Tuesday, September 29, 2009

Picking An Executor Or Guardian

 A lot of people don't like to think about picking their executor or guardian, but the reality is that by doing this work yourself while you are healthy you will save your family/friends a lot of work and grief when you might not be so healthy.

Taking care of your will/estate plan is an act of caring for your loved ones.  By doing it yourself, you are saving them from trying to guess what you want done or even prevent fighting amongst family members.  As bad as that sounds, I've seen family arguments because someone didn't leave a will, more than once, and it ends up devastating a family already going through a tough time.

The blog Thicken My Wallet has an excellent article on how you should choose your executor or guardian.  Take some time to read it, as it could be very important to how you care for your family after you are gone.


Monday, September 28, 2009

The Cost Of A Wedding

The average wedding in Canada costs $26,000.

I know that as a rather frugal guy that many may disagree with me, but I believe that $26,000 may be a little too much to spend on one day.  I have been happily married for over 12 years now, and we had a fairly simple wedding, but we had a lot of friends and family celebrate it with us in a pretty simple setting.  Our total cost was under $4,000.  I have trouble picturing starting off married with the added debt of a super expensive wedding, or saddling any parents with those costs.  We had enough debt with student loans that we sure didn't need to add more to it.

But for those who are planning for the big weddings, the following 2 links can help you control and even reduce your costs.  Always remember that as important as that one day is, all the days after it are even more important.

Get Rich Slowly site
Canada.com article


Thursday, September 24, 2009

Strategies That Beginning Investors Should Avoid

Mr. Cheap, who has a blog called Four Pillars, has written an article about investment strategies that beginning investors should avoid.  A lot of it comes down to 2 good pieces of advice:
1.  If it sounds too good to be true, then it probably is.
2.  Don't invest in an investment product or industry you don't know.

I would throw in a third piece of advice based on some experiences of people I know:
3.  If the investment is based on a secret or global conspiracy (New World Order), you are more likely to make someone else rich than yourself with your investment.  Enough said on that here.

Check out the more detailed article at Four Pillars.  http://www.four-pillars.ca/2009/09/17/beginning-investment-strategies-to-avoid/ 
Keep your investments safe

Wednesday, September 23, 2009

15% of parents are saving for kids education over retirement

Good article by Jonathon Chevreau of the Financial Post about saving for retirement and children's education at the same time.  Some scary stats about how many are saving for neither one of those.


Investment Planning 101

For some, retirement may seem like years away. For others, it may be right around the corner. Regardless of where you are, it’s still important to take control of your finances and start right now. If you invest even a small amount each month—say, $25 per week—you can accumulate a lot! If you wait, it could potentially cost you lots of money later.

If you start to invest in your 20s and invest $100 each month for just 10 years, then you will have a bigger nest egg than someone who invests $100 per month from age 35 to age 65!

No matter how old you are, if you're just starting to plan and invest for your retirement, you'll need to consider several things:
  • Your time horizon
  • Your risk tolerance
  • Your goals and objectives
  • Establish an Emergency Fund 

Your Time Horizon

If you're just getting started, you most likely have a while to go before you retire. The longer your time horizon, the greater your chances of reaching your retirement savings goal. Why? Because time gives compounding—earning interest on your interest—a chance to work. And, it gives long-term investors a chance to recover from market downturns.

Your time horizon also helps determine the amount of risk you can take on comfortably. The more time you have before you need your money, the greater the level of risk or volatility your portfolio can withstand (because you have years to recover). Volatility is inevitable, since markets tend to move in cycles. But the longer your time frame, the more volatility you can handle.

Risk Tolerance

To seek greater rewards–such as a higher investment return–you must be willing to accept greater risk. If you wish to reduce risk, you must be willing to accept lower returns. A diversified portfolio may help seek a higher long-term return and keep your risk relatively low. The key: find a comfortable place on the risk/return spectrum. You can accomplish this through diversification and asset allocation.

Goals and Objectives

Maybe you want to save for a dream home or your child’s education. Perhaps you just want to have a nest egg for a rainy day. Once you specify your goals and when you’d like to reach them, it’ll be easier to develop a financial plan.

Establish an Emergency Fund

It's very important to have some money set aside in case of an emergency. Experts recommend three to six months’ worth of expenses in cash or a relatively liquid investment like a money market fund. This money can help get you through emergencies or other times when you might be tempted to dip into retirement savings to get by.

You can find a more detailed article on our website at  http://rockycreditunion.com/default.aspx?PageID=1084

Friday, September 18, 2009

Debt Is Way Too Easy?

"Don't Pay for 14 months!!  No Money Down!"

My kids can practically quote some of the TV commercials that have pitch men shouting slogans about how cheap everything is and that you should get it now.  Especially the vehicle and furniture retailers.  Those ads are on all the time.  I have to turn down the volume just so I can think. Maybe that's a part of their advertising gimmick, making only their sales slogan stick in your head and erase all the other ads.  Who knows?  I think it might work on my kids.  To them, getting the item is far more important than thinking of how you might pay for it.  They would be quite happy to borrow money for every little thing that comes up on TV.

Debt itself is not a bad thing.  In fact it can help us purchase things that just cost too much to realistically have saved for before we buy: ie. a house, vehicle, or education.  So for those things most of us have to borrow money, and it's worth it to have a mortgage so we can have a house..  But there are things where borrowing money doesn't really make a lot of sense.

For instance, if you pay for a computer on credit card and make low monthly payments on your card, you will probably have to replace the computer before you have even paid it off.  That's probably not a good thing to borrow for and pay back over 7 years.

The smart people at Wealth Web Gurus have a very good article about "Good Debt vs. Bad Debt."  It describes how debt can help you and when it isn't good for you.

The Financial Post has an article about how easy it is to get into debt.  The author, Gary Marr, thinks it is a little too easy to get into debt.  "Debt Becomes Us."

Using debt wisely can help everyone over the course of their life.  Use it unwisely and you'll end up with a whole lot of letters and phone calls, maybe even some guy named Vinnie knocking on your door at midnight, asking for the keys to the car.  Nobody wants that.

My own advice about debt is:  If you have to borrow for it, the value of the item should last longer than the loan.

Thursday, September 17, 2009

Text Banking is coming soon

I just wanted everyone to know that we are currently testing our banking system with a very cool new service: Text Banking!  Pretty soon you will be able to get your account balances texted to your cell phone.  You can even get the last 5 transactions sent as well!

We're pretty excited about it.  When you consider our awesome online banking system and combine it with remote (telephone) banking and text banking, I have to say that our members can do their banking from pretty much anywhere.

Keep an eye on this blog or our website for when and how you can sign up.

We're reaching out across the world.  Not bad for a Credit Union based in a small town in Alberta.

Scams & Fraud

We have seen a rise in the number of attempted scams over the past year, and we really want our members to protect themselves from these crooks.

The most common scam that is hitting our members right now is called the Cheque Overpayment Scam.  This is how it works:

You are selling something through an internet site or the newspaper classifieds.  The purchaser sends you a cheque that is larger than the amount needed.  When contacted, the buyer blames the secretary or accountant and says you can cash the cheque and send the difference by money order or official order.  You go ahead and do this, mailing the money order right away.  Their cheque then bounces, but you are out the difference of the money order amount.

We have seen this for supposed purchases of items from less expensive items like speakers all the way up to a motorbike.  As long as the crooks can make money off of it, they will try it.

You can go to our website Scams page at http://rockycreditunion.com/default.aspx?PageID=1090  for information on other scams that keep popping up.

Keep your money safe.

Thursday, September 10, 2009

What does college and university cost?

We get this question quite a bit, especially in the fall when parents and grandparents are thinking about school.
The Edmonton Journal has a good article explaining the costs of education.  For 2009, the articles says that university tuition and books will cost about $6,500 a year, around $4,000 in personal costs, and another $11,000 for room and board if the student lives away form home.  These are general costs and will vary depending on the college and lifestyle.


So that cost comes out to about $22,000 per year, and that's if the student lives moderately.  While there are Government Student Loans, and every financial institution has student loans (including us and our very good education loan), it's a lot better for the student to avoid all that debt by saving the money before school.  The best way to do that is through the Registered Education Savings Plan or RESP.

The basics of  RESPs are:
  • You can open an RESP as soon as the child is born. 
  • The money in the plan grows tax-free and the government offers special savings incentives (from 20% up to 40% depending on family income)
  • When the child enters a qualified educational program at the post-secondary level, he or she can start drawing on the accumulated savings. 
  • Only the child will pay taxes on the money he or she withdraws. Since many students have little or no other income, they usually don’t have to pay much, if any, tax when they withdraw money from their plan.
You can talk to one of our Member Service Representatives to find out more about RESPs or you can visit the following government website for more details about this very good program.


Welcome to RCU Speak

This is my first posting on the RCU Speak blog. My name is Jerry, and I am responsible for our main website at www.rockycreditunion.com and for this blog. Our website is the place to go for information about our products, but we figured it would be nice to have a less formal way for our members to ask us questions and hear about the latest news.

We will use this blog to warn people about scams, new technology, the best way to take money on trips, and to respond to questions about our own services and even the banking industry in general. Hopefully you can use this blog to learn more about various financial matters, making you a better consumer and investor.

For the credit union, we will try to answer questions and respond to any concerns quickly and effectively. We rely very strongly on the word of mouth of our members, so we hope this can be another way for our members to communicate with us.

To better financial management