3 Steps for CU Members’ Financial Success

Now is the perfect time to evaluate how your credit union can help your members focus on their financial success and how you can help them accomplish their financial goals. Whether your members have plans to buy a home, pay off debt or build their savings for long-term stability, a little planning can go a long way in ensuring your members are successful.

Here are the top three steps your credit union can coach your members to follow in order to get their finances ready for success.

Coaching Your Members for Financial Success

Step 1: Recommend members check their credit 

Members can go to annualcreditreport.com to download their credit report from each credit bureau for free once per year. If they haven’t checked their credit in the past twelve months, they should use this opportunity to review the reports. This will help your members understand where their credit is and if they have any negative items, such as missed payments, that could be decreasing their score.

Reviewing their credit will help members plan ahead for the year, particularly if they plan on applying for a new loan or credit card. This is also an opportunity for your credit union to help members take steps to improve their score based on the information in these reports.

Step 2: Recommend members review their debts

Members should be proactive and check the current balance and APR of their debts. If your members have credit card debt totaling more than $5,000, recommend that they consider a credit card balance transfer to consolidate the debt at a low-interest rate. If members owe more than $10,000, offer ways that your credit union can help like personal debt consolidation loans or talking to a loan officer at your credit union to discuss options for using equity if they are a homeowner.

Your credit union should also review existing loans and consider if it’s time to refinance for any members. If a member’s credit has improved since they took out the loans, they may qualify for lower interest rates. Lower rates can lower your members’ monthly payment and reduce the total cost of paying off their debt.

Step 3: Recommend members set up a budget

Finally, counsel your members to review their budgets. Ideally, members should only spend about 75% of their take-home income. That gives them plenty of free cash flow to cover unexpected expenses that could come up each month.

Make sure that members have a savings account with your credit union so that they can begin separating their savings from their cash flow. If possible, recommend that members save about 5-10% of their income each month. To hit his goal, members should work savings into their budget as an expense– like a bill that they pay themselves. This will help ensure that your members save money consistently throughout the year.

Learn more about how your credit union can combine professional online education with targeted financial coaching so you can reach more members in a more meaningful way. Watch “Elevate Your Personal Financial Coaching” on demand today.

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KOFE (Knowledge of Financial Education) is the NAFCU Services Preferred Partner for Financial Literacy. More educational resources and contact information are available at www.nafcu.org/KOFE.

 

Developing the Right Strategy to Engage Millennials

By: April Lewis-Parks, Director of Education and Corporate Communications, KOFE.

Millennials (generally defined as age 18 to 34) are quickly becoming the largest consumer segment in the U.S. They outnumber baby boomers by 11 people. However, despite their numbers, Millennials struggle to achieve financial independence. They are among the least likely to engage with traditional financial products and services. So, what can credit unions do to bring this generation into the financial fold?

The financial experts at KOFE: Knowledge of Financial Education captured this dilemma in a new infographic, “Millennial Money: Banking and Credit Fear.” As you can see, it details the challenges facing credit unions that are eager to engage America’s largest consumer segment.

The biggest roadblock to millennial product engagement is the inherent mistrust of financial institutions. Many believe big banks played the largest role in causing the Great Recession, and they don’t have the knowledge to differentiate those organizations from smarter alternatives, like credit unions. As a result, they lack an understanding of how traditional financial products improve their ability to manage money effectively.

Nowhere is this more apparent than with millennials use of basic checking accounts. Nearly one in four millennials say they will never open a bank account. However, more than half that number say it’s because they don’t have enough money to keep the account open. That points to a lack of knowledge about accounts that offer no minimum balance requirement and protections to avoid overdrafts.

Education is often the key to fostering more engagement. By increasing awareness of credit unions’ member-centric culture and educating consumers on the benefits offered by traditional financial products, credit unions can overcome millennials’ reticence.

This is the driving principle that led the certified credit counselors of Consolidated Credit to create KOFE, developing an out-the-box platform that can be used by partners, such as credit unions, to educate unbanked and underbanked individuals, particularly millennials. Using a third-party platform allows credit unions to engage in effective outreach, without diverting revenue into developing in-house education systems.

For an in-depth conversation about how to use financial education to capture your members’ attention watch KOFE’s webinar on demand now.

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KOFE (Knowledge of Financial Education) is the NAFCU Services Preferred Partner for Financial Literacy. More educational resources and contact information are available at www.nafcu.org/KOFE.

 

Equifax Data Breach: What to do now to Safeguard Your Information and Avoid Being Scammed

By: April Lewis-Parks, Director of Education and Corporate Communications, KOFE

The latest big data breach has been reported all over the news and you might be wondering what to do or how it may affect you.

Equifax has been breached and it’s said that 143 million U.S. consumers could be affected.  Cybercrime is becoming more prolific and you need to protect yourself.  We strongly suggest that you consider freezing your credit as a precaution.  Contact each of the credit reporting agencies individually. Their contact information is:

Equifax — 1-800-349-9960 or https://www.freeze.equifax.com/Freeze/jsp/SFF_PersonalIDInfo.jsp

Experian — 1-888-397-3742 or https://www.experian.com/freeze/center.html

TransUnion — 1-888-909-8872 or https://www.transunion.com/freeze

You’ll have to provide your personal information and pay a small fee, except from Equifax who is providing the freeze for free since they were breached.

After they receive your freeze request, each agency will send you a confirmation letter containing a unique PIN (personal identification number) or password. Keep the PIN or password in a safe place as you will need it if you choose to lift the freeze, for example, to refinance your mortgage or take out an auto loan, etc.

By freezing your credit, you will block anyone from accessing your credit, which should prevent thieves from taking out credit cards in your name.

Freezing your credit will not prevent all identity theft.  You may also want to consider subscribing to a trusted company that specializes in protecting identity. For example, LifeLock is currently offering a 10% discount in addition to a 30 day trial on their Identity Protection products.

Precaution is the best way to approach these uncertain times and it is important to take control of what you can.

And be wary of scams connected to the Equifax breach.  People have been calling consumers trying to trick them into giving them their personal information. Here are tips for recognizing imposter scams and things to do if you are called:

  • Don’t give out personal information. Don’t provide any personal or financial information unless you have initiated the call and it’s a phone number you know is correct.
  • Don’t trust caller ID. Scammers can spoof their numbers so it looks like they are calling from a particular company, even when they’re not.
  • If you get a robocall, hang up. Don’t press 1 to speak to a live operator or any other key to take your number off the list. If you respond by pressing any number, it will probably just lead to more robocalls.
  • If you’ve already received a call that you think is fake, report it to the FTC.

The KOFE financial wellness portal has additional information to help you prevent identity theft and learn how to protect yourself.  www.kofetime.com

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KOFE (Knowledge of Financial Education) is the NAFCU Services Preferred Partner for Financial Literacy. More educational resources and contact information are available at www.nafcu.org/KOFE.