TCU

10 Steps to Creating a Financial Plan for a Secure Retirement

1. Write down each of your goals on a 3x5-inch card.
2. Create two stacks — goals you want to accomplish within the next five years or less and goals that will take longer than five years (you'll save for these goals differently).
3. Sort the cards within each stack in order of priority, based on how hard you are willing to work or save to reach each goal. Make retirement a priority.
4. Write on each card what you need to do to accomplish that goal, plus when, what it will cost and how much you'll need to save each month to reach your goal.
5. Set priorities again, creating a "dream" stack and a "reality" stack to guide your saving and spending.
6. Create a snapshot of your finances by calculating your net worth--the total value of what you own minus what you owe. Include items such as personal possessions, vehicles, home and other real estate, share draft/checking and savings accounts, insurance policies, stocks and retirement plans. On the liabilities side, consider your home mortgage, credit card debt, student or auto loans, and taxes/capital gains owed.
7. Envision your retirement and the monthly resources you'll need in retirement, along with when you want to retire.
8. Estimate how large your nest egg will need to be to "buy" your retirement goal.
9. Use a worksheet or software program to help calculate how much you'll need to save every month and the return on investment you'll need to reach your goal. For help with your retirement planning, contact TCU Investment Services.
10. Create a spending plan for your monthly income that starts with your "payment" to your retirement savings plan designed to build the resources you'll need for the retirement you desire.

Job Change?
Don’t Ignore Your Retirement Plan Dollars.

It is probably one of your biggest assets.  Don’t ignore it.  People change jobs all the time, but many forget some important details – like their retirement plan money and leave it in their old employer’s sponsored pension or 401(k) plan.

Could this be you?  If so, you really owe it to your future to consider where to put the retirement assets you’ve worked so hard to build up.  The wrong move could cost you thousands and greatly affect the quality of your retirement years.

One option is to consider moving over any retirement plans from a former employer into an IRA.

• Simplicity - Consolidate your retirement assets into one IRA.  It will simplify your record keeping and give you a better picture of your overall portfolio.
• Eliminate Investment Overlap - Having several accounts can have you holding many of the same type of investments in each account, and cause you to be out of balance for your set of financial circumstances.
• Wider Array of Investment Choices - It is very common for employer plans to have only a few investment options.  Rolling assets into an IRA will literally give you thousands of investment choices.
• Roth Conversions - Once your plan is rolled into a traditional IRA, you may be able to convert it to a Roth IRA.  You can only convert to a Roth IRA if your income does not exceed $100,000 and you file a joint return if married.
• Beneficiary Distribution Options - Many employer plans have very limited and rigid beneficiary distribution options, especially for non-spouse beneficiaries. Rolling your assets into an IRA offers many additional flexible distribution pay out options, such as the "Stretch IRA"(paying out the death proceeds over multiple generations of beneficiaries).

Need help deciding what option is best for you? Contact a TCU Investment Service Representative for a no-cost, no-obligation Consultation. B2MM-0405-24A3

Is Your 401(k) Turning Into a 201(k)?

A lot of people have seen their 401(k)s shrink in recent months. Many of them don't know what to do with their investments so they have enough money to retire.

If you're one of them, come visit TCU Investment Services. We have financial advisers who can help you figure out diverse ways to invest your money.

Don't let your 401(k) keep shrinking. Stop by and we'll help you determine a new retirement strategy.

Investment Vocabulary

If you're starting to invest, one of the first steps should be to familiarize yourself with some basic terms. This reference guide can help:

Asset allocation - Dividing your money among the basic asset classes - growth, fixed-income and cash investments - to match your financial goals. This diversification can help investors control risk and improve the probability of achieving an expected return.

Bear market - A term that describes a prolonged period of declining stock prices.

Blue chip - A company that is a well-known corporation with a long history of growth and profits; higher quality relative to smaller or less established organizations.

Bull market - A term that describes a prolonged period of rising stock prices.

Buying on margin - Buying on a loan; you're borrowing the money from a brokerage house to buy stocks. This is very risky behavior.

Capital gains - The amount of money you make on an investment when you sell it.

Capital loss - The amount of money you lose on an investment when you sell it.

Diversification - Spreading your money among a variety of investment types, rather than putting your money all in one place. This can reduce the risk of a decline in the overall portfolio from a decline in any one investment or category. For example, you may choose a mix of stocks, bonds from different issuers within technology, financial services, health care and international investments.

Dividends - The portion of the company's profit paid out to its shareholders.

Dollar-cost averaging - A method of buying mutual fund shares by investing the same amount of money on a regular schedule (for example, $50 a month), regardless of market price. This can reduce average share costs to investors who acquire fewer shares when prices are higher and more shares when prices are lower.

NASDAQ - The National Association of Securities Dealers Automated Quotations system; computerized stock market where trades are negotiated directly between buyers and sellers.

Portfolio - Consists of all the assets you own and represents the choices you've made with your money.

Prospectus - A legal document containing information about a mutual fund or other types of investments. It describes the investment's objective, management style, performance over the past 10 years, background of its officers and expenses.

Rebalancing - Periodically revising your portfolio's asset allocation to keep it in line with your investment plan.

Risk tolerance - Every investor has the ability to tolerate a certain amount of change in their portfolio's value, including short-term losses from market declines. Usually, younger investors can tolerate more risk because they have more than ample time to recover from these short-term losses. Vice versa for older investors. Conservative investors simply don't want to experience any declines. More aggressive investors tolerate losses well because they are confident they will recover before they are required to sell their investments. Where an investor falls on the spectrum between aggressive and conservative is called an investor's risk tolerance.

Time horizon - The length of time before you must sell investments to raise cash to meet spending requirements. Some time horizons are short, like investing for a vacation next year. Others are long, like investing for retirement. An investor with a long time horizon can usually take more risk, and vice versa. When you calculate your retirement investment time horizon, don't make the mistake of ending it on the day you expect to retire. At that point as much as one-third of your life may still lie ahead of you and your spending needs will not stop on your retirement date!

How to Survive and Thrive in Volatile Markets

Content developed by CUNA Brokerage Services, provided by TCU Investment Services

There is one sure thing about the stock market - it goes both up and down. These days it isn't unusual for the Dow Jones Industrial Average to swing 100 points, in either direction, in a matter of a few hours. So you think to yourself, "I'm pretty smart. I'll jump out of the market when it's going down and jump in when it's going back up."

That's the theory behind market timing. And a very tempting theory it is. But does it really work?

The idea behind market timing is to buy a stock when prices are low, hold that stock as the market rises, sell the stock at the peak and then wait as the market moves down again. Then, the process begins all over again. There is only one problem: market timing theories require that you correctly guess the direction of the stock market. But is that possible? And what is the risk if you guess wrong?

What If Your Timing Is Off?

Not being fully invested during a market upturn can seriously hurt your long-term investment plans. Studies of stock market history show that not being invested at the "right" times can be costly to an investor. Consider the following hypothetical example based on the return of the S&P 500:

On December 31, 1996, $10,000 is invested in a stock index fund based on the S&P 500 Index. By December 31, 2006 the $10,000 would have grown to $22,252.00, an average annual total return of 8.33%.

However, suppose this investor starts "timing" the market during that ten-year period, and as a result missed 10 of the market's best single-day performances. Their return would drop from 8.33% to 3.32%. And if you missed the market's best 20 days that 8.33% return would have dropped to -0.46%. Perhaps the best market timing strategy is to stay invested the entire time.

The Penalty for Missing the Market

This chart illustrates a $10,000 investment in the S&P 500 Index from Dec. 31, 1996 – Dec 31, 2006.

Source: AIM Management Group Inc.

This is a hypothetical example used for illustrative purposes. The performance of an unmanaged index is not indicative of the performance of any particular investment. The performance of an index assumes no transaction costs, taxes, management fees or other expenses. It is not possible to invest directly in any index. Past performance cannot guarantee comparable future results.

Market fluctuations can make many investors nervous. Getting out of stocks when the market falls may not be the answer. Be careful not to let short-term volatility drive your long-term investment planning. Your best defense against a volatile market may be a well-diversified portfolio and a disciplined program of periodic investments.

Put Market Volatility to Work for You

Making regular investments in a mutual fund when the market is down as well as when it is on the rise is a strategy known as dollar cost averaging. With dollar cost averaging, you invest a fixed amount of money on a regular basis. This way, when the market is down your money buys more shares. Investing the same amount of money steadily over time may lower your average cost. Although it?s important to know that it cannot guarantee a profit or protect you from a loss in a declining market.

Successful dollar cost averaging investing requires continuous investing regardless of fluctuating prices. You need to be emotionally and financially prepared to continue buying shares when the market is both up and down. And over time you just might find market volatility actually helped you reach your long-term goals.

If you have any questions, or would like to provide feedback, regarding the information presented in this article, you may contact A TCU Investment Services Representative.

Representative is not a tax advisor or legal expert. For information regarding specific tax situations, please contact a tax professional. For legal advice, consult an attorney.

Dollar-Cost Averaging: A Smart Way to Invest

Tough economic times don't mean you shouldn't invest. An efficient method, called dollar-cost averaging, lets you invest small amounts on a regular basis. Once you set it up, you might not even notice how quickly your account may grow - and you probably won't even miss the money you're putting away.

With dollar cost averaging, you invest the same amount of money - from a little to a lot - on a regular schedule, regardless of price. Your fixed investment buys more shares when the market is down, so you'll have more shares that will grow when the market rebounds.

Some mutual fund groups even waive initial minimums if you deposit funds directly from your paycheck or TCU account.

Combining dollar cost averaging with a mutual fund investment may further improve your chance of future success, as long as you choose a fund with low expenses. The combination is an excellent way to build long-term wealth.

Here's how to start:

• Decide how much money you can afford to invest each month.
• Select an investment that you want to hold for the long term.
• Complete any paperwork to ensure that you're making automatic investments at regular intervals.

This type of systematic investing is one of the best ways to invest. Using this approach, you may be able to lower the overall cost of your investment. Making regular investments in specific mutual funds every month, or quarter, will be easier to handle instead of having to come up with a lump sum.

For help with your investment plan, visit TCU Investment Services. Stop by or call today.

It's Time in the Market, Not Timing the Market

There is no magic formula to know the right time to invest in the stock market, or the right time to get out. And when the market falls, many people think, "I got in at the wrong time," and then jump out. But, experts say it's usually a better idea to sit tight. After all, eventually what goes down will come back up, at least when it comes to the market.

Consider this: Most people who get out of the market sit on the sidelines and wait for the market to run before getting back in. By doing this, they're losing a lot of the return. Say you're waiting on the sidelines when the market jumps 10%, causing you to get back in. Well, you've already lost that 10% move. And if you're out of the market during the five biggest days of a stock's move, you usually lose about 20% of the return of your portfolio.

Instead of "timing the market," or relying on your financial planner to pick market tops and bottoms, be conservative. Diversify properly, and rebalance periodically. This way you don't have to worry about tops and bottoms.

Diversify Your Portfolio in the Comfort of Your Credit Union

If you're one of the millions of Americans who owns a mutual fund, don't overlook TCU as a source for your next mutual fund. You may not realize that your credit union can offer access to mutual funds and other investment services through TCU Investment Services.

TCU Investment Services provides a complete array of financial services to meet all your needs. They can offer you investment vehicles to diversify your investment portfolio to include higher-risk, higher-earning investments. They also offer sophisticated investment options such as stocks, bonds, and insurance, in addition to mutual funds.

So look no further than the comfort of TCU Investment Services for all your investment needs. Contact us today to learn more about the diverse investment products available to you at TCU.

Sick With a Toxic Home Loan? We Have the Cure.

Some lenders spent the past few years making loans that were not in borrowers' best interest. If you're stuck with one of those toxic home loans, come see us. We can look at your situation and, if you qualify, heal your home loan sickness. We will not pair you with a loan unless it's good for your financial health.

Is comparing APRs the best way to decide which lender has the lowest rates and fees?

The Federal Truth in Lending law requires all financial institutions disclose the APR when they advertise a rate. The APR is designed to present the actual cost of obtaining financing, by requiring that some, but not all, closing fees are included in the APR calculation. These fees in addition to the interest rate determine the estimated cost of financing over the full term of the loan. Since most people do not keep the mortgage for the entire loan term, it may be misleading to spread the effect of some of these up front costs over the entire loan term.

Also, unfortunately, the APR doesn't include all the closing fees and lenders are allowed to interpret which fees they include. Fees for things like appraisals, title work, and document preparation are not included even though you'll probably have to pay them.

Borrowers need to be aware of the points and fees they will be expected to pay during the mortgage transaction. When shopping for a mortgage, ask for a Good Faith Estimate (GFE) which will itemize all of the settlement costs including lender charges. Additionally, the GFE will indicate the Annual Percentage Rate (APR). Comparing APRs will provide you with a definitive answer as to what rate and fee structure will be the most economical for you. Look at total fees, possible rate adjustments in the future if you're comparing adjustable rate mortgages, and consider the length of time that you plan on having the mortgage.

Don't forget the APR is an effective interest rate — not the actual interest rate. Your monthly payments will be based on the actual interest rate, the amount you borrow and the term of your loan.

What to Do When Your ARM Is Due

If you have an adjustable-rate mortgage (ARM) and your fixed-rate period is drawing to an end, your first rate adjustment is looming. It's time to devise a plan.

Begin by examining the ARM you have. How often can the rate adjust? How much can the rate rise at each adjustment? How much will your monthly payment increase at each adjustment? What's the limit on the rate increase over the life of the loan?

When your ARM comes due for an adjustment, you have three basic options:

1. Refinance into a fixed-rate 30-year (or shorter term) mortgage. You'd never have to worry about rate adjustments again for as long as you live in your home. But fixed-rate loans have higher rates than ARMs. You'll also have to pay closing costs and your current ARM may have prepayment penalties. Check your contract.
2. Refinance into a new ARM that has terms better suited to your situation. You'll face the decision again in a few years about what to do when the rate adjusts. Still, a new ARM might be a viable option if you plan to sell your house in a couple of years. You'd save a bit on monthly payments in the meantime. Remember to factor in closing costs and any prepayment penalties.
3. Stay with the ARM you have and take the rate adjustment. If you have a low-rate ARM and it can't climb much, you might want to stay in it for the remaining few years and see what happens—if you can live with the uncertainty. It also makes sense to stay in your current ARM if you plan to sell your home soon.

If you need help to decipher your ARM contract and plan your next move, turn to TCU Mortgage. We will advise you with your best interest at heart.

Calculate Your Debt-to-Income Ratio

It's good to know how lenders determine if you'll be able to afford your monthly payments comfortably, based on your income and other debts. Remember: Many lenders exceed these guidelines, particularly if you have no debt, good credit, or a large down payment when applying for a mortgage.

Use this guide to calculate your debt-to-income ratio:

Debt

• Monthly mortgage or rent $________
• Minimum monthly credit card payments $________
• Monthly car loan payment $________
• Other loan obligations $________
• Total monthly debt payments: $________

Income

• Monthly gross salary $________
• Other monthly income (bonuses, overtime, and so on) $________
• Monthly alimony received $________
• Total monthly income: $________

Total

• Total debt divided by total income = _______%

We're a Home Lender You Can Trust

We have good news if you need a home loan - to buy, refinance, or tap home equity.

You've seen a lot of news about the slumping housing market and its effect on access to affordable mortgages. The headlines and news reports sound ominous. Read between the lines, and you see that this also is a time of opportunity for borrowers with stable habits and clean credit records.

Some lenders got into trouble with risky types of loans. And sadly, some lenders made loans that were not in the best interest of the borrower - just to get a loan on the books. The very good news is that TCU doesn't operate that way, so our ability to make home loans and serve members is in great shape.

TCU is a member-owned, not-for-profit cooperative. We don't make business decisions that benefit the bottom line but hurt the consumer. Frankly, it makes us your best source for home loans across the board:

• Fixed-rate and adjustable-rate loans to buy a house
• Fixed-rate and adjustable-rate loans to refinance an existing mortgage
• Fixed-rate home equity loans
• Adjustable-rate home equity lines of credit

More good news: Home loan rates still are relatively low. Call today to talk to a TCU Mortgage Representative.

Home Equity Can Be Tax Deductible

The interest on a home equity loan or home equity line of credit usually is tax deductible. But, if you use the money for anything other than home improvements, or the combined amount of your mortgage and home-equity loan exceeds the fair-market value of your home, you may not be able to deduct all the interest. Contact a tax adviser for more information.

Buying Foreclosed Houses Not a Slam-Dunk Deal

Hardly a day goes by without more bad news about mortgage woes across the country. Bright spots seem nonexistent in this dark cloud - except possibly for one. Some consumers looking to buy a home are wondering: Could I find a good deal on a foreclosed house?

Good deals may exist, although that depends on the locale, the quality of the foreclosed property and the willingness of the owner or lender to negotiate.

You can buy a foreclosed house in four ways:

• Through a foreclosure sale
• At a foreclosure auction
• From a lender who has taken back the property
• From the U.S. Department of Housing and Urban Development (HUD)

Generally speaking, the first two methods in this list are best left to highly experienced property buyers. You must be familiar with your state's foreclosure laws, your rights as a buyer and how the foreclosure process works. Mortgage foreclosure laws and procedures vary by state.

The last two processes above are the least risky for buyers. You can buy a foreclosed house from a lender who has taken back the property. That means the property didn't sell at the foreclosure auction and the lender took it back to sell it through its "real estate owned" department. With these properties, known as REOs, the lender usually has paid off taxes or liens owed on the property and handled any necessary evictions. As a buyer you get to inspect the property. Thus, you avoid the nasty surprises that can spring up with pre-foreclosure sales or foreclosure auctions.

Your ability to negotiate a discounted price will depend on the lender's situation. A lender who has begun to accumulate foreclosed houses is more likely to want to lower the sales price.

With HUD foreclosures, HUD sells homes to the public after Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) mortgage foreclosures. Check with your local HUD office to find out about sales procedures or go to www.hud.gov.

TCU can help you during these unsure times. Visit us today or call TCU Mortgage for all your home loan questions.

What is an ARM?

An ARM (adjustable rate mortgage) is a loan type that allows the lender to adjust the interest rate during the term of the loan. Generally, these changes are determined by a margin and an index so that the interest rate changes, up or down, are based on market conditions at the time of the change. Most often these interest rate changes are limited by a rate change cap and a lifetime cap. If you apply for an adjustable rate mortgage, the lender is required to provide you with an ARM Program Disclosure which spells out the terms of the loan.

Steer Clear of Interest-Only Loans

Many consumers are turning to interest-only loans, where you pay only the interest on your loan for the first few years instead of paying both interest and principal.

Interest-only loans are touted as perfect for those consumers who don't plan to remain in the same house for more than five years, or who know their salaries will notably increase in the next few years. The reasoning behind this is that you start with lower monthly payments, so you either can save money to buy a bigger house, or save the heftier payments for when your salary increases.

However, be wary of interest-only loans. After the initial five-year period, your interest rate may increase. So you could end up paying more than you would if you had chosen an interest and principal paying mortgage at current low rates.

Furthermore, while you will have lower monthly payments at first, you are not paying any of the principal of your loan. So the only equity you're building in those first years is based on rising property value, or any extra payments you may make.

Instead, consider getting a traditional loan through TCU. Our Mortgage Representatives can help you find the right loan for your situation.

Up to Your Cheeks in Debt?

Don't wait until you're drowning in it before you visit or call TCU. Let us help you consolidate your high-interest loans at a lower interest rate, set up a repayment schedule or design a spending plan you'll stick with.

Internet Bill Payment Helps You Control Your Bills

Internet Bill Payment makes paying bills less painful, reduces the risk of identity theft, carries environmental perks and even gives you greater control over paying off credit cards and other debts.

This versatile tool is TCU's Internet Bill Payment.

You can do it!

Anyone with Internet access easily can learn to use Internet Bill Payment to manage money.

Internet Bill Payment lets you automate payments to take place on a set date every month, schedule a bill for payment weeks before a specific date or simply go online to make payments to be delivered in two to three days.

Tie payment to paydays
Since you can schedule payments for a specific date, you can tie payments to paydays. Just go online to alter the payment date or amount if your ability to pay changes before the payment is sent.

Even when you forget about a bill until it's due, Internet Bill Payment can help by minimizing the delay between when the payment is sent and when the recipient acknowledges its arrival, reducing late fees and interest charges.

Reduce risk
Internet bill payment reduces the risk ID thieves may steal envelopes containing payments from home mailboxes or while in transit. That's important, because the account information printed on both bills and paper checks offers a wealth of data to identity thieves who could misuse the information to open accounts in your name.

Manage your debt
Internet bill payment also can be a good strategy for reducing debt. One example is making extra online payments on loans at every payday.

You'll find Internet Bill Payment is a convenient way to get control over your bills.

It Was Such a Bargain: Help for Compulsive Shoppers

Like other addictive personalities, compulsive or obsessive shoppers indulge their passion even as it destroys their closest relationships and sends them into a financial tailspin.

Recent studies suggest compulsive shopping is a growing problem because of easier access to credit cards at younger ages, the convenience of e-commerce and the availability of television shopping channels.

To prevent shopping binges:

• Pay for purchases by cash, check, or debit card.
• Make a shopping list and only buy what's on it.
• Put financial goals in writing so you have something to "save" for.
• Get rid of department store credit cards; carry one major credit card for emergencies only.
• Record every dollar you spend and your feelings about each purchase.
• Avoid discount warehouses; allocate a certain amount of cash to spend if you do shop at one.
• Avoid catalog ordering and watching TV shopping channels.
• Take a walk or exercise when the urge to shop comes on.
• Find a money mentor; look for a friend or colleague who spends and saves wisely and ask for advice.

Give Your Debts a Financial Health Check

A debt-to-income ratio is a measure of financial stability calculated by dividing monthly minimum debt payments by monthly gross income. This calculation gives a straightforward depiction of your financial position. Typically, the lower your debt ratio, the better handle you have on debt.

Determining your debt:

• Collect your most recent credit billing statements for current balances
• Outline your total monthly bills using two columns: bill type (such as car loan, mortgage/rent payments, and so on) and monthly payment. Do not include bills such as taxes and utilities in this list.
• Add up the total for all of the monthly payments listed.
• Calculate your monthly before-tax income. If you receive a paycheck every other week, as opposed to twice a month, your monthly gross income is your before-tax income from one paycheck times 2.17.
• Your monthly debt-to-income ratio is calculated by dividing your monthly debt payments by your monthly income. For example, someone with a monthly income of $2,000 who is making monthly payments of $500 on loans and credit cards has a debt-to-income ratio of 25% ($500 / $2,000 = .25 or 25%).

Staying aware of your ratio can help avoid debt reaching a problematic stage.

"Budget" Is Not a Four-Letter Word

So you're having trouble sticking to a budget? Don't get discouraged. Follow these simple tips to save some extra cash.

• Go easy with the credit cards. Once you get in the habit of reaching for your credit card, it's hard to stop. If you don't have the funds, don't make the purchase.
• Buy used. There's no need to buy all new textbooks. New textbooks cost on average 25% more than used. Unless it's a book you know you'll keep or it's only available new, stick with used.
• Spread out your expenses. Most expenses come at the beginning of the semester - for example, instead of buying all your textbooks at once, buy them as you need them.
• Brown bag your lunch. Although it may not be as exciting as eating at your favorite deli or pizza joint, packing your lunch can save on average $3 a day - or $60 a month.
• Be smart about choosing a financial institution. Using TCU will save you money on fees, lower loan rates and higher savings rates.

Put Savings on Automatic

If you think saving money is too difficult, and even have justifications to back you up. We have the solutions to your saving hang-ups.

I don't have the money.

That's the standard cry from those who wait to save what's left over. It never happens. Instead, "pay yourself first." Sign up for automatic transfers through TCU and we'll automatically divert the amount you say, for as long as you say, to your share savings account.

For what little I can put aside, it doesn't pay.

Consistent, regular savings are the only kind that add up. If you only can start with $10 a paycheck, do that now. When you see how that works, you'll find yourself raising the ante to $25, $50, or more over time. And yes, that pays.

Payday and bill paying is too hectic to think about saving, too.

That's a lot like excuse No. 1. The solution here: Use direct deposit at TCU and your paycheck starts working right away, instead of waiting until you get around to making a deposit. That saves you time and, eventually, saves money, too.

But I'm paying too much on bills to save money.

Well, maybe we can help you there, too. Contact one of our Member Service Representatives and we can discuss loan consolidation options. Sometimes we can reduce your interest rate, and that can reduce how much you owe and how long you'll be paying off the loan. And that, too, can pay off in savings.

The bottom line: The professionals at TCU have the services and skills to help you automate your savings. Call today.

Five Steps to Organizing Your Finances

Do you know your net worth? Or how much you spend each month, and on what? Or how much you can expect from your pension plan or Social Security in retirement?

A no to most of these questions puts you with the majority of the population who have been too busy with life to get a handle on their finances.

Fortunately, there's a five-step action plan to help you take control of your money.

Step One

Set up a financial filing system. Create a personalized filing system by labeling accordion file pockets with broad financial categories. Then label regular file folders with subcategories that fit your situation and file them into the accordion pockets. For example, create a Property & Casualty Insurance accordion file and fill it with a Vehicle Insurance regular file folder.

Step Two

Gather records. Look through your records to identify missing information. For example, you need an estimate of your Social Security retirement benefits. To request one, contact the Social Security Administration at 800-772-1213. Gather copies of your health, disability, life, homeowners, and vehicle insurance policies, and get a copy of your credit report. To order your credit report for free go to http://www.annualcreditreport.com. You can order one free credit report a year from each of the three credit reporting bureaus.

Step Three

Size up your situation. Add the estimated current value of all assets, including your home, car, personal property, savings, investments, and retirement accounts.

Next, add all liabilities, including mortgage, credit card balances, and any other outstanding debt. Then subtract liabilities from assets to figure net worth.

Then, make a list of income and expenses by reviewing paycheck stubs, checkbook register, and credit card statements from the past year. Finally, track spending for a month by saving all receipts or recording cash purchases in a notebook. A spending plan form or money management software program helps organize spending by category.

Step Four

Chart a course. Set financial goals - long-term and short-term - and figure how much money you'll need for each. Create a target saving and spending plan that meets needs using your list of income expenses. For a month or more, track actual spending to see how you're doing, making changes as necessary.

Step Five

Brush up on money management basics. Contact or visit TCU for more information about how to save and spend finances wisely.

Give Your Debts a Financial Health Check

A debt-to-income ratio is a measure of financial stability calculated by dividing monthly minimum debt payments by monthly gross income. This calculation gives a straightforward depiction of your financial position. Typically, the lower your ratio, the better handle you have on debt.

Determining your debt

• Collect your most recent credit billing statements for current balances.
• Outline your total monthly bills using two columns: bill type (such as car loan, mortgage/rent payments, and so on) and monthly payment. Do not include bills such as taxes and utilities in this list.
• Add up the total for all of the monthly payments listed.
• Calculate your monthly before-tax income. If you receive a paycheck every other week, as opposed to twice a month, your monthly gross income is your before-tax income from one paycheck times 2.17.
• Your monthly debt-to-income ratio is calculated by dividing your monthly debt payments by your monthly income. For example, someone with a monthly income of $2,000 who is making monthly payments of $500 on loans and credit cards has a debt-to-income ratio of 25% ($500 / $2,000 = .25 or 25%).

Staying aware of your ratio can help avoid debt reaching a problematic stage.

How Are Credit Unions Different?

Your credit union is a different kind of financial institution. Here are four key factors that set us apart from other financial institutions:

1. You are an owner.
   Members who belong to the credit union are its owners, not merely customers. That's because credit unions are set up as not-for-profit cooperatives.
2. You pay lower loan rates and earn higher dividends.
   Because credit unions are not-for-profit businesses, they return income to members in lower loan rates and higher savings rates.
3. You pay lower fees.
   At the credit union, you'll find low ATM fees, low service charges on checking accounts, and low fees for overdrawn checks.
4. You get extra attention.
   Credit union staff help members toward financial health. We are here to answer members' questions or offer one-on-one counseling.

Share Insurance Rises to Protect Your Accounts

In these challenging days for the national economy, we can relieve you of one potential concern, and that is the safety of TCU and the money in your accounts here.

Your accounts are backed by the National Credit Union Share Insurance Fund (NCUSIF), a fund maintained by the U.S. Treasury and administered by the National Credit Union Administration (NCUA). Federal insurance protects your money in share savings, share draft/checking, money market, share certificate, trust and retirement accounts.

NCUA coverage is to credit unions as FDIC, or Federal Deposit Insurance Corporation, coverage is to banks. Both funds are backed by the full faith and credit of the U.S. government.

And now, passage of the Emergency Economic Stabilization Act of 2008 increases NCUA coverage from $100,000 to $250,000. The increase is temporary, taking effect from October 3, 2008 until December 31, 2009. Funds may be insured for even more than $250,000, depending on how you establish your accounts.

TCU operates with a safety net of capital that helps us weather temporary setbacks. And, we maintain an "allowance for loan losses." This additional cushion anticipates losses when some members fail to repay loans.

TCU can assure you that your money is safe.

Don't Rush Into Bankruptcy

Consider that more than 617,000 Americans filed for bankruptcy in 2006. Some people now have a more casual attitude about bankruptcy, just as some are more casual about getting into debt in the first place. Filing for bankruptcy can be a big mistake.

Many people who declare bankruptcy end up wishing they hadn't. They find out the hard way that:

• Bankruptcy mars your credit record. It stays on your credit report for seven to 10 years.
• You'll have a tougher time qualifying for future credit, such as a home mortgage.
• Not all your financial obligations vanish with bankruptcy.

Bankruptcies touch even closer to home when they involve credit union members. Because credit unions are member-owned cooperatives, the credit union's loss affects all members.

But what if you're snowed in debt? Is there another way out? Yes. Your options:

• Start by talking to a TCU Member Service Representative. We may be able to help you or refer you to someone who can.
• One resource the credit union may steer you to is a nearby office of the National Foundation for Credit Counseling, a not-for-profit organization. Financial counselors can set up a repayment plan to help you pay your debts. They also can act as intermediaries between you and your creditors.

Don't wait until you're in big trouble to seek help. Get financial help early so you don't have to even consider bankruptcy later.

Financial Considerations of a Career Change

The recent economic slowdown has churned up some rough waters for job seekers. But, with preparation and research, you can weather the financial considerations of a job or career change.

• If possible, look for your next career opportunity while still employed in your current position.
• If your new career will mean a significant change in income and lifestyle, start adjusting your spending habits now and sock away an emergency fund of at least three month's worth of bills, house payments and car payments.
• While you're still in your current position, consider buying disability insurance.
• If you're about to hit a vesting milestone with your pension or 401(k) plan at your current job, consider sticking around a few more months to pocket that extra money.
• Once you receive a job offer from another employer, review it with care before signing on. Look at long-range salary prospects and closely examine the benefits packages.

No matter what your career decision, remember you don't have to leave TCU when you leave your job - once a member, always a member.

Laid Off From Your Job? We Can Help.

Being laid off is a scary situation. You wonder if you'll be called back to work, or where you'll find another job, and how you can pay your bills.

Here are some steps you can take to keep it together financially:

• If you don't already make it a habit, start now to account for every penny you spend. What bills are coming due and when? How much must you pay? What's the minimum you can pay? If there's ever a time to cut back, this is it. All nonessential expenses stop. You need your support team so don't turn into a hermit - just substitute low-cost or free outings so you can stay in touch with friends and family.
• Postpone major purchases. And if you receive some severance payment, resolve to make it last. This isn't a good time to splurge on that flat-screen TV.
• Find out about and use the package your employer or government offers. You might be eligible for training - from your old employer or from a state program to help you land a new job, for example. Maybe you'll have access to career and placement services. And you probably will be eligible for unemployment insurance - apply as soon as you're allowed to. Ask about COBRA coverage for health insurance benefits - you will have to pay the premiums but it will mean you and your family can maintain health coverage at group rates.
• Find a part-time job or set up as a consultant, if you have a marketable skill. You will have more options about what job you eventually take if you can plug income gaps in the short term. You'll need most of your time available to hunt for a new job. Think about your interests and hobbies outside of your job; you might be able to turn them into paid work.
• Visit us at TCU. We can help you evaluate your budget, review your debts, and perhaps even make suggestions about consolidating them into a manageable loan. Most of all, we want you to know that we are here to help.

Credit Union Members Enjoy Low Fees

In today's credit crunch, more consumers are fighting back against the high transaction fees charged by their banks. But credit union members have a much more effective way of influencing fees and other charges - as member-owners, you keep fees down simply by using credit union services. The more services you use, the more cost-effective all services become. And credit union fees are low to begin with, because credit unions are not-for-profit cooperatives that return income to members in the form of lower fees and loan rates and higher savings rates.

Here are some examples of how credit unions benefit their members from CUNA's Economics and Statistics 2007 report:

• The average interest rate for a credit card from a credit union was 2.75% lower than a bank's interest rate, 12.23% compared to 14.98%.
• Money market accounts at credit unions earned an average interest rate of 1.92%, while the same accounts at banks earned 1.18% interest.
• Credit unions charged an average credit card late fee of $25, while banks charged on average $39. (Fee averages subject to change)
• Credit union mortgage fees were $1,500 on average, and mortgage fees charged by banks averaged $2,982 - a difference of more than $1,480.

You and other consumers can keep fees manageable by using your accounts appropriately and by using credit union services. Contact TCU about overdraft protection - from your savings or a line of credit - and about service packages that reduce our low fees even more. You're the reason we're here, and we can help you hold the line on fees.

Don't Let Fees Take Their Toll

Consumers are willing to pay for convenient financial services, such as automated teller machine use. But how much is too much?

Some fees finance the research and development of future products and services. Still other fees are used to modify negative behaviors, such as routinely writing checks against nonexistent funds.

But when it comes to fees, you can trace the difference between how many and how much to one major philosophical difference in the way credit unions and banks operate.

Banks are for-profit institutions: The profit motive influences the number and size of their fees.

Credit unions are not-for-profit financial cooperatives. Because there's no pressure from profit-minded stockholders, TCU charges fees to enable us to provide more convenient and useful services for our members.

That explains why credit unions usually charge fewer and lower fees than banks.

How much can members save just by using a credit union share draft or checking account?

Credit union members who open a share draft account usually can do so for free. According to the Credit Union National Association's 2006/2007 Credit Union Fees Survey Report, 75% of credit unions offer free share draft/checking accounts. TCU offers a free share draft account with direct deposit. ($7.00 membership fee & $5.00 initial deposit.)

Credit unions also make it easy - and cheap - to access your accounts. Nearly three-fourths of credit unions that offer access to ATMS participate in surcharge-free ATM networks, which means you won't be charged for any transactions at those ATMS. Even when you need to use an ATM that doesn't belong to the surcharge-free network, the most common fee credit unions charge is $1.00.

Stop by or call us to make sure you're taking full advantage of the credit union difference?before unnecessary fees take a toll on your hard-earned dollars.

Internet Banking Conveniences

TCU loves to see your smiling face. But when you don't have time to visit us in person, how about visiting us online? Internet banking can save you time. You'll no longer have to wait at an ATM to check your balance, and you can view your accounts anytime - not just during hours of operation. You'll be able to check your balance, view transaction records, transfer money between accounts, and communicate with TCU via e-mail.

As long as you have access to the Internet, online banking allows you to contact us from anywhere. It's especially convenient for members who aren't always in close proximity to a TCU service center - those who travel a lot or are away from home - maybe in college dorm rooms.

TCU has years of experience helping members manage their money and protecting their members' privacy and safety, so security and confidentiality play a leading role in our online banking service. We have highly sophisticated encryption procedures in place to prevent unauthorized users from reading confidential information, and following some simple guidelines can also help ensure your safety.

How to play it safe:

• Choose strong passwords of six to eight characters with a combination of upper and lower case letters, numbers, and symbols and keep them to yourself.
• Change passwords frequently.
• Keep personal identification numbers (PINs) to yourself.
• Don't leave account numbers lying around where others can see them.
• Don't ignore security messages - your Internet screen will indicate whether or not you're operating in a secure environment. An "https" - "s" meaning secure - and a padlock indicate a secure connection.
• Install a personal firewall and antivirus software.
• Update antivirus definitions and system patches regularly.
• Contact TCU if you have any problems or concerns.

Representatives are registered, securities are sold, and investment advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA, SIPC, a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free (866) 512-6109. Nondeposit investment and insurance products are not federally insured, involve investment risk, may lose value and are not obligations of or guaranteed by the financial institution. CBSI is under contract with the financial institution, through the financial services program, to make securities available to members.