Lone Star Credit Union Blog

The Ins and Outs of EMV Cards

Posted on Wed, Feb 03, 2016

The credit card swipe is on its way out. In its place is a new way to buy, featuring a small microchip embedded in your plastic and promising more security. Here are answers to questions you might have about the advent of these cards, dubbed EMV cards

First, why is it called EMV? 

Europay, MasterCard and Visa led the push for this technology. It’s been in use in Europe and much of the rest of the world for several years, but is just now making its way to the United States. 

What does an EMV card do (and not do)? 

That familiar magnetic stripe on the back of your credit and debit card contains a static set of information — card number, expiration date — that could be obtained by criminals. They either use a skimming device to extract the data on the stripe or hack into a retailer’s database and pull the card information stored there from transactions. An EMV card comes with an embedded chip. When the card is used at the point of sale — the mall, a grocery store, anywhere where you are buying in person — the chip encrypts your card’s information and transmits a unique bit of code to complete the transaction. This one-time code cannot be used again, so someone who obtains it won’t be able to make fraudulent purchases. In addition, EMV cards require either the cardholder’s signature or a personal identification number. However, an EMV card cannot flex its extra security muscles when used online or over the phone, because then the chip is not put to use. When making purchases this way, make sure the party on the other end is trustworthy. And should you lose your card, report it immediately to prevent any fraudulent purchases. 

Are EMV cards harder to use? 

Not really; just different. Instead of swiping your card at the register, you insert it into the card reader and leave it there until the transaction is complete. You’ll be prompted when it’s time to remove your card. (And for now, EMV cards also have a magnetic stripe so you can use them at stores that don’t have EMV readers yet.) 

Has the EMV card totally replaced its predecessor? 

Not yet. There’s no law that mandates the immediate end of magstripe cards. Instead, on Oct. 1, 2015, there was a liability shift between card issuers and merchants; now, if a transaction leads to fraud, the side with the lesser technology is considered liable. That  means that financial institutions and stores alike have incentive to update their cards and card readers. However, implementation will vary. Big businesses may have their new systems up and running, while some small businesses might take a little longer. And due to high demand, some card processors may not issue new cards until 2016. In the meantime, the older cards will be usable. Get your last swipes in while you can. 

Author: Lynn Mucken, NerdWallet
© Copyright 2015 NerdWallet, Inc. All Rights Reserved 

Topics: Managing Your Money

LSCU Recognized For "Green" Efforts

Posted on Mon, May 18, 2015

An Environmental Achievement

Recycle Revolution awarded Lone Star Credit Union with a certificate of recognition for the success of their recycling program from April 1, 2014 to March 31, 2015. The program consists of recycling materials such as cardboard, plastic, aluminum, glass, and paper. A total of 785 lbs was recycled which decreased LSCU’s carbon footprint by 2,735 lbs of carbon dioxide emission.

Going “Green” for the Good of Our Communities

Lone Star Credit Union’s recycling program helps to create more environmental sustainability and less waste in north Texas. The infographic below shows LSCU’s conserved resources through recycling efforts in 2014. 

Recycle Infographic 01 resized 600

About Recycle Revolution

According to their website (www.recyclerevolutiondallas.com):

“Recycle Revolution LLC (RR) is an independently-owned, non-landfill recycling company. We provide a one-stop shop collection service for a growing and diverse group of businesses and multi-family communities in the Dallas-Fort Worth Metroplex, and waste consulting and project management services to establishments seeking LEED and zero-waste goals.” 

Recycle Revolution is based in Dallas, Texas. 

Topics: In the Community

LSCU's "Help the Fight Against Cancer in One Click" to Support Kaufman County Relay for Life

Posted on Tue, Mar 31, 2015

This year, LSCU will participate in the Kaufman County Relay for Life event sponsored by the American Cancer Society. The event, taking place on April 24th, is a chance to remember those who have been lost, celebrate survivors, and fight back against a disease that has taken so much from many of us. Donations from the event go to cancer research and programs that help those fighting the disease with transportation to treatment, lodging accommodations, improving patients’ self-image while going through therapy, and support groups.

Facebook Donation Promotion Cove Photo

As a prelude to the event, LSCU will sponsor a “Help the Fight Against Cancer in one Click” promotion on Facebook. For each new person that “likes” LSCU on Facebook, we will donate one dollar ($1.00) to the Kaufman County Relay for Life. The promotion begins on Wednesday, April 1st, and ends on Friday, April 24th. It’s easy to participate, all you need to do is visit our Facebook Page and click “like”. If you’re already a fan, feel free to share with your family and friends and ask them to “like” our page. We will count the number of new “likes” we have at the end of the day on April 24th, and calculate the amount we will donate to the Kaufman County Relay for Life. Please see official rules for details.

View LSCU's Relay for Life Team Page

Topics: In the Community

How to Avoid Identity Theft by Hackers, Dumpster Divers and Snoops

Posted on Thu, Jan 29, 2015

If you’re worried about identity theft you have plenty of good reasons.


Tens of millions of people had their accounts compromised in some way in the past year alone after hackers breached U.S. retailers’ computer systems. The Federal Trade Commission has listed ID theft-related issues as the top consumer complaint for over a decade.


How can you protect yourself from identity theft and the havoc it can create? Lots of ways, it turns out. Here’s a quick checklist of practices to implement now to protect your personal information:


Think first

Don’t automatically provide personal information when it’s requested — think about who’s asking, why it’s needed and find out what will be done with it and how it will be protected. Never give out such details to a stranger who calls or sends an email request, no matter what is being offered as an inducement. Never disclose personal identification numbers (PINs) and don’t write them down where they may be discovered. Instead, memorize each one.


Lock it up

Keep vital records and documents such as your Social Security card and birth and marriage certificates locked in a safe place, and if you can’t have your purse or wallet with you at work, put it in a secure spot. At home, don’t leave things such as bills, tax returns, paycheck stubs and bank records lying around where they may be seen by roommates or workers passing through. Put a lock on your mailbox. Create a file with account numbers, expiration dates and contact information for use if anything gets lost or stolen.


Destroy, don’t toss

Shred or incinerate unneeded documents with sensitive information, such as credit offers, bills, old prescription containers, bank statements and medical forms. Cut up old credit cards especially where numbers are embossed or printed. 


Look carefully

Before using a cash machine, self-serve fuel pump or the card-swiping device at a store, give it a close examination to spot any abnormalities. If something seems out of place or unusual, don’t use it. Hackers sometimes put phony card-reading “skimmers” on automated teller machines, pumps and checkout registers to scoop up consumers’ account data. Often, these malicious mechanisms can be easy to notice if you’re on the lookout for them.


Check again

Go over your account information meticulously to spot any unfamiliar activity. Review your checking account transactions at least weekly, and study credit card bills closely each month. Check others, like individual retirement accounts, at least quarterly and make an annual habit of requesting your credit report from each of the three main bureaus that collect the information: Equifax, Experian and TransUnion. They’re all obliged to give you a free copy each year, when asked. Read each with an eye out for unfamiliar activity or errors.


Be on guard online

Install firewalls and antivirus programs on your computer and consider encrypting any files containing personal information. Exercise caution when providing personal details such as birth dates and credit or debit card numbers to websites and avoid exchanging private data over public Wi-Fi networks.


Identity theft affected 16.6 million Americans in 2012, leading to almost $25 billion in losses. Taking precautions including those above can help you avoid joining them. 



Topics: Fraud Protection

Here’s How to Beat a Holiday Debt Hangover

Posted on Thu, Jan 15, 2015

If you overindulged during the holidays and busted your budget in the process, don’t despair. This condition can be licked, though maybe not as easily as dispatching the residual effects of over-imbibing while spreading good cheer. Nonetheless, trying to ignore that flurry of January bills won’t make the debt hangover melt away.  

For some, getting over a spending binge takes nearly all year: 7% of 2013 holiday shoppers fell into that category, Consumer Reports noted in November. It may not be easy, but it can be done. Here are a few tips to get you started:  

Stash plastic: To avoid unnecessary spending, keep your credit and debit cards out of sight and leave them home when you go out. Take your information off of merchant websites and mailing lists to limit temptations.  

Assess the debt: Make a list of all your balances, the minimum due on each per month, due dates and interest rates, so you can set priorities and weigh options.  

Consider balance transfers: Sometimes consolidating debt using lower-rate accounts can save money as the amount is paid off. An online calculator can help you figure out potential savings, but don’t neglect to include upfront fees. Keep in mind that maximum cost reduction may rely on paying off balances before any introductory discount period ends.  

Create a budget: A budget can help keep you on track to eliminate overhanging debt at minimal cost. It should include monthly necessities — such as food, shelter, fuel — as well as income. Allocate amounts for debt payments as well as savings and incidental expenses.  

Pay extra: You won’t find your way out of the mess just by paying the minimum due on balances you owe each month, so pay more. That goes double for high-rate accounts, which should be your primary targets as you reduce debt as fast as possible.  

Increase income: Adding income will help. If you can’t negotiate a raise or win a bonus, maybe you can do some moonlighting to boost what you bring in. Even selling unwanted items can give you more money to pare down what you owe faster.  

Don’t get discouraged — persistence pays off. As your debts disappear, check out a savings account at a financial institution like Lone Star Credit Union. You can use one to prepare for the 2015 holidays and put yourself in good financial shape before the season’s shopping even begins.


Topics: Managing Your Money

Don’t Let Thieves Pry Funds Out of Your Debit Card

Posted on Thu, Jan 01, 2015
internet security

Lots of people enjoy the convenience of using debit cards — 59% of Americans use them every day, according to Accenture research — and many of us get paid or receive government benefits through them. In short, they’ve become indispensible.

So it’s important to protect your debit card information from hackers, thieves and fraudsters. These no-goods can pose a serious threat, and safeguards may be less robust than you think.

What’s at Stake 

Unlike credit cards, losses to fraud or identity theft can be unlimited — it all depends on how quickly you report a card lost, account information stolen or unauthorized transactions. No charges can be made against your account once you’ve reported it compromised. But you can lose your entire balance if the activity goes unreported long enough.   

Under the federal Electronic Fund Transfer Act, your losses are capped at $50 only if you notify the issuer within two business days of noticing that your card or account information has been lost or stolen. After two business days, your exposure can rise to $500. If you wait more than 60 days to notify the issuer about a fraudulent transaction on an account statement, you could be liable for all losses after 60 days and before you notified the issuer.   

Visa’s Zero Liability policy may protect you from any loss but only if the card company processes the transaction involved. Other limitations may apply as well.   

Minimize Your Risk 

Considering the potential stakes, it’s a good idea to take some steps to prevent crooks from getting their hands on your debit card information. Here are a few:

  • Register your Visa card with Verified by Visa and create a password for the account to add a layer of extra security in online transactions. Keep records of account and security numbers, passcodes and expiration dates. Never give card information to strangers or unfamiliar organizations.

  • Look closely at card-reading “swipe” devices — if something looks out of place, don’t use it. Thieves sometimes install “skimmers” on top of legitimate card readers to capture account data and use concealed cameras to learn associated passcodes.

  • Don’t keep your personal identification number (PIN) for your debit card in your purse or wallet. Memorize it and keep it a secret.

  • Check your account activity regularly — daily or at least weekly. Immediately reportany unrecognized activity to issuers like Lone Star Credit Union.

  • Let the card issuer know in advance if you’re traveling to distant places or you plan to make an unusually large purchase, so that such transactions don’t trip red flags for account monitors.

Don’t let the convenience of a debit card become a nightmare. Take steps like those outlined above to protect your money.


Topics: Fraud Protection

Credit unions are just like banks. Or, are they?

Posted on Fri, Jul 12, 2013

In answering the question "What is a credit union?", most people have the same answer "It's just like a bank, but...".  Well, in the case of products and services, that's usually a pretty good descriptor. Saying credit unions are just like banks is an easy way to let whomever is asking the question, know that credit unions have checking accounts, loans, debit cards, savings accounts, credit cards, and other traditional banking products.

But how does that answer end?  "It's just like a bank, but..."  

Often times those of us that know banks and credit unions are different aren't exactly sure how. Or maybe we just aren't sure how to explain it.  Well, there is very major difference between these types of financial institutions, and here it is, in a nutshell:

Banks are for-profit businesses that answer to investors.  Credit unions are not-for-profit and member-owned.

Basically, think of the money in your bank accounts as money you are lending to the bank that they will invest to make a profit.  And much like any other business, the bank will make these investments based on which will turn the greater profit.  And, at the end of the day, all of the decisions made for the bank as a company, that will in turn affect bank policies and customer fees, will be made based on investor happiness and what can garner the most revenue for the bank.

Credit unions, on the hand, operate under a not-for-profit business model.  Not-for-profit is not the same as nonprofit, which is a term you may be familiar with in regards to charity organizations. Nonprofit means that an organization is dependent on donations to survive.  Not-for-profit simply means that any profits that a credit union makes are returned to its members in the form of lower loan rates and higher savings rates.  And, if it so happens that there is any revenue left after making all of these adjustments, credit union members can receive dividends.  

Choosing a bank or credit union
So what kind of financial institution is best for you?  Of course each individual's financial and personal needs are different.  But here are a few items you should consider when choosing your financial institution:

  • Turning a profit has its benefits.  The big banks have tons of locations, nice and new branches, and many conveniences and technical advances that many smaller financial institutions cannot afford to offer; think robust mobile apps, remote check deposit, etc.
  • You're the boss.  A savings account is not just a savings account at a credit union. CUs call these "share accounts" for a reason; because it is your share in the ownership of the credit union.  And while banks are answering to investors, credit unions answer to their members. CU members even vote for the board of directors for their credit union and voice their opinions at annual meetings.
  • Investments aren't the only way to turn a profit.  A couple of years ago, consumer frustration with big bank nickel and diming practices culminated in Bank Transfer Day. November 5, 2011 was deemed Bank Transfer Day in a movement of consumers that were fed up with being charged fee after fee by big banks.  Not only were these banks raising existing fees, but they were also adding new fees, like Bank of America's now infamous proposal to charge its customers $5 monthly just for having a debit card.
  • If turning a profit has its benefits, then no profits must have some disadvantages. Most credit unions are smaller and more local in nature.  And sometimes that means that the conveniences that larger banks can offer, like the technological advances and multitude of branches we mentioned earlier, are not as easy to come by.  But, you should also know that credit unions are much more cooperative in nature and don't have the competitive spirit found between big banks.  So how does that help solve some of the CU inconveniences?  

    1.  Shared Branching.  Shared branching is a partnership of credit unions that
         allows credit union members to perform financial transactions (deposits,
         withdrawals, transfers, loan payments, etc.) at partner credit unions just as the
         member would at their own credit union.  

         So even if your credit union doesn't have a branch near your home or office, or
         you're across the country on a trip, chances are that one of the over 5,100
         shared branching participating credit unions is close by if you need them.

    2.  CO-OP ATMs.  So you don't necessarily need a credit union branch, you just
         need some quick cash from the ATM.  BUT, you don't want to pay a huge fee,
         right?  Most credit unions participate in the CO-OP ATM Network of almost
         30,000 ATMs across the country that members can use just as they would their
         own credit union's ATMs.  Fash cash with no fees.  And many of them even take
  • Service with a smile.  This is last, but certainly not least.  Another advantage of the smaller, community nature of credit unions is the impeccable and friendly service.  The hustle and bustle of long lines just don't lend themselves to remembering customer names or customer relationships with banks.  But, credit unions provide something much different.  So, don't be surprised if you're are greeted with "Good morning Mr. Smith" when you walk into your credit union, as opposed to someone asking for your account number or debit card.

We are obviously biased, but the advantages to joining a credit union seem to far outnumber the disadvantages.  And contrary to semi-popular belief, you don't have to work for an employer with credit union ties to join one.  Many credit unions do have restrictions on who can be a member, but many of those restrictions are as simple as living in certain counties or cities; which isn't much of a restriction at all. 

Want to switch banks but don't know where to start?  Download our simple steps to making it easy!


Topics: Managing Your Money

Are you unbanked or underbanked? Bank accounts can save you money!

Posted on Fri, May 17, 2013

The terms "unbanked" and "underbanked" are being used quite a bit lately; mostly by financial institutions and local and federal government officials advocating safer financial practices for their communities.  But, how many of us know what these terms mean? And what's so great about being "banked" anyway?

Let's run through the definitions first.  The FDIC defines someone without a bank account, credit union account, or another financial institution account as "unbanked". "Underbanked" typically means that, while someone may have a bank or credit union account, they also routinely subsidize that account with other non-traditional financial products like payday loans, check cashing, or pawn services. 

Currently, there are about 60 million adults that are underbanked or unbanked entirely. So why is this a problem?

Well, if you are someone who is banked, you probably don't worry about cashing your paycheck, social security check, or even just a personal check from a friend or family member.  You simply deposit the check into your account, right?  If you don't have a bank account, however, you would probably resort to a check cashing store to redeem a check.  National studies have shown that the average check cashing fee is between 2-6%.  Imagine paying $20 - $60 for every $1000 payroll check! That's money you have earned that you could be spending on food, gas, or clothing; and now you no longer have that option.  To make matters worse, some of these stores charge up to 20% of the value of the check they are cashing.

Bank accounts can save you money!

The unbanked and underbanked are also missing other services as well.  Because the underbanked don't have strong enough relationships with financial institutions, and the unbanked have no relationships at all, they often turn to payday lenders for high interest rate loans or cash advances when they are in a financial bind or need to supplement their income. And considering that payday lenders often have service fees ($15 - $20 per loan term) plus outrageous interest rates that can range from 300% - 750% (APR), this is a very pricey and risky alternative.  Many people end up paying back $300 - $400 or more to payday lenders for a $100 loan.  

Another type of short term loan that has grown in popularity is the car title loan.  Many car owners that are struggling financially are offering their car titles for cash by lenders who are known to charge triple-digit annual percentage rates (think 250%!).  The loan terms are typically pretty short, around 30 days.  The problem is that if the consumer didn't have a few hundred dollars initially, they are very unlikely to have twice as much money in 30 days to repay the loan.  So, many of these car owners are rolling over their loans for months until the repayment amount is nearly impossible to obtain, and eventually getting their cars repossessed.  The car title lenders are then selling the consumer's car and keeping 100% of the profit.  And the consumer is left with nothing; no cash and no car. While car title loans are generally considered a "predatory lending" practice, they are not illegal.  

So how could being "banked" help in these situations?  Many financial institutions offer short term loans or regular credit cards that would allow someone who is struggling financially to make it through the month, or several months, for much lower interest rates. Even the short term loans and most any kind of loan from a credit union, are offered at rates that are a fraction of those given by payday or car title lenders.  

The problem that some people run into is with credit checks/scores.  But part of a long-term solution for this would be to do something like a "credit builder" type loan that many financial institutions offer.  They allow you, if you don't qualify for a traditional loan, to secure a loan with your own money deposited into an account.  When you make payments to this secured loan, the payment history, etc. will still work to improve your credit score.  

And a credit card could also alleviate some frustration and give you more flexibility in months that you are short on cash.  Even if you don't have the most desirable credit rating, a 19% interest rate is still much better than a 300% interest rate.

There are other reasons that being banked is much better than being unbanked or underbanked.  Here's one more:  Safety.  If your credit card or check book is stolen, those items can be reported stolen and cancelled.  Even your debit card can be frozen by your financial institution.  But, if your entire paycheck is in your pocket or wallet and is stolen, you will never see that money again.  Not to mention, people that steal wallets, aren't always nice in their means to get your wallet.  

Other reasons to be banked include: having your money protected by the NCUA or FDIC, the helpful budgeting element of online banking that most financial institutions offer, interest bearing accounts, and much more.  If you aren't yet with an financial institution, the time to get banked is now!

Not sure what your financial future holds? Learn now how to improve your financial outlook!

Topics: Managing Your Money

To rent or to buy? How a mortgage loan could save you money.

Posted on Thu, Apr 04, 2013

Home ownership seems like a very grown-up proposition, doesn't it?  There's just something about mowing a lawn and making repairs that reminds us of our parents.  


Mortgage Loans have many benefits

But, a home doesn't just mean a house in the suburbs.  It can mean a condo or a townhome, too.  Given that, home ownership can really make sense for a variety of different people.  

So what does "make sense" mean exactly?  Well, there are many benefits to a mortgage loan that you may not be aware of, like:  payment stability, tax advantages, equity, as well as many other intangibles.  

Let's start with payment stability.  If you are renting then you probably have come to the understanding that your landlord/complex can raise your monthly rent payment due to inflation everytime your lease expires.  To make matters worse for the renter, rent hikes aren't always just due to inflation.  The rental market is just like every other business and varies greatly depending on demand.  According to the Dallas Morning News, North Texas rents have gone up 15% in just the last 5 years.  And that makes perfect sense when you think of that time period in relation to the extreme economic downturn from which our nation is still recovering.  If tons of people were foreclosed on or laid off about 7 years ago, then there was bound to be a huge demand for apartments in the years to follow, right?   

On the flip side of this coin is the fixed-interest rate mortgage loan.  If you were to buy a home and financed with a fixed-interest rate mortgage, then you would pay the same monthly principal and interest for the entire term of your loan; whether that is 30 years, 15 years, or somewhere in between.  Not so coincidentally, now is a great time to embark on a mortgage loan with low loan rates being so prevalent.

Did we mention there are tax advantages to owning a home?  We are not tax experts, but we can at the very least tell you that mortgage interest and property taxes are tax deductable.  The deduction you can take due to your mortgage interest will be your biggest tax break.  However that benefit is limited if your loan is for a million dollar home (or more).  There are also deductions regarding energy efficiency and "points" (regarding the fees or charges you may have paid to obtain your mortgage loan), but, we would advise you to see a tax specialist to delve into those.

Another huge advantage to home ownership is the equity you build!  What is equity, you ask?  Equity is what builds when your home increases in value and you have started to pay off your mortgage loan.  Bascially, it is the value of your home beyond what you still owe in mortgage payments.  Once you've built equity, you can borrow against it in the form of a home equity loan to pay for a variety of things, think:  home improvements, college tuition, or retirement planning.  You can even use it as an opportunity to consolidate some bills or go on a vacation.  There are many, many possibilities here.

Some other more intangible benefits include community stability.  Buying a permanent place to live will help you and your family bond with neighbors, allow your children to have a consistent school environment and classmates, and can even make decorating a little easier; no more puttying old nail holes in the wall when you move!

Of course, with all of that being said, there are still plenty of times when home ownership may still not be right for you.  Not sure you've found your perfect city?  Think your job may relocate you?  Do you want to wait until you have a spouse and children?  All of these are legitimate reasons to wait.  

But now that you know all of the benefits that come with owning a home, hopefully you will feel more confident in your decision when you are ready.


Worried about your credit score?  Learn what steps to take to give your credit score a boost!

Topics: Making a Big Purchase, Managing Your Money

Budget Well and Pad Your Savings Account

Posted on Thu, Mar 14, 2013
Build Your Savings Account

The word "budget" usually evokes a few words with negative connotations in many people's minds; words like can't and don't, as in "You can't eat out" or "You don't have funds available for those new shoes".  But, all a budget really is, is a plan for how much money you will spend this month or this week. That's it.  That doesn't sound too terrible, does it?

Of course, if you have been spending more than you can afford or you are setting a new savings goal, then setting a budget may come with a few constraints.

But, the most difficult part of preparing a budget is remembering every expense you incur each month; although, with the help of online banking and credit card statements, it's not really as hard as you think it is.  Here are a few basic expenses that most of us incur:

• Mortgage/Rent
• Utilities
• Home/renters insurance
• Car payment
• Auto insurance
• Phone bill (land lines & mobile)
• Cable/Internet bill
• Credit card payments

You might also have some less common, but recurring expenses like a gym membership or student loan payments to consider.

And then, there are a few other expenses that are sometimes difficult to estimate but should still be part of your budget.  Such expenses are:

• Gas
• Groceries
• Clothing/Shoes
• Entertainment 
(movie tickets, Netflix subscription, dining out, video games, etc.)
Honesty is the best policy on these items.  It doesn't really help your efforts to save if you tell yourself that you spend $25 per week on entertainment, when in actuality it's closer to $60.  Get a true assessment over three or four weeks on your gas, groceries, shopping (clothing/shoes), and entertainment expenses.  

If you're really anxious to get started, you can use your last receipt amount for all of those things, but be sure to take into account whether or not that last receipt amount reflects your normal behavior.  Maybe you spent $150 on gas in the past two weeks; but were you driving more than normal due to a family emergency or was it the one week per month that you drive a ton for work? Did you only spend $20 on entertainment because you were away on business or you had the flu and didn't feel like venturing out and you'd normally spend more?  Also, don't forget that the Clothes/Shoes category doesn't just include a brand new pair of running shoes or a new suit.  It also includes the not-so-fun-to-shop-for items like socks and undergarments.

Your entertainment bill will probably be the most difficult to assess because you probably do different things from week-to-week for fun; dinner with friends, a movie with your family, or maybe there was a special holiday festival in town, etc. The best way to handle that is, again, to get an idea of your average spending over several weeks.

Your grocery bill will most likely be easier to estimate.  Most people buy enough food to stock their refrigerators for one week and we tend to buy the same foods to prepare each week, so this won't be too difficult.

You will also want to enter a slot in your budget for miscellaneous expenses. These are the things that you spend money on that may not fit perfectly into any of these categories.  Do you visit Starbucks every morning on your way to work?  Or once a week?  If you're like us, then you're probably ordering the oh-so-delicious warmth of a Cafe Mocha or Vanilla Latte, and that could cost as much as $4 or $5 per visit.  Are you a smoker?  How often do you buy cigarettes and in what quantities?  Both of these things are examples of non-categorized expenses that can add up in a hurry, so don't forget to consider them in your calculations.

Lastly, don't forget that emergencies happen. You don't want to use every last cent available to you and leave nothing for:  car repairs, home repairs, trips to the vet, and anything else you wouldn't normally need to purchase, but may crop up unexpectedly.  Of course it's unrealistic to plan for an unexpected $400 car repair.  That is just too much money to set aside.  But, the idea is that if you set aside $50-100 every month and not use it, in just 4-8 months, you will be able to handle those rare emergencies without maxing out a credit card or borrowing money.  

So, now that you have a handle on what your expenses are, how do you track them all from month-to-month?  Well, we at Lone Star Credit Union, happen to like a good Excel workbook.  But, if the idea of inputting numbers and formulas into a spreadsheet isn't your idea of fun, consider using a budgeting software like BudgetSmart.  The BudgetSmart download is free on our website and can track your spending for you and even give you some advice on where you could cut back if you'd like.  

Speaking of cutting back, how do you begin to increase your savings now that you have a budget started?  Well, the first thing to do is to determine your goal.  Is your goal to save up for a down payment on a new vehicle?  Is it a new home?  Retirement?  Or just some general savings for a rainy day?

Once you have that number in your head, start thinking about how much you can reduce your expenses each month.  Then, you'll have a good idea of when your goal will be met.

But, how do you figure out what expenses can be reduced?  For this purpose, it will really help to list your expenses in order of importance.  Obviously your mortgage/rent payment will rank much higher than your daily Cafe Mocha. But, try to rank every expense regardless of how silly the process may seem.  Once your list has been compiled you'll probably have a good gauge on what is expendable.  And if you are really looking to cut back after doing away with trips to the mall and going to the movie theater, then think about how some of your larger expenses can be reduced.  Can you refinance your car for cheaper payments?  Renters:  can you live in a smaller, more inexpensive apartment?

Last but not least, remember to give yourself SOME play money.  If you aren't living paycheck-to-paycheck, then it's probably not a bad thing to have that Cafe Mocha every now and again.  Restricting your budget too much will surely foil your plan to stick with it.

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Topics: Managing Your Money, Saving for the Future