Where will you be in 2027?

Wow that sounds like a long time from now. In 20 years I’ll be getting ready to retire (I hope!) Will I have enough to live comfortably the way I do today, or will the money I’ve saved only allow for a tent and a nice cot? (Maybe I can rent a patch of grass in my daughter’s back yard!)

I've also thought maybe I'll live with my friends and family in one of the "McMansions" that are being built now with so many spacious bedrooms and bathrooms. There's an article about homesharing in this month's Home & Family Finance on our website. I think it's an idea that really has some legs!

But if the idea of sharing a residence with your brother just sounds like a nightmare to you, you'd better start saving! Now's your chance to get a jump on your savings by putting your tax refund into your IRA. You may even get a tax deduction for it.

I know it’s tempting to spend your tax refund. But why not take at least part of it and put it away? The sooner you start saving, the more time your money has to compound, which is essentially just the effects of time and interest building up in your account.

Here’s an example that really hits home:
Look at this example: Say Frank and Mary start working for the same company in the same year, earning the same beginning salary of $25,000, with annual increases of 4%. If Mary starts a savings program immediately putting away 5% of her salary annually with no interruptions, earning an annual return of 8%, after 30 years, she'll have accumulated $230,150.
Frank decides to wait to start a savings program. If he saves 11% of his salary annually for the last 10 years before retiring, earning an annual return of 8%, he would accumulate $114,832.
So if you’re early in your career, there’s time to make some head-way. If you’re late in the game you might be playing catch-up. Still, the more you put away the better. It’s never too late to start saving.

It’s true, too. I didn’t start saving as early as I would’ve liked to. At age 25 I was more interested in buying cars and houses. It’s understandable! But as soon as I was eligible, I started putting some pre-tax dollars from my paycheck into my credit union’s pension plan for employees. The credit union matches part of my contribution - which helps considerably. I’m always amazed when I get my quarterly statement – it adds up so quickly and that’s with a modest risk in a modest market. If your company offers a pension plan, you’d be wise to participate in whatever way you can.

Don't let worrying about retirement ruin the fun of living now. You know you'll get by with whatever money you have. However, the more money you have the more choices you'll have on where to live and with whom. So if retirement worries you, make a pledge to put away some money this year.

I-GO Affiliations : I-GO Car Sharing

I-GO Car Sharing

Here's an idea that won't help the folks out here in Naperville and the other burbs, but it's an idea worth mentioning! Chicago has its very own car-sharing service. Owning a vechicle is very costly for city dwellers, and now there's a solution. You can rent a car by the hour as a member of I-Go. You log in to I-Go, tell them when you need the vehicle and for how long. There are various places around the city to pick up a car, and return it. It' all automated - you have a key card and the car keys are in the car. I-Go membes save money on gas and insurance. How sweet is that? Check it out at igocars.org.

Playing favorites?

I've been reading the written comments that have been coming in from our recent Member Survey we sent a couple weeks ago. Many of the comments are regarding our deposit specials. We offer a special, higher rate for new money to attract new members to the credit union. This often upsets our current members. Why shouldn't they get the special rate, they often ask. We appreciate the business that our members bring us. We maintain all our rates to be as fair and competitive as possible and provide the best return we possibly can to all members. Actually, existing members can get the same special, higher rates, by bringing us new money from another financial institution.

But we also are in an extremely competitive market. Chicago is one of the most competitive banking markets in the country. To grow the credit union, we must offer special rates to attract new deposits. I realize it seems unfair to existing members.

I think we offer more reasons to keep your business at Hawthorne than just a competitive rate. If we do, let us know. If we don't, we'd like to know what you're looking for in a financial institution, other than the best rate in town. Post me a comment and let me know.

Kudos to Claudia

It is not very often that a member tracks down our Sales & Service Manager to give a compliment about one of our employees. But that's exactly what happened this week.

This gentleman has been a member since the early days of our credit union when it was housed at at Western Electric's Hawthorne Works Plant in Cicero (which closed down in the mid-80s, so this is a long term member!) He said he has always been happy with our service (when he said that she got a little nervous, waiting for the big BUT that usually follows a comment like that...).

He told her that he had the great pleasure of having Claudia help him today with his account, which he had a few questions about. He said that Claudia was very pleasant and didn’t make him feel as if his questions were a bother. He was very happy to work with her and wanted to make sure she was recognized for being so helpful.

Great Job, Claudia!! She is a great asset to Hawthorne, and always has a great big smile on her face.

Fraud Alert

We get notices a couple times a week when a new kind of scam is discovered. We'll let you know about them when we hear about them.

Here’s a scam that has been occurring in the Livonia, Michigan area. Consumers in the 734 area code have been receiving an automated telephone message that instructs them that their credit card has been compromised and they should call a toll free number to verify their account information. When they call, the scammers ask for their credit card number, PIN and expiration date.

Please be extremely careful with your credit card information and social security number. Be very careful who you give your personal information to. Identity thieves getting more clever every day. They come up with new ways to trick consumers into giving up information. Hawthorne staff will never call you or email you to ask for your personal information. If you ever get a suspicious phone call, hang up and call us right away.

Out of the mouths of babes

We just installed a new do-it-yourself coin machine in our lobbies. It’s so easy to use, that our first customer, a 6-year-old member named Tyler, counted his change with ease. Tyler came in with his sister and mom to make a deposit to his account. He had $16 and a bunch of change in Spider Man bag. Two of our employees led him to the machine (kids love machines) where he quickly walked through the steps, dumped his change in the bin and walked away with a voucher for $7.67 to deposit into his account. So easy a kid can do it! We think the ‘fun factor’ of the machine might encourage him to save more, too.

As Tyler put it, "I'm gonna save my money!"

We can all take a tip from Tyler! By putting away a few dollars each week into a savings account, it adds up quicker than you’d expect. A few years ago I started putting $75 per month into a savings account for my daughter. Now her account is over $1000.

Most Americans just don’t save enough. The personal savings rate in the U.S. is a negative number, yet 77% of Americans think of themselves as the kinds of people who "always look for ways to save money" (Pew Research Center Jan. 24). I think most Americans define “looking for ways to save” as ways to pinch pennies and spend less. But truly saving money in a savings account is really easier than you think if you take advantage of tools like direct deposit, payroll deduction and automatic transfer.

Here’s your best bet for putting away a few extra dollars. Direct deposit your paycheck into your account each payday. If it’s available to you and you’re not using direct deposit I must ask where do you park your dinosaur? Really, welcome to the 21st century. Get direct deposit. Then, arrange for us to automatically transfer whatever amount you think you can put away into a separate savings account. Whatever you think you can afford, add $20. You won’t miss it because if it’s not in your account you won’t spend it. If it is in your account you will spend it. It’s that simple. You’ll adjust your spending to account for the lower amount. It’s really that easy. Then just forget about it. Before you know it, you’ll be sittin’ on a nice savings account.
If it’s for retirement, consider rolling that money into an IRA once you’ve got some money saved up. Our IRA service center can help with that, or call our IRA specialist for help.

If you took this one step today, I promise you won't regret it.

Yippee, Spring is Here

Finally, after a very cold and bitter winter the first day of Spring is here. I'm always relieved when it arrives, even though it doesn't feel too spring-y yet, I know it won't be too long. In fact today it was 66 degrees in Chicago - that felt great, even with the rain.

But it also means more nice days in the 60s and 70s and getting my workouts outside! I really love to exercise outside, that's why I chose a healthclub that lets me freeze my membership during the summer. I can freeze up to 6 months with each 12-month membership. I save a ton of money during the summer when I don't pay the monthly membership fee and I can take advantage of free activities like biking, walking and tennis at the park. And I can put the money I save into a nice Roth IRA (or a nice new swimsuit....!)

Why we're looking out for you

Because somebody has to! We live in a dog-eat-dog world with way too much information thrown at us every day. Wouldn't it be nice to have somebody to sort it all out for you, at least when it comes to saving money? Since we're all about helping people with their money at Hawthorne, that's what we'll try to do here. We'll help you make informed decisions on how to manage your money. And give you little tips and tricks on how to save more of your hard earned dough. I think it'll be fun. So feel free to add your own two cents and post a comment here and there. We'd love to hear from you.