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IN THE ISSUE:
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118 Brushy Creek Road Easley, SC 29642 1025 Pulaski Street Columbia, SC 29201
Member Service Center
Greenville: 864.232.5553 Nationwide: 800.922.0446
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Columbia Office
Letter from the Executive Vice President
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Events & Community
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In the Spotlight
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24/7/365 SERVICE MONEYLINK℠ Online at sctelco.com
MONEYLINK℠ Audio Response Greenville: 864.232.3645 Nationwide: 800.633.4364
Members Financial Services
To Buy or Not? WHEN WILL A NEW CAR BE RIGHT FOR YOU?
What We Read THE ANSWER TO HOW IS YES: ACTING ON WHAT MATTERS
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YOUR PERSONAL FINANCES
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Taxes 101: Should I Do My Own or Hire a Professional?
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The Top 5 Tips to Prepare Financially for A Baby
Money Matters with Moxie FOUR WAYS TO KEEP THE “FUN” IN REFUND
SIMPLE STEPS TO IMPROVING
Gary Williams: 888.746.0002
Visit our website sctelco.com to locate an ATM near you!
FIND US ONLINE SCTelcoFCU @SCTelco_FCU @sctelcofcu sctelco.com
This credit union is federally insured by the National Credit Union Administration. SC Telco is a proud member of the Credit Union Service Center Network. co-opcreditunions.org SM
Copyright ©2019 by SC Telco Federal Credit Union and The Brand Leader. All foreign and U.S. rights reserved. Contents of this publication, including images, may not be reproduced without written consent from the publisher. Published for SC Telco Federal Credit Union by The Brand Leader. SM
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Oh, Forbes, you shouldn’t have! (But we’re really glad you did!)
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Dear Members, As we begin another new year, it’s easy to look toward the future. But resolutions are hard to keep—especially resolutions that require financial constraint. There are many reasons it makes good sense to use this year as the opportunity to start creating a better financial future. For one, recent statistics show that the majority of Americans—70 to 80 percent, in fact— couldn’t cover a $1,000 emergency without serious financial implications. And future plans like covering college or weddings, or simply planning for retirement? They’re even further away.
LETTER FROM THE EXECUTIVE VICE PRESIDENT
The New Year represents a great time to take stock of where you are financially—especially since most of us are likely to have overspent during the holidays. The good news is that, similar to your healthy eating resolution, you can create a financial “diet” that makes sense for you. Just because you lived a certain way in 2018 doesn’t mean you have to keep things that way. You can set goals and achieve them that will put you on the path to stronger fiscal returns. First, start wherever you are, create a plan, and take it slowly. Financial wellness is a long-term venture, so don’t worry about doing it all at one time. Just pick a small goal, save toward it, and then go from there. It’s unrealistic to expect that you’ll go from living month-to-month to having a year’s worth of savings overnight, and if you don’t manage that expectation, you’re likely to become discouraged—fast. Specifically, there are two things coming up that you can include in those plans—your tax return, and your IRA. In the case of the former, make your plans now for how you will utilize your tax refund to get you closer to your financial goals, so that check doesn’t end up in a shopping spree with little to show for it. In the case of your IRA, remember that you have until April 15 to make contributions for the previous year. It’s a benefit many don’t take advantage of, but can mean real progress toward your retirement plans.
Brian McKay EXECUTIVE VICE PRESIDENT
Whatever your plans include this New Year, SC Telco is here for you. Whether your 2019 plans include a new car, new addition, more savings or a better budget, please let us know if we can be of any service to you as you reach for your goals.
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EVENTS & C OM M U N I T Y
20 Headed SC TELCO H O L I D AY CLOSINGS
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01/01 TUESDAY
M A R TI N LUTH ER KI N G JR . DAY
01/21 MONDAY
PR E SI D E N T ’S DAY
02/18 MONDAY
to College? A P P LY N OW F O R A C R E D I T U N I O N S C H O L A R S H IP!
Louis C. Addison Memorial Scholarship For our members who desire to pursue higher education through college or university, our annual scholarship opportunity is currently open. Each year, through the Louis C. Addison Memorial Scholarship, SC Telco awards three members each a $3,000 scholarship toward their college degree. Qualifications: • Must be SC Telco members in good standing • Must be at least a graduating high school senior • Must be enrolled in higher education organization How to apply: • Visit sctelco.com/scholarship for more information • Submit application by February 1, 2019. Have questions? Contact Andrea Finley at afinley@sctelcofcu.org.
Carolinas Foundation Scholarships Scholarships provided through the Carolinas Credit Union Foundation are based on academic and financial need, and are provided to members of credit unions in North and South Carolina. Members may be eligible for multiple scholarships through the foundation and its member credit unions. Qualifications: • Must be a member of a North or South Carolina credit union • Must have a non-weighted GPA of 3.0 or higher • Must be enrolled as a full-time student in order to accept How to apply: • Complete the application at webportalapp.com/sp/login/ccuf18 • Submit application by February 1, 2019. Have questions? Contact Lauren Whaley at lwhaley@ carolinasfoundation.org. 4
IN THE SPOT LIGH T
IN THE SPOTLIGHT Lasonya Webb |
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STYLIST LOUNGE OWNER
here are many reasons that access to capital is such a big deal for small businesses—providing relief from
cash flow crunches, or a boost when big purchases are needed for the company. Small business loans are also valuable for planned growth, and when Lasonya Webb opened her business, the Stylist Lounge, in 2011, she approached SC Telco about getting a business loan. Through working with Mark Normington, a Business Services Manager with the credit union, she discovered that there were a number of things she still had to put into position in order to qualify for a small business loan, and immediately got to work. Lasonya was diligent—while she saved up money for a down payment on her own commercial property to house the Stylist Lounge, she rented space in Duncan to keep the business up and growing—an amount that rang up at around $1,400 a month. Over time, Lasonya was able to continue to grow the business, staying in touch and working with Mark to make sure she stayed on task to reach her goals to finally get her own place for her small business. She continued to work and save, pushing her role as an entrepreneur to the limits in search of attaining her business goals. In 2018, after years of hard work and focus, Mark and Lasonya were able to move forward, close on her small business loan and finally, Lasonya was able to purchase her own building. The commercial real estate loan provided affordable options and low fees, and not only that, but her new loan payment of only $322 a month provides a huge savings from her rent payment—which is more money she can put back into the business to keep it thriving.
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For seven years, Lasonya has worked hard to grow her business. Assisting her in financing the purchase of her own building and seeing SC Telco’s mission statement at work—to improve the financial lives of the members we serve— is incredibly rewarding. — MARK NORMINGTON
SC Telco Business Services Manager
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Do you have a story you’d like to share? Send it to Jessica Baker at jbaker@sctelcofcu.org.
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CAR LOAN S
To Buy Or Not? When Will A New Car Be Right For You? There comes a time in every car owner’s life where they start asking the question: when do I trade up?
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CA R LOA NS
Almost always, the cheapest car to own is the one that’s already sitting in your driveway, but there are other reasons a new car might be the best choice for you. When To Keep What You’ve Got It may seem like everyone on the road has a newer, nicer car than you—but that’s not true. The average age of cars on the road is 11 years, which is much higher than most people believe. The financial reasons for keeping your current car are numerous, with the most compelling reason being to avoid paying excessive depreciation. New cars depreciate most rapidly within the first five years. In fact, according to Consumer Reports, a new car worth $34,000 will lose over two-thirds of its value in the first five years, assuming an average of 12,000 miles driven per year. This standard depreciation means that you are likely to be upside-down in your car loan for the first few years, putting you at increased risk should you total your car or get into a financial situation where you need to sell. However, you can avoid paying as much depreciation by buying used. You can decrease your risk by purchasing GAP insurance or putting down a higher down payment on your purchase.
Signs That It’s Time to Get Something New There are cases, however, where buying a new car (or a late-model used car) makes more financial sense. Here are the top three signs that it’s time to replace your current car:
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Your current car isn’t safe. This is the number one reason you may consider trading up-even if your current car still runs well. Not everything in life is about finances, and you should always buy the safest car you can afford. At minimum, it’s recommended that your car have Electronic Stability Control (ESC) and curtain airbags. Fortunately, most cars built within the last decade should have both, so finding a late-model used car with these features isn’t difficult.
Your current car doesn’t fit your lifestyle anymore. Money isn’t the only consideration when deciding whether or not to upgrade your wheels. Before making the decision, we recommend taking a good look at your household and your current lifestyle. What is your work commute like? How many kids do you have and how old are they? How long until they start driving themselves or head off to college? You may find that the truck you loved as a single person no longer works for you, or you no longer need a minivan or SUV now that the kids have their own cars. Even if your car is in good shape, it may be time to shop for a new car if it no longer works for your needs.
Your current car would cost more to fix or maintain than it’s worth. Let’s say you’ve driven your car for 12 to 15 years, and now it needs a new transmission that will cost you several thousand dollars. If you don’t know what to do, there’s a simple financial formula to help you out. Check your car’s Kelly Blue Book Value. If the fix would cost more than your car is worth, it’s best to take that same money and use it as a down payment on a new or late-model used car. Likewise, if your monthly maintenance and repair bill is more than you’d pay for a monthly car payment, then it’s obviously time to start shopping.
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RESO U RC E S
WHAT WE READ
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Synopsis:
A Special Takeaway:
At the beginning of The Answer to How is Yes, you’ll find this quote: “Transformation comes more from pursuing profound questions than seeing practical answers.” It mirrors the book in its entirety—a book that tackles our “how to” culture head-on with a challenge on what is truly important in life. Instead of asking these “how” questions, Block suggests seven “yes” questions—which gauge your personal and financial investment level, your level of desire, and points of pain that the idea may bring to the surface.
When our team read this book, one thing jumped out to all of us, and that was the concept of finding out if it’s worth doing before you figure out how to do it. The how can be figured out later, and once you have an affirmative to move forward you can be sure that you will figure that part out. But don’t let the “how” stymie you and your team from exploring the true question—if it’s worth doing at all.
Why Read It:
The Final Word:
According to Block, when we ask the question “how,” what we are really looking for is reason to do it. It becomes a defense against risk and greatness, instead of a true definer of how something can be accomplished. From the cover, that inspires a zen feeling of being able to achieve the impossible, to Block’s insights throughout the book, The Answer to How is Yes does not disappoint. As Block says, “The Yes questions transform our inquiries into a deeper, more intimate discussion of why we do what we do. They bring us to the larger question : How will the world be different tomorrow as a result of what we do today? This kind of question brings our purpose into focus.”
Readers of all types may enjoy The Answer to How is Yes, but it’s an absolute must-read for anyone trying to lead a team of people to do bigger, better things, and get out of the pattern of making excuses not to do so.
RE SOURCE S
MONEY MATTERS WITH
GET MORE OUT OF YOUR TAX RE FUND
Four Easy Ways to Keep the “Fun” in Refund Stop me if you’ve heard this one—or experienced it for yourself: After doing your taxes and realizing you’ll get a refund, you spend a few weeks dreaming about everything you’ll do with your financial “windfall.” When the money finally arrives, you deposit it in your checking account and gaze adoringly at the too-good-to-be-true balance. But instead of following a spending plan, you decide to take a little budgeting break. Then, before you know it, the extra money is gone. Sound familiar? Yeah. Been there. Done that. Learned my lesson.
If you want to make the most out of your tax refund, follow my four favorite tips:
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Establish an emergency account. First things first, set aside $1,000 in a rainy-day fund. That should be your top priority. Yes, even before paying off debt. Pay down debt. Do you have high-interest debts? Pay them down with that refund! Start with your lowest balance and pay it off first. Then, move to the next smallest debt. And so on, and so on. Make a major purchase. Your refund can provide you the opportunity to address some deferred maintenance issues that will protect your investments, make you safer, or improve the quality of your life. Treat yourself. You have worked hard all year, so reward yourself with a little self-indulgence. Take a spa day. Splurge on that accessory you’ve wanted. After being smart with your money, you’ve earned it!
Learn more & see Moxie in action: sctelco.com/MeetMoxie
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Personal Finance Simple Steps to Improving Your Personal Finances
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inancial struggles? No one wants those. Knowing how to avoid them does not come naturally to everyone. Some people are gifted with numbers and managing money, and others studied finances and banking in college. But most of us have had to learn through some hard life lessons and could really benefit from some fundamental teaching and financial coaching. There are critical habits that most financial wizards practice. Incorporate these into your own money-management plans and you will soon be well on your way to stronger personal finances.
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FIVE HABITS YOU CAN START TODAY TO
Improve Your Financial Situation ONE
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Start with a budget.
Track your spending.
If you are one of the majority of Americans who live in a financial free fall, which is to say, you are not living by a budget, then establishing one now is a critical first step. If you don’t keep track of your spending, you may not understand why your wallet always seems empty. Having a plan for how and why you are spending your money helps you feel secure and in control, even when you’re financially stretched.
Armed with your new budget, you are ready to keep tabs on where your money is going. If your income is plenty for you and your family and things are rarely tenuous or tight, then you needn’t worry about tracking every impulse buy and visit to the drive-thru. On the other hand, if you find you are regularly running out of money before you run out of month, it is probably time to pay closer attention and identify leaks in your spending.
Beef up your emergency savings.
This doesn’t need to be complicated. You just need a straightforward, easyto-follow system for tracking your income, spending, and savings.
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In any case, you can track your spending the old-fashioned way, with pen and paper, or there are some great online tools and apps that do the work for you. For your SC Telco Checking Account, you can use MONEYLINK℠ Online, which shows you how much you’ve spent for the week and the month, how much you’ve deposited, and even breaks your spending into categories such as eating out, paying bills, shopping, etc.
Nobody ever plans for their water heater to blow, but these things happen—to all of us. It feels terrible to be stuck with a bill you have to pay that you can’t afford and didn’t see coming. This is the importance of an emergency fund. When these things happen (and it is a when, not an if), you can handle it without throwing off your budget or going into debt. In fact, most experts would say that putting aside at least $1,000 should be your first priority, ahead of all other improvements to your financial health. Long term, aim to have at least three months of expenses set aside. For most people that can take some time, but it’s an important goal to work toward.
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S IMPL E STEPS TO IM PR OVIN G YO UR PER S O N A L FINA NCE S
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Tackle that debt.
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Debt free is the new rich—there’s a lot of wisdom in that maxim. Today, Americans are relying on credit cards more than ever, with a total of $931 billion in credit card debt nationwide. That kind of debt comes with a certain amount of stress, not to mention the cost of high interest rates. We can be pretty sure no one ever regretted getting out of debt. It is a great goal. If you can only manage your minimum payments each month, so be it. But understand that paying only the minimum will get you out of debt at a snail’s pace and cost you more in interest. Challenge yourself to pay more than the minimum each month, even if it is only a few dollars extra. Do the same for other loans like your mortgage, car loan, and student loans. Over time, you really see the difference in your shrinking debt. Once you are debt free, you will love the freedom and security it affords you.
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Develop a savings plan that includes retirement.
There is an old Chinese proverb that says the best time to plant a tree was 20 years ago—but the secondbest time is today. Few of us have saved as much as we “should” or wish we had, but don’t let that fact shame you into not investing in your future starting right now. Also, it is never too soon to start saving for retirement, but it is never too late either. Whatever you can do to start making your money work for you (instead of the other way around) is worth doing. One of the most important things about saving is making a habit of it. Plan and schedule it regularly. Consider ordering bi-monthly transfers from your checking into your savings. You’ll be surprised how even $25 every couple weeks adds up.
Today is a fine day to get to work on practicing these key personal financial principles. If you are not sure where to begin, or you are ready to open a savings or retirement account, give us a call and make an appointment with a service specialist. We are here with you for the long haul, supporting you as you build and improve your long-term financial health.
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MONE Y M AN AGE M E N T
TAXES 101
SHOULD I DO MY OWN OR HIRE A PROFESSIONAL?
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aving to pay taxes stings enough, so it is only natural to want to save money when it comes to paying for tax preparation. Who wants to pay an extra couple hundred bucks for the privilege of sending our hard-earned dollars to Uncle Sam? In reality, you only have two choices when it comes to preparing your taxes: either do it yourself—aided by tax preparation software—or, you can pay someone to prepare your taxes for you.
When to Do Your Own Are my taxes going to be pretty simple? If you are not self-employed, don’t have multiple freelance jobs sending you a stack of 1099s, don’t have lots of assets, business deductions, charitable contributions, or a long line of dependents, then you can probably handle the basic forms yourself. Most tax preparation software navigates you step-by-step through the forms, eliminating line items that don’t apply to you along the way. Am I patient and methodical? If you enjoy pushing up your sleeves and embracing a good challenge, then you might actually like preparing your own taxes—as well as the additional savings. Pop up some popcorn, put on your favorite playlist, and get to it.
When to Hire a Professional Do I anticipate complexities with my taxes? If you have multiple 1099s or own your own business, that’s reason enough to hire a professional—things can get complicated quickly with the various forms and rules for different types of employment. Itemizing your deductions instead of taking the standard deduction makes for more complex tax preparation as well. In addition, if you’ll be reporting lots of assets and charitable contributions, or things like alimony or investments, then hiring a professional could reduce the likelihood of your getting audited and may decrease the amount you owe or increase your return. Have I had any major life changes this past tax year? Did you get married or divorced? Welcome a new baby into your family? Start a new job—lose an old one? Any of these major changes—and others—can trigger a change in filing, and professionals are equipped to help you identify those things and make sure they are correctly included on your tax return. Does my household income exceed $200k? Financial security is a wonderful thing, but it also means your chances of getting audited by the IRS are higher if your household income is north of $200k. Hiring a professional tax preparer can ensure that all of your documentation and paperwork is in one place in case of an audit, which will minimize the disruption.
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K ID S & M ON E Y
for
The Top 5 Tips to Prepare Financially
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lthough having a baby may be a joyful time, there are the expected stressors of sleepless nights, colic, spit-up on the new couch, changing schedules, and remembering the diaper bag when you leave the house. With that in mind, anything you can do to prepare for the financial implications of adding a member to your family will make everything else feel more manageable by not adding money worries on top of them.
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K I DS & MONE Y
So, in between baby showers and child-birthing classes, make time to consider these five common baby expenses:
1. Birth-Related Medical Expenses Having a baby is likely the biggest medical expenditure for couples in their childbearing years, when the average cost of having a baby in the United States is over $10,000. There are many variables that affect the bottom line, and while most couples cannot save up all the necessary cash to cover all of these expenses, you should definitely educate yourself ahead of time about your health insurance coverage and do your homework on your birthing options. Then, try to save a little each month toward this expense.
2. Parental Leave If you’re like most new parents, you’ll plan to take some time off from work when your baby arrives, and your spouse may want to take leave, too, so that they can help with the transition as well. Unfortunately, maternity and paternity leave are not a guarantee in the United States, so you’ll want to look into your employer’s policy about time off long before the birth.
3. Child Care After you have your precious baby, somebody has to tend to her every day, and it won’t be for free. Childcare is often the single biggest expense a family incurs while raising young children and, in many cases, the cost of childcare for the average two-parent, two-child household exceeds the cost of housing in 500 out of 618 U.S. communities. Unless grandma is waiting in the wings, you’ll either need to invest in a reputable day care facility, hire a nanny, or stay home with him yourself, which might mean giving up your current income.
4. Upfront Costs for Baby Needs Let’s face it, who doesn’t swoon over tiny little baby booties and enjoy testing rocking chairs for comfy bedtime stories? It’s easy to get dreamy about baby gear, and clever marketing entices you and can blur the lines between wants versus needs—especially when it’s for your kids! Do a little research into what you’ll really need for your baby over the course of the first year. Focus your registry on those items, and consider sharing with friends and loved ones that you prefer help in acquiring those things over fun but unnecessary toys and gadgets.
5. How Your Monthly Budget Will Shift This might be one of the tougher categories because of its more long-term nature and how it evolves over time. According to the U.S. Department of Agriculture, the total cost of raising a child is just shy of $250,000 to get your kiddo to adulthood, and the needs of a child from one year to the next generally means more money each year. Start by sketching out some budget changes long before baby arrives on the scene. Ask yourself what the possible needs are, and add that to the cost of food, clothing, and health care. 17
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