Tag Archives: financial tips

The Importance of Being Financially Fit

Are you ready to stretch those financial fitness muscles? We hope so, because it’s time to get financially fit!

Being financially fit means living a life of complete financial responsibility. The Center for Financial Services Innovation (CFSI), also known as the Financial Health Network, defines four basic components of financial health: Spend, Save, Borrow and Plan. These components reference everyday financial activities. As such, every choice you make in terms of these four activities either builds or detracts from your financial fitness. Like physical fitness, you can beef up those fitness muscles a little bit more each day.

Being financially fit is crucial for a well-balanced, stress-free life. Here’s why (and how):

Expand your financial knowledge

A financially fit person is constantly broadening their money knowledge. They read personal finance books and blogs, attend financial education seminars and are aware of the evolving state of the economy. This enables them to make monetary decisions from a position of knowledge and power, leaving much less up to chance or luck.

Stick to a budget

A financially fit person knows that tracking monthly expenses is key to financial health. They are careful to set aside money from their monthly income for all fixed and discretionary expenses and to stay within budget for each spending category.

Minimize debt

A financially fit person is committed to paying down debts and seeks to live debt-free. Constant budgeting, ongoing financial education and planning ahead enables them to make it through the month, and through unexpected expenses, without spiraling into debt.

Maximize savings 

A financially fit person prioritizes savings. In fact, savings is a fixed item on their monthly budget instead of something that only happens if there’s money left over. This allows them to think ahead and build a comfortable nest egg or emergency fund. In turn, having a robust safety net means sleeping better at night knowing there’s money available to cover unexpected expenses or a change in life circumstances.

Maintain complete awareness of the state of your finances

A financially fit person knows exactly how much money they owe, the accumulated value of their assets and the complete sum of their fixed and fluctuating expenses. This awareness takes the stress out of money management, allowing them to make better financial choices.

Maintain a healthy credit score

A financially fit person knows that an excellent credit history and score is a crucial component to long-term financial health. They are careful to pay all bills on time, hold onto their credit cards for a while and to keep their credit utilization low. This enables them to qualify for long-term loans with favorable interest rates, which saves them money for years to come.

Help your money go further

A financially fit person does not waste large sums of money on interest charges for purchases made using borrowed funds via credit cards or loans. They live within their means and only use these resources for purchases they can actually afford, or for large, long-term assets, like a car or a house. This means they have more funds at their disposal to help build their wealth through savings and investments.

Create concrete financial goals

A financially fit person has long-term and short-term financial goals. This enables them to keep their focus on the big picture when making everyday money choices, empowering them to actually realize their financial dreams.

Achieve financial independence

A financially fit person is independent. They don’t rely on loans from friends or family members to get by, and they don’t need to pay with plastic at the end of the month because they ran out of money. Their well-padded emergency fund means they don’t depend on their monthly income to put bread on the table, either. By sticking to a budget, prioritizing savings and maintaining an awareness of their finances, they are strong, secure and completely independent.

Being financially fit means living a life without battling anxiety about getting through the month or stressing about the future. You can achieve financial fitness by committing to making choices in each of the four components of financial health (spend, save, borrow, plan) that are forward-thinking and help to build your financial wellness.


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The Beginner’s Guide to Filling Out a W-4

Filling out a 4-page W-4 form can be a huge hassle. It’s not a good idea to rush through it, though, because a small mistake now can mean withholding too much or too little of your salary for covering your taxes. There have also been several recent changes to the W-4, so you may need to make some adjustments to your current form on file.

No worries, though, USAgencies Credit Union is here to help! We’ll walk you through a W-4 form and show you how to fill it out in five easy steps. It’s important to note that only Step 1 and Step 5 are mandatory; the rest are optional.

Step 1: Enter your personal information

First, you’ll need to fill out your personal information, including your legal name, residential address and Social Security number. You’ll also be asked to indicate whether you are filing taxes as a single individual, a married partner filing jointly or as the head of a household. According to the IRS, “Head of household” should only be checked if the filer is not married and pays more than half the costs of keeping up a home for themselves and another qualifying individual.

If you believe you are exempt from filing taxes, you may need to complete Step 1(a), Step 1(b), and Step 5 (you’ll also write “Exempt” in Step 4(c), as indicated below.) Before doing this, though, make sure you are truly exempt, which means you have no tax liability and did not need to file a tax return last year. Mistakenly filing as exempt can land you a giant bill come tax time, complete with penalties for late payments.

If you are a single tax filer or married to a nonworking spouse, have no dependents, only have one job and aren’t claiming deductions or credits beyond the standard deduction, you can skip the next three steps. Just sign and date your form now.

Step 2: Multiple jobs or spouse works

You only need to complete Step 2 if you hold more than one job, or you are married and filing jointly with an income-earning spouse. Be sure to read the instructions carefully. You’ll have three options in Step 2:

  • Use the IRS’s online Tax Withholding Estimator to determine how much to withhold below in Step 4(c).
  • Fill out the Multiple Jobs Worksheet, provided on page three of Form W-4, and enter the result in Step 4(c), as explained below. The IRS recommends only filling out the worksheet on one W-4 form per household, entering only the result of the highest-paying job.
  • You can check off this box on the W-4 form if there are only two jobs in total and both jobs have similar pay.

Step 3: Claim dependents (if applicable)

If you have multiple jobs, or if you are married filing jointly and you and your spouse each have a job, you’ll also complete Step 3 on the W-4 form for the highest-paying job.

Step 3 involves some math: If your income is $200,000 or less, or $400,000 or less if you are married and filing jointly, multiply each qualifying child under age 17 by $2,000 and each additional dependent by $500. Add up these numbers and list the total as indicated by Step 3 on the W-4.

Step 4: Make other adjustments (optional)

Step 4 is optional, but you may want to fill it out if you have multiple jobs, or you are married filing jointly and you and your spouse each have a job. If this applies to you, fill out lines 4(a) and 4(b), but only for one of these jobs. Here, too, the IRS recommends filling out these lines on the W-4 form associated with the highest-paying job. These lines can be left blank on your other W-4 forms.

For line 4(a), you’ll tally up all other taxable income not earned from jobs, including interest, dividends and retirement income. This will enable you to deduct the necessary tax out of your paycheck now so you don’t have to pay it later.

For line 4(b), you’ll need to turn to Page 3 on your form and fill out Step 4(b) — Deductions Worksheet. This worksheet will help you determine whether you’re better off taking the standard deduction or itemizing your deductions. You’ll also be able to tally up any other applicable tax deductions, such as student loan interest or deductible IRA contributions.

Once you’ve filled out lines 4(a) and 4(b), you’re ready to fill out line 4(c), which indicates the amount of additional tax you’d like withheld each pay period, such as taxes for a side job you hold as an independent contractor or gig worker. You may have already calculated this number when you completed Step 2 above. If you are exempt from filing taxes, write “exempt” here, as mentioned above.

Step 5: Sign here

Don’t forget to sign and date the W-4 before turning it in to your employer. If you’ve filled it out carefully, you should have just the right amount of money withheld from your paycheck so that you won’t have a huge tax bill to pay in April, and you won’t have a large refund either.

If your life circumstances change and you need to change something on your W-4, you can always make an adjustment. If you get married, have a baby or take on a second job, you’ll need to adjust your W-4 accordingly.

W-4, done!

5 Steps to Safeguard your Financial Data from Thieves

Most people leave a trail of data nearly everywhere they go.

Some of that data links to critical information, such as bank or credit card accounts. Hackers want access and are constantly deploying new tactics to steal that data from unsuspecting consumers.

You don’t have to make it easy for them. These five simple steps can help you protect your financial information from data thieves.

1 > Use Secured Networks and Websites
The majority of Americans shop online, and data thieves try to exploit that fact. You can help protect your bank and credit card accounts by sticking to secured websites, which typically include “https” in the Web address and display a locked padlock icon near the address. When using a wireless network outside your home or workplace, avoid making financial transactions unless the network is password protected.

2 > Beef Up Your Passwords
Make it harder for hackers to access your data by choosing complex passwords that include a mix of numbers, letters, and symbols. Steer clear of passwords that use personal information, such as your birth date or address, and avoid using the same password across multiple sites or accounts. Tools such as LastPass and PasswordBox will generate a random password for each site, store them securely, and automatically fill them when you log in to a site, so you only need to remember one password.

3 > Protect Your Phone
A stolen smartphone could be as risky to your finances as a stolen wallet, especially if you use mobile apps to manage your finances. So, while you’re strengthening the passwords you use online, consider doing the same on your phone. Some newer handsets are now equipped with fingerprint scanners, which could give you an added level of security if your phone is swiped.

4 > Be Smart at the ATM
Getting cash from an ATM is a fairly routine transaction. Many people insert their card, enter their personal identification number, or PIN, and take their money without giving it much thought. Doing so could put you and your money at risk, though. Before using a cash machine, check your surroundings, and the ATM’s card reader and PIN pad, for anything suspicious or unusual. If something seems amiss, it might be wise to find another machine.

5 > Upgrade to an EMV Card
Many card issuers are upping their security game by adding microprocessors to newly issued cards. Know as EMV chips, the devices create a unique code for each transaction with a given account, making it harder for hackers to steal your data or skim it from a card reader. Even if a hacker does get your account information, it’s virtually impossible to copy your card and its chip. EMV cards also require users to enter a PIN or give their signature to complete the purchase, adding a layer of security. (Note about EMV cards: USAgencies will be making the swith to EMV technology. Details coming soon!)

Despite taking every precaution, it’s possible your data could still be compromised. Use caution when doling out your account information, especially online or over the phone, and keep a close eye on your account and credit card statements. If you spot signs of a breach, alert your financial institution as soon as possible to help stop the fraud in its tracks.

Copyright 2015, NerdWallet