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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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Your Credit Score –  Add Positive Information

So how can you improve your credit rating?  Here is the third of five power moves.

  • Add positive 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.

Your Credit Score – Reduce Debt

 So how can you improve your credit rating?  Here is the second of five power moves to boost your credit score.

  • Reduce debt…namely, credit card 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.

Your Credit Score – Pay Bills On Time

So how can you improve your credit rating?  Here is the first of five power moves to boost your credit score.

  • 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!

 

What Does Your Retirement Look Like?    Step 4 of 4

 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 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 Does Your Retirement Look Like?   Step 3 of 4

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 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.

 

What Does Your Retirement Look Like?   Step 2 of 4

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

 

What Does Your Retirement Look Like?   Step 1 of 4

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.

 

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 - Your Income

Preparing now for unexpected costs can help keep your retirement plan and budget on track.

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.

Your Income

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.

Beware of Costly Surprises in Retirement - Your Home

Preparing now for unexpected costs can help keep your retirement plan and budget on track.

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.

Your Home

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.

 

Beware of Costly Surprises in Retirement - 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.

Your Taxes

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.

Beware of Costly Surprises in Retirement

Preparing now for unexpected costs can help keep your retirement plan and budget on track.

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.  

 

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.

Commit to Change – 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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