Summit Credit Union’s Guide to Financial Confidence

BRAVA asked the financial experts at Summit Credit Union to share insights about how to relieve stress in the everyday lives of Americans. At Summit, CEO and President Kim Sponem says that every employee is a financial educator, and Summit’s free financial education puts that promise into action.

Financial success isn’t how much money you have — it’s feeling good about what you’re doing with the money you have.

That’s extra important for women, who continue to be paid less and earn less in their lifetime than men, despite living longer. They’re also more likely to interrupt careers to have children or handle needs at home. This challenges women with doing more for the same level of financial stability, especially in retirement. And it hurts self-belief: 81% of women don’t feel financially confident to be the primary financial decision-maker at home.

But Summit Credit Union is working to change that, and, for over a decade, has focused specifically on helping women understand their resources, set goals like boosting savings and reducing debt, and enjoy richer lives. CEO Kim Sponem says empowering women with more financial confidence can build stronger, more resilient lives, families, communities — even a better world. And it starts with knowledge.

“Knowing a clear, big-picture view of goals and priorities is key,” Sponem says. “It’s why we’re opening up the conversation about money and taking a more holistic approach to finances to break the cycle of fear and stress with these topics.”

Every financial situation is different, but Sponem says three strategies can help women boost money confidence:

  • Learn and talk more about money — Summit can help!
  • Work with financial experts to build a plan
  • Act on the plan, self-advocating and staying connected with experts as you go

Read on to learn how these strategies pay off and help you build wealth, from buying a home to starting a business and more.

(And don’t forget to register for the Empower Lunch Hour with Summit Credit Union and BRAVA … a free one-hour virtual event where we’ll talk about gaining confidence with money!)

Financial Self-Care and Caring for Others

Financial self-care comes down to making a plan that works for you, says Wendy Woodson-Jones, Summit Credit Union’s assistant vice president of retail branches. Talking to a financial expert about your short- and long-term goals and making a plan to achieve those goals, whether it be paying off debt, saving for emergencies, building credit or buying a home, helps you feel confident in making day-to-day money decisions. Below, she shares tips for women at different stages.

BUILDING CONFIDENCE AS A SINGLE WOMAN

One of the things Woodson-Jones often sees with women is that they are hesitant to ask questions. Managing finances isn’t always taught in school, yet most women feel like they should know everything — and feel guilty if they don’t.

Overcoming the fear of asking questions is the first step, and online seminars are a great tool for this. Summit Credit Union offers these for free to their members on topics from budgeting (because understanding spending habits is critical) to homebuying, investing and 401ks.

It’s important for women to pay themselves first, and the sooner you set this habit for yourself, the more you’ll get ahead. Set up automatic transfers so a portion of your paycheck goes directly into a savings account. Not only does it help save for bigger purchases, but it’s useful for emergencies that can pop up without warning.

Women should also not be shy about investing their money, though many are — and that’s where Summit can help you get more comfortable and take action (see the “Invest Confidently” section). Make sure to set up a 401k and see if your employer matches your contributions – doubling your money each time you are paid.

“Single and younger people don’t always think about those things until much later,” she says.

“You could already have quite a nest egg put aside if that’s something you do early on.”

COMBINING INCOMES

One of the biggest money mistakes someone in a relationship can make is not taking an active role in the finances.

“A lot of times people in a relationship become codependent on another person to handle the finances,” says Woodson-Jones.

Initiate financial conversations so you both know how much money you make and where it’s going.

Also, make sure you’re both planning for the future: If you want kids, understand how that would increase your day-to-day spending, or if you want to purchase a home, factor in monthly mortgage costs and home improvements.

As early as possible, sit down together with your financial coach so you both understand your assets, savings and investments. Don’t just make assumptions based on what you both make.

Lastly, it’s never too early to set up a will and life insurance. Too often, people don’t do this until it’s too late, making an already difficult situation more stressful.

CARING FOR YOURSELF AFTER A DIVORCE

Woodson-Jones describes financial trauma as a huge shift in finances that is often the result of a traumatic event, such as a divorce, and the subsequent navigation through that change.

During this time, it’s common for your relationship with finances to change, and that’s OK.

First, assess your current financial situation. Review your account history as well as any credit card, retirement and other account information to understand your monthly bills and credit worthiness.

You’ll need to reassess your budget, and, most likely, make some cuts — at least temporarily.

“Take it one step at a time so you don’t become so overwhelmed you’re paralyzed by it,” she says. “Small successes lead to more successes.”

It can also help to reach out to an expert, like a Summit financial coach, who can view the situation objectively and has seen similar situations many times before.

Know that it’s OK to make mistakes, and pivot along the way when needed. It will take time, but Woodson- Jones says it is also empowering to get to financial self-sufficiency.

“When you own your financial situation and find success after going through something as difficult as a divorce, there’s a certain level of accomplishment,” she says. “No matter how long it takes.”

CARING FOR OTHERS — WHILE MAINTAINING INDEPENDENCE

Women are natural caregivers and tend to put others’ needs first. In some cases, women find themselves caring for multiple generations in their household. That can lead to women’s finances taking a hit when caring for a sick loved one, adult kids who move back home or aging parents.

As hard as it may be, it’s important to set financial boundaries from the get-go. Set aside money each month for your own savings and necessities, and don’t dip into it if you don’t need to. Then, make a budget for the loved one’s additional costs, and plan how to fill it.

Woodson-Jones says there are a lot of resources, though it depends on the specific situation. Parents’ Social Security or pensions can be put toward medical costs, and there are often community programs available for illnesses.

“Figure out what you can do based on the incomes they have,” she says. “And if there is a deficit, look for resources in the community.”

Above all, don’t plan to do it with your finances alone. Summit’s experts can review your options with you and know what resources could be useful to your situation.

Starting and Owning a Business

A common misconception Dana Hoffmann, Summit’s vice president of business services, sees in entrepreneurship is believing you have to have all the money up front to get your business off the ground. Women especially are less likely to take investment risks on their business plan — even if it’s a good one. They’re also more likely to ask for less money and use more of their personal funds for their business.

“It’s really about understanding your resources and knowing your value as an entrepreneur,” Hoffmann says.

The best way to get started is to gather trusted sources to bounce ideas off of and do a little research. Organizations such as the Wisconsin Women’s Business Initiative Corporation and UW-Madison’s Small Business Development Center offer resources and classes to gain skills — and other business owners can be a great resource.

A business development officer at Summit can also help you work through your options, look at your credit, understand funding resources and review your business plan to increase your confidence in owning your own business.

If you’ve already got a business and are looking to grow, you can count on Summit’s business development officers to guide you in the right direction. As the No. 1 Small Business Administration lender, the Summit team helped 45 businesses in Wisconsin with SBA loans within the last year, and we’re happy to talk through if an SBA loan is right for you.

Invest Confidently

Women make decisions differently and are more likely to compare options before making a choice.

That’s not a bad thing, but it can lead to many women hesitating to make investments, which could hurt them in the long run, says Jody Brown, vice president of wealth management and part of the Summit Financial Advisors team. It leaves more women in poverty or below their desired income by the time they hit retirement.

That’s why Brown says women need a different, more holistic approach to investing. Brown works with her female clients to understand the context and thought processes behind financial decisions.

Start by understanding your income and expenses to see where there’s room to invest. Read your 401k statements and reach out to an expert to talk through investing terminology, tax advantages and other things you want to understand better.

“There’s no judgment, just a conversation that can help you look at the big picture and find solutions that fit your needs,” Brown says.

Making an appointment with a financial advisor is an important step because that person is a valuable mentor and advocate for you. Supplement what you learn from your advisor with Summit Financial Advisors’ free seminars, articles or blogs, and other resources — and ask questions to keep learning.

Then, pull the trigger, even if you don’t understand everything. Brown says too often she sees women wait too long, when the best way to learn is to start somewhere.

Also too often, she sees women apologize for not knowing about investing, but there’s no wrong time to start learning. Gaining knowledge gives you confidence to start, and that’s nothing to apologize for.

Set aside money in your budget for investing. Experts can help you take small steps, starting with less risky options and working up.

When you have extra money, like a tax return or work bonus, Brown suggests investing it using the rule of thirds: emergency savings, paying off debt and treating yourself.

Homebuying

Owning a home is one of the biggest wealth-building steps women can take, says Laura Zweep, a mortgage loan officer at Summit. That should make it a top priority for anyone — but especially women — looking for financial success.

Homeownership creates your first — and largest — asset that builds equity over time.

“You’re no longer caught up in a cycle of rent that never lets you gain equity,” Zweep says. “Getting into a home is a first big step to changing a family, a life, a future.”

For many, though, homeownership can feel like a down-the-road, hard- to-reach ideal. Zweep says too often women face misconceptions about what they need to get started.

Women can feel like if they don’t have enough for a 20% down payment or don’t make enough money, they can’t own a home, but Zweep says that’s not true.

“Even if you think you have these barriers, don’t let that stop you from at least coming in to have the conversation,” she says.

Research and knowledge build confidence. Sitting down with a mortgage loan officer and engaging in these conversations is the best way to start — even if you aren’t sure if now is the right time.

Zweep also suggests doing some homework, such as learning about credit scores and understanding your own. Credit is a big factor in qualifying for a mortgage as well as what that mortgage’s interest rate will be.

Also learn about the communities you want to live in, including property taxes, average purchase prices and the size of the home you can afford in different areas. Talk to a mortgage loan officer to see what mortgage options make the most sense for you, including what your maximum purchase price is so you know payments will fit your budget. Summit’s experts can even help you get preapproved, so your realtor and home sellers see you’re in position to make a serious offer.

Working with a mortgage loan officer can help you strategize ways to prepare for homeownership, from increasing your savings per month to paying down debt.

One common strategy Zweep shares with first-time homebuyers is to act as if they’re making a house payment while they’re still renting: For example, if you pay $1,200 a month in rent but your house payment would be $1,900 per month, put an additional $700 per month in a savings account. This will not only help build savings, but will also let you see what living on the new budget will look like. (A good goal to aim for is $5,000 in savings.)

Summit Credit Union’s mortgage loan officers are here to talk with you. As the No. 1 mortgage lender in Wisconsin, their experts can get you on the right path and guide you to programs available in the community that make homeownership more accessible. And since they know those programs inside and out, they can even handle the applications and other details for you.

“Don’t rule yourself out of a home before you even start,” Zweep says. “We can work with you on just about anything to find the path to homeownership that’s right for you.”

Summit Makes it Easy

Don’t be afraid to ask for help — it’s the first step to financial confidence.

Our experts have worked through just about every scenario over the last 85 years, empowering thousands of women in their day-to-day
lives, and in their entrepreneurial paths — one of our favorite ways to strengthen our local economy. We’re also building an environment for you to thrive in through our community giveback and award-winning financial wellness program for area employers.

The bottom line? We’re here for your first and every step. We’ll connect you to experts who can offer clarity and guidance that will boost your confidence to take action. And we’ll help you make a plan that works for you — staying by your side while you execute it.

We can meet in person or virtually, whichever is most convenient for you. We can also help you open accounts online, on your own time.

Find the resources you’re looking for at SummitCreditUnion.com, including:

  • Summit’s women-focused Red SHOES® program, with steps and support to reach your million dollars
  • Insights from Summit’s Project Money participants on saving money and reducing debt
  • Summit’s personal financial management tool, Climbr®
  • Budget and goal planning worksheets
  • Financial calculators
  • Money tips and helpful blog posts

Schedule an appointment online or give us a call to get started.

SummitCreditUnion.com | 800-236-5560 | 608-243-5000

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