Financial Needs…or Wants?

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Happy birthday, K9 Apollo! Stay safe!

Happy birthday, K9 Apollo! Stay safe!We said yesterday there was another birthday boi coming up!! Today is K9 Apollo’s 2nd Birthday!!

Not often that you have back-to-back birthdays of such good bois!!!! Everyone wish K9 Apollo the happiest of birthdays!

#k9 #birthdayboi #birthdaycelebration
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1 day ago
Thank you!
#TelecommunicationsWeek!

Thank you!
#telecommunicationsweek!Big shoutout to all the amazing dispatchers keeping us safe and connected on #TelecommunicationsWeek! Your hard work does not go unnoticed 🚨📞💼

Dispatcher Cora Thorp has served this department for over 10 years. Thank you Cora for your dedication.
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1 day ago
Happy, happy birthday, K9 Ace!! Stay safe!Image attachmentImage attachment

Happy, happy birthday, K9 Ace!! Stay safe! ... See MoreSee Less

1 day ago

National Police Credit Union is honored to welcome the Munster Police Department (Indiana) into our field of membership. We look forward to serving you and your families. ... See MoreSee Less

2 days ago
Thank you, Dispatchers!!!!
#TelecommunicationsWeek

Thank you, Dispatchers!!!!
#telecommunicationsweekWhile they won’t be saying “Aloha” when they answer the phone, they are dressed for island time! Sheriff Crawford is proud to honor our wonderful Communications Unit this week during National Public Safety Telecommunications Week. We surely have the best!

#telecommunicationsweek #celebrate #dispatchers
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3 days ago
Thank you, Dispatchers!!!!
#TelecommunicationsWeek

Thank you, Dispatchers!!!!
#telecommunicationsweekFrom all of us at Parkers Mill Fire to Pulaski County 911 Center and surrounding 911 centers, We appreciate all the hard work keeping all agencies, and the community safe! Wouldn’t be able to do it without you guys! #telecommunicationsweek
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3 days ago
Thank you, Dispatchers!!!!
#TelecommunicationsWeek

Thank you, Dispatchers!!!!
#telecommunicationsweekHappy Telecommunications Week! We here at the Itawamba County Sheriff's Department want to thank all the hardworking dispatchers out there! We want to take a moment to show our utmost respect, appreciation, and admiration for the vital role you play in emergency situations. Your calm voice and quick thinking bring peace in moments of chaos. Thank you for your dedication and selfless service, we couldn't do it without you!
#ThankYouDispatchers #TelecommunicationsWeek #RespectAndAdmiration
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3 days ago
Thank you to all of the Dispatchers who live behind the scenes, but are always front and center!!
#TelecommunicationsWeek

Thank you to all of the Dispatchers who live behind the scenes, but are always front and center!!
#telecommunicationsweekBig shoutout to all the amazing dispatchers keeping us safe and connected on #TelecommunicationsWeek! Your hard work does not go unnoticed 🚨📞💼

Dispatcher Denise Roberts has served this department for over 10 years. Thank you Denise for your dedication.
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3 days ago
Thank you for 40 (!!!!) years of service!! We truly appreciate your many years of dedicated service. All the best and every success in your retirement. Stay safe!

Thank you for 40 (!!!!) years of service!! We truly appreciate your many years of dedicated service. All the best and every success in your retirement. Stay safe!Last night at the board meeting, the Naperville Park District and its commissioners recognized Park Police Officer Arzania "Zook" Williams for his dedication and service to the community over the past decade as a Park Police Officer as he prepares to retire. Congratulations and best wishes for your retirement, Zook!

#ParkItInNaperville
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3 days ago
Thank you for 44 (!!!!) years of service!! We truly appreciate your dedicated service and wish you all the best in your retirement. Stay safe.Image attachmentImage attachment+Image attachment

Thank you for 44 (!!!!) years of service!! We truly appreciate your dedicated service and wish you all the best in your retirement. Stay safe. ... See MoreSee Less

3 days ago
YES!!
#Superheroes

YES!!
#superheroes
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5 days ago
Thank you!! Stay safe!Image attachmentImage attachment+2Image attachment

Thank you!! Stay safe! ... See MoreSee Less

6 days ago
Happy birthday, K9 Luka 💙💙💙💙!!!!
Stay safe!

Happy birthday, K9 Luka 💙💙💙💙!!!!
Stay safe!Ok, 0k..we might’ve overloaded you with doggo cuteness lately, but today is a special occasion - K9 Luka is turning 2!!! 🥳

Happy birthday Luka!! Your endless happiness makes each day brighter but today is all about you. Enjoy your special day! 🎉

And we have another birthday boi celebration lined up for tomorrow….check back to see who it is!!!! 👀

#k9 #birthdayboi #celebrate
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6 days ago
Thank you!! Stay safe!

Thank you!! Stay safe!Give Trooper Skiles and Trooper Toal some gratitude this morning. ... See MoreSee Less

6 days ago
Congratulations and thank you! Stay safe.

Congratulations and thank you! Stay safe.We forgot to post this yesterday.

Today, we celebrated a promotion with Deputy Duggan and his family. He was promoted to the rank of Sergeant and sworn in with the Oath of Office. We expect great things from Sergeant Duggan, and we believe that Sergeants in our office hold the greatest responsibility to their squads, the communities they serve, and this office. Congratulations, Sgt. Duggan!

#Promotion #Sergeant #Congratulations #Leadeship #teamgreen💚
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6 days ago
💙💙💙💙Image attachment

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1 week ago
Congratulations and thank you! Stay safe, Officers!Image attachment

Congratulations and thank you! Stay safe, Officers! ... See MoreSee Less

1 week ago
Thank you for 34 years of service! Enjoy your retirement and stay safe!

Thank you for 34 years of service! Enjoy your retirement and stay safe!Congratulations to Billy Delgado on his 34 years of dedicated service to the City of Corpus Christi. We hope you enjoy your retirement. ... See MoreSee Less

1 week ago
Congratulations! Thank you! Stay safe!Image attachmentImage attachment+2Image attachment

Congratulations! Thank you! Stay safe! ... See MoreSee Less

1 week ago

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Financial Needs…or Wants?

How many times have you heard one or more of the following comments in the last year?

· “The situation was beyond my control”

· “No one could have planned for this”

· “How was I to know?” or “No one told me…”

When I hear these statements, I can’t help but question the validity of them.  It is far too easy to say and then believe that when hard times hit there was no way you could have been prepared and it is, undoubtedly, a great way to absolve yourself of any blame.

Everyday, things happen in our lives that are random and unplanned.  Shouldn’t that fact alone be enough to tell us that there will always be surprises and that not all of them will be positive?  While, none of us have any way of telling what is around any corner, shouldn’t we all instinctively know that we should be prepared for the unexpected or unforeseen, whatever it turns out to be?  Who is most responsible for what occurs or doesn’t occur in his or her own life?

There are virtually no limits on the number of actions people can take to ensure that they are prepared for whatever occurs in their life, but for our purposes, let’s stick to the steps that you can take to be financially prepared for life’s journey.  Even limiting the discussion to the topic of financial preparedness is broad based.  There are many worthy topics to explore on everything from the merits of budgeting and setting financial goals all the way through sound saving habits and investing techniques.  So, lets drill all the way down to what I believe is at the core of every financial decision and the basis for which people will either experience financial freedom or financial indebtedness.

I think the foundation of every financial decision is set by the answer to this question, “Is this a financial need or a financial want?” and a complete understanding of the importance of the answer.

Let’s start by defining what a need really is.  There are essentially three basic human needs…food, shelter, and clothing.  For the purpose of this exercise, I am going to add two more and they are transportation and education because they are so essential to the pursuit of your dreams and the quality of your life.

Your financial objectives begin by satisfying these five needs.  How you go about doing that will go a long way toward determining how much debt you will incur and how much financial freedom you will have.

When you address these financial needs, the first thing that you want to do is to make sure that you do not end up confusing any of these needs with a want.  It is safe to say that all of us would like to live in a new house, drive a cool car, eat at the best restaurants, and go to the best schools, however, our financial wherewithal will determine to what degree we are able to meet our needs and at what point we could convert a need into a want.

Financial freedom is derived from having the ability to make your own choices about how you spend your money and you are only able to make these choices if you actually have it to spend.  In other words, if you have committed all of your income to meeting your debts each month, then you will not be free to make any additional choices unless you find a way to earn more money.  In today’s economic environment, that is a pretty tall task; so, you need to make sure that the choices you make in addressing your actual financial needs are sound and that they leave you with some money left over each paycheck.

One way to prioritize your financial needs is to rank them in order of importance and then assign the portion of your income that reflects that importance.  For most of us, our homes and our transportation are going to comprise the biggest piece of our expenses.  To illustrate, I am going to use round numbers, but if you are applying this thought process to your own situation, simply use the percentage guidelines provided.

For example, let’s say that you earn a total of $1,300 per month and that you have $1,000 in take home pay after taxes.  You will probably be able to devote a maximum of 40% or $400 to your housing expense.  You will likely want to spend more in order to get a bigger place with more amenities, but doing so will likely cause you to overextend and/or have to make sacrifices in other areas without yet addressing your other needs.  To further clarify, this 40% needs to cover your rent at a minimum.  If you are a homeowner or want to become one, this number needs to cover your mortgage payment and any insurance and real estate taxes that may apply.

By prioritizing your housing expense, you will now have a clearer picture of what is available to cover your remaining financial needs.  Generally speaking, you should do your best to limit your debt payments to no more than 50% of your total pay.  With $400 already committed to housing, you are left with $250 for your essential monthly needs.  If you are in need of a car or you have a car payment, those costs will account for the majority of your remaining $250.  Remember that your car budget must include the car insurance payment as well.

It is certainly possible that you live in an area where public transportation is a viable option.  You may even be able to ride your bike to work.  If these options exist for you, your transportation costs may comprise a much smaller piece of your financial needs.

Obviously, there will be a lot of variance in each individual situation. Some of you have higher education costs, but have very little need to purchase new clothing.  Some of us may be out of school, but going out on our own and purchasing food and clothes with our own money for the first time.

The value in the exercise is found in addressing those five needs and doing so within the confines of approximately 65% of your take home pay or 50% of your total pay.  Using our example, you may wonder how the additional $350 of monthly income affects your needs and wants equation.

By not obligating 35% of your take home pay toward debt, you will afford yourself a couple of luxuries; the largest, of which, is the freedom of choice.  Keep in mind that you have not accounted for all of your bills.  As one example, you will still need to pay your utilities out of the 35% that you have left, but you have given yourself some flexibility and left yourself with some options.  Now, each month, you have the option of saving a few dollars or splurging on a nice dinner.  If something unforeseen comes up, you’re prepared.  More importantly, with your first set of financial goals in place and solidly based on your needs, you can start on your next set of financial goals based on your wants.

As is the case with everything, your ability to effectively separate your needs from your wants will require self-discipline on your part.  You cannot allow yourself to fall into the trap of…I needed transportation so I had to get that new car.  No, transportation is the need; the new car is the want.  Wants are a derivative of needs, but they are still wants.  Housing is a need; a large house on a beautifully landscaped lot is a want.  Food is a need. Steak is a want.  A suit may even be a need depending on your job.  An Armani suit is a want.

It is possible to meet your needs and achieve your wants, but only if you first separate them and then apply the reality of your finances to the equation.  If you keep those two steps in mind regardless of whether times are good or bad and you maintain the equation regardless of how much money you make, you will put yourself in position to meet your financial needs and obtain your financial wants.  You are destined for a future that is fueled by financial freedom or one that stagnates because of financial obligation.  The choice is yours, but wouldn’t you rather be free instead of obligated?

And, don’t forget, members of the Credit Union enjoy free and confidential Credit Counseling and Financial Planning through our Financial Planning and Education Center. We are here to assist you every step of the way.

Scott Arney
Chief Executive Officer
Chicago Patrolmen’s Federal Credit Union

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