CCFB News» July 2025

Managing your finances can sometimes feel overwhelming, but avoiding common money mistakes is simpler than you might think. With a bit of planning and awareness, you can sidestep pitfalls that often catch people off guard. Here are some of the most frequent financial missteps—and how to avoid them.

Buying More House Than You Can Afford

Just because you're approved for a large mortgage doesn’t mean you need to use it all. Overspending on a home can strain your finances. Keep these tips in mind:

• Keep your monthly housing costs—such as mortgage, property taxes, insurance, and HOA fees—below 28% of your gross income.
• Avoid private mortgage insurance (PMI) by making a 20% down payment.
• Save 3–6 months of expenses for emergencies before buying.

You may also explore programs such as the Federal Home Loan Bank of Chicago Downpayment Plus® Program to reduce upfront costs. Our Loan Officers are available to provide guidance regarding housing costs.

Neglecting to Invest

Investing is essential for building a retirement fund—savings accounts alone won’t keep up with inflation or market growth. Start small:

• Begin with small, regular contributions to your workplace 401(k) or IRA.
• Direct deposit into investment accounts to make saving automatic.

Even modest investments grow through compounding over time, setting you up for a comfortable retirement.

Paying for Unused Subscriptions

Unused subscriptions can quietly drain your budget. Take the following steps:

• Review your accounts to identify all subscription charges.
• Cancel anything you don’t use regularly.
• Redirect those savings toward paying off debt, building emergency funds, or investing.
•  

Overlooking Your Credit Report

Regularly checking your credit report is crucial for protecting your financial health:

• You’re entitled to one free report annually from each credit bureau.
• Review your report for errors and dispute any inaccuracies.
• Correcting errors can significantly improve your credit score.

IAA Credit Union offers members access to My Credit Score, where you can monitor your credit score and report online, anytime.

How IAA Credit Union Can Help

At IAA Credit Union, we’re committed to helping you succeed financially. Our wide range of services are designed to support your financial goals, such as:

• Home Loans: Competitive rates and personalized guidance from our loan officers.
• Retirement Accounts: Investment options to grow your retirement savings.
• Emergency Savings Solutions: High-yield accounts to build a safety net.
• Financial Education Resources: Tools and tips to help you avoid common mistakes.

Let us help you navigate these challenges and achieve your financial goals with confidence. Visit www.iaacu.org for more information

Originally published by SavvyMoney Blogs on March 4, 2025, adapted by IAACU.