A Guide For Smart Shoppers
If you believe what you read, there are sales and last-minute bargains everywhere you look. But how do you weed through advertising gimmicks and actually get the best prices? Instead of following sales, try these shopping tips that can save you money any time. If you shop slowly online, quickly at the grocery store, and use your credit cards rewards, you could see significant savings without obsessing over coupons.
Shopping online can already save money as you aren’t factoring in the cost of a brick-and-mortar businesses’ overhead into the cost of what you purchase. Still, the world of online shopping is just that - a world unto itself. So how do you get a good deal? First, be sure it is a reputable business with a secure payment system (look for the secure padlock on the checkout page) before entering your financial information.
When shopping on Amazon.com or other mega-distributors, use the tools they have on their site to find the best product, and plan on buying it tomorrow, to stave off impluse shopping. Make the Internet work for you and your wallet in the following ways:
● Take the time to read and research product reviews to find out what other customers think and whether the product is worth the money.
● Check out comparison websites such as Google Shopping and Bizrate.
● Before ordering, Google the merchant's web site with the word "coupon" or "promotional code." You may be able to get a discount on your purchase, shipping costs, or both.
● If you see “free shipping” understand it’s not always the case. In 2013, retailers decided to add free shipping as 85% of Americans in a study said it affected their purchase. Larger companies like Amazon eat some shipping costs, as well as including some in the list price. Check around to see if there is a better price, shipping and all.
If you plan on shopping at traditional brick-and-mortar stores, always cross-check prices on your smart phone, and ask if the store price-matches. A $500 printer at Best Buy in Omaha, for instance, could be $400 on Amazon. Still, Best Buy will match the price, and you can have your printer on the spot.
Credit Card Rewards
It’s key to find a credit card with a rewards program that fits how you already spend. Andrew Schrage, co-owner of Money Crashers Personal Finance, recommends, “(analyzing your) purchasing habits and (choosing) one that aligns with them.” This is when knowing yourself comes in handy. If you only fly during the holidays, then air miles might not be for you. If you are living paycheck-to-paycheck, cash-back rewards can be used almost immediately.
Credit cards carry responsibility, but having one can help save money on shopping. It could also be the difference in getting a mortgage or a loan. To keep your credit working for you, try looking at the credit card as a tool for smarter shopping, rather than an easy means to a big online purchase.
Security National Bank offers the UChoose Rewards® program, offering points similar to credit card rewards, for debit card purchases. So, even those without credit can save when spending money.
Groceries - shop fast, shop full
Grocery stores have a science to make you stay longer and spend more. Instead of making your weekly shopping a whole Sunday event, try squeezing it in between work and the gym, or other times when you’ll be forced to move quickly. It’s easier to stick to the list when you have blinders on.
Still, spend the time to look at unit pricing–that means square footage between paper towels and fluid ounces of chicken stock. When looking at labels and pricing, your eye should go directly to the units of measurement on the package and start doing some math. While you are doing price math, keep in mind how much you plan on spending. One way to put your back against a proverbial wall is to only carry cash into the grocery store - that way any impulse buys will have to be within budget.
Some grocery stores in Omaha offer online shopping and delivery.This is an easy way to stick to a budget as you can see the total cost going up with every item you add to your cart. Some have a spending minimum or delivery costs, so make sure it’s worth it for you. Still, the time, energy and gas spent at the store, could be worth the price of delivery.
Eating healthy: the dirty 15 vs. the clean 12
When shopping for healthy food, you have to wonder, does everything I buy need to be organic? Since 2004, the Environmental Working Group (EWG) uses thousands of samples tested by the USDA to determine which produce have been affected by pesticide contamination. Filling a cart with organic food can cost more than double the bargain brand, so which items can you swap out for the cheaper stuff? Since 2004, strawberries, tomatoes and spinach are almost always on the top of the pesticide contamination list, whereas pineapples are almost never a risk.
Shopping can be draining on the bank account and on the psyche. Why not make a fun challenge out of your shopping experiences to see how much you can save? It could be more enjoyable than you’d think, and very enjoyable once you start to see real savings!
Startups and Their Most Common Problems
So, you think you’re ready to shed your current career and found your own company. Congratulations! In order to be successful in your future business, be aware of the general pitfalls with startups. Below are some of the most common mistakes that can kill a startup and tips on how to avoid them.
Assuming anything about your money
The three little words that can kill a startup are: It’s probably fine. Tracking revenue vs. expenses has to begin at the company’s infancy, when there are typically more expenses than profits, or no profits at all. Setting up a cash flow management dashboard is key to early success, so every nickel, dime, transportation receipt, and bill is accounted for. You can simply track them in Microsoft Excel or one of these programs:
● Sisense gathers and visualizes finances and other data useful to your company
● Mint allows tracking of personal and business expenses in one place
● DOMO creates automated reports and is mobile-friendly
Going it alone
Running a startup has its share of pros and cons, and independence can be both. Regardless of whether you have hired accounting staff, consider having a competent advisor (not an employee) who can help you navigate a complicated financial landscape. A dedicated financial professional can give big picture advice about growing your company, investing, and when is the right time to make big choices.
Nobody gets excited over taxes, but the last thing you want is to wonder if you’ve missed an obligation to the IRS. Every dollar of revenue that begins to flow in has various taxes attached that your business will need to file. According to US News and World Report, “Hiring a tax advisor, while it's an additional cost, will ensure your startup is following all the proper tax regulations to stay compliant. It's a small upfront cost in the grand scheme of things.”
Most entrepreneurs have remarkable work ethics, but it can take a serious toll on their personal lives. For those who thrive on an extended work day, be aware of the signs of burnout and how to overcome it. Stress, anxiety, and low energy are all signs of burnout, but it can be difficult to pinpoint it, since hard workers are often stressed and tired. Good, healthy work stress can turn to anxiety. Being tired yet satisfied after a hard day’s work turns into a feeling like you are constantly running on fumes. What can you do when this begins to set in? Entrepreneur.com offers solutions to early-onset burnout, but it can be difficult for a workaholic to adhere to – mainly, not working.
● Massage: When burnt out, your nervous system is frazzled and massage can help to calm it.
● Acupuncture: An effective method for ridding anxiety that comes with burnout.
● Sleep: Good sleep hygiene means going to bed and waking at the same time each day. Arianna Huffington, media mogul and entrepreneur, begins winding down for bed at 8 p.m. and gets at least eight hours every night.
● Play: Find a life beyond your startup. Take exercise or language classes, learn something new, play hide and seek with the kids for a few hours, and make time in the day to laugh.
● Eat well: Create a schedule if you’re guilty of eating the wrong things at the wrong times. If you are the fuel that propels the company in its early stages, your body needs real fuel (vitamins and protein) to sharpen you, physically and mentally.
Paying at the wrong time (or not at all)
Similar to having an outside team supporting your company, you need to build trusted internal support. At the helm of a new business, an owner can’t always prioritize, since he or she wants control over everything; a founder needs to drum up the first customers, hire and train employees, and keep the lights on. You have to make choices about what positions to hire for, so you don’t do everything yourself. Do not underestimate the importance of who you hire, especially in the early months. You need to trust each person to know what you know and watch every penny like you would or you risk killing your business with small mistakes like over-ordering or early paying.
Finding free labor is not sustainable to a long-term successful business. As CNN Money warns, “Recruiting your family members or hiring unpaid interns might sound like a great cost-saving tool at first, but remember that your long-term goal is to build a profitable business. It's not enough to ask employees to forego pay in exchange for equity; if you're serious about growing your company and keeping the talent you have, you'll need to find room in your budget to pay your employees.”
Too busy to focus on hiring, training, and managing employees
Would you consider yourself on the cutting edge of management, leadership or HR? Forbes recommends every new startup owner, regardless of his or her background, invests in management courses or workshops and to keep learning how to manage better. Keep in mind, 75% of employees don’t quit their jobs, they quit their managers, so you have a responsibility for retention. Training new employees, orienting people to your preferred workflow, and spending time in the office to foster the growth of your mission and values is pivotal. Finding and retaining the right people can make or break your company in its early stages.
The truth about starting a new business is that you can’t do it alone. The more success you have, the more you will need the right staff and systems in place to make sure it’s running smoothly. What if you get the flu or decide to take a vacation? Your team, if you have the right one, will be there for you. Let SNB be part of your startup team and we can make plans for successful growth together.
Retirement Accounts 101
You’re starting to think about your future – your long-term plan, and you’ve realized it’s time to start saving for retirement. Why not just keep your money in your savings account and save for retirement that way? While 401(k)s have only been in existence since the 1980s, today more than 94% of private companies offer 401(k) plans. Some companies even enroll employees into 401(k) plans automatically.
However, those are not your only options, and some people who have the option of a 401(k) choose other routes, or ideally combine them. Each plan comes with tax benefits that surpass sticking your money in your mattress or checking account. Below are the three most used retirement accounts and how some people use them successfully.
In the 1970s, banks and the IRS were coming up with a plan limit executives’ access to unlimited cash-deferred plans. As a result, a loophole was created that allowed for employees to fund retirement investment accounts, using a portion of their salary, with the employer matching the contribution. So that is what most companies have done over the past 20 years; they set up a company-wide investment account that employees pay into, and the company matches the money. That money is then:
● Invested into different stocks, bonds and cash (assets). Depending on which kind your company has, they control the investing, or you can.
● Controlled through your company, even after you no longer work there.
● Yours, when it comes time to retire; you are still able to access that money regardless of how long ago you were an employee.
● Taxed, as soon as you start spending it. Whatever your tax rate is at retirement, plan on paying that on money you withdraw. Depending on the kind of account you have, the remainder of the money could be continually invested.
Some experts recommend saving as much as 10% of your paycheck (if you can), but recommend at least matching the employer contribution. When should you stop contributing? Not until retirement, ideally. Not when you have your first baby, not when that baby goes to college, not when you’re saving for vacation.
Unlike the employer-run retirement account, an Individual Retirement Account (IRA) is a personally-funded investment option that gives you more control. People who are self-employed, don’t have access to a 401 (k) or want to have diverse investments, can turn to IRA’s. A traditional IRA is similar to a 401(k), with the exception that you choose where to invest the money. The taxes are still deferred to retirement, as with a 401(k). However, there are limits to what you can contribute to each:
● IRA 2016 limit: $5,500 (or $6,500 if you’re age 50 or older)
● 401(k) 2016 limit: $18,000
A Roth IRA has one distinctive feature, and that’s taxes. Although you set up a Roth IRA the same way as a traditional IRA, you pay taxes on it immediately. That changes how much you are able to invest each year (assuming you are taking the tax money out of your investment). There is a reason, however: once you retire and start taking money from your account, that money will be tax free.
Putting them to the test
A 35-year-old woman makes $60,000 a year. What happens if she sets up each kind of account listed above?
● In a 401(k), if the company matches her contributions and the investments make an average of 7% return, she will have saved $946,509 at age 65, if her employer matched her contribution. Otherwise, it’s around $729,840. She will then pay taxes on the money as she withdraws it.
● In a Traditional IRA, she chose to invest the maximum into her account every year, and saved a total of $620,851, before taxes, and an estimated $527,723 after taxes.
● With a Roth IRA at a 25% average marginal tax rate, making the same investments as her Traditional IRA, this woman would make $590,402 at retirement age, tax free.
At SNB, we are ready to sit down with you and plan for your future. Saving can be simple, and inspirational, if you know your options and choose what is best for you. We are here to help.
Documents to Keep in Order to Make Taxes Easier
It's tax season. For some us, it can to be confusing, frustrating and stressful time, but don’t worry, you’re not alone. The good news is that filing your taxes doesn’t have to be a nightmare. Keeping certain documents in order before tax season arrives can make your filing experience easier and less stressful.
Here’s what we recommend:
Maintain paper and electronic filing systems. The most important thing you can do to make tax time easier for yourself is to stay organized throughout the year. While you should also find a place on your computer for any financial documents to go, the majority of your financial information should exist in paper format, as well.
For the paper documents, The Motley Fool suggests a three folder system. One folder for all of your income-based documents (pay stubs, bank statements), one folder for expenses and deductions (work-related costs, medical bills, charitable donations), and one for any investments you may have.
Here’s a quick checklist of applicable documents that you’ll want to have filed away:
• Pay stubs and bank statements
• Big ticket receipts
• Proof of a major life change (birth, death, new home, new job)
• Previous year’s tax statements
• Copies of W-2, 1099 forms
It’s not over once your taxes are all filed and your returns show up in the mail. To be really safe, you should hang on to your filing history for 7 to 10 years. It may seem excessive, and in the vast majority of cases, it is. But the IRS can audit any individual as far back as they like if they have reason to suspect fraud. To make sure you’re covered in the rare instance of an audit, it’s best to have your documentation readily available.
The best way to make tax season less stressful is to stay on top of it throughout the year. If you don’t already have a filing system, start one today. Get organized in a way that works for you and add relevant documents to the bunch whenever you encounter one. Taking these steps will ensure that, filling out your taxes will be quicker and easier than ever before.
5 Scams to Look Out For This Year
Though you shouldn’t be living in fear, it’s important to be aware of all the potential dangers that lurk out there in the world. Scammers are out there, and they’ll try anything to steal your money or precious information. The best way to combat them is simply to be prepared.
When you educate yourself about the ways that scammers are most likely to strike, you know what to look out for and are less likely to fall victim to their scams. Below are 5 types of scams that you should be aware of this year.
Identity theft. This is one of the most prominent forms of financial fraud today. With a few key pieces of information, thieves can assume a person’s identity and do massive amounts of damage to their finances. The most important thing you can do to combat identity theft is to keep your personal information completely safe at all times! Never give out your social security number or other personal financial information to anyone. Always keep important financial documents in a safe, locked location.
Impersonating an institution. With the rise of digital communication, it’s not always easy for people to tell who is on the other end of the phone or email. Scammers will take advantage of this fact by pretending to be someone (or something) they are not. And many of them can be quite convincing, telling you that they need some piece of your personal financial information or some bad thing will happen to you. Government organizations like the IRS will never contact you via telephone or email. Disregard and report anyone claiming to represent themneeding your financials.
Impersonating a family member. This type of scam happens most frequently to seniors. Often a scammer will call an elderly person claiming to be a relative in need of money. They will say that there has been an emergency or they are in jail and need some amount of money wired right away. Many people get tricked into sending the money because of the urgency of the call and the fear they feel for their loved one. Make sure your elderly family members are educated about this type of scam and tell them to contact you first if they ever receive this kind of call.
Phishing. Phishing is a type of scam where scammers will send out an email attempting to get you to click on a link. That link will then access your information without your knowledge, implant malware on your computer, or take some other harmful action against you. These emails are often very well disguised so your best bet is to maintain a vigilant attitude when reading through your emails. Double check the address of the sender to make sure it is from who you think it is from. And never click a link that you have even the slightest suspicion about.
Credit card magnetic strip fraud. This is a newer example of scamming tactics. Some scammers have figured out a way to place a device in certain credit card readers (especially at gas stations or big box stores) that automatically store your credit card information when the magnetic strip is swiped through. Though it may be nearly impossible to identify a credit card machine that has been tampered with, you can always avoid credit card machines that are unattended, pay for certain things like gas in cash, or upgrade to a new EMV chip card.
You can’t spend your entire life being worried about scammers and being distrustful of every email or phone call. But what you can do is protect yourself with knowledge. We hope these tips have been able to help you do that. Check back soon for more financial tips from the pros at SNB.
Community Involvement: How the SNB Young Professionals Group Makes an Impact
Ultimately, what we want to do when we go to work every day is to help improve our customers lives with our array of banking products and services. We take pride in doing that, and it makes us feel good. But as a company born and raised in Omaha, we don’t want our involvement in the community to stop there.
In 2012, a small group of our employees launched SNB’s Young Professionals group to help achieve that purpose. SNB’s YP group is connected to the Omaha Chamber of Commerce’s Council of Companies and also takes part in city-wide events with YP groups from other companies. For those who have been involved, YP has been an amazing opportunity to learn, grow, and give back to the community.
Our YP group meets monthly and is structured in three tiers, outlined below:
Our group volunteers once a month, doing things like serving meals at the Siena Francis House or Open Door Mission. We’ve volunteered to staff different charity runs, packed pallets full of food and other items, and this year we are looking forward to installing smoke detectors for the American Red Cross.
One member of our group remembered being overwhelmed at the outpouring of appreciation she felt during her first time serving at the Siena Francis House. The hugs, handshakes, and thank you’s we receive when we volunteer just a small slice of our time is a truly moving, and reminds us that when we volunteer, we get back everything we give tenfold.
Even for those of us who have been in our jobs for many years, every day at work is an opportunity to learn and grow. We take that same attitude when we plan activities for our YP group. Aside from giving back to the community, our biggest goal is professional development.
We schedule one education event per month. And we use the term education loosely. Instead of classroom, think experiential learning that we can apply in our everyday lives. For example, later this month we have a nutritionist scheduled to come in and talk to us about creating healthy meals. It’s all about helping us learn how to live healthier, better lives.
When it comes to professional development, networking is a crucial aspect. We typically schedule one networking event per quarter, where we do things like tailgate, attend a Storm Chasers game, or host a bowling night.
These are fun ways for us to meet people from other companies’ YP groups and to get to know our coworkers and their families better. This helps us get to know our friends and neighbors even better while also planting our roots even deeper in the Omaha community.
On many occasions, we’ve talked to people who work for companies with no YP group that say, “we wish we could do that.” Well, you can! It doesn’t matter if your company is small or you’re not exactly “young.” The focus of Young Professional groups is two-fold. On the one hand, it’s about strengthening the bond between Omaha and the people who work here. At the same time, it’s about growing new bonds and strengthening existing ones between the people who work and live here.
Those of us who have had the chance to participate know the value a YP group can bring to a locally owned company like SNB. It has strengthened our bond with the community and with each other, and we couldn’t be more excited to see YP groups grow in Omaha. If you’re interested in starting a Young Professionals group at your company, the Omaha Chamber’s Council of Companies can help. Click here to learn more.
4 Easy Ways to Save Money
Sometimes financial issues can feel overwhelming. Whether you’re dealing with debt or simply trying to plan for your future, money matters can cause some serious anxiety. But you should know that, though you may not be exactly where you want to be today, establishing good financial habits now can help you get there.
Here are a few simple things you can do on a daily basis that will help you save serious money in the long run.
Piggy bank your change. For most of us, change doesn’t serve much of a purpose other than to weigh down our pockets or purse. But, if you use much cash at all during your daily life, those little fractions of a dollar can add up quickly over time. At the end of the day, empty your change into a large opaque vessel. That way, you won’t really think about it and the money will just add up over time. You might be surprised how much change you can save in a year.
Got clutter? Sell it. Another thing many of us have way more of than we tend to notice on a daily basis is STUFF. Let’s face it: most of us have way more stuff than we need, whether that’s in the form of clothes, electronics, sports equipment, or anything else that accumulates over time. Even if that stuff is not valuable, per se, it tends to be worth something. So instead of throwing it out, sell it online. At the very least, you can donate it and write off the donations on your taxes.
Sign up for rewards. If you like getting a little something back for every dollar you spend, you need to sign up for rewards programs wherever they are available. Many of the retailers you regularly visit likely feature their own reward programs. Here at SNB we offer UChoose Rewards as part of our Checking accounts. This program allows you to earn points for every transaction and eventually get free stuff that you would otherwise likely be paying for out of pocket.
Be smart about utilities. Summer is approaching and that means that cooling costs can easily put a hurt on your wallet. If you take a practical approach to utilities, you could end up saving some serious cash. Turn off your AC when you aren’t home, use fans to circulate air, and if you can, get used to keeping your house a degree or two warmer. Just using a bit less energy during the most extreme weather periods can reduce your bills considerably.
These 4 steps are only the tip of the iceberg when it comes to saving money on little things. Just look around you and consider how you spend money on a daily basis. You are likely to find plenty of other ways to “pinch pennies” that you can feel good about.
Your Emergency Fund: How Much Should You Have and For What?
Recently, we published a article about what to do when you receive your federal and state tax refunds in the mail. One of the most financially responsible things you can do with that tax return is to start your emergency fund. Because not everyone has an emergency fund or knows where to start with creating one, and why, we’ve put together this guide that should help you on your way.
Here’s what you need to know.
How much you ought to have in your emergency fund depends on your situation. Generally, the rule of thumb is 3 to 6 months of living expenses. So, in order to figure that out, add up your major living expenses for one month: rent, bills, groceries, and leisure spending. If the “6 month” number seems exorbitantly large, don’t worry too much. Getting started is better than doing nothing.
As for where to store your emergency fund, your grandparents may have chosen a shoebox, but these days that is just plain unsafe! Though there are other options, a savings account makes the most sense as the place to store your emergency fund. It’s safe, it accrues a bit of interest, and of course you can withdraw it anytime you need.
Depositing either your federal or state tax refund into a new savings account that you open specifically for your fund is a great way to get your emergency fund started. In order to keep up the momentum and keep your emergency fund growing, there are a few more things you could do, as well.
Dedicate a small portion of every paycheck you receive to your emergency fund. Whether that’s just $5, $10, or $20, every little bit adds up over time and you’ll feel good knowing you’re positively contributing to your emergency savings on a regular basis.
Another way you can save a little bit at a time is by saving your change and/or one dollar bills. Most of those single dollars and coins won’t make a huge difference in your ability to accomplish the necessary tasks of your daily life, but you could be pleasantly surprised at how much builds up after just a few months.
If you’re planning to take this opportunity to start your emergency fund, congratulations! That is a financially responsible decision that, in time, could pay you back many times over. Just remember, it’s called an emergency fund for a reason. You should ignore the temptation to take money out for any reason that cannot safely be called an emergency. You will be much better off in the long run.
5 Smart Ways to Use Your Tax Return
It’s that time of the year again where many people are starting to get their tax refunds back. That means you have an important choice to make. Some folks tend to make the unwise choice to view their federal and state returns as “free money” but it’s important to remember, that is not the case! You worked hard all year for that money and you should be careful about how you choose to use it.
Depending on how much your refund is for and what your current financial situation is, we’ve put together a brief list of things that would generally be smart ways to use your tax return.
Deposit into savings. It’s always a wise choice to add a little cushion to your savings. Whether you’re thinking about a big vacation somewhere down the line or you have a goal in mind that you’d like your savings to reach, a nice healthy deposit into your savings account can help put you at ease with your finances.
Pay down some debt. No matter what kind of interest you are paying on your credit card, student loan, or other debt, using some of your tax refund to pay some of that debt down is always a smart idea. It means that, not only do you reduce the height of the mountain you need to climb, but you also reduce the amount of work it takes to get there.
Start your emergency fund. If you haven’t had a chance to establish your emergency fund yet, the receipt of your tax refund is a great opportunity to do so. Generally, it is advisable to start with around 3 months’ worth of living expenses, so that you will be able to take care of your basic needs were you to get injured, lose your job, or have some other unforeseen circumstance.
Make an improvement to your home. Not every home improvement project has to cost thousands of dollars. Look around your home and you will probably find several things you could do that will not only improve your quality of daily life, it could also improve your property value in the long run.
Treat yourself. Are you debt free with a comfortable emergency fund? Been particularly financially responsible this year? Good for you! You ought to use some of your tax refund to treat yourself to something nice. Whether that’s a nice evening out with your significant other or some other small extravagance, it’s nice to be able to remind yourself that you are worth it and that responsible behavior pays off in the end!
Remember, when your state and federal returns arrive in the mail, they aren’t free money! They are small portions of the money you worked hard for all year long. There’s nothing wrong with treating yourself to something small, but instead of blowing it all on something frivolous, make a smart choice and invest in your future.
Pros and Cons of Filing for Bankruptcy
Filing for bankruptcy is considered a last resort for individuals who cannot pay off their debt or bills. People who turn to bankruptcy are often trying to stop lenders and creditors from garnishing their wages or foreclosing on their homes.
Bankruptcy sounds scary but educating yourself is the most important thing you can do in your quest to live a financially healthy life. If you think you might be getting in over your head and are considering bankruptcy as an option, read on to learn more about how it works and what your options are.
More than 4,000 Nebraskans filed for bankruptcy last year, with more than 2,000 so far in 2016. While it can help some get back on track, it’s not right for everyone struggling financially. Below we will look at different kinds of bankruptcy, how to file and what to expect in the process, and how it affects your future. We also look at some pathways out of debt without filing for bankruptcy.
What are the different kinds of bankruptcy?
Most individuals file for Chapter 7 bankruptcy, known as liquidation. This means you can sell your assets (like a house or a car) in order to pay off your debt. This is recommended for people with few assets, and therefore not too much property to lose in the process. Before a person files, they must complete two steps. First, check to see if you make more or less than the median income in your state, which in Nebraska is just under $42,000 a year. If you make more than that, the state may charge you a monthly fine to pay towards your debt, even after filing for Chapter 7. Second, since 2005, you must get credit counseling from a government-approved credit counseling agency within 180 days before filing for bankruptcy.
A lesser-used option is Chapter 13 bankruptcy, known as debt adjustment. The difference is, people filing Chapter 13 are planning to pay back creditors within three to five years and are making steps to do so. The amount you pay back over that time is based upon your income, not your debt. To file for this kind of bankruptcy, you must have under $300,000 in unsecured debt (like credit cards and medical bills), and under $900,000 in secured debt (like a house).
When is it time to file?
When you file for bankruptcy in court, a judge will ask questions about how you arrived in this situation. It’s important to think about your answers now before you file, to determine if you should. LegalZoom offers some questions to ask yourself if you are preparing to file for bankruptcy:
■ Do you only make minimum payments on your credit cards?
■ Are bill collectors calling you?
■ Does the thought of sorting out your finances make you feel scared or out of control?
■ Do you use credit cards to pay for necessities?
■ Are you considering debt consolidation?
■ Are you unsure how much you actually owe?
If you answered “yes,” to two or more questions, it might be time to think about how to get out of financial struggle, whether it’s bankruptcy or another plan.
In order to sincerely know if you need to file for bankruptcy, you will need to do some accounting. Add up all of your income and assets (paychecks, stocks, bonds, retirement and college savings, and big items like the house and car). Next add up each credit card statement and bill you receive monthly. If you owe more in bills than you have in assets, it could be time to file for bankruptcy. However, if you think you will acquire new debt in the coming months, it might be worth holding off until you are not accruing debt anymore to file, since you can only do it once in a six-year period.
How do you file for bankruptcy and what happens next?
With or without the assistance of a lawyer, a person fills out these forms, and files them in their state court. A lawyer can be useful depending on how complex your case is, but can cost an average of $3,000. It takes anywhere from four to six months to complete the process after filing. There are also fees attached which can accumulate to around $400. Afterward, creditors will stop calling and mailing immediately. You will be able to keep your retirement savings like a 401(k), but will still have to pay off mortgages, student loans and other secured debt, like a car payment.
Before you decide on how to move forward, know these important facts about what happens next. When filing in court, this becomes an issue of public record, that anyone can look up. Also, lenders and creditors will see this information first and foremost on a credit report, and will for 10 years (Chapter 13 lasts for seven years). That drastically affects your future interest rates, and your ability to get credit or any loan. You will lose the credit cards you have, and it takes one to three years to get a new one after filing for bankruptcy. Keep in mind, you cannot file for bankruptcy again for the next six years, so if something worse happens, this will not be an option.
Options before filing for bankruptcy
There are different levels of need when considering filing for bankruptcy. Are you trying to stop debt collectors from calling you incessantly? Have there been medical bills that wiped out your line of credit? Have you lost your income or been unemployed for awhile? Depending on your situation, there are some avenues to explore before making a big bankruptcy choice.
■ Negotiate with your creditors
Creditors don’t want you to file for bankruptcy, but they do want their money. How much money? That’s up for negotiation. If you lay out a plan to your creditors where they will receive regular payments, it could reduce your total debt and help with the phone calls from creditors while buying time until a better financial opportunity comes along.
■ Find a debt counselor
Like Chapter 13 bankruptcy, this plan allows you to consolidate debts and create a payment plan to pay off your debts. Unlike Chapter 13, it will not show up on a credit report or public record.
■ Restructure your mortgage
If you are able, you could try to negotiate a new payment plan for your mortgage with your lender. If you can decrease what you pay into your mortgage every month, you could use that money to pay off debt and avoid bankruptcy. Like creditors, they don’t want you to file for bankruptcy or to take your house; they want the money they lent you. If you give them a plan to pay it back, they may accept. If not, consider refinancing your home altogether which could secure you a lower mortgage.
■ Borrow from family and friends
No one wants to have to ask their parents or loved ones for money, but no one wants to have to file for bankruptcy, either. Friends and family with secured income could be the simplest way to avoid bankruptcy, as it doesn’t involve negotiating or signing on with any agencies. This is a private way to stay out of the court, albeit a difficult one. If you are not opposed to using social media, consider setting up a site on gofundme.com, where people can donate to your cause. You might have more people supporting than you thought.
The decision on whether or not to file for bankruptcy is a difficult one. The steps involved in filing for, or staying out of bankruptcy are difficult. You should consult with a trusted legal professional.
If you have more questions on your financial future, let our team of financial advisers make a plan that fits you.
Flashback to 1990: If you had asked your family and friends if they used a checkbook, almost every one of them would have said, “yes, of course!” For a long time, checks were the way to pay for things and keep easily keep track of our spending money. Today, checks are still a useful tool, but much less common.
That’s because we’ve seen the emergence of secure and easy digital tools like Popmoney. So, what is Popmoney, and how do you use it? We’ll fill you in on all the details below.
What is it?
Popmoney is an online web-based personal payment service available to anyone with an SNB checking account. It allows you to send and receive money, quickly and securely, to or from anyone who has a bank account.
How does it work?
It’s really easy. When you log into your SNB account, click Bill Pay, then look for the Popmoney tab on the left. You can send money to anyone using their email address, mobile phone number, or bank account information. However, take note: You never need to give your account information out to send or receive money!
When someone sends you money, it will be available via the Popmoney tab in your SNB account. Then you’ll be able to direct that money to whichever SNB account you wish. You’ll also be notified via email and/or text so you know when it is delivered.
Why use it?
There are many situations where Popmoney is the quickest and easiest way to send or receive money. Whether you need to split rent or a meal with friends or roommates, need to send some emergency cash to a child or family member from out of town, or want to pay for services like babysitting or landscaping, Popmoney is fast and convenient.
Besides that, it’s extremely safe. Your account information is never made available to anyone you send money to. You may be asked to confirm your email address and phone number on occasion, but this is only for your added security.
Are there limits on how much money I can send or when I can send it? Popmoney does impose limits for your safety. When you select a recipient in the "To" field, a question mark will appear after the "Amount" field. Simply click on the question mark to find out your personal dollar and transaction frequency limits.
Can I schedule payments? You can schedule a single one- time payment or recurring payments in advance. You can cancel those payments anytime on or before the send date.
How long does it take to receive money? Funds are typically available on the next business day.
Do additional fees apply? When you use Popmoney through SNB, no fees apply. If you do not have an account with a bank that uses Popmoney, there may be additional fees.
We hope this has served as a helpful introduction to what we think is an extremely helpful new tool for our customers! If you still want to learn more about Popmoney or have a specific question that wasn’t listed above, click here.
Understanding Your Credit Score and How to Improve It
Whether you’re just getting married, heading to college, or looking to buy a house, three simple numbers could determine what money you are qualified to borrow. Your credit score, usually ranging from 300-850, is a number boiled down from a credit report that details your credit history and determines how risky it is to lend you money. But how are those numbers calculated and how can you see your score go up?
Understanding Your Score
Your credit history information comes from a credit report compiled by three data collectors: Equifax, Experian, and Transunion. Credit score companies then use their specific formulas to translate that report into a single number. The most widely used credit scores are FICO Scores, the credit scores created by Fair Isaac Corporation. 90% of top lenders use FICO Scores to help them make credit-related decisions. Your FICO score takes every credit report you might have from each card you hold, and makes a total evaluation, 300 being risky and thus “poor” credit and 850 being stellar.
FICO is not the only credit score you can have and each has its own range. See the most common credit scoring models below:
■ FICO Score: 300-850
The newest version, FICO Next Generation, or NextGen scores, have scales with a high score of 950. FICO uses a different algorithm for each of the data collectors listed above to give information fitted to their scores. Each collector uses different information about you and your history and FICO fits your information for them to understand in their model.
■ VantageScore 3.0: 300–850 (versions 1.0 and 2.0): 501–990
Unlike FICO, VantageScore has one algorithm, combining data collectors’ information into one universal number that combines all the information any data collector might have.
■ PLUS Score: 330-830
Developed by Experian, this score is for consumers only, meaning lenders will not see it or use it in determining your credit. It is just for you.
■ TransRisk Score: 100-900
While VantageScore looks at recent credit history, TransRisk uses your lifetime’s worth of data to build your score. If you typically have great credit all your life, but recently went through a slump, TransRisk will take that into account.
All credit scores use the same information from your credit report, but they treat the information slightly differently to meet the needs of the particular lender. As you can see above, you could have two different numbers (or five) that indicate you are a very good credit risk because different models have different score ranges.
Improving Your Score
If you know your credit score, you might not know how you got that score, or how to improve it. Fair Isaac Corporation isn’t obligated to reveal how it determines its credit scores, so you are not the only one guessing. Roughly, FICO scores are calculated by “payment history (35%), amount owed (30%), length of credit history (15%), new credit (10%) and type of credit used (10%).” In other words, they are looking at if you pay on time, if you have filed for bankruptcy, how much debt you carry combined, how actively you use your card, the proportion of new accounts to existing ones, and the kinds of credit or loans you have been approved for. Read below to see some tips on how to improve your credit score.
1. Check your score frequently
According to a WalletHub survey, 30% of credit card holders haven’t checked their score in a year, and 13% never have. In a survey conducted by Discover, nearly three-quarters of those who checked their scores more than seven times in a year (every six weeks or so) said doing so changed their financial behavior for the better.
2. Set up payment reminders
Paying on time is a big factor in any credit score. Depending on your credit provider, you could have emails or texts sent to you when it’s time to pay. Some consumers go one step further and set up automatic payments of their cards, but it only pays the minimum balance and doesn’t keep you engaged in your own credit life. Instead, try setting up a reminder to actually look at your credit payments, credit score, and spending so you’re learning as you pay.
3. Keep an eye on how many cards you have
There is no magic number of credit cards that stand out on a credit report. Some people take out specific cards for a period of time, then get rid of them. Others have one card they will use for the rest of their lives. No amount of airline miles or bonus cash could get them to change. If this is your first credit card, don’t apply for several cards all at once to get a bigger line of credit. It will not improve your score instantly, and it could cause credit problems later, especially if you are not familiar with using credit.
If you keep learning about your spending and how it influences your credit score, it could be beneficial when deciding on lenders. If you have a credit card with us, check out your activity online here. If you’re happy with your credit score and are ready to look into mortgages and loans for your life’s next step, see more information here.
5 Financial Tips for College Students
Whether you’re getting set to enroll in your first semester of college classes or you’re going back for your MastersMaster’s degree, college students have a lot to consider when it comes to their finances. College can be one of the most exciting and rewarding periods in one’s life, but with many potential sources of stress, it can begin to feel like a burden, as well.
If you have a good hold on your finances, you will help alleviate some of that potential stress. You’ll also be better prepared for life after graduation. In hopes of helping you live your best life, we’ve put together five tips to help you maintain control of your finances while in college.
Budget, budget, budget. Whether you have $5 or $500 to spend, nothing is more important than staying within your means. It’s effectively what keeps your financial ship afloat as you traverse life’s uncertain seas. So learn how to budget early. Make sure you always know your regular income and expenses. In other words, keep a log of how much money you make and how much money you owe on a regular basis for things like bills and rent. Once you do this, you’ll begin to have an idea of how much spending money you have and how much you can afford to put in savings.
Show some restraint. College can be an incredibly fun and tempting time. However, it’s important that, once you make your budget, you stand by it. You may run into a friend or acquaintance that simply has a bigger budget than you. That’s okay. It’s important for you to learn how to resist the pressure of simply going along with what others do. Sometimes a group of people may decide to go to a restaurant that you know is too expensive for your budget. That’s okay. Learn how to show some restraint and you will certainly be better for it in the long run.
Use your credit card wisely. Not every college student needs a credit card, but opening one can be a wise choice. As you may have heard before, there is “bad credit” but there is also such a thing as “good credit,” and it’s actually very important for getting loans for a car or home down the line. The best way for you to start building credit is by using a credit card responsibly. That means staying well under your credit limit and making at least your minimum payment each month.
Know where you stand with financial aid. If you’ve taken out student loans or received financial aid from the institution you are attending, make sure you stay up to date on where those payments and disbursements stand. Even in the case of scholarships, it’s important not to take them for granted. As we have said before, there is no such thing as free money. Make your payments on time and/or know your timetables for repayment once you graduate.
Shop smart. Even when you’re in college and trying your best to be frugal, you can’t avoid spending money. Whether it’s food, clothing, or supplies for your apartment or dorm room, you would be wise to learn how to comparison shop, find discounts, and buy secondhand. Though you can’t avoid buying things, you can avoid buying things that are unnecessary or extravagant.
Whether you’re a high school senior preparing for your first college experience, or a seasoned upperclassman, we hope you’ve found these tips helpful when it comes to managing your finances wisely. While you’ll no doubt learn a lot in the classes you’ll take, it’s possible that the most important thing you’ll take with you after college are the habits you establish.
How To Help Your Child Build Credit
We all want the best for our kids. And in order to teach them well, it takes a mix of leading by example and letting them discover by doing. This is especially true when it comes to teaching them good financial habits. Having good credit as an adult is made all the easier when we establish good financial habits as a child.
Although every family is different and it’s up to you to determine what is right for your family, we’ve made 3 basic recommendations that should help enforce good financial habits in your child.
Get them a checking account and a debit card. The first thing you can do is wean them off the piggy bank and introduce them to what money looks like in real life. At its most basic level, this is a checking account and a debit card. This will teach them that managing your money isn’t as simple as counting your pennies. Though maintaining a checking account won’t start building credit in the child’s name, it lets them take that important first step of accepting accountability.
Open a savings account. Once they’ve got the basics of balancing a checking account, you could open a savings account in their name. This will introduce them to the idea of interest and get them thinking about saving for their future, what their goals are and how they will get there.
Talk to them about good financial habits. Finances are complicated. Especially for kids, they can be overwhelming. Take the time to explain complicated financial concepts to them. Talk to them about expenses. Take them to the bank with you. Encourage them to get a job. Explain what all the numbers on their paycheck mean. You probably have an opportunity every day to increase your child’s financial literacy. Even the smallest experience helps inform their future.
If you want to set your child up for financial success in adulthood, do what you can to give them a solid foundation. Good credit starts with a good understanding of financial responsibility. Set a good example by being financially responsible yourself and by sharing some of your knowledge and experience with them. Then, when they’re ready, make them accountable for their own finances with checking and savings accounts.
Cyber Security 101: Reducing Your Risk of Identity Theft
Identity theft is a growing concern. As people do more of their personal business online, cybercriminals are becoming more resourceful in order to steal their valuable personal information. SNB takes every possible measure to protect you and your identity, but you may want to know what other steps you can take to safeguard your activity online.
Below are a few things you can do to protect your identity from cybercriminals.
Pay attention to your accounts. One of the worst things you could do is take a “set it and forget it” approach to your finances. In a world of direct deposit and auto-pay, it can be easy to do that. But ignoring your bank statements could leave the door open for unauthorized activity to go unnoticed. The best way to stay on top of all of your financial activity is to make a habit of checking in on all of your accounts on a regular basis. Our SNB mobile app makes it easy to keep tabs on your finances. Our banking app makes it easy for you to monitor your accounts wherever you are. Additionally, we also recommend utilizing our Account eAlerts service, available in online banking. eAlerts can be setup to send messages to your mobile device or email when a transaction posts to your account. You can find eAlerts by logging into online banking and clicking on the Alerts menu item at the top of the online banking landing page. Remember eAlerts must be setup using our full site and, at this time, cannot be setup using our mobile app.
Vary your passwords. When it comes to deterring cybercriminals, you have to make it difficult for them. Don’t make it easier by using the exact same password for everything you need to access online. If you make them all the same and your password for one site gets compromised, the cybercriminal immediately has access to all of your passwords. Though it may seem like a hassle, this potentially very bad situation could be avoided if you create unique passwords for each site you use. Changing your passwords on a regular basis is also a good idea.
Be wary of suspicious emails. Some scammers accomplish their crimes by fooling people into thinking they are legitimate, or someone they actually are not. Be vigilant when reading emails and don’t be afraid to disregard or report anything that seems suspicious. Most important of all, never send money to anyone who asks through email. Know that the IRS and other government organizations will never contact you via email requesting personal or account information, nor will SNB. Do not respond to anyone claiming to need your personal information.
Identity theft is a real concern. But with a little vigilance you can help reduce your chances of becoming a victim.
If you feel you have fallen victim to online fraud theft, follow these recommended steps immediately.
Have you been affected by the recent Equifax Data Breach? Check out the Federal Trade Commission’s recommendations on what to do: