Phone 403.845.2861 Fax 403.845.7295 P.O. Box 1420 Stn Main, Rocky Mountain House, AB T4T 1B1 www.rockycreditunion.com

Community UpdateSeptember 2011

4 Effective Tips To Reduce Anxiety About FinancesThe economy has gone up and down and sideways over the past three years, leaving many people feeling anxious about their finances. What can you do to take away the financial stress?

While each person’s situation is unique, the following 4 tips have been proven over time to be good ways to help stabilize your finances, whatever situation you are in:

1. Have a financial goal and a plan - A goal gives you purpose. It is the constant reminder of why you are saving money or paying down debt. The plan is how you will achieve that goal. Having a well thought out plan to actively follow changes the goal from a wish to an action, something with meaning. Whether you are saving for a holiday or retirement or you are paying off consumer debt, a goal and a plan will help.

2. Build an emergency reserve - Most financial advisors recommend having 3 to

6 months of living expenses saved as an emergency fund. This can help you in case of injury, loss of work, or almost any other circumstance that requires money quickly. This is not something most people can do right away, but it is a goal to work towards over a couple of years.

3. Avoid high interest debt - Putting debt on credit cards at 19% to 28% is a quick way to make your financial situation worse. Sometimes debt is necessary, and a credit card is incredibly convenient, but the sooner you can clear off your high interest debt the better off you will be. Go ahead and have a credit card, but use it wisely.

4. Save money today and regularly - If you haven’t started saving money for retirement, then start today. If you have already started but haven’t made it a habit, start contributing regularly today. It’s the best way to build your nest egg and establish financial security for your retirement.

Follow these tips, plus make some guidelines of your own, and you will find that you will feel more secure about your finances and able to concentrate more on living life.

For more financial tips like these visit our blog online by looking up RCU Speak or going through our Rocky Credit Union website. Feel free to post comments or questions and we will respond on the blog.

Are you looking for a source of good financial information? Check out our blog, RCU Speak, for quality information about a variety of financial topics.Over the past 6 months the top 7 articles on our blog are:

Financial Life Stages Are Changing - 1. Good Or Bad?Rent vs. Mortgage2. OAS & CPP Facts And Myths3. 72 Hour Emergency Kits Are Important4. Bank of Canada Is Concerned About Debt5. Debit & Credit Card Fraud - How To 6. Protect Yourself Risky Market News7.

You can go to RCU Speak through our main website at rockycreditunion.com or just Google “RCU Speak.”

Top 7 Financial Articles

Summer vacation is over, school has started and life is returning to normal. It’s time to get rid of your high interest credit card debt.

With loans and lines of credit costing far less than your credit cards, Rocky Credit Union can help you make your finances feel more comfortable. Talk to a Consumer Lender today, or you can use our secure online loan application to get rid of your credit card debt.

Ph. 403.845.8861rockycreditunion.com

Lower Your Costs By Getting Rid Of Credit Card Debt

Page 2 September 2011

RCU Quick Fact: You can apply for a loan from the comfort of your own home any time you want with our secure online loan application. 11:00 at night or 6:00 in the morning, it’s up to you when you apply.

Extra Payments On Loans Pay OffTaking a mortgage out over 25 years or more helps make the monthly payments more manageable than a shorter term, but by extending out the loan for so long you increase the amount of interest you pay.

To help reduce the total interest you pay on a mortgage (or any loan) borrowers should make extra payments. If you get a tax return or a bonus put at least some of it towards repaying debt. High interest debt, like credit cards, should be your first priority for extra payments, but reducing mortgages help long term as well.

For example, if you have a $10,000 credit card balance at 19% annual interest (store cards range from 24% to 28%) and have to make the monthly interest payment and the monthly minimum principal payment of 2% (some are 3%) with a minimum payment of $20, you will pay the credit card off after 13.5 years and will have paid over $7,500 in interest. If you can make an additional payment of $600 each year in the first 5 years you will knock off over 3 years of payments and save over $2,300 in interest. It is well worth your time and money to try to pay off credit cards quickly, and not add to the credit card debt as you pay it off.

If you don’t have much in high interest debt, it can be a good idea to pay off low interest debt, like mortgages, early in the amortization which can also

greatly reduce the interest you pay.

For example, let’s say you have a $200,000 mortgage at 4.5% and you make monthly payments of $1,111.66 per month for 25 years. Assuming the same interest rate for all 25 years (which is improbable but necessary for the example) you will pay over $133,000 in interest. If you can put down an extra $2,000 onto the mortgage every 12 months in the first 5 years, you will knock off 24 months worth of payments and save yourself over $15,500 in interest over the life of your mortgage. If you

were able to make an extra payment of $2,000/year for the life of the mortgage you would finish the mortgage in under 21 years and save over $30,000 in interest. The extra payments more than pay for themselves.

As your debt is being repaid and your payments are no longer primarily going to interest, then you can start thinking about investing for the future. Hopefully you can reduce your debt early in life so you can start investing and saving for the rest of your life. It will be worth the sacrifice.

For more good information about reducing your debt, you can find additional articles online at our blog - RCU Speak.

With an extra $2,000 per year on your mortgage you can save over $30,000 in interest and reduce a 25 year mortgage to under 21 years.

Top 3 benefits of RESPsRegistered Education Savings Plans are a great way to save for education.

1. The money grows tax sheltered until withdrawn.

2. The money is supplemented by at least an additional 20% on the first $5,000/yr.

3. The money is transferable if the child does not go to school.

Come talk to us for more details about how Rocky Credit Union can help you save for a child’s post-secondary education.

Unfortunately, many people are being conned out of their hard earned money. As returns on investments are at all time lows people are looking beyond their regular investment sources to try and get greater returns. Some of these people get taken in by confidence (con) men who promise high returns only to turn around and flee with the investor’s money.

It is important to remember something with all investments - If it seems too good to be true, it probably is. There are many investment opportunities out there, from investing in large corporations, to buying into a business, to helping fund private investment firms. However, there are many crooks that are quite willing to take your money, and they are very good at it. The following are a few of the things you will want to think about before trying to invest your hard earned money:

How much risk is there? 1. Are they up front about risk? Every investment has risk. If they are saying that there is no risk or even low risk, you will want to ask questions about how risk is minimized and still provides the returns they are talking about. Ask lots of questions about this, as you are putting your money at risk in their project.

This opportunity will be gone soon. 2. Con artists want to get in and out, so they push people to invest quickly. They say things like “It’s a limited time offer,” “If you don’t invest now, Dave down the road is willing to make money,” or “We only want 12 partners on this project, and I thought you were really our kind of guy (or woman).” If you feel pressured to make a decision fast, don’t.

What do other sources say?3. Do internet searches about their product, company, even the names of the salesmen themselves. If the

opportunity is really that great, there should be someone who has spoken or written about the chance to make money in this area. Does the company have a website that explains clearly what they do and how they make money, or does it stress attending a meeting or seminar (often at a fee)? Are the owners’/managers’ pictures and names on the site? A simple thing to look at is how many exclamation points they use on the site. Do they offer facts and supportable data or just testimonials? If the investment is based on a secret or conspiracy, be aware that you will not be able to verify what they are saying, which is a big red flag for fraud.

Do they talk about specifics?4. How will they make money? Where and with whom? Who are the customers? They need to answer all of these, clearly. If they gloss over everything, giving only vague answers, you should be concerned.

Get it in writing. 5. Do they hand out brochures or written material, or is it all verbal and part of a visual presentation? You want written proof of what they are talking about, and not just testimonials either. If they aren’t willing to give handouts with facts about the investment, then you may want to avoid the company.

How can you sell your investment? 6. They should be able to explain how you can cash out if you no longer want to be involved. Are there penalties or fees involved? Is there a minimum amount of time you have to keep your investment?

We hope that no-one will ever lose money to a con artist, but the reality is that they are around and they take a lot of money from a lot of people. Feel free to share the above questions with your friends or family. You can get a print out of a similar article with the same title from our blog, RCU Speak.

Credit Card Interest paid with or without extra paymentsStarting with a $10,000 balance at 19% interest

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Mortgage Interest paid with or without extra paymentsStarting with a $200,000 balance at 4.5% interest for 25 years

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Investments Too Good To Be True

Before heading out to auctions or the dealership, check with Rocky Credit Union and find out if a Flexi-Line Loan or a Revolving Loan can make your purchase easier.Designed to be easy to use over and over again with only one application, the Flexi-Line and Revolving Loan are perfect when purchasing equipment, vehicles, or even furniture. Talk with a Consumer Lender today, or apply online with our secure online loan application so you can have cash ready when you need it.

Quick Access to Cash

www.rockycreditunion.com Page 3

RCU Quick Fact: Rocky Credit Union started 1944 with 36 members and has grown to help over 8,000 members today.

With the Federal Reserve in the U.S. announcing that rates will be kept low until 2013, Canada’s own government bond rates have dropped and will most likely stay relatively low for the next 2 years as well.

What does this mean? With an almost guarantee of low rates for the next few years this will mean something very different to 2 groups - the savers/investors and the borrowers.

Savers & Investors - Low rates most likely mean low returns on the safest investments. This means bonds, GICs and term deposits. With so many baby boomers looking at retirement over the next dozen years (or much sooner) they generally want a good return to build up their retirement fund. The reality is that returns will probably be low, unless they go into riskier investments like mutual funds and stock markets. However, principal and returns are not usually guaranteed with mutual funds and stocks, so investors should be careful how much of their portfolio they put into the riskier investments while hoping for higher returns.

With investments earning lower returns, baby boomers may need to invest more of their money each year to get to the desired cash flow amount in retirement. Hopefully they will have cleared off mortgage or credit card debts so they can put those funds into their retirement savings.

For people who are already retired and depending on cash flow from investments, these low rates could hurt, and probably for a few years. Your biggest priority is most likely to protect the money you have saved over the years. Be careful to not invest in something that could decrease your principal, unless you can afford to put some of your savings at risk. Your second priority is finding somewhere to get some returns. That will be difficult as low

risk usually means very small returns. You should talk with a financial investment expert (we have a few here) to discuss your options. Otherwise the next few years will probably mean living life a bit more frugally than you had planned 5 years ago.

Borrowers - These low rates mean the interest cost on housing, vehicles and other types of

loans is at an all time low. While this is good for the interest you currently pay, it has a side effect of promoting the purchase of more or bigger items than people would when rates are at more normal levels. Rocky Credit Union encourages everyone to take advantage of the

low rates to make additional payments that knock debt down quickly and can free you from interest payments when the interest rates start to rise, which they will eventually. Don’t get too comfortable with these low rates, as being at all time lows means they will eventually go up.

In summary, savers and investors will probably have a tough time for the next few years. If you are not retiring for 15 to 20 years you can have confidence that rates will increase sometime in your time horizon before retirement. If you are ready to retire or have already retired, hopefully you are debt free and have a good budget that meets your needs. For borrowers, don’t fall into the trap of spending more than you should, because if you are locking into a 5 year mortgage today, when it renews in 5 years the odds are that rates will be higher. Protect yourself, and if you plan ahead you should be able to ride out the bumps in the economy.

Life With Low Rates

Baby boomers will need to invest more of their money each year to get to the desired cash flow amount in retirement.

Saving Money While At SchoolGoing to college or university costs money. Tuition and book prices have increased at about 2 to 3 times the annual inflation rate for the past 15 years. In Canada tuition is kept relatively low because universities are heavily subsidized by the federal and provincial governments. Often the greatest costs for students are not directly related to the cost of education: rent, food, vehicles and entertainment.

Here are 6 ways that students can save money while at school:

1. Room mates. A 2 bedroom apartment can cost over $700/month, plus some utilities, meaning living quarters are about $450 or more per month. If there are 2 people per bedroom, you cut the cost per person in half.

2. Food. As convenient as microwaveable quick food is, those pizza pockets and microwave dinners cost money. It is far less expensive, and usually healthier, to buy unprocessed food and cook it. A little bit of extra time spent on meals can save a lot of money, and provide the health benefit of helping you to think more clearly while you are in class or working on homework.

Attached to the food topic is to limit eating out. Even having a cheap sub sandwich adds up, unless you have half at lunch and half at supper. Eating out once or twice a week can easily add up to over $40 more each week that you could save by doing a home party or something besides going out to eat. That is over $160 per month just at restaurants, when eating at home could cost less than half of that.

3. Vehicles. Having a car while going to school is convenient, especially if you are not from that city. However, a vehicle is quite costly. Insurance, gas, maintenance, and parking are all expenses that add up. Going without a vehicle is less convenient, but it is also far less costly.

4. Entertainment. Whether it is going to bars, movies, restaurants or buying video games, all of these things cost you money. Be careful with spending on entertainment, because while these activities are fun, they are a straight cost. There are often low cost campus activities (Sports, clubs, events...) that are fun and located close to school.

5. Books. University and college textbooks costs add up quickly, especially when a new version of most textbooks comes out every second year, outdating previous ones within a year. If you can get your class book list early, order your books through Amazon.ca or go through the many other websites that offer them second hand.

6. Avoid interest and late fees. Try not to use your credit card. They may be freely given to you when you start school, but the cost of using them is far from free. Having one or two that you manage responsibly is good, but using them often without paying them off each month can become habit forming. Also, pay your bills on time. Late fees and interest add up and are usually unnecessary. Plus many of those late bills will report on your credit history and get you off to a bad start.

Going to college can be one of the most challenging and enjoyable periods of your life. Enjoy it, take advantage of the new experiences, but try not to leave school owing a pile of debt that may drag down your finances for years to come. A few years of excesses during your school years shouldn’t leave you with a dozen years of difficult debt. Remember, it is unlikely you will never meet anyone who wished they had taken on more debt while at school, but you will meet many who wish they had less.

We have new chequing account services and fees effective September 1, 2011. Check out the changes on our website.

Even the most reliable borrowers can fail to meet every loan payment on its due date, and it is possible that there is good reason for the failure, such as layoffs, illness in the family or too much debt.

Rocky Credit Union wants to help you keep your assets for which you have worked so hard. As soon as you recognize that you may have problems meeting your loan obligations please contact us to discuss your options. The longer you wait to contact us about payment difficulties the fewer options we have. By staying ahead of missed payments we can work with you using a variety of tools that could get you out of a tight spot and help you get back on track financially.

Please be aware of credit counselling scams. Scam artists follow the headlines, and know there are homeowners falling behind in their mortgage payments or at risk for foreclosure. Their pitches may sound like a way for you to get out from under, but their intentions are far from honourable. They mean to take your money. It is best to work directly with your lender to try and resolve your financial troubles. There are legitimate credit counselling organizations out there, but your lender should be able to make recommendations about those if such services are needed.

Trouble Making Loan Payments?

RCU Quick Fact: The Bank of Canada will release new plastic $100 bills this November, and then release other bills throughout 2012 and 2013. These new bills will last longer and carry less germs.

Phone 403.845.2861 Fax 403.845.7295 P.O. Box 1420 Stn Main, Rocky Mountain House, AB T4T 1B1 www.rockycreditunion.com

Supporting Our Communities

Congratulations to the Rocky Credit Union Red Dogs, the 2011 Parkland Baseball League Champions!Jill Richardson of RCU presents the team with our sponsorship.

In 2010, we gave out over $70,000 in cash and donation items to help support local community and charity groups. Our staff gave over 2,300 volunteer hours in the local community. Over the past 6 years we have shared over $4.6 million with our members through our Member Share program. We are proud to be your local financial Institution. Our vision is: Helping members succeed. Building our communities.

Colleen Peterson of RCU presents a donation to Krystal Stirling of the Rocky Clearwater Family Wellness Program. The donation was used to support day camp programs throughout the summer.

Jerry Pratt with Rocky Credit Union presents a donation to Clint Kautz, representing the Rocky North and South 4H Beef clubs.

Doug Glessing of RCU presents a donation to Albert Kuipers & Tia Stadnicki of the Grey Wooded Forage Association. The donation helped out the Annual AG Tour held on Aug 25.

Colleen Peterson of RCU presents some draw prizes to Gail Krabben of the Brian Mazza Memorial Run. The Run took place on August 20.

Global market research company, Synovate, awarded Canadian Credit Union their Customer Service Award in banking services for the 7th year in a row! This award comes after surveying over 40,000 people across Canada and asking in depth questions about the quality of service they receive at various financial institutions.

We at Rocky Credit Union are proud to say that we offer great service, but more importantly we deliver. Some of the ways we do this are:

We have more staff in branch to serve you.• We have the longest branch hours in town.• We have two ATM locations in Rocky Mountain House.• We have a secure, easy to use online banking site.• If you ever have a service problem you can talk directly with a • manager or our CEO.

We are also committed to helping our members make the best financial decisions for today and for the future. In fact educating our members is one of our governing principles. We do this by:

Teaching budget and investment classes in the community and at schools.• Teaching Junior Achievement classes at schools.• Posting articles weekly on our blog about a wide variety of financial education topics.• Counselling with members about lending, saving, investing and budgeting needs.• Providing up to date materials and information to members about mortgages, RRSPs, • RRIFs, RESPs, and TFSAs.

We are dedicated to helping the communities we serve prosper and be vibrant places to live. Our actions show how we do this:

We employ over 50 local people in our local community.• We participate in many community events and organizations.• We support our staff to participate in community organizations.• We donate the use of our shelter tents, cargo trailer, and popcorn machine to • community groups.Last year we donated over $70,000 to local community groups and events. The • following are just a few of the groups that we regularly support:

In addition to great service, helping our members so they can make the best financial decisions, and providing lots of community support we are also different from our competition in a major way - Members have input on the direction of the credit union. As a credit union we are democratically controlled by our customers, who are all shareholders in Rocky Credit Union, and thus our members. Every member has the right to vote for our Board of Directors and vote on

bylaws that the Board presents to the membership. Each member gets one vote. Whether you have $100 or $1 million, you have an equal say.

Your elected Board of Directors sets the direction for the credit union, ensuring that members receive the best financial service and value. As the credit union makes money the Board reinvests earnings into the credit union to make sure we are around to serve our members and our community for years to come. Anything above that reinvestment is then shared with our members through our Member Shares program.

So, Canadian Credit Unions are ranked best in banking service for the 7th year in a row. It’s really not surprising, based on who we are and why we do what we do. We are a community financial institution that builds our communities by helping our members achieve financial success.

Credit Unions Rated Best Banking Service Again!

Rocky Minor HockeyRocky Minor BaseballRocky Knights SoccerRocky Figure SkatingCaroline Figure SkatingSchool activities & sports5 Scholarships for Graduates4-H clubs

Bonspiels (mens, ladies, seniors, farmers/farmerettes)

Golf tournaments (mens, ladies, seniors, charities)

Dart ClubRoyal Canadian LegionLions Crash Up DerbyElks Club

Caroline & Rocky Chambers of Commerce

Rocky & Caroline rodeosRocky Air ShowRocky & Caroline paradesRotary Club Penny CarnivalRelay For LifeRocky Scouts and Girl Guides

You can see more of our donations using the QR codes to go to the following sites:

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