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AACREDITUNION.ORG | 11 ing to Certified Financial Educator Ogechi Igbokwe, founder of OneSavvyDollar. She says that all big-ticket items should be considered carefully before pulling out that credit card or signing a loan application. "A little bit here on a credit card, and a bit more on a loan or two, and before long you're over- whelmed with payments, interest and fees," says Igbokwe, who tells consumers to prepare in advance for any nonemergency expenses (e.g., vacations, new additions to the family, home purchases). Use an allocated budget. Depend- ing on your income, she suggests setting up expense categories like this: • Essentials (50%): Items you can't survive without like rent/mortgage, utilities and food • Savings and Debt (15% each): The more debt you can pay off, the more money you can com- mit toward your savings. • Nonessentials (20%): Your lifestyle expenses Igbokwe also suggests that consumers use four different savings accounts — one for emergen- cies, another for investment savings, a third for "fun" savings (e.g., vacations, weddings, etc.) and a final one for retirement. "The lat- ter is the only category that's coming from your pretax income, and it should be automatic," she explains. "Once you're eligible to sign up [for retirement/401(k) benefits] through your employer, do so right away." When he's working with clients, former hedge fund manager turned prosperity coach Joel Salomon advises them to never fund liabilities with debt. "If they can't afford it, the cost of the liability — like a vacation, couch or anniver- sary party — lives on for years in the interest expense," he says. To avoid prolonging the expense with interest payments and the other challenges that come up with running up a debt balance, Natasha Rachel Smith, personal finance expert at Top- Cashback, suggests opening a zero percent APR credit card for big-ticket purchases that you know you'll be able to pay off within the allotted timeframe (i.e., before the "free" period ends). But beware: These zero percent offers usually go up to a much higher APR if you don't pay them off in time. "If you're in the market for a new credit card, shop for something that offers free or very low interest for the longest period of time to maxi- mize your savings," she points out. "This will allow you to focus on simply paying off the items you purchased without worrying about added interest payments." Be sure to pay off the entire balance before the promotion period ends or you'll incur interest charges. Smith also tells consumers to plan smart with the understanding that positive and negative life events are going to happen. "You may not be able to control the specific circumstances, but you can control how much you're willing to spend on them," she says. American Airlines Credit Union The Credit Union offers several credit card options depending on your financial needs. For more, see Page 40. The Credit Union also provides free credit education services. To find out more, see Page 42.