Saving Smarts

For the responsible adult who thinks about being prepared for the future, savings are a fixed expense that is built into the monthly budget just like car payments and insurance. For most people, though, this habit does not come naturally. It needs to be acquired and practiced. Teach your kids those saving smarts now when they’re young to help make it a lifetime habit they’ve already mastered by the time they hit their 20s.

The Goal

Give your kids a clear understanding of why saving is crucial to financial wellness and how to make it happen.

Pointers to cover:

Why putting money aside each month is crucial
How interest and compound interest work
Long-term vs. short-term saving
Reasons to save

Conversation starters

For kids under age 9:

Let’s say you’ve only got $15 and you want to buy a drone that costs $65. You get $5 a week as your allowance. How can you buy that drone?
When did you wait for something and find that it was more enjoyable because you waited for it?
Can you think of some things that Mom or Dad saves up for?
If you earn 10 cents for every dollar you save, how much money will you earn by putting away $5?

For kids over age 9:

Are you saving up for anything important?
Can you think of some things that Mom or Dad saves up for?
Have you ever had to pay for something unexpected? How did you come up with the money?
Some things we save for are short-term goals, and others are long-term goals. Can you name some of each kind of goal? How will we save differently for each kind?
Do you think it’s smart for Mom and Dad to keep money they’re saving under the mattress? Why or why not?

If you haven’t already, consider setting up a Youth Saving Account for your child, and help them put these saving smarts into action!

For more youth-geared financial activities, visit our Activities & Resources page.

Getting the Most Out of Youth Accounts

Managing money is a foundational life skill. There are so many factors involved and so many open-ended questions at play. How much should you be saving? When is it worth spending more? How do you keep spare change from burning a hole in your pocket? It takes years of discipline and training to perfect this skill, and ongoing self-control to maintain it.

That’s why it’s best to give your kids a head start on money management and saving. As a parent or guardian, remember that the lessons you plant today will take root and blossom, enriching your child’s life for years to come.

Here at Olean Area Federal Credit Union, we understand the enormity and difficulty of this task. In honor of National Credit Union Youth Month, we’re focusing on ways to help make this process as smooth and as simple as possible.

Olean Area FCU is proud to offer a specialized Youth Savings Account that is designed just for kids. You can learn more about it by clicking here.

Ready to open an account for your child? Does your child already have one? Read on for three steps to take for ensuring your child gets the most out of a new or existing account:

Set a goal

Now that your child’s money will be sitting in an account instead of a piggy bank, let her use this opportunity to save up for something big. Sit down with her and discuss what she’d like to save for. You can create a long-term goal, like saving up for college or for a first car. Also establish a short-term goal, like a new gaming console or a hoverboard.

Set a date for your goals, and then set up a savings calendar for illustrating how much money needs to be saved each month to reach the intended target by the designated date. Discuss ways to add to the savings, being sure to include money from birthday gifts, summer jobs, allowances and chores.

Bank together

Whether your child is a first-grader or a teenager, if this is their first time owning an account, they’ll need you to show them the ropes.

Always bring your children along with you when you stop by Olean Area Federal Credit Union to deposit their savings. Show them how it works and let them see the account balance growing. If your child asks you to withdraw money from their account, make sure they see how this translates into a dip into their savings.

For teens, you’ll need to walk them through that first deposit and withdrawal. When they’ve probably got the hang of it, it’s time to take a step back and let them be on their own. They’ll feel like a million dollars managing their account independently.

However, share with your teen that every swipe of their debit card also means a dent in their account balance. Also be sure to warn kids of all ages about security. They should know to never share their account information with anyone, and to keep their debit card in a safe place.

Monitor your child’s activity

Don’t aim to be a helicopter parent, but do keep an eye on your child’s account. If he’s depositing a lot less than planned, ask him where his money is going. If your teen is maximizing his daily ATM allowance, speak to him about money management and impulse purchases.

Your teen’s daily withdrawal limit may need occasional adjustment, so keep a careful watch on spending to see if any modifications are needed.

Remember: Every financial lesson you teach your child today equips them with money management skills for a lifetime.

All You Need to Know About Savings Accounts

Looking for a safe place to grow your money? Look no further than the savings accounts at High Point Federal Credit Union!

Here’s everything you need to know about our savings accounts.

Opening a savings account

Stop by one of our branches or visit the High Point FCU website to open a Share Savings Account. You’ll need basic identifying documents and information along with a minimum initial deposit of just $5. If you’re looking to maximize your earnings on a higher balance, you can open a Money Market Account and earn dividends once you reach a $2,500 balance.

Accessing your funds

If you need to make a withdrawal from your Share Savings, visit a branch location to do it in person, visit our drive-thru or you can access your funds via our 24-hour ATM. You can utilize our digital banking to transfer funds between accounts.

Many financial institutions restrict the number of monthly withdrawals members can make from their savings accounts. At High Point Federal Credit Union, you have unlimited withdrawals from your Share Savings Account! We just hold $5 as your membership interest in the credit union.

If you use a Money Market Account, you are limited to six withdrawals or automatic and telephone transfers each month. This total also includes auto transfers if the account is linked as an overdraft privilege account to cover your checking account. However, you can have unlimited in-person and mobile transfers/withdrawals.

NOTE: Due to hardships associated with COVID-19, there is currently NO LIMIT to the number of transfers members can make whether they are automatic or not (It is unknown when this restriction will go back into place).

Fees and penalties

Banking partners may charge a nominal monthly maintenance fee for savings accounts, but these can generally be avoided by meeting specified account requirements. Savings accounts at High Point FCU have no monthly fee.

Bank and credit union members may be penalized for going over the withdrawal limit on savings accounts. If you go over the six-withdrawal limit in your Money Market Account, your account will be subject to closure by the credit union.

If you overdraft an account, you will be charged the standard NSF fee of $25 for all returned items. At High Point Federal Credit Union, you can sign up for Overdraft Privilege, linking your Savings to your Checking to prevent overdrafts. There is a $2 fee for automatic transfer from Savings to Checking to cover an overdraft.

Higher earnings rate

One of the most advantageous features of a savings account is its interest/dividend rate, which is nearly always higher than the rate of a checking account in that same institution. According to the NCUA , in December 2020, the average checking accounts rate for credit unions was 0.08% APY. The average rate for savings accounts was 0.11% APY.

Explore our Share Savings rates and our Money Market rates by clicking here.

Safety and security

Your money is always safe at High Point FCU. Our credit union is federally insured up to $250,000 by the National Credit Union Administration. The funds in your savings account will also be protected from the fluctuations of the stock market.

A savings account can be an excellent place for keeping and growing funds you may need to access in an emergency. Call 800.854.6052, click, or stop by High Point Federal Credit Union to open your account today!

All You Need to Know About the New Stimulus Bill

It’s another stimulus bill, and that means more checks are a-comin’! But don’t hit the shops just yet. Although the new bill promises bigger stimulus checks, there are stricter eligibility requirements. And that’s just the tip of the iceberg that is this bill.

Below, we’ve outlined some of the most significant measures included in the American Rescue Plan.

Stimulus payments

The third round of stimulus checks are set at $1,400. Here’s who is getting checks:

Single taxpayers with an adjusted gross income (AGI) of $75,000 or below.
Taxpayers filing as heads of household with AGIs of $112,500 or below.
Married couples filing jointly with AGIs of $150,000 or below.

Parents will also be getting checks for every child they claim as a dependent on their tax return, including college students and adult children with disabilities.

Older relatives who are living with taxpayers will also be counted as dependents.

Higher earners will receive partial payments, but these will phase out quickly. For single filers, the checks stop at an AGI of $80,000. For heads of household, the checks stop at AGIs of $120,000, and for joint filers, the cutoff is $160,000.

To be eligible for a payment, an individual must have a Social Security number.

Changes to unemployment insurance

The relief bill will extend unemployment benefits for another 25 weeks, until Sept. 6. The weekly supplemental benefit of $300 will continue running through that date, too.

The first $10,200 of benefits will be tax-free for people whose income is less than $150,000. This only applies to unemployment paid in 2020.

In addition, unemployment benefits received through the Pandemic Unemployment Assistance program will run through Sept. 6. Benefits received through the Pandemic Emergency Unemployment Compensation program would also run through that date.

Changes to the child tax credit

The relief bill will expand the child tax credit to $3,000 for children ages 6 through 17, and to $3,600 for children ages 5 and under. The credit will now also be fully refundable.

In addition, half the child tax credit may be advanced to parents before the end of 2021. Plans for the distribution are still being finalized, but lawmakers are hopeful that parents will start getting monthly payments toward their child tax credits for 2021 as early as July.

Married couples with a modified AGI of up to $150,000 (or up to $112,500 for heads of household and up to $75,000 for single filers) would receive the full value of the new benefit.

Changes to student loans

There will be no income tax on forgiven debt for those that qualify for loan forgiveness or cancellation. This would apply to all debt forgiven between Jan. 1, 2021, and Dec. 31, 2025.

How Much Money Should I Keep in My Checking Account?

Most of us use our checking accounts on a daily basis. Every swipe of a debit card, every bill we pay and every personal check we write takes money out of our checking account.

But, how much money should we be keeping in these super-convenient accounts? Let’s find out.

What’s your magic number?

It’s best to have one to two months of living expenses in your checking account at all times. Some experts suggest adding 30 percent to that for an extra cushion.

To determine your exact living expenses, track your spending over several months, including all bills and discretionary spending.

Why keep that much money in your checking account?

Here are three reasons you want to keep your checking account well-padded at all times:

Avoid overdrafts. Even high-income earners can miscalculate their spending and end up with an overdrawn account. Why risk being charged overdraft fees for every transaction when you can easily avoid them? Here at Olean Area Federal Credit Union, you can sign up for overdraft privilege to help you avoid embarrassment and a merchant fee.

Provide a cushion for pre-authorization holds. Some merchants place a pre-authorization hold on your debit card until the transaction completes. These holds can reduce your available checking account balance by up to $100 per hold. Keeping your account well-funded allows you to comfortably accommodate the holds without fearing a negative balance.

Keep liquid funds available. A robust checking account means access to cash is just an ATM transaction away.

Can I be keeping too much money in my checking account?

Having an overstuffed checking account may mean you’re missing out on higher returns you can earn if you were to keep those same funds in a Olean Area Federal Credit Union Money Market Account or in a Share Certificate.

Once you’ve determined exactly how much money you should be keeping in your checking account, look into other options for the rest of your funds. Speak to a Member Service Representative at Olean Area Federal Credit Union to learn about our savings options to find out which is right for you.

If you dare

Now that your checking account numbers are worked out, you may want to consider an unconventional way of making money management simpler: Open two separate checking accounts.

Here’s how it works. You’ll open a second Olean Area Federal Credit Union Checking Account, and when your paycheck clears, transfer all the funds you need to pay your bills into your second account. If you have any bills linked to your previous checking account, be sure to update the information before they are due. This way, you’ll be paying all of your bills from one account. Best of all, with two accounts, you’ll be able to tell exactly how much spending money you have left each month without doing mathematical gymnastics.

It’s budgeting made simple!

What School Doesn’t Teach You About Money

With the new school year either here or just around the corner, it’s time to fill your shopping carts with No. 2 pencils, protractors and all the goodies the kids will lose by the second day of school. If they’re headed off to college, it can be even more exciting. But, instead of needing you to replace their pens on day two, your college-aged child will probably be calling to ask for money by then.

It’s such a ritual that, at this point, many of us don’t really question it. But how much do our kids actually know about money? You might want to only include the lessons you taught them, because their school probably didn’t teach them much at all.

Common core and other national guidelines don’t include requirements for teaching budgeting skills, how to balance a checkbook, or even explanations of basic concepts such as credit, loans or mortgages. Basically, the last time your children learned about money at school, it probably involved finding out how many apples and oranges they could buy in some middle school math word problem.

We talked to some credit union members about the lessons they want to pass on to their kids, and below you’ll find some of our favorite lessons to teach your kids.

Pay yourself first

No one else is going to make you a financial priority, so don’t make them your financial priority.

If you want to know if you can afford something, check your budget. When you have to check your checking account, you can’t afford it.

If you reconcile your accounts every month, you’ll have a pretty good idea how much is actually in each account. Plan ahead. Make a budget. Execute the plan by sticking to that budget.

Take risks while you’re young

You can afford to be more aggressive with your retirement and college funds while you have plenty of time to make it back up, so don’t be afraid to push those funds a little bit. That said, not saving for retirement is not a risk. It’s just a bad idea.

Make sure the Joneses are keeping up with you

It’s easy to get lost trying to compete with your peers and almost as easy to ignore those consumer pressures entirely. But what about the third option? Instead of ignoring their financial situation, check in every now and then to see if they need help. Our communities are better when we care about each other.

Whether your kids are in diapers or their kids are wearing them, it’s never too early or too late to teach financial literacy. Make sure you’re instilling the right lessons, and check back in with Olean Area Federal Credit Union, because we’ve always got plenty of resources for young people to learn the lessons they aren’t getting in math class.