A Note from Dan - Winter 2019


Dear Members,

Happy New Year! This is the time of year many of us will make resolutions to improve our health and happiness. You may resolve to set and stick to a budget. According to Business Insider, 80% of us who resolve to budget will break that pledge by February. But there is good news: a simple formula that can help you make a budget and keep it year-round. It’s called the 50-20-30 rule. A Forbes Magazine article published in 2016 explained the rule as follows:

  • 50% of your income should go to living expenses and essentials. This includes your rent, utilities, and things like groceries and transportation for work
  • 20% of your income should go to financial goals, meaning your savings, investments, and debt reduction payments (if you have debt, such as credit card payments)
  • 30% of your income should be used for flexible spending. This is everything you buy that you want but don’t necessarily need (like money spent on movies and travel)

Keep in mind the percentages for essentials and flexible spending are the maximum you should spend. Falling under those guidelines can leave more money for other financial goals. – Forbes July 11, 2016

SCE FCU’s products and services are here to make it easier for you to fulfill your goals. Our no fee checking account eliminates banking costs from your budget and it’s easy to meet the requirements for incurring no fees. For short-term goals, opening a Vacation Club or Holiday Club account will help to ensure you’re ready for next summer’s getaway or the 2019 holiday season. When savings is taken care of automatically, you’ll be less likely to think about it, be tempted to skip putting the money aside, or spend what you planned to save.

To improve your return on savings, consider putting some funds into an SCE FCU Certificate or Money Market account. Those products pay higher dividends than basic savings accounts and as the Federal Reserve Bank has been increasing short-term rates, Certificate and Money Market account rates have also been rising.

If you want to accelerate your savings, focus on that 30% used for flexible spending. These things can be important, they can be fun, and can even be thought of by some as necessary. Still, this is the category where we can usually find savings if we look hard enough. How many subscriptions or apps are you paying for? Do you still have a land line telephone service plan? Can you eat out a little less – perhaps pack a lunch for work? Every dollar you cut from this category can go to savings, including paying a little extra on your debt – that’s savings, too!

One last important piece of advice: make sure your budget allows you to have some fun and treat yourself during the year. Budgets are more successful if they leave enough available to do the things that bring you joy. Be practical, not miserable. As a member of SCE FCU, you have access to excellent savings and investment products. Always know we have your best interests in mind.

Here’s to a healthy and prosperous year for each of our members, our team, and our communities.


Dan Rader