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What to do after becoming debt-free

When you’re focused on getting out of debt, it’s easy to get caught up in the process and not think about what happens afterward. But, it’s necessary to establish a plan once you’ve eliminated your debt, or else you’ll slip back into the cycle again. Below are crucial steps you should take after becoming debt-free:

Organize your finances

Preparing for your new financial future starts with organizing your finances. The easiest first step is to automate your finances. Put any recurring bills, like your cell phone, electricity, or credit card on auto-pay, so you don’t miss a due date. You can even automate your retirement account and emergency savings contributions.

Now’s also the time to organize any financial paperwork you may have neglected while paying off debt. Sift through papers and shred anything you no longer need, like old cable bills. Keep only the most recent copies of items, like account statements or insurance policies. However, one exception to this rule is tax returns, which you should keep for at least three to seven years.

Build a solid emergency fund

Having a solid emergency fund covering at least three to six months of expenses is crucial—and something you may have neglected to save for while paying off debt. Now that you’re debt-free, it’s time to get back on track towards saving for the unexpected.

You may need to revisit your goals and figure out how much you should have saved in case of an emergency—and if you don’t have a savings account for unexpected expenses, you should open one now. The bigger your savings are, the more equipped you’ll be to financially handle an emergency (and avoid falling back into debt).

Continue budgeting

After spending months (or even years) sticking to a strict budget to pay off debt, it can be exciting to have extra cash—it can also be tempting to stray from your budget. But, if you stop budgeting entirely, you may become neck-deep in debt again.  

With more money on hand your monthly income has changed, which means your budget should, too. Take the time to reevaluate your budget and see how you’re spending or where you can cut expenses.

Contribute to a retirement account

The sooner you start saving for retirement, the better—but it’s never too late. If you haven’t started saving for retirement, look into an employer-sponsored plan, plus additional options like a Roth IRA. If you’re self-employed, look for a SEP IRA, a Simple IRA, or an individual 401(k).

The most important thing is to be consistent with your contributions. If your employer offers matching, try to take advantage of that. Don’t touch your retirement fund until you reach retirement age, or else you’ll face tax penalties.

Start saving for major purchases

If tackling debt was a motivator to start saving for a home or a car, you’re one step closer to achieving that dream. Establish a separate savings account to reach your goal, and start contributing—you’ll get there before you know it! If you’re a first-time homebuyer or are applying for a car loan for the first time, Georgia’s Own has options to guide you through the process.

Review insurance coverage

You may have been skating by with the bare minimum insurance coverage while trying to pay off debt. Now that you have more money, you may consider increasing your insurance coverage. For example, if you don’t have life insurance coverage, you may want to look into that. Depending on your age, you may also want to consider additional coverage, like long-term care insurance if you’re in your 40s.

Refresh your financial plan

After making sure you’re covered for any future events (both good and bad), you can start refreshing your financial plan. As previously mentioned, now that your income has changed, your financial plan should change, too—your financial plan from two or three years ago may not work anymore.

Take the time to assess your financial goals and see where you should reevaluate. Start looking at your short-term goals and decide where you are with meeting them. If you’ve met them (or are close to meeting them), you may want to adjust them to your current financial circumstances.

Consider investing

Now that you’re debt-free (and if you have an established emergency fund) try diversifying your investments. You can consider financial products and other investment options with a higher risk that have higher earning potential, like stocks, bonds, or mutual funds.

If you’re new to investing, consider working with a financial planner. Georgia’s Own offers investment and retirement services to help you get on track and make the right choices when it comes to your money—and you can meet with one of our financial planners at no cost and with no obligation to discuss your options.

Treat yourself

Being debt-free is an incredible feeling, so it’s only appropriate that you celebrate! Having a healthy financial plan is knowing when to be disciplined and when it’s okay to treat yourself. Have a party or take yourself to a fancy dinner—you deserve it after putting so much work into reaching your goal of becoming debt-free.

Best practices for avoiding overdraft fees

An overdraft occurs when there are insufficient funds in an account. If you make a purchase with your debit card and there’s not enough money in your account, your financial institution may charge you an overdraft fee. Depending on the fee, this could become an expensive scenario. We’ve compiled a list of best practices for avoiding overdraft fees.

Be aware of your account balance

Checking your account weekly (or more often) is a good habit to form. By checking your accounts frequently, you’re aware of the funds available in your account and how much you have left to spend. It allows you to monitor for any suspicious transactions. You can check your Georgia’s Own account balances 24/7 via online banking, our mobile app, or TeleTalk.

Set up alerts for low balances

Balance notification is a handy feature that lets you set up personal notifications when your checking account drops below a certain amount. This will give you a heads up to hold off on further transactions until you can add funds. With a Georgia’s Own account, you can choose to be notified via text or email.

Link your account to another account

Mistakes happen—whether it’s an accounting error or a temporary shortage of funds, overdraft services are designed to provide a backup for those moments. You can link another Georgia’s Own account to cover the shortage when there is not enough cash in your account. The fee with this option is much smaller than the cost of a returned check.

Set up direct deposit

Setting up direct deposit means that your paycheck is automatically deposited into your account. This can prevent check holds or a delay in deposit. It ensures you get access to your money faster and can help prevent an overdraft. Some financial institutions even offer early access to your money. Our Perks+ Checking account features Early Direct Deposit, allowing you to receive your direct deposit funds up to two days earlier* than traditional banks—which can make or break whether your account overdrafts.

Weigh the pros and cons of opting in for overdraft protection**

Pros of opting in for overdraft protection

When you opt in for overdraft protection, your transaction will not be declined—but you will normally be charged a fee. Overdraft protection is helpful in the event of an emergency, and it can save you from embarrassment at the gas station or drive-thru. If you overdraft, make a deposit as soon as possible after the overdraft occurs to avoid additional charges. If it’s your first overdraft, contact your financial institution. In many cases, they may consider waiving the fee if it is a first-time offense.

Cons of opting in of overdraft protection

By opting in for overdraft protection, you still need to pay whatever fee your financial institution charges. If you don’t have overdraft protection or enough funds available in your linked account, your purchase is declined. Some people might also view overdraft protection as an opportunity to overspend because they may not understand the fees involved. Overdraft protection policies vary by financial institution, so be sure you understand your financial institution’s rules and whether or not overdraft protection is right for you.

Want more information on overdraft protection, direct deposit, online banking, or setting up balance notifications? Visit georgiasown.org!

*Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date. Click here for FAQs.

**Overdraft Services is available to members 18 and over who are in good standing with the Credit Union. We may approve certain transactions that overdraw your account. An overdraft fee of thirty-three ($35.00) dollars may be charged for each transaction that overdraws your account. The categories or types of transactions that may overdraw your account include payments, purchases, and transfers. Whether your overdrafts will be paid or not is in our sole discretion and we reserve the right not to pay the overdraft. For example, we typically do not pay overdrafts if your account is not in good standing or if you have too many overdrafts. We reserve the right to require you to repay your overdrafts immediately or on demand. Read full Overdraft Disclosure.

How to build your credit score

You’ve seen all the commercials that talk about needing a better credit score. But none of them seem to outline exactly which steps you take to make that happen. Read on for some practical ways you can improve your score and keep it growing. First, let’s look at some of the basic information you need to know about credit scores.

What is a credit score?

A credit score is three numbers, typically between 300 and 850, that are used to show potential lenders how often you pay your bills on time. Many times, lenders will only let you borrow money if your score is above a certain number, or they may require higher monthly loan repayments if your score is on the lower end. The score is determined by your past credit history and payment history.

What is a good credit score?

Credit scores are divided by numbers into five categories:

• 300-579: Poor
• 580-669: Fair
• 670-739: Good
• 740-799: Very good
• 800-850: Excellent

You can use your score to determine where your credit rating, which is expressed as a letter grade, will fall.

How can I improve my credit score?

You know what a credit score is, so let’s talk about how you can improve it. Below are nine tips and tricks to help you check your credit score for free, plus the ways you can make your score better.

1. Know your score

There are a few ways you can find out your credit score for free. You can check your credit card or other loan statement—many credit card and auto loan companies now put your score on the statement to allow you to keep up with it. You can also talk to a non-profit counselor who can work with you to find out the info you need. Or you can use a service like Experian to check your score for free once a year, or use a website like myfico.com, which allows you to access your credit score more often for a fee.

2. Pay your bills

This may seem obvious, but if you want better credit, pay your bills on time. This means everything from your latest electric bill to your monthly car payment. Lack of payment will lower your score, and it can take a long time for those late payments to fall off your record.

3. Leave your credit cards open

If you decided to switch credit card companies, that’s great. Just be sure not to close your old card after paying it off because a closed card can ding your credit score. However, if you’re paying a large annual fee to keep the card open, it may be worth risking a slightly lower score instead of paying tons of money for a card you don’t use.

4. Lower your debt

Easy to say, hard to do, right? But whittling down your debt goes a long way in raising your credit score. Many experts say to start small—pay off your smallest debt first, and then go to the next-smallest, and so on. This will allow you to rid yourself of some debt without draining your bank account.

5. Stop applying for store credit cards

There is nothing wrong with a store credit card, but you do want to be cautious of how many you apply for, and how many times you try to get approved. When you apply for credit of any kind, it has the potential to lower your score, as it is a sign to potential lenders that you need a lot of credit and can’t pay for it all (even if you’re just applying for the card to get the discount).

6. Keep up with your score

We mentioned some resources above that allow you to track your credit score without lowering it. It’s important to know your credit score and if or when it changes. For one thing, you want to know if your hard work is helping your score! You’ll also be able to monitor any potential suspicious activity, like identity theft, by checking on your score more often.

7. Maintain a credit history

While you know you don’t want to open ten credit cards at once, you also don’t want to find yourself with no credit history at all. Lenders want to see a consistent history of paying your bills on time, and having no credit to your name doesn’t show them how reliable you are at repaying loans. Consider opening one credit card and paying it off monthly to build some credit that won’t send you into tons of debt.

8. Dispute credit inaccuracies

Remember how you need to monitor your credit score on a regular basis? One more reason to do this is so you can report and dispute any inaccurate information. It takes seven years to get rid of “bad” credit, so having these problems corrected will make a big difference in upping your score.

9. Consult an expert

There are financial professionals who specialize in understanding and building credit, so if you still don’t know where to start, set up a meeting with one of these pros. You will walk away with some new information about how to build your credit, along with a solid plan for reaching your next credit score goal.

Financial matters aren’t anyone’s favorite topic to discuss, but you have to have a handle on your credit score to give yourself the best chance for financial success. Learn your score today and start taking steps to make that number climb even higher.

Bitcoin, Ethereum and what you need to know about cryptocurrency

You’ve probably heard a lot about cryptocurrency, Bitcoin, and everything in between. Maybe you feel confident and have a complete understanding of what exactly those words mean. But if you’re like most of us and have a vague idea of what this trend is all about, we have you covered. Read on to learn the cryptocurrency basics so you can become an expert, too.

What is cryptocurrency?

Think back to your favorite arcade as a kid. You played game after game, earned tickets or coins, and exchanged them for a prize of your choice at the end of the day. Cryptocurrency works in a very similar way. Essentially, cryptocurrency is a form of payment that is used online in exchange for goods or services. You purchase cryptocurrency with real currency, i.e. your favorite credit card.

How many kinds of cryptocurrency are there?

There are more than 10,000 forms of cryptocurrency. This is because many companies often use their own cryptocurrency, called tokens, that their customers only use for the company that issues them. One of the most popular types of cryptocurrency is Bitcoin, which has been around since 2009. You may have also heard of Ethereum, which proves the second-most popular type of cryptocurrency currently available, called Ether.

You may have stayed out of the cryptocurrency trend, and we can’t blame you. However, it’s probably a good idea to have a basic understanding of what cryptocurrency is and how it may affect you, especially as more and more businesses embrace the digital age and offer cryptocurrency as a form of payment.

Is cryptocurrency better than paying with my credit card?

In some ways, cryptocurrency seems redundant—we already have a way to pay online for goods or services by using a credit card, PayPal, or other money-transacting service like Zelle and Venmo. But the appeal to things like Bitcoin is that, due to the type of security it employs, defrauding or cheating someone is very difficult. This has made cryptocurrency a popular choice for many people who are concerned about having their personal and financial information stolen.

Should I invest in cryptocurrency?

This question has been a popular one for many people as they consider whether they should try to put Bitcoin and other cryptocurrency to work for them and grow their finances. While there are a lot of considerations to be made about this decision, many financial experts warn people to tread carefully before making an investment in cryptocurrency.

Citing concerns like the instability of cryptocurrency, now might not be the time to invest a lot of your money. In 2021 alone, the value of cryptocurrency skyrocketed, only to plummet nearly 50% just a few months later. But if you are interested in learning more about investing to see if it’s a good choice for you, consult a financial advisor before you take any steps on your own.

How do I get cryptocurrency?

You can purchase cryptocurrency through a number of online options. Coinbase is a particularly popular website that allows you to create an online wallet that facilitates the purchasing and trading of cryptocurrency. Be sure to note that some companies require you to purchase their cryptocurrency with other cryptocurrency, so if you are going forward with cryptocurrency, you may want to remember to keep a little extra on hand (or online, in this case).

This seems shady—is it legal?

If you live in the United States, cryptocurrency is 100% legal. But you should know that it’s up to each individual country to decide whether they will allow cryptocurrency to be used as a way to purchase items or services. While cryptocurrency offers extra layers of security for your financial information, there are still plenty of scammers who use things like Bitcoin to defraud users. Even if your country allows cryptocurrency to be used, you should still be aware of who you are buying from and where your real currency is going.

What are the drawbacks?

While cryptocurrency allows you to ensure your personal and financial information is secure, there are some drawbacks. Unlike your credit union or bank, cryptocurrency is not FDIC insured. When a financial institution is FDIC insured, this means that in the unlikely event of a bank failure, your money is protected. With cryptocurrency, you don’t have that guaranteed protection. And, as technology evolves, cryptocurrency can be subject to cybersecurity breaches and fall into the hands of hackers. Cryptocurrency is also managed online, and you may not necessarily know who you’re speaking to—or where they’re located. While that may appeal to some, others may want to know who exactly is handling their finances. With Georgia’s Own, you’ll have peace of mind knowing that we’re safe, trustworthy, and FDIC insured.

When it comes cryptocurrency, the best way to make your decision is stay informed and understand the pros and cons involved. Speak with your personal financial advisor to learn how you can diversify your portfolio while working with your preferred financial institution, get your Google on, and spend some time learning what cryptocurrency can do for you.

Relationships and money: what to talk about and why

Money is one of those subjects that everyone has to talk about, even though few people are comfortable discussing it. While you don’t need to lay out your five-year financial plan to every person you meet on the street, it is vital for you and your family to have appropriate discussions about money, your budget, and family spending habits. If you’re not sure how or when to have that discussion, we have a few ideas on ways you can get started.

You and your spouse

We’ve said it before, and we’ll keep saying it until the end of time: you need a budget. It just has to happen if you want to have any type of financial security, even if you are living paycheck to paycheck. You and your spouse or significant other need to be aware of your expenses and the plans you have for your collective financial future.

If you’re uncomfortable starting this conversation, start small. Sit down one evening with as few distractions as possible and list out your expenses. Include everything, from the electric bill to your estimated weekly gas usage for the car, and, if money is tight, look for places where you can trim some of the excess. You might not even realize how much you’re spending until you write it all down. This is a great launching point for creating a budget that works for your family.

You and your kids

Teaching your children about money is vital to helping them understand the idea of saving, budgeting, and spending. You don’t need to give your kids a list of every line in your budget, or ask them to audit your bank account. But you can still talk to them about money and why it matters to use it well. How you have this discussion will depend on the age of your kids:

Infants: Do nothing. Smile at them a lot. You’re done!

Young children: You don’t have to get into the math, but you can begin explaining to your children that it is your job to figure out the best ways to spend your money. The older your kids get, the more they will understand that money is not an infinite source, and just because you have money in the bank doesn’t mean you need to spend it all.

In fact, you can show your young children your budget to let them see all the items you need to account for when choosing how and where to spend your money. If you don’t want to them announcing to their schoolmates how much you spend at Target each month, you might just want to show them where your money is assigned, and not how much is spent.

Older children: Once your kids have a better grasp on more complicated math, like adding and subtracting in double digits, multiplication, division, etc., you can ask them for their input on your budget as a math exercise or help them make a budget of their own. If your children earn money through chores or an allowance or if they receive money as gifts, you can sit down with them and explain the process of deciding how to spend their cash.

Get them comfortable with the idea of not using every penny they have and show them the value of looking for deals on coveted books, games, or toys. You don’t need to insist they research for six weeks before making a purchase, but teaching them how to spot a good value is a skill they will use for their entire life.

Teenagers: While you don’t want your teen to take on the emotional burden of your financial responsibilities, you can still be honest with them about your financial situation as needed. For instance, if your teenager is hoping for a birthday gift that isn’t in line with your budget, you can explain that they need to choose a gift within a certain price range or encourage them to find a job that will allow them to buy the gift for themselves. In fact, one of the best gifts you can give your kids is the ability to understand the responsibility that comes with money.

What else should I discuss?

Starting these conversations is a great way to help your family gain a better understanding of your financial situation, especially as they begin to grasp the value of smart spending. You can keep the conversation going by checking in with your kids regularly and helping them with questions they have.

Normalize the money talk

It’s important to help your kids understand that discussing money is not a bad thing – in fact, it’s a great idea. You don’t have to turn every conversation into a lesson on finance, but by openly discussing age-appropriate money topics, you can help your kids become comfortable with communicating money-related questions or concerns. You can even consider having a weekly family budget discussion, where you talk with your family about new ideas for budgeting or show them how your savings helped them get a fun treat.

Speak openly and without judgment

If you and your spouse share a checking account, you both need to review it regularly, and speak to each other about any questions you have. The same goes for having separate checking or savings accounts – the goal is to understand how much shared money you have between you, and what you plan to use it for.

Address any concerns right away: for instance, if one of you goes over budget without discussing it first, work on a plan for an alternate solution that you could use in the future. Remember that staying calm and working smart next steps will aid you in making better financial choices moving forward.

When it comes to money, it’s always better to overcommunicate than to under-communicate. Your finances don’t have to dominate every conversation, but encourage everyone to ask questions and voice concerns so you can keep an open conversation going. Practicing the concepts now will go a long way in preparing your family for the future – and you might just learn something, too.

12 ways to make distance learning a success for your family

Distance learning has been an adventure for parents, students, and teachers alike as they work to maintain the high quality of in-person learning through a digital platform. This is new territory for a lot of people, and we have some ideas on how you can make the digital days a little more manageable.

1. Plan, Plan, Plan

There are so many unknowns that come with digital learning, so taking care of the known obstacles will help you free up some time. For instance, you might go ahead and plan and prep your meals for the week over the weekend, or arrange for work calls to be taken during school breaks if you are working from home.

2. Make a Schedule

You may think you can keep everything organized in your head, because that’s what you do as a parent anyway. But for distance learning, consider making a schedule that everyone can see. If your children aren’t reading yet, you can use pictures instead of words to give everyone an idea of how the day will go.

3. Set the Scene

If possible, create a space that is exclusively for digital learning. That way, you can keep your school materials organized, while also giving your kids the chance to leave school behind at the end of the day, just like they would if they were there in person.

4. Be Flexible

There will be a day where nothing works right. The laptop won’t turn on. A rogue tree limb will knock out the power. Your internet connection will be spotty. These days will be frustrating, but it’s important to go with the flow as much as you can. Distance learning is new to everyone, so keep an open mind and do some deep breathing to get through the tough times.

5. Communicate Often

The only way to get answers to your questions is to ask them! If you or your child are struggling to navigate the distance learning world due to a lack of understanding or communication, reach out for help, either to other parents or the teacher. Your question may be shared by other people, and working together will allow you to find a solution more quickly.

6. Take Breaks

If 2020 has taught us anything, it’s that many people, and especially kids, do not love being trapped inside their houses for months at a time. Be intentional in planning and taking breaks with your family, whether that means taking a walk around the yard or having a movie night together. School will be waiting for you when you return, so go ahead and take five minutes to relax.

7. Get School Supplies

Just because you’re learning from home doesn’t mean you won’t need those glue sticks! Many schools have released modified supply lists that will allow your child to thrive from home. You can even let your kids be part of the fun and pick out some supplies of their own, like a hot pink pencil box or some neon markers.

8. Create a Local Group

If you have some neighbors or local friends who have children, why not create a group where you can all get together for distance learning? This will allow you to reach out to other parents who are in the same boat and give you some much-needed mental and emotional support. Meanwhile, your kids can benefit from having older kids to help them understand more difficult concepts.

9. Prepare for Video Calls

Many teachers are doing live lessons over video platforms to teach new material. This means your child will need to be able to access video calls – and it also means you need to remember that you may be on camera. It’s up to you to determine what that means for your family, but if your child decides not to wear pants that day, odds are high that his teacher and class will know.

10. Pretend Everyone is at School

No, we are not suggesting you leave your six-year-old at home and head to the store alone. But you and your children should act like a typical school day is in session. This means making appointments for after-school hours as much as possible, eliminating other distractions, and showing up on time and prepared to learn.

11. Set Expectations

When your child is on a computer or tablet most of the day, they will eventually find their way to Minecraft. Talk with your child ahead of time about what they need to be doing during school hours, and set up a time in your schedule for them to have some free time. This is a win-win – they get the information they need while still having the freedom to do what they love later in the day.

12. Find a Balance

While it is important to treat distance learning like a regular day, it’s also important to remember that some days will be harder than others. Don’t be afraid to skip a lesson and come back to it later if it’s causing your child to stress. You’re their caregiver and you know better than anyone what will help them thrive and learn.

Distance learning has been an interesting turn of events for everyone, but you can make it work! Prepare as much as possible and team up with others to handle the unique aspects that will make this school year a memorable one.