see something appealing, wait at least 24 hours before purchasing.
• Calculate how many hours you must work to pay for it.
• Determine how the item will improve your quality of life.
• If you still want it, shop around for the best price and create a plan to pay for it.

Smart Borrowing

There are times when taking on additional debt makes sense in the long run. Below are some suggestions to keep in mind when considering any type of loan.

Short-Term Debt For Long-Term Results

While you might be earning a good salary right now, maybe you’re not where you want to be in terms of income and professional position.

And if you need help getting there, PrimeWay Federal Credit Union can assist you with a variety of loan options. This is something to consider if, for instance, you need to trade in your current automobile for a more reliable vehicle to get to and from work. Our Auto Center features several resources for finding and financing an affordable and trustworthy car, truck or SUV.

More Education, Professional Clothes

In any type of economy, people consider the value of an advanced degree to help them move up the career ladder. If returning to school could benefit your career, there are loans available to help you finance the cost. Before making that decision, think about whether that extra education really will pay off for you. Talk to trusted sources in your industry or field of work to get their opinion, because you don’t want to pay thousands of dollars and get no return on your investment.

Smart borrowing also could be as simple as enhancing your wardrobe with suits and other clothing and shoes for a crisp, professional look in the workplace. Loans from PrimeWay often feature rates that are more competitive than credit cards, so contact us today to find out how we can help you borrow smart.