News for YOU!
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Graduation season is wrapping up and many young adults are beginning their careers. This is a good time to talk to them about starting to save early for retirement and the importance of preparing for financial emergencies.
What should you tell them about saving and investing? Here are a few discussion points you can use.
A great place to save and invest money you earn is in a Roth IRA.
- If your children have jobs, encourage them to open Roth individual retirement accounts.
- Explain that interest in a Roth IRA grows tax-free for life.
- Experiment with different amounts of savings and interest rates. Use a compound interest calculator at investor.gov.
- Use the "Rule of 72" to estimate how many years it would take to double your money. If you invest in an account that earns 8 percent interest, you'll double your money in nine years (72 divided by 8 is 9).
- Explain to your child that once he starts a job, he may be offered a similar account at work called a 401(k). In a 401k, he can deposit pre-tax dollars through a payroll deduction. Some employers may even provide matching contributions. The money in the account generally won't be taxed until it's withdrawn.
When investing, consider the risks and the annual expenses.
- Invest in an IRA or a 401(k) as soon as you have some income.
- Putting all your eggs in one basket can be a risky way to invest; consider a diverse mix of stocks, bonds, and cash.
- Compare mutual fund costs: An "annual expense ratio" of 1.5 percent instead of 0.5 percent on a $1,000 investment could cost you almost $2,000 over the course of 35 years.
- Ask about index funds, which tend to have low annual fees.
- Think about your goals. Attending college? Buying a home in 10 years? Purchasing a car in five? Define two financial goals for the long-term future, and make a plan to achieve them.
It's important to save for emergencies.
- Financial emergencies will happen; it's only a matter of when. Be prepared by starting a savings account to handle repairs, replacements, sudden trips, job loss, etc.
- Some experts suggest saving three to six months' worth of expenses. If this seems too difficult, start by looking back at some recent financial emergencies. Set a savings goal you think will meet your urgent needs. When you reach that goal, aim higher.
- Keep your money in a safe place, like a federally insured bank or credit union.
With the travel industry lifting restrictions, and businesses and schools beginning to open again, it creates a feeling of starting fresh and encourages us to set new goals. Setting new financial goals should be on the top of our lists. As you reflect on the past year, focus on your experiences – build on what worked and what didn’t – to shape this year’s money habits. Here are some ideas to consider as you set your financial goals.
New Savings Account
Think about what you want to save for the coming year and commit to opening a savings account to reach that goal, whether it’s creating an emergency fund or setting money aside for your kids’ future college tuition. There are many types of savings accounts available to save for both short term and long term goals.
Small Step: Decide on the type of savings account that will meet your goal and commit to depositing a set amount on a regular basis to get into the habit of saving. For example, if you open a basic savings account, deposit $25 every month and sign up for direct deposit or automatic withdrawals from your checking account to ensure that amount is saved. Once you’re comfortable with saving a small amount consistently, you can increase it.
Pay Down That Old Debt
Confronting your debt and thinking about how to pay it off can be scary and overwhelming. Make a list of your debts, noting the monthly payment, current balance, and interest rate, and make a plan to start paying down the debts. Many experts recommend focusing on either debts with the highest interest rates or debts with the lowest balances to pay off. While you will likely save more money paying off debts with the highest interest rates, it may be faster to pay off the smallest balances first, and seeing this progress may help keep you motivated.
Small Step: Whichever method you choose for paying down debt, start by adding a small amount to one of your current payments. For instance, if you are focusing on paying off a credit card with a minimum monthly payment of $100, add $25 to that amount to start (for a total monthly payment of $125). Once you are comfortable with that new amount, add more when you’re able and stay focused on the goal.
Keeping your finances organized will help you control your money and achieve your financial goals. Some basic tasks to help you get organized include making a budget, tracking your spending, and putting a system in place to ensure you pay your bills on time every month. Be sure to monitor your credit card and bank statements for any unexpected fees or unusual activity too. The sooner you find mistakes or unauthorized transactions, the easier it is to correct those issues.
Small Step: Like dealing with debt, organizing your finances can be daunting, so start small by picking one organizational task and focus on that task for one month before adding another. For example, you might start by setting up automatic bill pay from your bank account in order to make sure your bills are paid on time. Give yourself one month to learn about it, set it up, and get comfortable using it. Next month, focus on creating a budget, which gives you several weeks to learn about budgeting and working on it.
Protect Your Money
With so many financial transactions occurring electronically, it’s important to proactively protect your personal information, including your credit card and bank account numbers. Take charge of protecting your money. Never provide your personal information in response to an unsolicited request, whether it is over the phone or over the Internet. Always track your bank and credit card statements and your credit reports for unusual activity. Catching abnormal transactions early will allow you to take steps to prevent more harm if your information has been stolen.
Small Step: One important step to protect yourself from online scams and theft is to change your passwords regularly. If you have been using the same passwords for your financial accounts for a while, create new, difficult-to-guess passwords and change them often to keep your money safe.
(Article provided by FDIC Consumer News)
A roomy condominium with lake views. A quaint Cape Cod in a great neighborhood. A spacious contemporary with a bright home office. If you're starting the process of buying a home, you may be fantasizing about the perfect home. But, as homeowners know, there's a lot more to the process than just finding the right home. You have to make it yours.
Here are five important steps you can take to make that happen:
- Get your credit in order. Having good credit is essential to getting approved for a mortgage and helping you secure the best interest rate. That's why it's important to understand, review, and manage your credit even before you apply for a mortgage. You should start by obtaining your credit report. You're actually entitled to receive a free annual credit report from each of the three major credit bureaus, Equifax, TransUnion, and Experian. To access these reports, visit AnnualCreditReport.com. Because your credit plays an important role in the mortgage process, you'll want to pay any overdue balances, dispute any errors, and even wait to apply for a mortgage until you improve your credit. With most lenders, you'll need a credit score of at least 620 to qualify for a conventional mortgage.
- Determine how much home you can afford. Before you start shopping for a home, you'll need to figure out how much you can afford. You can easily determine this by using mortgage calculators available online. You'll be asked to provide some information, including your income, total debt, and the amount of your down payment.
- Shop online. The pandemic has impacted the way people shop for homes. To ensure your safety and make home shopping convenient, take advantage of online real estate sites. Many offer virtual tours that let you take a closer look at homes before you make appointments to see them.
- Get pre-qualified for a mortgage. As more people have opted to stay at home, the inventory for homes for sale is low. That makes the market extraordinarily competitive. One way to gain a competitive advantage is to get pre-qualified. A pre-qualification is conditional based on your credit. It can give you a valuable negotiating edge, informing sellers that you are a serious buyer.
- Be realistic. Before you begin shopping for your home, set a budget. While it may be tempting to spend more than your budget, you don't want to put yourself in a situation where you are "house poor" and can't afford to do the activities you love to do. Though you may have a long list of features you want in a home, you may have to prioritize them to stay within your budget.
Taking these steps before you shop for a home will help you save time and make the "perfect" home yours.
When you’re ready to purchase your next home, KS StateBank is here to help. Our team of experienced Mortgage Loan Originators* will guide you through the process, from start to finish. Visit our Home Loans website, homeloans.ksstate.bank, to get started.
*KS StateBank | NMLS ID 410602. Please note KS StateBank does not provide real estate brokerage services.
Your 20s is one of the most exciting times of your life – and you want to make the most of it. It's also a great time to make the most of your money and start working toward your short- and long-term financial goals.
Here are a few smart financial moves you can make in your 20s for a brighter financial future:
- Build your credit score. A good credit score is essential in securing the affordable financing you need to reach your goals later on in life, such as buying a home. You can accomplish that by paying your bills on time, catching up on overdue balances, and avoiding opening multiple credit accounts and running up high balances. You should also monitor your credit regularly to check for errors and fraud.
- Set a budget. The most important step in building financial security and independence is creating a budget. Start by tracking all your spending each month. This includes your regular bills, such as your rent, car payment, cell phone, etc., as well as money you spend on food, entertainment, and other activities. Once you know all your expenses, create a monthly budget on a spreadsheet or a budget app to assign dollar amounts for each spending category. When making your budget, think about what expenses you could eliminate or reduce – and always allow a line item for saving money. My Money is a free financial management tool offered by KS StateBank that can help you create a budget, track your spending and set goals. Just look for the My Money tab in your Online Banking account to get started.
- Build an emergency fund. One thing you will need at every stage of your life is an emergency fund. Because let's face it, life is unpredictable and you never know if you might experience a job loss, illness, or even a global pandemic that would impact your income. To make saving easier, set up automatic transfers from checking to savings.
- Establish a plan for repaying debt. With the high cost of tuition, you may very well have accumulated student loan or other debt. Try to establish a plan for paying off your debt sooner either by consolidating your debt or putting more money on the principal by making extra or larger payments.
- Save for retirement. Okay, it's hard to think about retirement when you're just building your career, but you actually have a great advantage on your side – time. With the power of compounding interest, you can build your retirement savings considerably if you start when you're young. If your company offers a 401(k) or other retirement plan, contribute to it, especially if they offer a matching contribution. Even if you have to start small, get in the habit of saving for retirement regularly.
You definitely want to enjoy this amazing time in your life. But there's no reason why you can't do that and enjoy the rewards of building a strong financial future in the process.
The tax season is winding down and millions of Americans will be receiving their tax refund soon, if they haven’t already. Using your tax refund wisely can bolster your financial security, and having a plan in place for your refund will reduce the temptation to spend that money on things you really don’t need. We’re highlighting some tips to help you make the best use of your tax refund.
- Create a safety net. Too many people do not have enough money in savings to cover a $400 emergency. Your tax refund can be used for a dedicated emergency fund that will cover you in a crunch. Ideally, it should hold about three-to-six months of living expenses in case of sudden financial hardships like losing your job or having to replace your car.
- Pay down debts. Dedicate some of your tax refund to lowering any existing debt, such as credit card debt. Pay down existing balances either by chipping away at loans with the highest interest rates or by eliminating smaller debt first. You can also make an extra payment on your mortgage or student loans each year to save money on interest while reducing the term of your loans.
- Save for your child’s education or future health expenses. Look into opening a tax-advantaged 529 education savings plan to ensure school expenses will be covered when your child reaches college age. Or save for future health expenses with tax-free dollars by investing in a Health Savings Account.
- Grow your money with bonds. Invest safely with U.S. savings bonds or municipal bonds. The U.S. Treasury allows for savings bonds to be purchased using your tax refund for as little as $50. Savings bonds earn interest for a maximum of 30 years.
- Make home improvements. Use your refund to invest in home improvements that will pay you back in the long run by increasing the value of your home. This can include small, cost-effective upgrades like energy-efficient appliances that will pay off in both the short and long term, especially if they qualify for tax credits. If you have more substantial renovations in mind, your bank can help with a home equity line of credit.
- Donate to Charity. The benefit is two-fold: Giving to charity will make a difference in your community, and you can also claim the tax deduction, if you itemize.
The American Bankers Association Foundation and the Federal Trade Commission have released information highlighting the problem of government imposter scams. In 2020, 498,000 imposter scams were reported to the FTC by consumers and nearly one in five reported losing money, with reported losses totaling nearly $1.2 billion. Almost one-third of the scams involved someone posing as a government representative.
In imposter scams, scammers will typically call, email, text or direct message consumers on social media, often claiming that back taxes are owed or that jury duty was missed and threatening victims with fines or arrest. Some scammers claim that Social Security or Medicare benefits are being withheld due to COVID-19, in an attempt to trick victims into clicking on a link or handing over personal information.
The information below provides tips on how to spot these potential scams and how to report them.
How to Spot the Scam
- Scammers will call, email, text, or direct message you on social media.
- Scammers say you did not appear for jury duty and must pay a fine or you will be arrested.
- Scammers say you will be fined, arrested, or deported if you do not pay taxes or some other debt right away.
- Scammers say your Social Security or Medicare benefits have been suspended because of COVID-19-related office closures.
- Scammers say you can get a free COVID-19 test kit from Medicare in exchange for giving personal or financial information.
- Scammers say you owe back taxes, there is a problem with your return, or please verify your information.
These are all scams!
How to Stop and Report the Scam
- Don’t give information or money to anyone who calls, texts, emails, or direct messages you on social media. Keep your Social Security, bank account, debit and credit card numbers to yourself.
- Never make a payment to someone you don’t know, especially by gift card, mobile payment apps, money transfer, or cryptocurrency. Only scammers will demand you pay that way. They know these payments are hard to reverse.
- When in doubt, check it out. If you’re concerned about the request, contact the agency directly. Look up the government agency’s real number on the agency’s site and call to get the story.
- Report the scam to the FTC at ReportFraud.ftc.gov. Tell your bank, and be sure to share these tips with your friends and family.
There's no doubt about it; online shopping offers an easy and convenient way to get the things you need. It does, however, need to offer you more like peace of mind and security. Here are some smart steps you can take to make your online shopping experience more secure and reduce the risk of fraud.
- Shop with brands you know and trust. The Internet has brought a world of shopping opportunities right to us. Unfortunately, it's also brought disreputable retailers that may be looking to defraud you. To protect yourself, shop with companies you know and trust, and carefully review online reviews before you purchase anything.
- Don't shop with public WiFi. Online shopping requires you to share sensitive information, such as your credit card number. That, can make you susceptible to hackers on public networks. If possible, use a virtual private network (VPN) when shopping.
- Make sure the retailer's website is secure. You only want to shop on websites that use Secure Sockets Layer (SSL) encryption. To ensure you're on a site with SSL, verify that the URL begins with "https," not just "http." In addition, if a website is secure, you will see a little lock in the address bar on your browser.
- Set strong passwords. The passwords you use to log in to online retailers should be difficult to guess and should include a combination of letters, numbers, and symbols, if possible. Try to avoid using birthdays, pet names, addresses, and sequences, such as "12345" or "abcde." Change your passwords regularly and never share them with anyone.
- Monitor your account activity. Services like online and mobile banking make it easy to review your account activity any time. You can also use them to set transaction alerts, so you can get notified when transactions have been made on your credit or debit cards.
- Run anti-virus software on your devices. Also, be sure to download software updates to ensure your devices have the latest security protection.
- Beware of phishing scams. Don't click on links from retailers. Instead, go directly to the sites you know and trust.
By taking these precautions, you'll help ensure a convenient and safe way to shop.
When buying a home, it is easy to get caught up in emotions. You fall in love with the new kitchen or giant yard, but the largest purchase for most people requires some objective consideration. The best way to determine if a house has the potential to be your dream home is to visually apply your daily life to it.
Just another day
Picture yourself living in the home on a typical day in your life.
Everyday living: Where do you prepare and eat meals? Is there space for everyone to gather together? How about apart? Do you need an area for a hobby or for large holiday gatherings? Where do you pay your bills and file important documents? If you have school age children, where will they do their homework?
Entertainment: If you entertain, do you typically invite a large group or prefer more intimate gatherings? Where will you set up your television, sound system and computer? Is special wiring required? Do you have a hobby that requires separate space? Do one or more family members take a daily run or use exercise equipment indoors? If so, where would these things take place?
Maintenance: What will require additional time or money for maintenance? Can you clean the house on your own or will you need to employ a cleaning service? Are there carpets that will need regular cleaning? What about the heating and/or cooling systems? Will you have to paint the exterior or does it have siding? Is there a pool? Does the yard require lawn maintenance?
Outside: If you like to spend time outdoors is there space for eating, entertaining or just relaxing? Is there a patio? What is the sun exposure? Are there trees to shade the house in the summer? Are they well maintained to allow light and air to circulate? What will autumn raking entail? How about winter shoveling? How much maintenance will be required?
Household tasks and local activities
Once you determine a house is ideal for your family's way of living, think about where you need to go when you pull out of the driveway.
Are there a grocery and hardware store, library, farmers' market, or other retailers and service providers you and your family use regularly near this home? If your children are currently enrolled in sports and activities, can they continue or will you have to find new ones? Are there families nearby to carpool with? Will children have to change schools?
Making your decision
Create a check list of things that matter to you and rate each home you're considering by these criteria. It will be easier to keep your emotions in check using this type of unbiased tool.
Finally, the object of your desire may look different after you step away. Take these tips into consideration and be sure to sleep on it before making a commitment.
Are you ready to purchase your next home? Our team of experienced Mortgage Loan Originators* can help you through the process. Visit our home loans website, homeloans.ksstate.bank, to get started.
*KS StateBank | NMLS ID 410602. Please note KS StateBank does not provide real estate brokerage services.
You can't control everything in life. We've all learned that lesson during the global pandemic. But even though we can't predict the challenges or even opportunities we might encounter on the road of life, we can take some steps to remain in the driver's seat, particularly with our finances.
One way to accomplish that is by getting financially organized. Organizing your finances can help you stay focused on your goals, increase productivity and success, save time, and of course, reduce stress. So how can you get started? Here are some tips:
- Bring together your finances. There are many aspects to your financial life; you have your credit accounts, bank accounts, insurance, and retirement accounts. Gather all your financial information and create files either on your computer or in a filing cabinet. You can also create a spreadsheet that documents all your assets and liabilities. If you receive paper statements, put them into binders organized by date and type of information.
- Create a budget. Budgeting is the key to saving. To create your budget, make a list of your monthly income and expenses. Be sure to include all expenses, such as your rent or mortgage, credit card payments, utilities, monthly subscriptions, and fun and entertainment costs. Also, include monthly savings in your budget.
- Track your spending. A budget is only effective if you follow it. Use a spreadsheet or budgeting app to track your actual spending each month. If you're over budget, you'll have to find ways to decrease your spending. For example, can you save money by eating at home versus dining out? Make adjustments in your app or spreadsheet as needed.
- Save automatically. They say you should always pay yourself first. Automating savings makes accomplishing that even easier. You can specify the amount you wish to save, the frequency, and the date you want funds deposited.
- Organize your bills. Bills are just a part of life. The most important thing is to stay on top of them since late or missed payments can result in costly fees and negatively impact your credit. Make a list of your monthly bills and due dates. To simplify bill payment, consider using online bill payment and setting up recurring payments.
- Check your accounts regularly. Thanks to technology, monitoring your accounts is easier than ever. With online and mobile banking, you can set and receive alerts to notify you about specific account transactions or balance levels. Monitoring your accounts can also help you avoid overdrafts, stay on track for your goals, and even spot fraudulent transactions.
- Set and document your financial goals. Think about what you'd like to accomplish in the short and long term and then write those goals down. Then, determine what you'll need to do to achieve them. For example, if you want to buy a home in five years, how much money will you need to save each month for the down payment? When you determine that, add it to your budget and track your progress.
Our free online financial management tool, My Money, makes it easier to stay on track, set goals, and maintain your finances. You can create a budget, organize your personal finances, and set savings goals. Look for the My Money tab in your KS StateBank Online Banking to get started.
By taking these steps, you'll be better prepared financially for the road of life – no matter where it leads you.
If you're a parent, you want to help your children make the right decisions. That includes one of the most important decisions they may make – choosing the right college. As part of that decision-making process, students and parents will often take advantage of a valuable opportunity – college visits. However, due to travel, financial, or safety concerns, an in-person visit may not be a viable option today.
Fortunately, there are some convenient ways you and your child can get the information you need to make a decision – without even leaving your home. These include:
- Visiting college websites. If you want to learn more about the programs and activities offered at a particular college, start by visiting the school's website. You can read about degree programs offered, admissions requirements, student population, as well as facilities and activities offered.
- Taking online tours. Thanks to technology, you can bring the campus right to you with a virtual tour offered by many colleges and universities. A virtual tour will allow you and your child to go inside campus facilities, including dorm rooms, dining areas, and classrooms. You can usually find the tour right on the college's website. Or you can visit sites such as CampusTours.com, which feature tours for colleges throughout the country.
- Getting social. If you want to get a sense for the culture or student population of a particular college, visit the school's social media sites, including Twitter, Facebook, YouTube, and Instagram. You can read about and see events on campus to get a sense for campus and academic life.
- Interview current students or alumni. What better way to find out about campus life or a particular academic program than to ask a student who's experienced it? Use your social networks, including LinkedIn to connect with others who have attended the college. For example, you may ask a current student if kids stay around on the weekends or go home. Or you could ask alumni about the career opportunities they had post-graduation.
- Setting up a virtual meeting with Admissions. To help students learn more about financial aid, housing, or admission deadlines, many colleges offer virtual interviews via programs like Zoom. Make sure your child dresses professionally and prepares questions in advance to make the most of the meeting.
By doing a little homework even before they get to school, your child can take an important step toward a brighter future.
All KS StateBank branches and offices will be closed on Monday, February 15 in observance of Presidents Day. We will reopen during regular hours on Tuesday, February 16.
The U.S. Food and Drug Administration (FDA) recently issued two emergency use authorizations for COVID-19 vaccines in the United States. While this is encouraging news, it unfortunately means there is potential for fraud or other similar criminal activity related to the vaccines and their distribution.
The Financial Crimes Enforcement Network (FinCEN) has warned, “COVID-19 vaccine fraud may include the sale of unapproved and illegally marketed vaccines, the sale of counterfeit versions of the approved vaccines, and illegal diversion of legitimate vaccines. Already, fraudsters have offered, for a fee, to provide potential victims the vaccine sooner than permitted under the applicable vaccine distribution plan.”
Here’s what you need to know to avoid a vaccine-related scam:
- You likely will not need to pay anything out of pocket to get the vaccine during this public health emergency.
- You can’t pay to put your name on a list to get the vaccine.
- You can’t pay to get early access to the vaccine.
- No one from a vaccine distribution site or health care payer, like a private insurance company, will call you asking for your Social Security number or your credit card or bank account information to sign you up to get the vaccine.
- Beware of providers offering other products, treatments, or medicines to prevent the virus. Check with your health care provider before paying for or receiving any COVID-19-related treatment.
If you get a call, text, email — or even someone knocking on your door — claiming they can get you early access to the vaccine, STOP. That’s a scam. Don’t pay for a promise of vaccine access or share personal information. Instead, report it to the FTC at ReportFraud.ftc.gov or file a complaint with your state or territory attorney general through consumerresources.org, the consumer website of the National Association of Attorneys General.
Learn more about coronavirus related scams at ftc.gov/coronavirus/scams.
Information for this article was provided by the Financial Crimes Enforcement Network and the Federal Trade Commission.
It's a holiday leftover many of us carry around for months. It's not Aunt Edna's fruitcake or even those few extra pounds amassed from all the holiday treats. It's the excess credit card debt that comes from spending more than you can afford during the holiday season. Unfortunately, for many Americans, a few festive days of the year can result in mounds of depressing debt that can take months to shed.
If you find yourself with leftover holiday debt, here are some steps you can take:
Stop the credit storm. If you can't purchase something with cash or your debit card, don't buy it. While it's important to have credit cards for emergencies, it's a good idea to put them on ice until you pay down your debt.
Start digging out. On your credit card statement is the minimum payment amount you must make each month to cover finance charges. Always pay more than that amount. The more you pay, the faster you will pay down your balance. If you have multiple credit card accounts, focus on paying off the ones with the highest interest rates first.
Consolidate higher-interest debt. Many credit card companies offer attractive balance transfer offers that come with low teaser rates, allowing you to transfer higher-interest balances to save on interest. Be sure to read the fine print so you know when the introductory rate expires and what the prevailing rate will be. It's also critical to close the accounts from which you transferred the debt. Many people make the mistake of keeping those cards and running up new balances, creating even more debt.
Minimize your other spending. Take a close look at your monthly budget and see if you can cut your spending in other areas in order to pay more on your credit card debt. If you have the opportunity to make more money, either by picking up more hours at work or getting a second job, consider putting excess funds on your credit card debt.
Stay the course. While it can be overwhelming to look at the debt you owe, the most important thing you can do is keep making payments. If you keep digging, you're sure to see a clear path toward credit card debt freedom.
Martin Luther King, Jr. Day
All KS StateBank branches and offices will be closed on Monday, January 18 in observance of Martin Luther King, Jr. Day. We will reopen during regular hours on Tuesday, January 19.
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