From neverending student loan payments, stacks of maxed-out credit cards, non-existent savings, and more, Americans are taking on enormous financial commitments every day. Research shows that the vast majority of Americans lack basic financial literacy skills needed to responsibly handle the burden of these financial commitments.

Understanding how to manage your money responsibly can help you plan properly for retirement, make better investment decisions, manage credit card debt more successfully, and achieve financial freedom. Conversely, Americans with low financial literacy are statistically more prone to be burdened with fees from credit card companies, unmanageable interest rates, and debt that can inhibit the ability to save for the future.

Financial literacy is essential for thriving in today’s economy. If you have struggled with budgeting, saving, or investing, you are not alone. A significant number of Americans do not have a working household budget, live paycheck to paycheck, and spend more than they earn. Many report feeling uninformed about managing their personal finances.

Orion FCU is dedicated to serving our members and our community by offering financial literacy tools. Below are four easy tips to help you get started boosting your financial savvy.

Learn how to budget

Budgeting is the cornerstone of responsible financial planning. Creating and maintaining a budget will allow you to see precisely how much money you have and where you are spending it. Keeping a close eye on your finances will help you avoid spending more than you earn or running up more debt than you can comfortably manage. A household budget can also serve as a blueprint for achieving your financial goals. It also shows where you can save money and how you can plan for the future. If you are not sure how to get started, Orion has resources that can help you succeed.

Orion offers a useful, free budgeting tool that can help you get started today. Integrated into your Digital and Mobile Banking accounts, MoneyDesktop is an online money management tool that helps you track and visualize your spending and create a personal budget. Using this tool can help you avoid excessive debt, prepare for the future, and set yourself for a healthy financial future.

Orion money desktop budgeting and financial literacy tool

Learn how credit works

Making the most of credit starts with first understanding how it works. It can be complicated to learn why credit is necessary, how to improve your credit score, and how to responsibly pay down credit card debt. Having a line of credit means you are borrowing money from a financial institution who has faith that you will pay that money back on time. In exchange, that financial institution is paid interest by you for using that loan.

Having good credit is important to more than just your financial institution. Your credit history is often taken into consideration when looking for an apartment or home to rent, setting up your utility services, and even when applying for certain jobs. Making late payments or missing them altogether can impact your credit score negatively. A poor credit score could mean lenders view lending money to you as risky and may charge you higher interest or not lend to you at all.

Spend responsibly, create a trustworthy record of on-time payments, and keep careful control of your debt to help you achieve financial freedom. You can partner with your local financial institution to learn more about best practices to improve credit and create a tailored plan to improve yours. Learn more about how Orion FCU can help by contacting one of our Universal Bankers at a location near you.

Learn how to handle your debt

According to the Federal Reserve, the average credit card debt for households with credit cards is over $15,000. This amounts to years of monthly payments and hundreds or thousands of dollars of interest accrued over time. If you have more debt than you are comfortable with, there are several steps you can take to reduce it. First, determine which of your cards or loans carries the highest interest rate and work to pay that balance off first. Focus on paying the maximum amount you can each month rather than the minimum, or transfer your outstanding balances to accounts that offer lower interest rates. Orion FCU offers several loan products that allow you to consolidate your debt at a competitive and manageable interest rate.

girl creates a budget using her credit card online

Start saving now

You can start small if you need to, but the sooner you begin to set cash aside in a savings or retirement account, the faster it will accumulate, building interest along the way. If you are not already saving regularly, you can use your budget to determine how much you should be able to put into savings each month. Whether you are planning for an upcoming vacation or saving for a long-term goal like college or retirement, getting yourself into the habit now will give you more options in the future.

There are also ways that Orion FCU can help you make your money work for you. Orion’s 3% Premium Checking Account can help you save money quickly and easily. This account pays 3% APY interest on balances up to $20,000, which can add up to nearly $600 a year!* Orion FCU also has savings accounts that are designed with your long-term savings in mind. Orion’s Christmas Club Account helps you save money slowly for the holidays – or another special occasion with a limited withdrawal period.

Improving your financial literacy can be as easy as starting with these tips. Keeping a personal budget, understanding how credit works, managing your debt, and saving money can help get you started on the path to financial freedom. Consult with an Orion FCU team member to learn more.

*Conditions apply. See OrionFCU.com

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