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. To view September’s blog covering end-of-year holiday expenses, click here. We hope you find this month’s information on creating a financial emergency plan and focusing on education helpful.
Session 1: Planning for a financial emergency.
If you ever need a little reinforcement on the need for a creating a plan for a financial emergency, take a few minutes to talk with a financial counselor or coach. They all have stories about families for whom life was prosperous and rosy until it suddenly wasn’t. If you don’t have at least six months of essential expenses in a liquid savings account, this is the time to start making that happen. You don’t want to become another of those stories.
Tip: 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. Building an emergency fund while you’re employed can help you bridge the time between jobs.
Our Online Savings account is a great way to start planning for the unexpected. You’ll earn 4.00% APR* with Direct Deposit (3.00% APY with it). There’s no minimum deposit or maintenance fees. In addition to accessing your funds at our branches, you can also withdraw funds from more than 30,000* fee-free ATMs, and more than 5,400 shared branches.
If you need help saving for a rainy day, our Rain Day Savings account may be the perfect account for you. It pays 3.04% APY** on balances up to $2,000, and there’s no minimum balance requirement. To help you reserve these fund for true emergencies, you can only make 2 free withdrawals per calendar year (there’s a fee for additional withdrawals). And there’s no debit card or checks issued to help you resist the temptation to splurge.
It’s often said that the best defense is a good offense. Get ahead of challenges with our Financial Wellness Check. It’s a free opportunity to check if you’re growing wealth efficiently and to alert you of red flags. It only takes a few minutes to complete online, and we’ll contact you in a few days after you’re done to share your results and offer some ideas on how to move forward. There’s no selling, just tips to help you thrive in good and challenging times.
Session 2: Focus on education.
If you have children, take this opportunity to evaluate where you’re at with saving for their college—if that’s in the works 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.
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, or invest in yourself. Taking extension classes, getting another degree or certificate can lead to great employment opportunities and make you more valuable to your current and future employers.
Tip: A great place to start increasing your money savvy is by visiting our Financial Education Center. These easy-to-understand, jargon-free videos cover a range of topics, including budgeting, how to have a family conversation about money, credit scores, and more.
Podcasts are another great source for personal finance information. 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. Try a few to find the host, topics, and level of complexity that best meets where you are and where you want to be.
Planning for a child’s education is a fine opportunity to teach them about saving as well. We offer a number of Youth Accounts that help young kids, teens, and college-bound young adults become financially responsible. And our money clubs are packed with info, games, and tips to help them understand the value of a dollar.
Final thoughts.
An ounce of financial prevention today can prevent a pound of financial pain tomorrow. Saving for a financial emergency is just as important as saving for retirement. It’s never too early to start setting aside funds for the educational needs of children. As with reaching most financial goals, saving consistently over the long term can reap big rewards. If you’d like to learn more about any of our savings opportunities, or our Financial Wellness Check, contact us today.
This article was developed in partnership with our friends at Balance Pro.
*APY = Annual Percentage Yield. APY is the annualized rate based on a compounding period of one year. When the deposited money earns dividends and the accumulated dividends starts earning dividends as well, we are talking about compounding. Fees could reduce the earnings on an account. All yields except Certificate yields are subject to change retroactively to the beginning of the month.
Rate bonus is for a minimum of $1,000 monthly ACH Direct Deposit into a Farmers Insurance Federal Credit Union Checking Account. Rates are subject to change at any time. No branch or call center access with this account.
The national average for this type of account is 0.45% APY, based on rates published in the FDIC Monthly National Rates and Rate Caps accurate as of 7/15/2024.
**APY = Annual Percentage Yield. Rates are subject to change at any time.
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.
