Money Management

A collection of 28 posts

Money Management

Better Budgeting: Aim for the Moving Target

The market is uncertain, budgeting season is wrapping up and after all the iterations are complete, it leaves me to wonder…why do this at all?  Why do we spend so much time getting the budget correct when there is so much uncertainty? The targeted growth could be wrong, the

Money Management

The Effects a Second Trump Term Could Have on the Economy

Fresh off his election victory on November 6, former president Donald J. Trump will once again take up residence at Pennsylvania Avenue come January. A second term for Trump could have several potential effects on the economy, interest rates and inflation. While predicting the exact outcome is speculative and can

Money Management

An “Old Faithful” Tool That Brings Simplicity to Investments & Liquidity

SimpliCD Case Study featuring Clearview FCU It’s no secret that financial management is a critical topic in today’s environment. That’s especially true for institutions like credit unions, which are not only in charge of managing their balance sheet, but also providing and preserving funds so that their

Money Management

Providing for Shade: 3 Concepts to Incorporate in Your ALM Modeling

Warren Buffett once said, “Someone’s sitting in the shade today because someone planted a tree a long time ago.” As Buffet’s quote reminds me, I would much prefer to leverage the efforts by others who came before me to my benefit. It just makes sense, doesn’t it?

Money Management

A Look Ahead: Rate Expectations

The market widely expects the Federal Reserve to begin cutting rates in September of this year, but the big question is, how much will they cut? Right now, Fed Fund Futures is pricing in a 100 percent chance of at least a 25 basis point (bp) reduction, and a 59

Money Management

ALM Management: Less is More or More is Less?

Growing up, I frequently heard the famous quote from Ludwig Mies van der Rohe, “Less is More”.  Maybe you did too. But for me, as a child, this phrase did not resonate with me. Why wouldn’t you put all the possible toppings on an ice cream sundae? It just

Money Management

Beyond the Platform: A Core Built for Partnerships, Not Just Processing

CU*BASE Core Case Study featuring Lesco FCU From processing transactions and balancing accounts to storing member data and making loan decisions, every single piece of credit union operations hinges on one thing – a core processing system. When viewed through this lens, it’s almost an understatement to say that

Money Management

Short-Term Maturities versus Long-Term Maturities: Why Now is the Time to Go Long

You may recall that in the years following the financial crisis, investors were forced to choose between bad and worse when it came to investment rates. That all changed when the Federal Reserve began their aggressive battle against inflation in March of 2022, and credit unions were finally able to

Money Management

Sallie Mae: A Low Effort, High Impact Student Loan Program You Don't Want to Skip Out On

We've all done it...skipping school is just a rite of passage for every student at some point or another. But as credit unions and providers of student loans, skipping out on easily earned income and an opportunity to give your members a chance at higher education is

Money Management

The Liquidity Awakening Has Begun

The recent rate environment has done wonders for many sleepy ALM programs, waking them up and inciting a resurgence of focus in the way credit unions monitor the interest rate risk exposure on their balance sheets. After 10 years in a static rate environment, this demanding rate cycle has forced

Money Management

Credit Union Investing 101

The financial world has become a bit…complicated…as of late. We all know the markets have been tumultuous in the face of a pandemic, bloated balance sheets, skyrocketing rates, rapid liquidity tightening, inflation and other economic factors. So, let’s take it back to basics for a bit – let’

Money Management

A Look Ahead: Expectations for the Markets & Economy in 2024

You’d think after nearly four years of pandemic-induced financial hysteria, we would’ve seen it all. But that wasn’t the case – not even close – as we continued to weather many storms in 2023. As 2024 closely approaches and we try to prepare ourselves for what’s next, we

Money Management

The Ingredients for a Strong ALM Program

When’s the last time you baked a cake for a special occasion? Or tried your hand at a new recipe for dinner? Even if you’re a pro in the kitchen, chances are you still probably utilized some of the basic ingredients, right? Otherwise, you might run the risk

Money Management

The Fed's Battle Against Inflation: Challenges or Opportunities?

Over the past year, we’ve seen an epic series of interest rate hikes by the Federal Reserve that began in March 2022. So much so, that some debate remains on whether we’ve seen the last rate hike or if the Fed will decide to raise one final time

Money Management

Goldilocks and the ALM Model

Do you remember the story of Goldilocks and the three bears? You know, the one where a little girl happens to find the home of three bears in the woods. She goes inside and eats their bowl of porridge. One of the bowls of porridge is too hot; one is

Money Management

Bank Term Funding Program: The Fed’s Solution to Liquidity

How can you solve a problem like liquidity? In today’s world, that’s a tricky question. Luckily, the Federal Reserve has a solution that might just interest your credit union. It’s called the Bank Term Funding Program (BTFP), and it’s a relatively new lending program available to

Money Management

Asset Liability Management: Interest Rate Risk Exposure Limits

When a credit union comes to me regarding updating asset liability management (ALM) policy limits, one of my first questions to them is: what is your risk tolerance? More often than not, I get the response: we are not sure, what does the NCUA say?. While it’s definitely important

Money Management

Liquidity Solutions as the Fed Continues to Tighten

Among the ebb and flow of economic data, pandemic-induced inflation and other financial turmoil we’ve (almost) become accustomed to the past few years, it’s no surprise that liquidity has been impacted. This continues to be the case as we watched the FOMC meet on February 1, 2023, and

Money Management

What to Expect from the Markets and Economy in 2023

In the past two years, we’ve endured a slew of challenges brought on by a global pandemic, many of which could be described with one of the most used words of 2020 – unprecedented. Maybe these highlights will jog your memory: all-time high unemployment rates that have dropped to incredible

Money Management

SimpliCD – It’s Not Just for Investors

Liquidity needs can change quickly. Even just a few months ago, credit unions were flush with cash and were searching for ways to invest their excess liquidity. But for many credit unions, things have changed as the Fed has begun to raise rates more aggressively than we’ve seen in

Money Management

Debunking Two Myths About Core Solutions: Get Back to Basics

It’s a fact within our industry: credit unions need a core processing system. Now that I’ve stated the obvious, I have a question for you…what do you think makes a good core solution? Is it fancy features or the latest and greatest technology? Is it working with

Money Management

“Oh Bother,” Another Model Validation

Do you ever have quotes pop into your head that seem to just fit your situation? What about when the exam list or a model validation request makes its way to your inbox? I know what I hear it in my head, “Oh Bother!” I never fully appreciated this phrase

Money Management

How Should Your FI Overhaul Your Overdraft Fees?

Banks and credit unions have been making material changes to their overdraft fees and policies with increasing frequency since the middle of 2021. To date, the national banks, large regional banks and a sprinkling of credit unions have led the charge with announcements that make their public relations providers proud.

Money Management

Monetize This!

Imagine the following conversation: > Customer service representative: “So, is this the right account for you?” New customer: “Yes, sounds great.” Customer service representative: “Excellent. In which case, I suggest signing up for our top-tier, state-of-the-art mobile and online banking technology, which costs just $7.00 per month. You can

Money Management

Broaden Your Perspective with Liquidity Stress Testing

“Because I said so.” Few phrases convey a universal response of utter dismay like this one. I remember vividly as a child hating this response and, like most children, vowed never to let those words escape my lips. Those same childhood memories influence our responses to this day and leave