A checking account at one bank is the same as a checking account at another bank, right? Well, maybe not. In fact, according to the J.D. Power 2021 U.S. Retail Banking Satisfaction Study, now 41% of people do all their banking online. This is a pretty big shift from traditional banking.
After reviewing the financial strength of a bank, here are several other things to consider as you decide what’s really most important to you in selecting a bank.
The online bank versus nearby location
While having a nearby brick and mortar location is important to many banking consumers, you might find better interest rates with an online-only bank because they don’t spend lots of money to maintain physical branches. As people switch to taking care of all their basic banking transactions online, one of the reasons to visit your local bank branch is to talk with a banker. If you believe you’d benefit from such discussion, make sure the online bank you’re considering will facilitate that for you.
Understand key bank fees
In addition to charging loan fees when they lend out money, banks bring in much of their revenue by charging fees on your deposit accounts. You’ll have a much more positive experience by ensuring your bank’s fees don’t outweigh the benefits of the account you’re considering. Here are three key fees to understand:
Other banking tools
Banks often provide tools to help you budget your daily and monthly expenses. Many offer free credit scores and credit monitoring. Others offer automatic transfers into a savings account. Still others offer the ability to open multiple savings accounts and label each account for different purposes.
Keep these tips in mind the next time you need to choose a new bank. With many different banks to choose from, a little research can ensure the bank you choose fits your financial needs and priorities.
You may recognize the name Bitcoin and maybe even Ethereum, but what about Litecoin, Dogecoin or Ripple?
These are just some of the more than 4,500 cryptocurrencies available today. There are hidden tax complications, however, associated with every cryptocurrency transaction. Here’s what you need to know.
Tax and financial planning is a year-round proposition. In fact, you can benefit personally from a continuous, 12-month rolling forecast, much like a business does.
What is a rolling forecast?
Rolling forecasts let you continuously plan with a constant number of periods 12 months into the future. For example, on January 1, you would plan what your financial picture looks like each month through January 1 of the following year. When February 1 rolls around, you would then drop the beginning month and add a forecast month at the end of the 12-month period. In this case, you add February of the next year into your 12-month forecast.
The month you add at the end of the 12 months uses the finished month as a starting point. You then make adjustments based on what you think might happen one year from now. For example, if you know you are going to get a raise at the end of the year, your next-year February forecast would reflect this change.
How to take advantage of a rolling forecast
By doing tax and financial planning in rolling 12-month increments, you may find yourself in position to cash in on tax- and money-saving opportunities within the next 12 months. Here are several strategies to consider:
While initially setting up a rolling 12-month forecast can be a bit of a pain, once established, it is pretty easy to keep up-to-date as you are simply rolling forward last month into the future. A well-planned system can often be the first sign of future challenges or potential windfalls!
Paying bills is an inevitable part of everyday life, but that doesn’t mean it has to be stressful. Here are some ways to get control of your budget and perfect the art of stress-free bill paying.
Which unique method of budgeting will work for you?
You have your own unique personality, preferences and lifestyle. Likewise, how you manage and organize your finances can have its own personality, including how you budget. Here are five different methods of budgeting, each with a distinct way of helping you organize your spending and finances.
The best budget approach? One that works for you and one that you will continue to use. So pick an approach and try it. It can really change how you spend your money.
As always, should you have any questions or concerns regarding your tax situation please feel free to call.
A sad and oft-repeated truth is that half of all new businesses fail within the first five years. Although many factors contribute to business failure, a common culprit is poor cash management. All businesses, large and small, must deal with the uncertainty of fluctuating sales, inventories and expenses. Follow these practices to moderate the ebb and flow of cash in your business:
Analyze cash flow. If you don’t know it’s broken, you can’t fix it. The starting point for any meaningful action to control cash is discovering where the money’s coming from and where it’s going. Get a handle on cash by monitoring your bank accounts for at least one complete business cycle; then use that information to establish a realistic forecast. This should be done throughout the year to help you understand your seasonal cash needs.
Monitor receivables. Extending credit to risky customers, failing to identify late payers, refusing to collect payment on a timely basis — these practices amplify cash flow problems. Mitigate receivable fluctuations by generating aging reports. Use the report to follow up when payments are late. You may even wish to offer discounts to customers who pay early.
Slow down payments. Prudent cash flow management dictates that you retain cash as long as possible. So pay your vendors on time — not too early. Of course, if suppliers offer discounts for early payment, take advantage of cost savings whenever possible. Also consider negotiating with suppliers to extend payment terms.
Time large expenses. If you know a property tax payment is due in May, start setting aside money in a separate fund in October. The same holds true for any large payment that comes due during the year. If your equipment is nearing the end of its useful life or your roof is showing signs of wear, start saving now. Don’t let big expenditures catch you by surprise.
By taking these steps and endeavoring to smooth out cash fluctuations, proficient managers keep their companies strong throughout the business cycle.
According to the Federal Reserve, U.S. student loan debt is now $1.5 trillion with more than 44 million borrowers. Only mortgage debt currently has bigger numbers among types of consumer debt. Even worse, more than 10 percent of these loans are past due. Here are some tactics to help make student debt easier to manage:
Suggestion: Create a spreadsheet with a student loan in each column. Then note the terms under each loan. This will create a strong visual of your situation and show you which loans are most important.
Suggestion: Figure out how to make some or all of the interest payments while in school. This will not only lock the amount you owe, it will reduce the amount of overall loan payments.
Suggestion: Pay extra every month as soon as payments start. While this seems impossible as you enter the workforce, even $25 extra per month can dramatically reduce the amount of total payments you make over the life of your loan. For example, a $25 extra payment on a 10-year $50,000 student loan with 5 percent interest would cut six months off the loan, save $834 in interest, AND save $3,180 in future loan payments!
Suggestion: Purchase one less latte a week. Drop one monthly service from a bill. Eat in more often. Then use these savings as a bonus payment on your student loan principal.
While student debt is often an unavoidable outcome of getting a college education, it can be minimized if actively managed. Small changes can yield results if planned for in advance.
If you’ve ever attended a state or county fair, you know it’s really easy to spend a lot of money, and fast. The best way to avoid overspending is to know the problem areas and be prepared. Here are five typical fair spending traps (and tips to avoid them):
Paying full price for admission. In 2019, the price of admission for a state fair can cost a family of four well over $50. Most fairs offer pre-sale discounts or set aside days with special rates. Some examples include half-price admission days, opening day, closing day or certain days during the week. In addition to admissions discounts, you can often find discounted ride tickets or coupons for food or attractions before the day you head to the fair.
Not having a food strategy. Do you really need that whole deep-fried onion? Or entire bucket of fries? If you go to the fair with some friends, opt for the small portion, wide variety strategy. Take turns buying the goodies and share. It’s a perfect way to try new things without overindulging! Your budget (and digestive system) will thank you later.
Impulse buying. While it’s really cool that the blender can turn a bushel of apples into a smoothie in six seconds, it doesn’t mean it’s worth $300. There are a lot of fun and unique products to buy at the fair, but have a plan. If you will be doing some shopping, identify your needs and create a spending budget prior to taking in the product demonstrations.
Ignoring the weather. All it takes is a pop-up thunderstorm or unexpected heat wave and you can watch the prices on ponchos and bottled water shoot up faster than Old Faithful at Yellowstone National Park. Before you go, check the weather, bring appropriate gear and empty water bottles to fill at free water stations.
Falling for carnival gimmicks. All you need to do is make one of three basketball shots to win that huge pink gorilla. Don’t fall for it. Chances are the rim is one foot higher, two inches narrower and the ball might even be egg-shaped. Go ahead and give it a try for fun — just try not to get frustrated if you don’t hit the shot. Carnival games can be a good time if you have the right mindset. Treat them as entertainment, not a way to easily win a valuable prize.
Fairs are a great way to spend a late summer or fall day and make some memories. Saving some cash with some savvy decisions makes it even better!
Most everyone knows you need to budget, balance and save. However, here’s a list of the ten steps to ensure you walk on stable financial ground.
Last week we gave you the first half of a list of essential economic concepts that every high school student should understand. Here’s the second half of the list!
The strength of investing – The most valuable investment a young person can make is in themselves. Whether it is a college degree or a trade school diploma, your child can create tremendous value in skills that will provide a positive financial return each year.
Mutual fund and stock understanding – Once your child grasps self-investment, next consider teaching some of the basic investment alternatives available to them. Stocks and mutual funds are the most common, but also consider explaining bonds, CD’s, annuities and other investment tools.
Budgeting – Help your student create a basic budget and then help them track their saving and spending against the budget. Don’t forget to mention an emergency fund to prepare for the surprises in life.
Cash flow – The hard way to learn the lesson of cash flow is when bill collectors are calling and there simply isn’t money to pay them. When creating an initial budget, show your child the flow of funds each month. An easy example of this is to show the flow of funds that relate to car. There are everyday expenses like fuel, there are monthly expenses like a car payment or insurance, and there are periodic expenses for licensing and maintenance.
Calculation of net worth – Assets (what you own) minus liabilities (what you owe others) equals net worth. This is the math of banks and businesses. The sooner your child understands this concept, the easier it will be to plan to purchase a car, a house, or any other item of value.
The value of identity – The value of a personal identity is the most undervalued asset owned by your child. Online media may seem free, but your child has paid for this access with their identity. With the advent of identity theft, government/employer access to personal online information and the proliferation of online advertising, consider helping your child understand the value of having a small online footprint. Help them establish healthy habits that will protect their personal information.
I hope you find this information helpful in preparing your child for a sound financial future.