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Get Financially Fit

The new year is an ideal time to set new goals, but it is never too late to start. Anytime, you can assess your finances, gain control and stick to a new budget or saving plan. Taking control of your personal finances will allow you to save and prepare for unexpected expenses.

Follow the tips from the American Bankers Association below to get started.

Get Organized
Set up an organized system for filing your receipts and financial information. Consider buying a shredder to eliminate receipts when no longer needed and to avoid identity theft.

Create a Budget
Track your income and expenses to determine how you spend. Establishing a budget will help you pay down debt and save at same time. Use a computer software program or basic budgeting worksheets to create your budget and review it regularly.

  • Identify how you spend your money. 
  • Set realistic goals, especially if you plan to cut some of your expense.
  • Track your spending and review your budget often.

Lower your Debt. Establish a budget to pay down debts while you save.
       Points to consider when cutting debt: 

  • Pay more than the minimum due and pay on time.
  • Pay off debt with higher interest rates first.
  • Transfer high rate debt to credit cards with a lower interest rate.
  • Use credit cards and loans for purchases that will appreciate in value, like a home.

Save for the “Unexpected and Beyond”

  • Pay yourself first. Saving ensures a comfortable future that can endure financial surprises. It is never too late to start saving.
  • Save at least 10% of your income for retirement.
  • Consider keeping 3 months’ salary in a savings account in case of financial emergencies.
  • Increase your contribution to retirement as your income increases.
  • If your payroll is direct deposited, ask your employer to transfer a certain amount of money into an account the same day as the payroll deposit.

Learn More

Protecting the Elderly from Financial Abuse

You, or someone you know, could become the victim of a growing crime in America — financial abuse of older Americans.  Seniors are increasingly becoming targets for financial abuse. As people over 50 years old control over 70 percent of the nation's wealth, fraudsters are using new tactics to take advantage of retiring baby boomers and the growing number of older Americans. Senior financial abuse is estimated to have cost victims at least $2.9 billion last year alone.

What Is Elder Financial Abuse?

It’s a crime that deprives older adults of their resources and ultimately their independence. Anyone who sees signs of theft, fraud, misuse of a person’s assets or credit, or use of undue influence to gain control of an older person’s money or property should be on the alert. Those are signs of possible exploitation. Older Americans that may have disabilities or rely on others for help can be susceptible to scams and other fraud. Advances in technology can also make it difficult for seniors to know who to trust and what's safe.

Despite these threats, taking simple steps to safeguard personal information and being aware of warning signs can protect aging men and women from financial abuse.

Tips for Seniors:   What should you do to protect yourself?

  • Plan ahead to protect your assets and to ensure your wishes are followed. Talk to someone at your financial institution, an attorney, or financial advisor about the best options for you.
  • Shred receipts, bank statements and unused credit card offers before throwing them away.
  • Carefully choose a trustworthy person to act as your agent in all estate-planning matters.
  • Lock up your checkbook, account statements and other sensitive information when others will be in your home.
  • Order copies of your credit report once a year to ensure accuracy.
  • Never give personal information, including Social Security Number, account number or other financial information to anyone over the phone unless you initiated the call and the other party is trusted.
  • Never pay a fee or taxes to collect sweepstakes or lottery “winnings.”
  • Never rush into a financial decision.  Ask for details in writing and get a second opinion.
  • Consult with a financial advisor or attorney before signing any document you don’t understand.
  • Get to know your banker and build a relationship with the people who handle your finances. They can look out for any suspicious activity related to your account.
  • Check references and credentials before hiring anyone. Don’t allow workers to have access to information about your finances.
  • Pay with checks and credit cards instead of cash to keep a paper trail.
  • Feel free to say “no.” After all, it’s your money.
  • You have the right not to be threatened or intimidated. If you think someone close to you is trying to take control of your finances, call your local Adult Protective Services or tell someone at your bank.
  • Trust your instincts. Exploiters and abusers often are very skilled. They can be charming and forceful in their effort to convince you to give up control of your finances. Don’t be fooled—if something doesn’t feel right, it may not be right. If it sounds too good to be true, it probably is.

What should you do if you are a victim of financial abuse?

  • Talk to a trusted family member who has your best interests at heart, or to your clergy.
  • Talk to your attorney, doctor or an officer at your bank.
  • Contact Adult Protective Services in your state or your local police for help.

Learn more about the signs of financial abuse and what to do if you suspect a loved one of being abused.

Learn More

Remember  

Never give your Social Security number, account numbers or other personal financial information over the phone unless you initiated the call

Questions? Please contact Consumers@aba.com for more information

Tips to Establish Good Savings Habits

Practicing these savings habits from the American Bankers Association will provide you with more peace of mind and money for the future.

  • Pay yourself first. Determine in advance how much money you plan to keep on deposit each month. If you receive a raise, increase the amount of money deposited into your savings account.
  • Take advantage of bank technology. Arrange to have a specific amount automatically transferred to your savings account every pay period.
  • Pay your bills on time-and pay more than the minimum amount. Although 97 percent of Americans pay their bills on time, some consumers find themselves paying late fees. Pay them once a month in plenty of time to reach the creditor.
  • Determine needs versus wants. By bringing your lunch to work a couple days a week, you can save hundreds of dollars a year. Look at other ways to save.
  • Shop around. There are thousands of options for financial services products. Be selective, and get the best prices, services, convenient locations and lowest fees for credit cards, bank accounts, mortgages and CDs.
  • Consider investments. For long-term goals, such as saving for a home or retirement, look into bonds, mutual funds, real estate and stocks.
  • Consult your local bank. Ask which package of bank products and services would best suit your needs. Your banker is the best source of information about accounts and interest rates available at your bank.

Learn More

Developing a Financial Plan

You can take charge of your finances and your life by setting financial goals, planning a budget and sticking to it. Check out these tips from American Bankers Association can help you begin.

The following steps outline your process. It's important to keep accurate records of your spending so you'll spot places where you can save money and know how much you can reasonably spend.

  • What is your current income? The first step in creating a budget is to total all of your income, or money coming. We recommend you do this on a monthly basis. Include only your take home pay.
  • What are your monthly expenses? Next, you'll need to track your expenses, or money going out.
  • How much of your income should be spent? Rent or mortgage payments plus your credit obligations – should not exceed 35 to 40 percent of gross monthly income. The amount you owe on credit cards, monthly car payment, student loans and other monthly payments should not exceed 10 to 15 percent of your take-home pay.
  • Put it in writing. Document and categorize your expenses. Tally up everything you spend money on. Don't forget your daily coffee or snacks. Those can add up quickly!
  • Do the math. The last step in creating your budget is to total all of your expenses and subtract them from your total income.

Where Do You Stand…….?

Did you have money left over at the end of the month – or too much month left at the end of the money?

If your income and expenses are EQUAL ...
           
You might be living paycheck to paycheck. Cut expenses and develop a savings plan in case of emergencies or unexpected expenses.      
If your income and expenses equal each other, but only because you're using credit to survive and paying only minimums each month, you may need to talk to a debt counseling service to help you get back on the track to live within your means.

If you have MONEY LEFTOVER at the end of the month…

You're doing a good job of managing your expenses. Here are some suggestions for the leftover money:

  • Open a savings account at a bank. 
  • If you already have a savings account, consider setting up automatic transfers to your savings account or, if you have direct deposit, ask your employer to put a portion of your paycheck in your savings account automatically.
  • Also, investigate whether your employer offers a 401(k) or other employee matching savings plan. The contribution you make to this type of account is taken out of your paycheck before taxes.

If you DON’T HAVE MONEY LEFTOVER at the end of the month…

  • You need to make adjustments immediately. Keep in mind that it's usually easier to cut back on expenses than to increase your income. Analyze your budget to see where you can cut expenses. Extra items for personal care and leisure activities are some of the easiest things to cut from your budget.
  • Call your utility, phone, cable, cell phone providers. There may be ways to cut those bills that just take a phone call.
  • Consider increasing your income by getting a second part-time job or by working overtime.

Questions?  Please contact Consumers@aba.com for more information.

7 Tips for Improving Your Credit Score

An important step to finding a home, whether you’re renting or buying, is ensuring that you have a good credit history. The American Bankers Association suggests the following tips to improve your credit score.

  • Request a copy of your credit score report – and make sure it is correct.    
    Your credit report illustrates your credit performance, and it needs to be accurate so that you can apply for other loans – such as a mortgage. Everyone is entitled to receive a free copy of his or her credit report annually from each of the three credit reporting agencies, but you must go through the Federal Trade Commission’s website at www.annualcreditreport.com​, or call 1-877-322-8228.

Note that you may have to pay for the numerical credit score itself.

  • Set up automatic bill pay.
    Payment history makes up 32 percent of your VantageScore credit score and 35 percent of your FICO credit score. The longer you pay your bills on time, the better your score. Avoid missed payments by setting as many of your bills to automatic pay as possible.     

  • Build credit through renting. 
    VantageScore’s scoring model, created by the three major credit bureaus, will now weigh rent and utility payment records. This will allow it to score as many as 35 million people who previously couldn’t get a credit score.

  • Keep balances low on credit cards and ‘revolving credit.’ 
    Racking up big balances can hurt your scores, regardless of whether you pay your bills in full each month. You often can increase your scores by limiting your charges to 30 percent or less of a card's limit.

  • Apply for and open new credit accounts only as needed
    Keep this in mind the next time a retailer offers you 10 percent off if you open an account. However, if you need a new line of credit, don’t jump at the first appealing offer; compare rates and fees offered through mail solicitation, on the Internet or at your local bank.

  • Don’t close old, paid off accounts.
    According to FICO, closing accounts can never help your score and can in fact damage it. 

  • Talk to credit counselors if you’re in trouble. 
    Using legitimate, non-profit credit counseling can help you manage your debt and won’t hurt your credit score.

For more information on debt management, contact the National Foundation for Consumer Credit www.nfcc.org.

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