What are your goals in life?
Some of you may be thinking education for your children, a house or even furthering your own education. Whatever your goals may be, we cannot escape the reality that money plays an important role in achieving them. As many of us know, one pay check may not be able to finance our goals but rather months or even years of savings therefore, we must be savvy money managers. Managing our money properly helps us to save for our dreams and goals and it also creates a cushion to see us through bad times.
So where do we start?
Well, keeping your cash under the mattress may not be the wisest thing to do. You may lose your cash, it might be stolen and having access to money at the snap of your fingers may tempt you to spend it unnecessarily. It is for this reason that saving it at a formal financial institution may be your wisest choice. One of the key things to enforcing the financial part of your plan is choosing a financial institution that is right for you.
How do you know which financial institution is right for you?
In Belize, Credit Unions and Banks are formal financial institutions that you can use. Although both Financial Institutions are financial intermediaries, they operate differently. Banks are owned by stockholders, who are wealthy individuals usually from other countries. In addition to covering their operating expenses, banks must make a profit for their stockholders. These stockholders are their investors and the primary goal of the bank is to increase their stockholder’s share value. To do this, banks either pay their stockholders dividend or use their profit to expand their services to make more money for….? Yes, you’ve guessed it, for their stockholders.
So if you ever wondered why banks charge you more fees to service your account, usage of ATM, insurance, or higher interest on loans etc. there is your answer; to maximize their shareholders value. Not yours.
Credit unions on the other hand are owned by ordinary people like you and me. Credit unions allow their members to vote for their board of directors and have a say in the overall direction of the institution. Every year credit unions host their Annual General Meeting where important decisions about the future of the institution are made. Some key decisions made in this meeting are usually about the dividend payments on shares for the fiscal year.
If credit unions manage to make a profit at the end of the fiscal year, the surplus is either re-invested in the institution to expand services for its members or, pay a dividend to its members. In addition to that, Credit Unions in Belize pay insurance on your savings and loans from the profit they make. We can summarize all the above by saying, “The credit unions exist for its members.”