AA Credit Union

A mericans don't seem to be buying into the theory that smart and sometimes strict spending habits are key to building a strong fi nancial foundation. After years of belt-tightening, consumers are proving they are ready to shop again. According to Consumer Reports National Research Center, 46 percent of consumers bought a new or used vehicle in 2014 or intended to purchase one in 2015, while 12 percent bought a residence or plan to. While buying a car and investing in a house are not signs that we're spending as fast as we are earning these days, spending can be a slippery slope. "I would recommend that consumers pause and not forget about what happened," says Cynthia Coleman, Certifi ed Financial Counselor and manager of the Credit Education Department at American Airlines Federal Credit Union. "Like the downturn in the economy, any major change in a person's life can cause a fi nancial setback — loss of a job, illness, divorce, etc." So let's remember the lessons we've learned. Coleman gives the following advice for those seeking a balance between building a strong fi nancial foundation and the desire to spend generated by the uptick in the economy: Spend as if you are a one-income household. If you can do this comfortably, then you're already ahead. Save the rest. Unless you have money in the bank to cover major expenses, I recommend taking time to evaluate whether there is a need for any purchase. Even if you have a two- income household, see if you can survive comfortably a few months on one. Doing so will really put things in perspective. Create a spending plan. No matter how much or how little your income, you should always know where your money goes. It starts with making a simple spending plan. Then, stick to it. Shop with a list. Have a purpose and a need when you go into any store. Following a list will help you get in and out of a store so you have less time to buy on impulse or browse around and purchase items you may want but do not need. Another good strategy is to take only the exact amount of cash necessary for making your intended purchases. That way, you spend wisely, because your spending will follow your spending plan. Do your research. You may research information about almost anything you need to buy — from purchasing a home or buying a car to getting discounts on oil changes or seeking cost savings on extended service plans. You can save thousands per year by simply doing research. AACreditUnion.org | | 11 For help creating your spending plan, visit American Airlines Credit Union's Resource Center, AACreditUnion.org/advice-and- planning.aspx. The resource center features tools and fi nancial-planning information, including widgets, rate calculators and other tools that help users manage their money in one place. AMERICAN AIRLINES CREDIT UNION ahead. Save the rest. Unless you have 1 3 4 2

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