The 2×2 System is where you set aside two hours on the calendar two times a month to complete a predetermined financial task. This modest but consistent effort can help you sustain financial health and build wealth in bite-sized chunks. Read September’s blog to learn the value of calculating your net worth and the importance of understanding your insurance needs. We hope you find this month’s information helpful.
October Session 1: Go Over Your Financial Emergency Plan
According to a June Bankrate survey, only 48 percent of U.S. adults have enough emergency savings to cover at least three months’ expenses.* If you don’t have at least three months’ minimum, but hopefully six months of essential expenses in a savings account, now’s the time to start. Just because your money is liquid, there’s no reason why it can’t grow your emergency fund. Our Rainy Day Savings account earns 3.04% APY** on balances up to $2,000. No minimum balance, debit card, or checks are issued to help you resist using these funds for non-emergencies.
Tip: If you need a little reinforcement on the importance of a financial emergency plan, talk with a financial counselor or coach. They all have stories about families for whom life was great until it suddenly wasn’t. So often, the financial emergency people face is an unexpected job loss. Because there is so much emotion and tension at the time of the severance, it can help to think ahead of time about employment alternatives should you face this traumatic outcome. One step you can take now is a side hustle. Consider a few hours of part-time work each week or selling items you make on such popular websites as Etsy. Another action you can take now to bulk up your financial reserves is to sell things you no longer need. You’ll improve your rainy day savings as you declutter your home.
October Session 2: Focus on Education
If you have children, take a moment to evaluate where you’re at with saving for their college—if that’s a goal for your family. For younger kids, consider a 529 plan or Coverdell Education Savings Account. If your child is closer to college age, there’s no time like the present to start solidifying your final plan for financing their education. Your Credit Union offers an Education Savings Account to help you pay for college. The money saved can go toward qualified education expenses, including tuition, books, and more. If you contribute the limit of $2,000 per child every year from the time they are born, each could have a backpack full of cash to get them started on the road to their degree.
If you don’t have any children for whom the cost of college is an issue, use this time to research financial topics you’ve always wanted to learn more about.
Tip: Numerous podcasts cover personal finance. If you have little time to beef up your money know-how, a podcast during your commute or while making dinner can open your eyes to new understanding and greater possibilities. From personal finance to real estate to deep economic analysis, there’s a podcast out there to match your level of financial knowledge.
We hope these tips help you take control of your finances as we dive into the last quarter of the year. If you have kids, emergency savings and an education fund can help you manage unexpected expenses and limit student debt. For more great ideas that help you take control of your finances, please review the previous 2×2 blogs.
*Bankrate, June 22,2023
**APY = Annual Percentage Yield. Rates are subject to change at anytime. Limit one Rainy Day Account per qualified membership. Rainy Day Savings is an interest-earning savings account eligible for 3.04% APY interest on balances up to $2,000 and the standard Membership Savings rate on balances over $2,000 when funded via recurring ACH deposit or other qualifying external funds. Dividends are calculated by applying a periodic rate to the Average Daily Balance in the account for the Dividend period. Interest earned will be credited to the account at the end of the statement period. This account is limited to two withdrawals per calendar year, each withdrawal in excess of this amount will incur a $20 excessive withdrawal fee that must be paid at the time of the withdrawal. This account does not qualify for withdrawal access via debit or check and does not support transactions originating via VRU, online banking, mobile banking, or ATMs. Withdrawals can be made in person at a Credit Union branch or by calling us at 800.877.2345. This account does not qualify for overdraft protection. Account holder must be a member with a regular share account who is in good standing. Current interest rates and the annual percentage yield may be found at the Credit Union’s website, may be verified at a Credit Union Branch or by calling 800.877.2345. Interest rates earned and qualifying dollar amounts for interest earned are subject to change at any time. APYs and eligibility criteria are subject to change at any time. Fees may reduce earnings.