This segment is brought to you by the Northwest Community Credit Union. Today I'm here with. Hi, I'm Cassandra, I'm an intern at Northwest Community Credit Union. I'm Martin, I'm sophomore and I'm an intern at Northwest Community Credit Union.
That's great, so I have a few questions for you. What is a credit union and what does a credit union offer? So a credit union is basically like any other financial institutions such as a bank. We offer services such as savings and checking accounts, but we also offer credit rates on a wide range of services such as student loans, auto loans or personal loans.
The Northwest Community Credit Union is a non-proper-profit institution. Because of this, we do have more accessible rates and the Northwest Community Credit Union is more particularly appealing to students for this reason. My next question is, what is financial literacy and why does it matter? So financial literacy is about having knowledge of various financial aspects and applying that knowledge to your own personal situation to help you make the best decisions possible for your financial well-being.
Another part to consider about financial literacy is resources that are available to you and how to best use them. So for me, I really enjoyed using our financial literacy modules from our website from the credit union, NWCCU.com. On our homepage, we have like a part there that says get financially fit, which brings you right to the modules and they've been extremely helpful for me. I learned a lot like in a very short amount of time and they cover a wide range of details, you know, things from basic budgeting all the way to home ownership and retirement.
And financial literacy matters because it's something that affects everyone. It doesn't matter what you study in college, what you do for a job or where you live. It's something that is going to affect you directly and everyone should have at least some kind of working knowledge of it. That's great.
Now you mentioned budgeting. What is budgeting and how can someone budget wisely? So budgeting is being able to allocate funds appropriately depending on your own expenses and your income. So a great way to budget is to first analyze how much money you have coming in versus how much money you have coming out.
A good way to do this is to list out everything you spend money on and compare it to how much money you're actually making. Budgeting can help you allocate funds appropriately. That way you don't find yourself overspending or having too much money left over that could be otherwise invested or used on other things to generate even more money. A quick rule that we like to tell students about is the 50-30-20 rule.
This means that whatever money you have coming in, 50% of your money will be used in expenses, 30% of your money will be used on whatever you'd like to spend it on and 20% would be used to save or invest. So to recap, 50% on what you need, 30% on what you want and 20% for your future. This is a nice rule. I'd like to use myself in college.
It's helped me keep my income stable and not feel so tight and feel like I'm overspending or not using my money appropriately. So going off with that question, how can people better plan on how to spend their money on a day-to-day basis? Like Sandra mentioned, a really nice practice is to list out everything that you're buying and figure out from that. What's really essential and what can you maybe cut back on or maybe even cut out altogether?
It can be tough trying to figure out how to save money on a day-to-day basis, but it's definitely doable. It sometimes requires sacrifices, but it's definitely possible, especially if you keep your long-term goal in your mind. An example you can see this is something like eating out. Instead of eating out, let's say seven days a week, you might be able to maybe stay home for five days a week, eat in and then go out at the weekend.
So by doing that, you're still having a bit of fun, you get to go out at the weekend, but you're also saving money during the week and that money adds up and you'd be surprised by how much that can actually end up being. So with everything going on now, how can people stay safe when facing all the security and scam threats that exist? Yeah, that's definitely tough, especially these days, everything being online, but it's just really important to be a smart consumer that's bottom line. But you have to be careful when you're spending your money, but you also have to be careful when you're sending out your information.
So you don't just want to click on random pop-ups that you see on your phone. You also want to be really careful when links come into your phone, whether they're from someone that you know, especially with someone that you don't. And you just want to be off the careful readings through the businesses that you're buying from, see if they're legitimate, you can look them up, you can look up reviews. And you also, you know, it changes the basis, but it's just about being extra careful.
Follow your gut too. If your gut tells you something's wrong, it probably has no follow through. Very true, very true. Now with the holidays coming up, how can people budget during the holidays and how can they budget on a limited income?
I actually started budgeting two years ago for Christmas because I'm part of the family. So very quickly, I had to figure out a way to be able to buy some gifts for my immediate family while not overspending or going over my budget. So something that has worked for me personally used to see how much money I can put aside and to start early. So I start saving three or four months prior to the holidays, have that money just set aside and then easily divide how many gifts I have to buy for each person.
If working with those numbers isn't pleasing, another thing that anybody can easily do on a limited budget is to look for cheaper alternatives. So instead of going to homework for your gift wrap and your cards, holiday cards, it would be more inexpensive to look at the dollar store or anywhere where you can find things for cheaper, making DIY gifts even. This way you are still able to celebrate the holidays but you don't overspend. Also, it's very easy to just open up a credit card, go over and then maintain that debt and in the long run that is really, really bad for you.
So a tip that we like to give out is to stay under 30% of your credit card usage and just monitor that to stray away from credit cards when holidays shopping in order to not overspend. Also, buying your gifts with cash instead of swiping is a quick and easy way to monitor how much money you're actually spending because it is tangible versus swiping where you don't really see the money physically being spent. Financial literacy is a skill that everyone should have some kind of knowledge with. It's also important to know how to budget well and especially with holidays coming up.
Budgeting is super important because you want to have a fun holiday season but also one where you don't lose all your money. But if you can follow some of the tips and tricks that we talked about here today, you can definitely have a really nice holiday season. Don't forget to visit us in our new location. We are located across the street from the word building at Grand School of Management.
You can stop by anytime to talk to myself or Martin for any financial literacy tips or anything you need. Just remember we're here for you. This podcast was brought to you by the Northwest Community Credit Union.