Avoid unnecessary credit: A Q&A with Stride Credit Union spokesperson Nancy Funk

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This article was published 19/09/2024 (531 days ago), so information in it may no longer be current.

Financial and investment planning plays a crucial role in securing long-term stability and achieving personal goals. By carefully managing credit, selecting appropriate loan options, and making informed investment decisions, individuals can build a stronger financial foundation.

In this context, Brandon Sun’s reporter Abiola Odutola spoke with Stride Credit Union marketing and communications manager Nancy Funk to explore several investment and financial planning tools. Their conversation follows below. It has been edited for length and clarity.

AO — What should potential borrowers consider in terms of interest rates and repayment schedules when applying for a loan?

NF — Always make sure to be financially responsible, ask about our rates and our repayment options, and take time to explore those options in depth with one of our financial experience officers. Members will want to make sure they have equity left in the item they are purchasing after the loan or mortgage is paid in full. Every situation is different and can be customizable to suit you.

AO — How can an individual manage and monitor their credit?

NF — Individuals can manage their credit scores and keep them high by not seeking out unnecessary credit. Make your minimum and regularly scheduled payments on credit cards, loans, and mortgages on time each month. Make sure you are revolving your credit and staying below your maximum limits. Building healthy credit habits by borrowing only what you need. Building a monthly budget and sticking to it.

Other tools we recommend are online services through our StrideCU mobile app and the Collabria CardWise app. These 2 platforms offer options to pay bills, track expenses, set up transfers, and even investments. These features allow your banking information to be at your fingertips anytime, anywhere.

AO — Can you explain how building a good credit score can influence financial opportunities, such as loan approvals and interest rates?

NF — A good credit score helps make decisions on whether a lender can offer you a mortgage, loan, or credit card. A good credit score could potentially qualify you for higher limits on credit cards and lines of credit and make home buying easier as there is a minimum score requirement for high ratio mortgages.

AO — What investment options are available for potential investors to help clients grow their savings, and how can someone choose the right one based on their financial goals?

NF — When advising clients on investment options, it’s important to match their financial goals, risk tolerance, and investment horizon with suitable products. Some of our available options are Segregated Funds, Mutual Funds, Term Deposits/ Savings Accounts, Choosing the Right Investment, and Assess Financial Goals.

If the goal is within 1-3 years, consider safer options like term deposits or short-term bond funds, and for goals 3-10 years away, a mix of mutual funds and segregated funds might be appropriate, depending on risk tolerance. For goals beyond 10 years, equity funds or segregated funds.

AO — But how can investors evaluate risks?

NF — For low-risk, Term deposits, high-quality bonds, or guaranteed investment certificates (GICs) might be suitable, while balanced mutual funds or segregated funds with a conservative allocation could be appropriate for moderate risk. For high-risk, it is important to consider equity mutual funds or growth-oriented segregated funds.

AO — What role does risk tolerance play in investment decisions, and how can potential investors assess their comfort level with risk?

NF — Risk tolerance is a crucial factor in investment decisions because it determines how much volatility and potential loss an investor is willing to accept in exchange for potential returns. It essentially reflects an investor’s comfort level with uncertainty and their ability to withstand financial losses without significant stress or change in their investment strategy.

AO — What are the best practices for long-term financial planning, and how can an investor prepare for retirement or other future goals?

NF — Long-term financial planning involves setting and working towards goals that span many years, such as retirement, education funding, or major purchases.

AO — What are the best practices to ensure one is well-prepared for these future goals?

NF — Outline your long-term goals, whether it’s retirement, buying a home, or funding education. Be specific about the amount needed and the time frame.

Keep a detailed record of your income and expenses. This helps identify areas where you can cut back and increase savings. Set up automatic transfers to savings or investment accounts to ensure consistent contributions toward your goals.

Save 3-6 months’ worth of living expenses in a liquid, easily accessible account to cover unexpected expenses or emergencies. Also, spread investments across various asset classes to reduce risk. Choose investments based on your time horizon and risk tolerance. For example, higher-risk investments might be suitable for long-term goals like retirement, while short-term goals may warrant more conservative investments. Regularly review your investment portfolio and adjust as needed to stay on track with your goals.

Calculate how much you’ll need in retirement considering factors like living expenses, healthcare costs, and lifestyle. Ensure your retirement portfolio is well-diversified and periodically reassess your asset allocation as you approach retirement. Be aware of how different investments and accounts affect your tax situation. Consider tax-efficient investment strategies.

AO — It appears saving is a major tool in financial planning. Can you give an overview of some attractive savings options?

NF — Our upcoming Flash Sale is providing a unique opportunity for a 1-year term at a great interest rate. Not only are you making money on your money, but you can access it after just one year. If you need to save for that first home, this is your best option market-wide.

AO — What strategies can clients use to maximize the benefits of promotions like the Flash Sales Deposit Special while balancing their overall financial goals?

NF — Promotions like Flash Sales Deposit Specials can offer attractive short-term benefits, such as higher interest rates for depositing funds into a specific account. To maximize these benefits while balancing overall financial goals, clients should carefully review the details of the promotion, including the interest rate, deposit requirements, and any associated fees or restrictions.

Also, they should compare the promotion’s benefits with other available financial products to ensure it offers a competitive advantage. It is also important to ensure that taking advantage of the promotion doesn’t conflict with your long-term financial goals. For example, if the promotion requires tying up funds for a period, make sure it doesn’t disrupt your emergency fund or other critical financial needs. Assess whether you’ll need immediate access to the funds. If you might need to access the money soon, prioritize accounts that offer both high interest and liquidity.

» aodutola@brandonsun.com