Posts From July, 2016

Thunderbolt Area FCU’s Rich History: Keeping it in the Family  

July 20, 2016 Categories: credit union difference legacy series

Although they offer many of the same services, credit unions operate in a fundamentally different way than banks, one based on the philosophy of “people helping people”.  Credit unions were typically founded by friends, like neighbors, workers and people who worship together. Today we’re featuring a credit union founded by eight toolmakers who worked in America’s first Defense Airport.

The South Jersey town of Millville is rich in history, most famously known as the home of the Millville Municipal Airport, the first training ground in the country for pilots during World War II. Thunderbolt Area Federal Credit Union, located at the airport entrance, is a part of that history and holds quite a story of its own.

Its president, Bob Millard, is the son of the credit union’s founder, Asher K. Millard. Asher worked for Airwork Corporation, the engine overhaul shop located in Millville, as a toolmaker. He and seven other Airwork employees began Airwork Employees Federal Credit Union – later to become Thunderbolt Area Federal Credit Union – by pooling together their money, $5 each at the time. Until then, Asher had kept his money in a safe at home, lending to friends in need when he could. Laying the foundation for the credit union came as a natural next step for him.

The credit union gained its federal charter on May 1, 1951 and was located on the premises of its original sponsor company, Airwork Corp. Asher, however, couldn’t take off work from his position as a toolmaker to operate the credit union. So, his wife, Helen K. Millard, worked there part-time, for no pay, from 10 a.m. to 2 p.m., Monday through Friday.

Their son, current Thunderbolt Area Federal Credit Union president Bob Millard, at the ripe age of 8, began helping his parents with calculations. “Effectively I have been involved in some way for nearly 65 years,” says Millard. He was then elected to the board of directors in 1968 and eventually took over as president when his father retired in 1985.

When asked why he began working at the credit union, and continued for as long as he has, Millard says it’s the philosophy of “people helping people” that brought him there and kept him there. “I liked the concept,” he explains, “To help an individual, someone who just walks in, needs help, that’s where it counts.”

Where does the name Thunderbolt Area come from? It was also taken from the pages of the history of Millville. The Thunderbolt P-47 was a plane flown in World War II, and pilots of these planes were trained at the nation’s first Army airfield: Millville Municipal Airport. “Area” comes from the credit union’s change in charter to serve the surrounding area.

Through the years, Thunderbolt Area FCU has stayed true to its roots—its community and its humble beginnings—due to its founding family.

At a credit union, you’re much more than just a customer. For more information on Thunderbolt Area FCU, including how to join, visit www.tbafcu.com or find a credit union near you at www.BankingYouCanTrust.com

But, How Much Debt is TOO MUCH Debt? 

By Daniel Jacinto
July 08, 2016 Categories: debt

Thinking of taking on debt? For example, opening a credit card or purchasing a car or home? Unsure how much of it is too much? This is quite an ambiguous question because many have different opinions on debt. Some believe having it is taboo, even when it comes to buying a house. Others believe it’s fine to have debt as long as you can afford the payments.

Credit and debt go hand-in-hand. Credit is a financial device such as a car loan, mortgage, or credit card that people can get from a credit union or other financial institution. Credit serves as a source of funding when you don't have enough cash or assets to pay for things you want or need. (a car, a home, college education, etc.). Debt is what you owe after obtaining credit.

The amount of debt you can and should take on depends on your situation. Current living arrangements, current debt, your spending and saving habits, and how much you’re getting paid are some factors that go into deciding how much debt is too much for you.

According to CFA Elvis Picardo, a good rule-of-thumb to calculate a reasonable amount of debt would be to use the 28/36 Rule. This rule suggests that households shouldn’t spend more than 28% of their gross income on housing expenses (including mortgage payments, home insurance, property taxes, and condo fees), and a maximum of 36% on total debt service (housing expenses + other debt). For example, on a $40,000 salary following the 28/36 Rule, housing expenses should not exceed $11,200 for the year or about $933 monthly. Other personal debt should not exceed $3,200 annually or $267 monthly. Use this rule as a starting point to calculate your reasonable debt load.

Now that we’ve covered one big purchase let’s focus on another: your car. When deciding how much car you can afford (not how much you should spend on a car) it all depends on your needs, lifestyle, and how much you take home. According to www.moneyunder30.com, there are three answers to the question of how much car you can afford: the frugal answer (10% of income), the compromise (20% of income), and car lover (spending more than typically recommended for most people, perhaps up to 50% percent of your income).

If your car needs aren’t excessive and you just need a “beater” that goes from point A to B, then the frugal approach suggests between 10-15% of your salary should be how much you spend on a car. For example, if your income were $30,000/year, a good rule-of-thumb would be to purchase a car that’s between $3,000-$4,500 likely with high mileage.

This must all sound really conservative to you right now, but let’s compromise. What if you’re looking for something a little bit more reliable and safer to accommodate family needs? You’d probably want something newer that’ll last longer, right? For a more reliable, newer car, 20-25% of your income would be a good benchmark. If you make $30,000 a year, you’d be spending between $6,000-$7,500.

I know there are some readers still thinking even that is too strict and unrealistic for their car needs. Well, if you have a passion for cars and value cars more than other items, you may fall under the “car lover” category. The www.moneyunder30.com blog gives the OK to spend up to 50% of your income on your car, but only if you can afford it along with your other expenses. Just be cautious. If your car is your largest expense, be weary of other expenses.

Be mindful of your financial situation as a whole before you apply for a loan and go into debt. If you’re able to afford the payments, are confident you’ll get a return on your investment, and qualify for a good interest rate, then debt is very much a tool at your disposal. Great interest rates on mortgages can land you a profitable home if it appreciates in value over the long term. Getting a student loan to beef up your knowledge and can earn you more income over your lifetime.

Most credit unions have competitive interest rates on mortgages, student loans, car loans, credit cards, and more. Find a credit union that can provide you with the tools to grow your worth over your lifetime at www.bankingyoucantrust.com

 
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