July 1, 2019

Financial wellness: establishing an emergency fund

First the car broke down, then the dishwasher stopped working, and now the dog is sick. Sometimes the old proverb, “It never rains but it pours,” seems to ring a little too true. When you need money to pay large, unexpected bills, where do you turn?

Many people use credit cards or borrow from their retirement savings plan when they have a cash crunch. But those aren’t the healthiest choices. One step toward achieving financial wellness is having an emergency fund to use for unanticipated expenses.

Easy Often Equals Expensive

It’s easy to use a credit card to pay for a car repair or a trip to the vet. But if you don’t pay off the credit card bill right away, interest will be added to your balance. After a few months, you could be carrying a large balance that becomes a financial burden in your life.

Hands Off Plan Money

When you have a large expense, you may be tempted to turn to your retirement plan account balance. After all, it’s your money that you’ve saved. However, borrowing from your plan (assuming the plan permits participant loans) may not be a smart choice. The money you take out of your plan will no longer be invested and benefiting from potential tax-deferred growth. And you will have to pay back the loan. If you aren’t able to contribute to the plan while you are repaying the loan, your retirement savings could suffer. If you make a withdrawal instead, it will be subject to ordinary income taxes plus, if you are younger than age 59½, an additional 10% tax for early withdrawal.

Building Your Emergency Fund

Your goal should be to set aside three to six months’ worth of expenses in an account that you can access when needed without paying penalties, charges, or termination fees. That amount may seem daunting, but saving even a small amount each month can help you build your fund. Cutting back on your out-of-pocket spending can free up money you can set aside in your fund. And consider putting a portion of any bonus or raise you receive in your emergency fund to help build it up more quickly.

Emergencies Only

You should use the money in your fund only for financial emergencies, not for things like vacations or non-emergency home renovations. And any time you take money out of your fund, make sure you replenish it as soon as possible so you’re prepared for the next unpleasant surprise.

Have more questions?

Consult your benefits administrator or advisor for guidance on the option that’s most appropriate for your individual circumstances. To get started call (616) 234-6358 or visit LMCU.org/Investments.



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Not NCUA Insured. No Credit Union Guarantee. May Lose Value.

Securities and financial planning offered through LPL Financial, a registered Investment Advisor, Member FINRA/SIPC.Insurance products offered through LPL Financial or its licensed affiliates. Lake Michigan Credit Union and MaxWealth Management are not registered broker/dealers and are not affiliated with LPL Financial.

Awards


Lake Michigan Insurance Agency, a part of LMCU, has been named a top ten for Highest Personal and Commercial Growth by Auto-Owners® Insurance.

Lake Michigan Insurance Agency (LMIA) is proud to announce its recognition as one of West Michigan’s top ten for Highest Personal and Commercial Insurance Growth in 2018. Auto-Owners celebrated all of the top ten agencies with a lunch and reception this past May. Lake Michigan Insurance Agency is honored to be counted among West Michigan’s most trusted, fastest growing insurance agencies.


LMCU is recognized as Michigan’s most outstanding credit union!

The Michigan Credit Union League selected Lake Michigan Credit Union as the Most Outstanding Credit Union in the state of Michigan for the large asset category.

LMCU’s impressive service levels, unique value, and the impact we make in our communities were the factors that the judges used to select LMCU for this impressive award.

Thank you for making us #1!

Our business is protecting yours

Many LMCU members know that we offer personal insurance— including auto, home and motorcycle insurance—but did you know that we have the same great products for your business?

Lake Michigan Insurance Agency (LMIA) has roots going back 80 years with over 30 experienced agents in five locations. We’re licensed with over 15 insurance carriers, and have everything you need to keep your company secure. We can help with your insurance needs from in-home accounting business to large manufacturing company. We offer Business Owners’ Policies, Commercial Package Policies, General Liability, Worker’s Compensation, Error’s & Omissions/Professional Liability, Business Auto, Builder’s Risk, and any other commercial insurance need.

When was the last time you took time for a personal comprehensive review of your commercial insurance program? We have very competitive insurance carriers and can give you the best value for the coverage you need.

Contact Lake Michigan Insurance Agency to schedule your no obligation coverage review at (616) 234-6979 or visit LMCU.org/Insurance.

First comes love, then comes mortgage

Then comes love again. Because at LMCU, going from honeymoon to “Honey, I’m home!” is easier than you think. Here are four ways we can help you finance the home of your dreams:

Low down payment options When you finally find the one, a bunch of zeros shouldn’t get in the way. It’s a common myth that you need 10-20% down. In reality, the average down payment is only 6%*, and with LMCU, your down payment could be as low as 0%**.

Down payment assistance programs If the nine-layer wedding cake and rose petal cannon have left you a little short on funds, don’t worry, just ask us about our down payment assistance programs. You may qualify for government assistance or as little as 0% down**.

Online Banking budget tool The average engagement is 13.6 months.*** That leaves plenty of time to start budgeting. And with our online banking budget tool, you can save enough for your wedding AND your home by the time you say, “I do.”

Jargon-free service The home-buying process can be harder to understand than a sobbing bridesmaid delivering her maid-of-honor speech. But it doesn’t have to be. Our friendly, expert loan officers will walk you through the process step-by-step. We’ll explain every detail in simple, easy-to-understand terms, and we’ll promptly answer any questions you have along the way.

Get pre-qualified today at LMCU.org/Mortgage, and say so long to that 700 square-foot apartment and hello to years of homeowner bliss.

Save trees. Save time. Give back.

Mother Nature isn’t the only one who benefits when you go paperless with electronic bank, credit card and mortgage statements. You can access your statements on your computer or mobile phone anywhere, anytime, and you can quickly and easily reference past statements. Plus, for every member who signs up, we’ll donate $1 to Habitat for Humanity*.

For step-by-step instructions on just how easy it is to go paperless visit LMCU.org/GoPaperless