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Remember to vote in our Moms Madness Bracket Challenge today - Carol Brady vs. M... Read More April 25 2014
Guess what?! Gera, Kim, Imad, and Cortney were all recently PROMOTED in our bran... Read More April 24 2014
For our first Moms Madness match-up... and it's a doozy... we have Carol Brady v... Read More April 24 2014
March Madness is over but MOMS MADNESS is just starting! Each day for the next 2... Read More April 24 2014
Youth week continues! I would like my kid to spend a $1,000 on _______, but my k... Read More April 23 2014
Hope you're enjoying our fiiiine Earth on this mighty fine Earth Day. We happen... Read More April 22 2014
Click to help our running team win the SacTown Ten-Mile T-shirt contest! Very ea... Read More April 22 2014
Youth week, day 2! We're kinda proud of the fact that we fund Banzai financial l... Read More April 22 2014
It's National Credit Union Youth Week! I'll be sharing kid stuff all week. Like... Read More April 21 2014
One of our annual favorites. Happy Easter to all! Read More April 20 2014

Featured

27 Shetland Ponies

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College is great - so much knowledge to be gained, lessons to be learned, fun times to be shared… and, unfortunately, debt to be accumulated. Student debt is what stops so many from planning to attend school, and what cripples so many for years after they’ve graduated. We always advocate for learning, and student loans can be so valuable to those who wouldn’t otherwise be able to attend school (we even have our own student loan product to assist our members who need it!). BUT student debt can cause a lot of extra stress and cost a lot in interest. The more you can get prepared ahead of time, the less you (or your child) will have to rack up in student debt. Start putting a little aside from each check now, collect all your coins, or maybe save half of a child’s birthday money – whatever you can manage to save away now will be that much less student debt in the future. Our Financial Consultant, Steve, specializes in college savings plans (and better yet is no-cost, no-obligation) and can help get you started now so that maybe you can avoid the student loan stress altogether… and spend all that money on 27 Shetland Ponies instead! What else could you buy with all that money? Well, allow us to show you with this ridiculous infographic from Mashable.

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Now, don’t you think backstroking in Nutella sounds a whole lot better than loads of student debt? See Steve today and start saving now for a Nutella-rich future tomorrow.

 

Garbage Bags, Underwear, and Pecans

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Any time I meet someone new who learns that I work at a credit union, I feel like the first question they ask me is, “What are your savings accounts paying?” Well, just like everyone else, not a whole lot. I know, it stinks. Have you ever considered investing your hard-earned money in garbage bags, underwear and pecans instead? Uh, yea, me neither. But check out this story I heard on KUNR the other day. Is bulk buying the way to invest? You tell me…

http://www.npr.org/2013/05/30/186450423/how-a-trip-to-costco-can-work-as-an-investment-strategy

Too Good To Be True?

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I have this friend. I know, you thought all I did was sit on the computer to blog and update facebook. But, I have a friend, and she has been telling me for years about these books that tell her if she saves x amount for x years, she will be a millionaire by the time she’s 45! Awesome, sign me up! I never can seem to get started though; the 2 problems that immediately scare me away are a) that sounds way too good to be true and b) who has extra money every month to start this!? I am a numbers person so I wanted to spell it out (wait, numbers person or letters person?) and see the proof. Well I did, and I am here to dispel both of these myths!

A) It is NOT too good to be true. Let’s break it down by looking at an example of my friend’s saving plan compared to mine:

  • Let’s say that my friend started saving $1,000 per year in a mutual fund (earning 8% annually) when she was 18 years old.
  • She added $1,000 per year for a total of 15 years.
  • After 15 years, she stopped adding to the mutual fund and simply sat back and watched it grow.
  • Now let’s say that I waited until I was 36 years old to begin saving anything.
  • I deposit $1,000 per year in the same mutual fund at the same 8% rate for the next 30 years.

  • So, my friend invested a total of $15,000. I invested a total of $30,000. But by the time we’re 65, my friend has over three times as much as me in her savings account!
  • Well, in this example, neither one of us are millionaires, but the reason I showed this example using $1,000 per year is to point out how easy that really can be. $1,000 a year is only $83.33 per month. Or $16.67 per week. That’s only $2.38 per day! I could find that at the bottom of my purse every day in change probably!

So the point of the story? Well, there are several:

  1. The sooner you start saving, the more you can reap the rewards of compounding interest. Time really is money!
  2. It’s totally not too good to be true!
  3. Does your company offer a 401(k)? Start participating today. Especially if they have a match program!
  4. We have a financial consultant at the credit union that can talk to you about your savings plan. Give us a call today!

Stay tuned for next week’s blog when I help debunk my second myth – “B) who has the extra money every month to start this!?”

 

The assumed rate of return in this chart is hypothetical and does not represent the return of any particular investment.

The Recovery – A New Reality?

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So, two “WHEN” questions: WHEN am I going to get a REAL rate on my certificate, and WHEN will the economy around here get back to normal?  The UN-clever and UN-funny answer we need to consider is that for practical considerations, this is the new Reality.

I have to consider things like this when planning for the credit union and reluctantly, I’m forced to look at things in Northern Nevada, the nation and the effects of the current international economic situation. Though the unemployment rate in Nevada is easing, the US rate is actually up. The Euro market is teetering (technical term) and may face the loss of some members. The 10-year T-Bill is at historical lows; currently around 1.5%, with possibilities of going lower and few expectations of going materially higher. The relative magic of the 10-year T-Bill is that mortgage loan rates are generally tied to it and it is telling us, “Stop worrying about inflation for the next five to ten years.”  Ergo, nothing is going up for at least five years, if not longer.

Kind of a downer, especially for us Boomers dependent upon savings rates, but there are some rays-of-light and positive perspectives to consider. First, we are actually in a recovery. Not an exciting one but things are going in the right direction, albeit slowly. Second, things around here are relatively stable and that’s good because you should be able to make some decisions to help you optimize the circumstances instead of waiting for a complete collapse.

I hate saying this, but you should be looking to pay down or payoff your borrowings. Yes, at the credit union, but look at the other loans you have at that “other place” and see if the credit union can get you a better rate. We refinance vehicles, mortgages and personal loans. Are you paying fees on your checking account? You should be talking to our branch staff to see if you can close that second checking account at the “other place” and take advantage of Great Basin’s CORE relationship advantages that not only provide you with free services, but interest rate bumps on loans and certificates too. You should consider moving some of your extra money back into certificates to get any type of rate advantage. Many members have let maturing certificate drop into their regular savings or money market account. Even if it is only a five or ten basis point advantage, why wouldn’t you grab it? Get your CORE account bump. Consider longer and multiple terms on your certificates and “laddering” multiple certificates maturities to increase the overall yield while preserving liquidity. Remember to keep a six month cushion in liquidity for tires, insurance and the little emergencies. Consider letting our Financial Advisor look at your longer term alternatives.

We have a ways to go, but remember that you belong to a NOT-FOR-PROFIT credit union that is established for the benefit of its members – not a bank where the goal is to maximize how much they can get out of you. Take advantage of every opportunity your credit union offers. We’re with you for life, and all its realities.

 

Want to Retire Tomorrow?

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I tell members they ­might be able to, but it depends on how much money they want to live on.  Some people prefer to work longer so they can have a higher income; others are willing to live on less if they can retire earlier.  That’s why financial planning is such an individual process.

Setting goals is the first most important step.  I worked with one member who needed to retire for health reasons but didn’t think he could until all his debts were paid off.  I helped him design an income plan in which he had a higher income until his debts were paid off and then lowered it for future years.  Another member wanted to retire early and thought he would use his 401k to pay off his house so he could live less expensively.  I showed him that he would pay so much in early withdrawal penalties and taxes it would use up his whole account.  Instead, we set up a monthly automatic withdrawal to pay his house payment and invested the rest of the funds for future growth.  Many members want a higher income stream early in retirement while they still have to pay for health insurance or want to do a lot of traveling.

So do you have enough to retire tomorrow?  It depends on what your goals are.  Get the clearest idea you can about what is most important.    If you are not ready, you’ll have to decide whether you want to retire later, live on less, save more, or some combination of the above.

Join us for a complimentary workshop on avoiding the “10 Most Common Retirement Mistakes” on Wednesday, February 29th at 5:30 p.m. This workshop will be held at the Main Branch. Please click here for details and to RSVP.

Betsy Dart is a CERTIFIED FINANCIAL PLANNERTM for the MEMBERS Financial Services programs located in Great Basin Federal Credit Union.   For more information on Betsy and her services, please click here.