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We are pleased to provide you with additional financial information to assist you with your financial well-being. Please check this page every Wednesday for our updates.

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Money Musts Before Baby Arrives – Make an Estate Plan

Preparing early will allow you time to think through your options and come up with a game plan.  

Make an estate plan.  This covers your wishes for your child in the event that something happens to you.  Simply telling people around you what you want is legally not good enough.  It needs to be in writing.  Without documents such as a will, trust, and power of attorney, your family details will end up in court with a judge deciding what he or she thinks is best. 

Please speak with an Old Fort banker about this tip and more to make sure you are confident in your financial plan so you can focus on your new baby.

Money Musts Before Baby Arrives – Start an Emergency Fund

Start an emergency fund.  If you have not already, start saving three to six months of household expenses in an account that you can access quickly.

Please speak with an Old Fort banker about this tip and more to make sure you are confident in your financial plan so you can focus on your new baby.

Money Musts Before Baby Arrives – Review Insurance Benefits 

Review insurance benefits.  This step includes life insurance and short-and long-term disability income insurance.  The goal is to make sure your family could continue to keep your household going financially if something unexpected happened.

Please speak with an Old Fort banker about this tip and more to make sure you are confident in your financial plan so you can focus on your new baby.

 

Money Musts Before Baby Arrives – Create a Parent Budget

When you are a new parent, it is difficult enough to figure out how to change a diaper, let alone how to set up your family for financial success.  You will be busy holding your baby, feeding your baby, bathing your baby and enjoying each moment that your new baby brings.  That is certainly how it should be.  The time to get money-wise about parenthood is before the baby arrives.  Preparing early will allow you time to think through your options and come up with a game plan.  The following are some tips to help parents-to-be.

Create a parent budget.  Budgets change drastically when a child arrives.  Factor in things like diapers, formula if needed, child care, clothes, toys and taxes…which can work in your favor (child tax credit).

Please speak with an Old Fort banker about this tip and more to make sure you are confident in your financial plan so you can focus on your new baby.

What Should You Do With Important Financial Documents?

The filing cabinet is overflowing…what do you really need to keep and for how long?  Here is a basic guide that may be helpful:

Permanently:

  • Vital records such as birth and death certificates, marriage licenses, divorce decrees, Social Security cards, military discharge papers, wills, trusts and citizenship papers
  • IRA contribution records, retirement and savings account statements, estate planning documents, life insurance contracts
  • Home improvement records (remodeling, additions, installations), receipts for big purchases such as jewelry, antiques, rugs, appliances, etc. (these might be needed to prove value in case of an insurance claim, but be sure to check with your home insurer)
  • An inventory of your bank safe deposit box (share a copy with your executor or your attorney)
  • Pre-paid funeral expenses

 Keep these for seven years:

  • Tax returns (electronic and paper)
  • Canceled checks/receipts (alimony, charitable contributions, mortgage interest and retirement plan contributions)
  • Credit card statements if they are tax-related
  • Records for tax deductions taken

Keep until the item is sold or paid off:

  • Loan documents
  • Vehicle titles
  • Stocks, bonds, mutual funds, etc.
  • Warranties

Keep for less than a year:

  • ATM and bank-deposit slips, credit-card receipts and bills, until reconciled with your monthly statements
  • Insurance policies and investment statements, until new ones arrive
  • Paycheck stubs, until you can reconcile with your W2 form

This is not to be considered, or intended to be legal or tax advice.  For answers to specific questions and before making any decisions, please consult a qualified attorney or tax advisor. 

Please speak to an Old Fort banker about securing your valuables in a safe deposit box.

 

 

What Does Your Retirement Look Like? 

When you visualize your retirement, what comes to mind?  Maybe you will sleep late every morning.  Perhaps you plan to take one big trip each year.  Or maybe you will start a new business, go back to school or volunteer.  Whatever you imagine, to achieve it, you need a plan. 

Now is the perfect time to jumpstart your retirement plan and make your vision of retirement a reality.  Like every great endeavor, your retirement starts with a little imagination, some planning, and then a commitment to see it through.  Here is how to get started with the help of an Old Fort Banker and your financial advisor. 

STEP 1:  Imagine life 10, 20, even 30 years from now.  Think about the details.

STEP 2:  A good plan will get you there.  Ask yourself, “Work more or retire sooner?”  “Do I want growth or protection?  Or both?”  “Save or spend?”

STEP 3:  Work with an Old Fort Banker and your financial advisor to devise and implement a plan designed to give you the  best chance at a secure and fulfilling retirement.

STEP 4:  Analyze and monitor progress.  As life changes, your plan should as well.  You and an Old Fort banker, along with your financial advisor can make adjustments and tradeoffs as necessary. 

What You Should Know About Home Equity Loans?

If you are in the market for a loan, a home equity plan is one of several options that might be right for you. Before making a decision, however, you should weigh carefully the costs of a home equity loan against the benefits. Shop for the credit terms that best meet your borrowing needs without posing undue financial risks. Remember, failure to repay the amounts you have borrowed, plus interest, could mean the potential loss of your home. Please speak to an Old Fort banker to discuss your borrowing options.

How to Boost Your Credit Score 

So how can you improve your credit rating?  Here are five power moves to boost your credit score.

1. Pay all your bills on time. 

FICO credit scores range from 300 to 850 points.  According to officials from Fair Isaac Corp., creator of the FICO score, the biggest factor in calculating your three-digit credit score is your payment track record.  To be exact, 35% of your FICO credit score is based on how well you pay your bills, like credit cards, student loans, or auto loans.  So make sure you always pay your financial obligations on time.

A single payment that is 30 days past due can lower your credit score by 50 to 100 points or more. Ouch!

2. Reduce debt

Although you may fret over having hefty student loans or a big mortgage, if you are paying those bills on time, they are not hurting your credit score.  But just carrying large credit card debt does impact your credit rating.

That is because 30% of your FICO credit score is based on the amount of debt you owe…specifically your credit card debt.  The FICO scoring system compares the amount you owe against your overall credit card limits.  The result is your credit utilization rate.  For example, if you have charged $2,500 and your credit cards lines total $5,000, then you have a 50% credit utilization rate. 

Knock down some credit card balances…or better yet, pay off a credit card or two and you will see your credit score rise.

3. Add Information to Your Credit Reports

One of the newer trends in credit reporting and credit scoring is the growing importance of nontraditional data. This refers to financial obligations such as rent payments, utilities, or day care bills…items that historically were not shown on credit reports.

These days, that is changing. Adding your rent payment to your credit reports is a particularly nice, fast way to give your credit score a boost. Of course, your rental payment history must be positive…as in, no late payments! If so, you are likely to get a double-digit increase to your credit score, according to studies by Experian and TransUnion, two of the country’s three main credit-reporting agencies.

Since about one-third of Americans are renters and not homeowners, tens of millions of renters can potentially benefit from this strategy. If you are among those renters who have paid rent on time, you should get credit for that.

Be aware, though, that you cannot add your rental data to your credit reports on your own. A third-party company has to do it to verify your on-time payments with your landlord. RentReporters.com and Rent Track.com are two third party companies that will add rental payment history to your credit reports.

4. Dispute errors in your credit report.

One of the easiest ways to improve your credit score is to review your credit reports (from TransUnion, Equifax, and Experian) and make sure they do not contain mistakes. By various estimates, up to 70% of consumer credit reports have errors. It is possible that erroneous data could be dragging down your credit score.

Under the Fair Credit Reporting Act, information that is erroneous or outdated or that cannot be verified must be removed from your credit report if you dispute it. Start by getting all three of your credit reports for free at annualcreditreport.com.

5. Use a personal loan to payoff credit card debt

Slashing credit card debt can boost your credit score, but can you do it if you do not have the cash to aggressively reduce your credit card bills? Well, you can trade your credit card debt for another type of debt: a personal loan.

The credit scoring system views personal loans as “installment loans” and that is better for your credit rating than revolving debt, which is how credit cards are classified. Personal loans also often have lower interest rates than credit cards.

So if you already have fair to good credit (a score of about 660 to 750) but would like to have excellent credit (a score of 760 to 850), a personal loan can help. By using the five power moves, you can boost your credit score and have excellent credit sooner than you ever thought possible.

See an Old Fort banker today to discuss trading your credit card debt for a personal loan.

What Does Your Retirement Look Like?  

When you visualize your retirement, what comes to mind?  Maybe you will sleep late every morning.  Perhaps you plan to take one big trip each year.  Or maybe you will start a new business, go back to school or volunteer.  Whatever you imagine, to achieve it, you need a plan.

Now is the perfect time to jumpstart your retirement plan and make your vision of retirement a reality.  Like every great endeavor, your retirement starts with a little imagination, some planning, and then a commitment to see it through.  Here is how to get started with the help of an Old Fort banker and your financial advisor:

  •  Imagine life 10, 20, even 30 years from now.  Think about the details.
  • Analyze and monitor progress As life changes, your plan should as well.  You and an Old Fort banker, along with your financial advisor can make adjustments and tradeoffs as necessary.
  • Work with an Old Fort Banker and your financial advisor to devise and implement a plan designed to give you the best chance at a secure and fulfilling retirement.
  • A good plan will get you there.  Ask yourself, “Work more or retire sooner?”  “Do I want growth or protection?  Both?”  “Save or spend?”

Everyone Needs an Estate Plan

One of the biggest misconceptions about estate planning is that it is only for the extremely wealthy.  But the truth is, anyone with investments, a home, a small business, or any assets he or she would like to pass on should have an estate plan.

An estate plan is much more than a will.  It is a plan designed to safeguard your estate, smoothly transfer assets upon your passing and care for the ones you love.  It is the best way to ensure your assets will be handled as you wish and your legacy is preserved.  It can also provide important tax advantages.

An estate plan does not need to be complicated.  Take the first step and talk to an Old Fort banker about creating your estate plan and turning your life’s work into your legacy.

Beware of Costly Surprises in Retirement

Achieving a successful retirement requires not only planning for what you hope will go right, but also preparing for what may go wrong.  While it is no secret that retirement includes a number of unknowns, you certainly do not want to be caught off guard.  With so many financial and lifestyle decisions to be made, planning now for some of the surprises that may lie ahead can help you feel more confident that your financial future will be comfortable.

Consider these to-dos as you plan for the unexpected:

  • Meet with your advisor to discuss different scenarios that could affect your retirement budget, and stress-test your plan against unexpected shocks.
  • Talk to your tax professional to gain a deeper understanding of how different types of income are taxed.
  • Speak with family to manage expectations about your ability to help provide future financial support.  

Your Income

Achieving a successful retirement requires not only planning for what you hope will go right, but also preparing for what may go wrong.  While it is no secret that retirement includes a number of unknowns, you certainly do not want to be caught off guard.  With so many financial and lifestyle decisions to be made, planning now for some of the surprises that may lie ahead can help you feel more confident that your financial future will be comfortable.

What costs $1 today could more than double in price in 25 years and many retirements last at least that long.  Please consider working with one of our advisors to plan your retirement income stream, and keep in mind that experiencing the tragedy of losing a spouse may also mean facing the financial hardship of losing their income stream as well.  Run hypothetical scenarios and talk about how you can help your money last as long as you will need it to, while keeping up with inflation.  This could mean investing for growth, even if you thought you would be more conservative during this period of your life.

Your Home

Achieving a successful retirement requires not only planning for what you hope will go right, but also preparing for what may go wrong.  While it is no secret that retirement includes a number of unknowns, you certainly do not want to be caught off guard.  With so many financial and lifestyle decisions to be made, planning now for some surprises that may lie ahead can help you feel more confident that your financial future will be comfortable.

Many people believe that paying off their mortgage will reduce their housing costs.  However, whether downsizing or staying in your current home, there will still be ongoing maintenance expenses to consider.  In fact, major home repairs and upgrades are the number one spending shock for retirees.  Additionally, downsizing ushers in moving costs, and staying put could trigger renovations to account for changes in health or mobility.  Finally, if you are considering purchasing a second home, keep in mind that getting a mortgage can be difficult without current income.

Your Taxes

Achieving a successful retirement requires not only planning for what you hope will go right but also preparing for what may go wrong.  While it is no secret that retirement includes a number of unknowns, you certainly do not want to be caught off guard.  With so many financial and lifestyle decisions to be made, planning now for some of the surprises that may lie ahead can help you feel more confident that your financial future will be comfortable.

It is crucial to understand how different types of income can affect the way your earnings are taxed, especially if you decide to take consulting or part-time work in retirement.  Taxes can also change according to state of residence and marital status, so understanding their implications is wise.  Additionally, you may have to pay taxes on your Social Security benefits once you start receiving them.  Talk to a tax professional to understand your obligations. 

Commit to Change 

Focus on New Habits 

  • Start a part-time business around a hobby you love.  Do you love to bake, paint, build or garden? There may be a little extra income in doing the things you love.
  • Instead of spending time on the phone or in front of the TV, volunteer at your favorite charity, or assist a friend, neighbor or family member with a project they may be struggling with. Sometimes we benefit more by doing for others.
  • Have a garage sale…it really works. Not only do you gain a little extra cash…you have cleared out unused items cluttering your home and garage.
  • Talk to others about ways to save. They may offer tips on how to save on items and receive discounts you were not aware of.
  • Keep educating yourself on financial wellness.

 Speak with an Old Fort banker about establishing a commitment to save.

Take a Closer Look at Your Finances

  • Review your monthly statements to ensure they are accurate. Do you have automatic monthly charges you no longer use or want? Would you save time and late fees if you scheduled automatic bill payments?
  • Review your credit card interest rates. Transfer high interest credit card balance to a lower interest rate card and commit to paying it off. Be sure to read the fine print regarding late payments.
  • Review your insurance rates. Are you getting the best rate and do you have the coverage you need?
  • Are you an impulse shopper? Start a “ten- minute rule”. Ask yourself if you really NEED the item. Set it aside and walk away, continue to shop, if you feel you still need it…walk back and get it. 

Speak with and Old Fort banker about your financial needs, we care about you and your financial well-being.

Tips for Millennials to Begin Good Savings Habits 

  1. Save for Emergencies. Unexpected expense such as parking tickets, flat tires or medical bills will pop up, and you want to have money set aside when they do.
  2. Manage Your Money. Start putting a small amount in your savings account each pay period. Use credit cards sparingly and always pay-off the balance immediately or over a short period of time.
  3. Take Advantage of Company 401(k) Retirement Plans. Set up payroll contributions into your retirement plan. Employers may even match your contributions, learn more about your retirement plan. If your employer does not offer retirement savings, you may be able to open a Roth or Traditional IRA. 

The sooner you start saving and investing the better…speak with an Old Fort banker about starting a savings plan today.

Can You Cover an Unexpected Expense of $400?

If not, you are not alone…approximately 46 percent of adult Americans said they would not have enough funds available to cover a $400 emergency expense without borrowing. 

Speak with an Old Fort banker to establish your “Emergency Fund.”

Review Your Insurance Policies

  • Home improvements: Create a list of your home improvements especially those to safeguard your home. Notify your insurance agent to see if any of these improvements qualify for a discount.
  • Review your car insurance: Do you need to drop a vehicle from coverage, remove a driver no longer living at home? Are discounts available for student drivers with good grades or for installing a car alarm?
  • Deductibles: Adjusting your deductible may be a cost savings…consider your situation to see if it makes sense.

 Parents…Teach Your Children to Save

 Below are a few tips to help get you started.

  • Set the example of a responsible money manager by paying bills on time, being a conscientious spender and an active saver. Children tend to emulate their parents’ personal finance habits.
  • Talk openly about money with your children. Communicate values and experiences with money.  Encourage them to ask questions, and be prepared to answer them…even the tough ones.
  • Explain the differences between needs and wants, the value of saving and budgeting and the consequences of not doing so.
  • Open a savings account for your children and take them with you to make deposits so they can learn hands-on in their money management.
  • Let friends and family know about your child’s savings goal. They will be more likely to give cash for special occasions, which means more trips to the bank.
  • Put the literacy in financial literacy. Encourage your children to read books that cover various money concepts. Not only will they become strong readers, but they will be smart money managers, too.

 Speak with an Old Fort banker regarding our children’s savings options.

 

  

 

 

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