Welcome to MECU’s Teen Information Pages. Here you will find TIPS on budgeting and saving for important purchases and events in your life, building good credit, buying a car, getting a summer job, preparing for college, and much more!

Your Budget

Budgeting is important whether you are saving towards a specific goal or just starting to manage your own finances. Without a budget it is easy to spend all of the money you earn without even thinking about what you’re spending it on. It makes it much more difficult to save for the things you want in a timely manner and manage your expenses.

Budgets include money coming in (income) and money going out (expenses). One of the most important things to include in your budget is PYF (Pay Yourself First). This means you treat putting money into your savings account as an expense. Before you take your spending money you must pay all of your bills or expenses. When you treat your savings account as an expense, you will be able to save much more quickly for the important purchases and events in your future.

Budgets can be based on any length of time you choose (monthly, weekly, etc.). It is important to stick with your budget if you want to attain your financial goals. Be sure it is flexible enough for you so that you don’t get easily frustrated and give up. Your goals when creating your budget must be realistic for your situation. Everyone’s budget will be different.

Using a spreadsheet is a quick and easy way to set up your budget and start achieving your goals. Here is an example of a budget worksheet. If you are interested in learning more please contact us and we’d be happy to help.

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Your Credit

Establishing good credit is one of the most important things you can do in order to get ahead financially. Understanding how to use and manage your credit is essential, but can be confusing. We’re here to help you!

Your credit history begins when you open your first credit card, car loan, or even when you sign up for a cell phone contract, begin renting, or possibly even from your checking account history. Everyone begins with a clean slate, but it can easily become tarnished if you are late on payments, miss payments, rack up your credit cards at or near their maximum limits, or even from bouncing checks, not paying traffic tickets or not paying medical bills.

Your credit history is reported on a credit report and you are given a credit score. This is a VERY IMPORTANT document that will impact your financial opportunities your entire adult life. Blemishes on your credit report may result in higher loan rates or not being approved for loans or contracts (cell phone, renting, cable, etc.). On the other hand, a very good credit report may result in lower loan rates and better financial opportunities. Remember that your credit history will remain on your credit report 7-10 years after the loan has been paid or the incident has been resolved. Please use credit wisely.

Quick TIPS on using Credit wisely.

• Make all of your payments on time.
• Only charge what you can afford to pay in full each month on your credit cards. Pay during your grace period and avoid paying finance charges.
• Do not get in the habit of making only the minimum monthly payment on credit cards. A quick example*: Say you charge $500 to your card buying CD’s, clothes, movie tickets and restaurant meals. You decide to pay the minimum $15 a month on your bill and your APR for the card is 18%. You’ll end up paying an extra $180 for those items in interest and you’ll be paying for them for 4 years! You probably won’t even listen to those CD’s or wear those clothes anymore and you definitely aren’t still enjoying your evening movie and meals from 4 years ago, but you are still paying for them. Does that make sense?
• Do not apply for numerous retail store credit cards just to save a percentage off of your purchase that day or for any other offers they push. Numerous credit cards can be more difficult to manage and remain financially responsible. It can also hurt your credit report score. Only open those you plan to use often and close them if you stop using them often.
• Read the Fine Print in ALL Credit Card and Loan Offers.
  • Shop around for the best deal.
  • Know if the annual percentage rate (APR) is fixed (stays the same) or variable (subject to increase). Sometimes the APR will be disclosed as fixed but the fine print will tell you that the rate is temporary or that one late payment will result in a much higher rate. Try to avoid credit cards with high APRs. Keep in mind that most retail store credit cards contain higher APRs than credit union credit cards.
  • Be sure to check the card’s annual fee (look for one with no annual fee), late payment fee, grace period length, transaction fee, and finance charge computation.

Additional Information
Young Money Magazine

*Example from the National Endowment for Financial Education (NEFE) High School Financial Planning Program, student guide (page 65).

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Your Car

Buying a car is a big financial decision in most people’s lives. Whether you buy only a few cars in your life or dozens, each purchase involves a lot of thought if you want to make a good decision. The first question: Do you want to purchase a Used or New vehicle? Consider the following things.

Shopping for a Used Car
Before you begin:

• Decide how much you can afford. If you or your parents have been saving money for a car, how much do you have? Do you want to get a car for that amount or less? Do you want to use that money for a down payment and get a loan for the rest? Be sure to discuss these options with your parents.
  • Get pre-approved if you will be taking out a loan. (If you are under 18 you must discuss the possibility of a vehicle loan with your parents, as the loan would need to be in their name.)
• Decide which car models and options interest you that are within your budget.
• Research the reliability and costs for basic repairs of the model(s) you want. Is there a repair shop nearby that works on this model?
• Check if parts are readily available for the type of car you want.
• Get a Blue Book value on the vehicle. This tells you what the vehicle is worth based on its year, mileage, and options. You will know if the seller or car dealer is asking too much and have an idea how much bargaining room you have when negotiating your price.
• Know how to read a “Buyer’s Guide” sticker on the window of vehicles at dealerships.

Consider the Costs of Owning and Operating a Vehicle:

• Costs will vary among different vehicles so it is important to consider these things before making your purchase.
  • Ownership (fixed) Costs
    • Depreciation (based on purchase price). Depreciation is the loss of value over time. The value of some vehicle types or brands/models depreciates much more quickly (or less quickly) than others.
    • Interest on your loan (if buying on credit).
    • Insurance.
    • Registration fee, license, taxes. Remember, in Wisconsin, you need to pay a license registration fee annually to operate your vehicle.
  • Operating (variable) Costs
    • Gas.
    • Tires.
    • Maintenance (i.e. oil changes every 3,000 miles) and repairs.
    • Parking and tolls (were applicable).

As you Shop:

• Ask many questions, including information on the previous owner’s experience with and use of the vehicle.
• Find out the reputation of the dealer.
• Find out what type of warranty comes with the car.
• Find out what type of service contract comes with the car.

Sources of Used Cars:

• New-car dealers – provide quality used vehicles; offer service department; often higher priced.
• Used-car dealers – specialize in previously owned vehicles; limited vehicle warranty (if any at all); vehicles may be in poor condition.
• Private Parties – may be a good buy if vehicle was well maintained; few consumer protection regulations apply to this type of sale.
• Other sources – auctions, government agencies, auto rental companies, or on the Internet.

Shopping for a New Car
Before you begin:

• See shopping for a Used Car.
• Find out the invoice price and true cost to the dealer of the model and options you want. Try to find out if the manufacturer offers any dealer incentives.

As you shop:

• Make your offer to as many dealers as possible and be prepared to walk away.
• Compare final sales prices with other dealers and buying services.
• Compare financing costs from multiple sources. When the dealer offers financing or cash rebates, be sure to check with your credit union. Our loan officers are here to help you and that includes making the best financing decision when buying a vehicle. Between your excitement and the sales person’s pressure it can be difficult to weigh your options and make the best decision. Sometimes taking a cash rebate and financing with your credit union is a better deal for you than taking the dealer’s 0% financing. We can help you decide which option makes the most sense.
• If you are trading in your current car, check the Blue Book value to determine that the dealer is offering you a fair trade-in value. You may want to try and sell your old car on your own (dealers usually give better prices without a trade-in and you can usually get more money for your old vehicle this way).
• Decide if an optional service contract or credit insurance is needed. Almost everything comes with an optional service contract these days. Evaluate it carefully to decide if it is beneficial for your planned vehicle use.

Auto Insurance Basics
The following are the types of coverage you can get on your auto policy. If you take a loan out to purchase your vehicle, you are required to have Full Coverage protection which includes liability, collision, and comprehensive. Here is a brief breakdown. Your insurance agent can go into much more detail with you.

• Liability (40-50% of premium)
  • Bodily injury coverage
  • Property damage coverage
• Collision (up to 30% of premium)
  • Pays for physical damage to car caused by accident
  • Limited by deductible
• Comprehensive (about 12% of premium)
  • Pays for damage caused by vandalism, theft, hail, floods, etc.

Additional things you may add to your policy.

• Medical
  • Covers medical payments for injured driver and passenger(s) in accident
• Towing and Labor
• Uninsured Motorist
  • Reimburses you for bodily injury in accidents caused by uninsured drivers
• Rental Reimbursement
  • Pays a specific amount per day to rent a car while damages to yours are being fixed

Possible Discounts on Premiums.

• Good Student Discount (Keep your grades up).
• Good Driver Discount
• Multiple Vehicle Discount
• Many more. Check with your agency to find out which discounts you qualify for and which discounts they offer.

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Your Job

A summer job or part-time job after school can have many benefits. It gives you an opportunity to save money for college, a car, or whatever else you want to save for. It also puts spending money in your pocket so you’re not always asking mom and dad for cash. Besides money it gives you an opportunity to meet new friends and learn what working is all about. You’ll gain responsibility and people skills that will be very beneficial in all aspects of your life.

Here are some links to help you find a job now and get ready for one later on.

•www.appletonoshkoshhelpwanted.com - local job classifieds.
•postcrescent.gannettonline.com/careerbuilder/index.html - (local) Appleton Post Crescent job classifieds.
•www.careerbuilder.com
•www.mapping-your-future.org - information on career choices, college planning, and more.
•www.Jobstar.org – great resume and cover letter ideas.
•www.Internjobs.com – national database of available internships for students and recent grads.
•www.SummerJobs.com – summer jobs available for students and temporary workers.
•www.Myfuture.com – information on military careers and tips on resumes, cover letters, and interviews.

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Your College

Where do I begin? Choosing a college can be a big step. You need to make your decision based on many variables including price, location, size, educational specialties, and many more. There are also many steps you need to take to apply, be accepted, register, and pay your tuition and other expenses. Your guidance counselors, teachers, and parents will help you with many of these details. We can help you and your parents with the, “How do I pay for it?” part of the process.

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Your Products and Services

We have many products and services that will help you achieve your financial goals and become financially savvy. Items with (*) indicate products/services offering convenience that allows you to use your account even if you move to another city or even state for college.

Savings Account – $5.00 is all it takes to start saving for your short-term (prom, concerts, etc.) and long-term (car, college, etc.) goals.

Checking Account – FREE Checking! Use this account for your purchases and bills. There is no monthly fee or minimum balance requirement.

Debit Card (ATM/Check Card)* – When you have a checking account, you can apply for this totally convenient card. Use it instead of writing checks to make purchases at your favorite store. You can also use it to withdraw cash from your account 24/7 at any ATM.

Share Certificate – If you have a larger chunk of cash that you’re saving for a long-term goal, you may want to consider placing it in a share certificate account. You’ll earn a higher dividend than a regular savings. Find out more.

@Home Financial Services* – 24/7 account access on the web! Check your balances, what checks or debit card items have cleared, recent deposits, balance your checking account, and make transfers or loan payments.  Sign Up Now!

M.A.R.T.Y (Audio Response Teller)* – 24/7 account access over the telephone! Check your balances, what checks or debit card items have cleared, recent deposits, and make transfers or loan payments. (920) 733-3620. Sign Up Now!

Direct Deposit* – Ask your employer if they offer direct deposit. If they do, use this form to get set up. You won’t have to make the extra trip to cash your check. Use your debit card to get your cash on your time.

Payroll Deduction* – The easiest way to stick to your budget and pay yourself first! Once your check is direct deposited, set the dollar amounts you want going to each of your accounts. Example: Say you get paid $200 (net-pay) every other week. Your direct deposit sends the $200 to your checking. You can fill out a payroll deduction form so that every time you get paid, $50 goes into Savings, $25 to your Holiday Club Account, and leave the remaining $125 in your checking. Use this form or stop in and we’ll help get you started.

Holiday Club Account – The holidays are the most expensive time of year for many people. Save all year using this account and you’ll never have to worry about being short of cash or racking up credit card bills. Use with payroll deduction to make saving even easier.

Credit Card* – Get a card from a financial you can trust. Our card has no annual fee, a low fixed Annual Percentage Rate (APR), a very low late fee and other benefits. You can pay your bill over the phone, in our lobby, or online. Learn more. (Must be 18 and older to apply.)

Student Loan – We offer student loan options for you and your family. Learn more.

Vehicle Loan – We have loan options for all kinds of vehicle loans. Learn more. (Remember, if you’re under 18 you must discuss loan options with your parents.)

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