Financial Responsibility for All

Corporations, governments, and individuals have received a loud wake-up call this year concerning debt and its effect on financial stability. The past history of excessive borrowing to meet present needs and obligations is simply a recipe for trouble. Unfortunately, our U.S. Government is not a very good educator on wise financial management as our total U.S. Government debt stands at nearly $10.5 Trillion and growing at over $3 Billion per day! State and local governments around the country are also experiencing debt problems.

It is time to live within our means. It is time to separate needs from wants. This certainly is true from an individual standpoint as well. Excessive credit card debt and high debt ratios are a direct reflection of living beyond the current financial abilities. Admittedly, living expenses have increased on food, fuel, and energy items. These rising living expenses have contributed to the rising debt levels on consumers.

Think wisely before adding new debt. Perhaps the emphasis should be on how to payoff or reduce the existing debt. If you have credit card debt, consider a Consolidation Loan from the Credit Union to lower your interest rate charges paid each month. If you have a vehicle financed somewhere else and are paying over 6-7% on that loan, consider refinancing with the Credit Union for a lower rate. There is nothing negative or derogatory about refinances. Saving money is a wise decision. All of our loan rates are posted on our web site. A Loan Calculator is also available on the web site to calculate how much you could save each month with a new loan from the Credit Union. If you save $25 per month on a monthly payment, that $25 can then be used to offset fuel or food costs.

Hopefully the country as a whole will realize the adverse effects of excessive debt and make the appropriate spending changes.

U.S. Personal Savings

The latest U.S. government study on savings as a percentage of disposable income reflects a dismal savings rate of roughly 3%. For every $100 earned in disposable income, $3 is being saved for the future. Let's face it, that's not very good. At least the rate of savings is improving as it was hovering around only 1% for the past few years. This low rate of savings among consumers has contributed to higher levels of consumer debt.

In comparison, Japan and Germany enjoy at least a 10% savings rate as a percentage of their disposable income. This 10% rate of savings should be a goal for all of us.

Saving for a rainy day has never been more important than it is now. From a worldwide economy perspective, we have that rainy day upon us now. Payroll deduction or direct deposit is a great way to set aside money each paycheck for a savings plan. The Credit Union has various club accounts available that can be used as a "rainy day fund", "vacation fund", or whatever future financial need there is. Christmas Club accounts are also popular on an annual basis. The key is having a savings plan and sticking to it.

Credit Union Day - October 17th

North Alabama Educators Credit Union is celebrating Credit Union Day this Friday, October 17th. International Credit Union Day is actually on Thursday, October 16th but we wanted to celebrate on Friday since more members will be in our offices. There will be complimentary refreshments, drawings for prizes, and other giveaway items for members of the credit union. Each of our offices will be celebrating Credit Union Day on Friday.

Our main office will also have a free Shred-It Day on Friday, October 17th. The available times for the free shred service will be between the hours of 11:00 AM to 1:00 PM and 3:00 PM to 5:00 PM. Document Destruction Services will be on hand in the main office parking lot to handle your shred materials. Please limit the items to paper records only. This would be a good time to safely destroy any old personal records.

Credit Union Day is also a time to express our appreciation for the members of the credit union. We are a financial cooperative owned by the member-owners using the services of the credit union. We thank our members for choosing North Alabama Educators Credit Union.

I will be in the main office lobby from 3:00 PM to 5:00 PM on Friday to meet and greet members. Come by any office this Friday and celebrate Credit Union Day!

Federal Insurance increased to $250,000

Much has happened over the past week in the financial markets and congress. It was bad timing for a family vacation over this past week! The stock market has lost over 18% of its value this week and today's market activity is dismal as well.

One positive news for credit union members was the increase in federal share insurance to at least $250,000 by the National Credit Union Administration (NCUA), a U.S. Government Agency. This increase insurance coverage is effective immediately. Visit http://www.ncua.gov/ for the upgraded insurance calculator for share accounts. The financials of North Alabama Educators Credit Union are also available for your review on the NCUA site. Any members with questions or comments are encouraged to contact our main office at 256-534-2423 to speak with me personally. (I will be back in the office on Tuesday, October 14th).

North Alabama Educators Credit Union remains a safe and sound haven for your deposits. The additional federal insurance coverage enhances your safety net even further. These are tough economic times right now. Your credit union has positioned itself to protect your assets during times such as these. Our conservative lending and investment approach in the past has led us to this place of security during this economic downturn.

What Credit Crunch?

There have been a few members asking if the Credit Union has money available for loan requests. The answer is YES! These type of inquiries are no doubt due to the media attention on "tight credit markets" in financial institutions. We are not part of the "tight credit market" crowd because our money for lending comes from our membership in the form of deposits. Remember that we are a financial cooperative. We don't borrow money from other institutions to lend money to members.

We continue to provide low cost loans to our members. In fact, our loan balance growth is greater than 11% from last year at this time. Our loan delinquency remains extremely low.

Please do not confuse the availability of internal 1st mortgage money with a "credit crunch". For safety and soundness reasons, the Credit Union's ratio of long term real estate loans to total assets is limited to a 20% cap. When this 20% cap is reached we then offer mortgage loans through our mortgage partner, CU Members Mortgage.

North Alabama Educators Credit Union is open for business. We are actually seeing an increase in deposits as current and new members seek the safety that credit unions provide. Members and potential members are encouraged to view our available loan and share rates which are always posted on our web site under the "RATES" tab.