What steps have you taken to better your chances of a successful life? 

• Developed consistent habits like working out to keep yourself physically fit? 
• Managed your reputation by associating with high character people?
• Prepared for the long term and studied hard in your field to set yourself up for a great career?

These steps can all contribute to a happy and successful life, but find out how they apply to your financial happiness as well.

Develop Consistent Money Habits

The sooner you start to develop a savings habit, the better off you will be.  Follow these guidelines to save effectively.

• Set aside 5-10% of your earnings into a savings account.
   
• Keep accumulating your savings until you have three to six months of earnings set aside for an emergency.
   
• Keep your emergency funds in a separate account and use it only for real emergencies.  Once you use, begin to replenish it.
   
• Don’t stop saving once you reach your emergency fund limit.  Start putting your savings into two separate additional accounts.  One account can be used to save for fun things like vacations.  The second account is to begin building a savings and investment fund above and being your emergency fund.

Manage Your Financial Reputation

Your financial reputation is also known as “credit.”  Maintaining good credit will ensure that lenders will lend to you when you need to borrow and protect from paying more loans and insurance.

It doesn’t take a ton of skill and talent to maintain good credit.

• Track your spending against to know that it won’t exceed your income.  It’s usually pretty simple to project your monthly income.  Keep track of your spending throughout the month to make sure you don’t spend so much on fun stuff that you can’t meet your payment obligations.
   
• Start borrowing wisely.  Establish your credit with a secured credit card or starter loan.  A secured credit card uses funds you have in a savings account as collateral for the loan.  A starter loan can be a small loan or a savings account secured term loan.  Both loan types have different advantages in establishing your credit and paying both on time will help build your credit.
   
• Use your credit cards but try to keep the balance you owe to less than 30% of the credit amount available to you.  You will need restraint in spending and to make more than just the minimum payment each month.  Showing you can manage a credit card wisely will strengthen your credit quality.
   
• Pay your loan payments and bills on time, every time. Set up automatic payments to make sure you don’t forget a payment.

Plan for the future.

When you’re just starting out on your own, it’s hard to think about wanting to retire some day.  For most people, that day comes much faster than they ever imagined.

The sooner you start saving even just a small portion of your income in an employee sponsored 401(k) or Individual Retirement Account, the better of you will be in the future.  In fact, an early start will deliver dramatically better results than waiting until you are 40 or 50 years old to begin.

Consider these tips:

• If your employer offers a 401(k) plan, take advantage of this benefit.  It can seem tough to allocate a portion of your income to longterm savings when you have more immediate needs.   Start with a small percent of your pay, something like 2 or 3 percent.  Many employers will match the amount you save, immediately giving a boost to your savings.
   
• Increase your retirement allocation by 1% each time you receive an increase in pay.  If your increase is for more than 1%, you will still get more take home funds.  By increasing each year, you will soon get to the maximum amount you can contribute, and you will begin to see real growth in your retirement fund.

It doesn’t take a genius.

Over time, you will want to understand more about investment options and selecting the best credit.  However, just developing these three basic habits can set you up for financial strength.

Talk to a Genisys Credit Union Financial Services Representative to get the tools you need to develop these three habits.  Find our branch locations or contact us by calling 248-322-9800 x5 or 800-521-8440 x5.

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