The Money Class Read Online Free PDF Page A

are in the business of making money for themselves, not you.
    You must be a member of a credit union, and some credit unions limit membership to people with a specific affiliation; it can be through an employer, or a community group. But many credit unions are in fact more than happy to invite “outsiders” to become members, often for a small fee of $5–$20 or so. You can search for federally insured credit unions that you may be eligible for at the website of the National Credit Union Administration. Go to cuonline.ncua.gov or CreditCardConnection.org .
    There is just one trick to joining a credit union: Please make sure it is a member of the National Credit Union Association (NCUA). That means your deposits are federally insured in the same way bank accounts are backed by the FDIC. The base level of protection in an NCUA-member credit union is $250,000. That is, if anything were to happen to that credit union, the federal government would step in and pay you back every penny up to $250,000. You can learn more at www.ncua.gov .

Go to The Classroom at www.suzeorman.com :
Depending on how you set up your accounts you can in fact have more than $250,000 protected by federal insurance at either a bank or credit union. At my website I have a detailed explanation of how you can use different accounts to increase your total coverage at one individual credit union.
    SAFETY FIRST WITH YOUR SAVINGS
    In early 2011, most basic checking accounts are not paying more than 1% or 2% interest. We may see those rates persist at least through 2012 as the Federal Reserve is determined to keep short-term rates low to help spur economic growth.
    As low as the yields are on super-safe bank and credit union deposit accounts, they are indeed the best place for your emergency fund. You must keep this savings account safe and sound. You need to know that money is available to you whenever you need it—and you need to know exactly how much is there.
    Don’t use a money market mutual fund for your emergency savings. It’s not just that money market mutual funds are not federally insured. The problem is that they charge an annual fee. It can be quite small, maybe one-tenth or two-tenths of a percentage point, but right now that small sum is actually huge given how low general interest rates are. You want to earn as much interest income as possible.
    I also want you to stay away from putting this money into a certificate of deposit account that matures in more than 12 months. These accounts, especially ones that have longer terms (five years or more), are not where you want to be when interest rates start to rise.
    SAVING FOR BIG-TICKET ITEMS
    The New American Dream also requires that you have ample savings beyond your “life happens” fund in order to borrow less for major purchases. Be it the cost of a new car, a 20% down payment on a home, or the full cost of a kitchen renovation, I want you to do your very best to have that money saved up—completely—before you embark on this expenditure. That is how our grandparents did it and it is the way of the future.
    I have news for you: This isn’t just about my wanting you to borrow less. As I write this in early 2011, you probably will not qualify to borrow money from banks and credit unions unless you have a sizable amount of your own savings to bring to the deal. You need a down payment to make a deal. It is that simple. (Yes, I am well aware homebuyers can make just a 3.5% down payment and qualify for an FHA-insured loan. But as I explain in the Home Class, I do not think a 3.5% down payment is in any way standing in your financial truth.)
    Here are a few tips on how to save for a capital expense.
    Open a separate savings account for each goal . Your emergency fund should be its own separate account. And every additional savings goal should have its own dedicated savings account.
    Set up an automatic monthly transfer from your checking account into your savings account(s) . All banks and