Archive for the ‘ Personal Finance ’ Category

Preserving a Precious Commodity – Your Credit Report

We all have seen commercials on TV or in the media regarding identity theft and how that impacts you and your Credit Report.  Due to our busy schedules, many folks ignore the importance of checking their credit reports on an annual basis.  Credit reports contain your personal information and history on how you pay your financial obligations.  Obligations reported about you may vary; they could include your credit card activity, payments on your car loan, your home mortgage, student loans, etc.  More importantly, they include information about “bounced checks” written by you, that have been turned over to an agency for collection, unpaid medical bills or any other account you have incurred that has been converted to judgments against you. The report also shows if you have filed for bankruptcy protection in the past.

You may ask, “Why is this important to me?” This information is used to assist a lender in determining your credit worthiness when you apply for a loan, credit card or any other credit request you may have.  It will be used to determine if you get a preferred interest rate or if you are considered a higher risk, thus demanding you to pay a higher rate.  Your credit report may be reviewed by a potential employer when you apply for employment. A poor report certainly could negatively influence their opinion of you and the possibility of being passed over for the job.  Insurance companies use a credit report to determine how you will pay your bills – the higher your credit score, the cheaper your insurance premium may be.

It is widely recognized that a great percentage of credit reports contain incorrect information or information that is not yours.  Your credit report is yours alone. You need to monitor it closely and make sure that it accurately states your history.  If there are inaccuracies, it is your responsibility to get them corrected. The reporting agencies are Equifax, Experian or Transunion. Contact any one of them for the procedures to make corrections.  You may access your credit report online at www.annualcreditreport.com.

By: Bill Brennan, Sr. Vice President

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Investment and insurance products:

  • Are Not Insured by the FDIC or any other federal government agency
  • Are Not deposits of or guaranteed by a Bank or any Bank Affiliate
  • May lose value

IRA – An Important Silo in Retirement Planning

Saving in an Individual Retirement Account (IRA) is an important way to prepare for retirement. A traditional IRA will grow tax-deferred and a Roth IRA will grow tax-free. The reason so may people are investing in IRA’s is that they realize personal savings will provide an important part of their retirement income. Personal savings and IRA’s are one of three silos in the retirement planning world. The other two are company sponsored retirement plans and Social Security. 

By: Cindy Lewis, Client Services Director

Money Management for Kids

Some common questions often arise when discussing the topics of money and kids. 

1)      When and how should kids start earning money?
2)      When should they start managing/saving their money?
3)      How do you encourage them to save? 

Kids should start to earn money as soon as they start wanting and needing things.

Adults have all heard from kids “I want this” or “I need that”.  We need to teach them how to earn those items, not just get them. Earnings could be an allowance from their parents for doing daily chores around the house, assisting grandparents, neighbors, birthday money and gifts.  The list could go on and on based on their abilities.   

With that in mind, kids should also start managing/saving money as soon as they start earning money.  Kids will naturally want to spend what they earn.  If they receive $5 from grandma for raking leaves, they’ll want to spend the $5 on something they think they really want or need, then wonder why they have no money.  

How do we get kids to save and manage their money?  We first need to help them put together a plan to earn money. That plan should be fun and workable for them.  Then we need to implement a plan based on the individual. What do they want to do with their earnings?  Do they have something specific they want that’s more expensive?  If so, spending what they earn on smaller, less expensive items will not help them save money to buy that more expensive special item someday.

I offer my children three options with the money they earn.  The first option is putting some money in there wallet to spend on those smaller items that give them immediate satisfaction.  The second option is to have a savings bucket at home to fill for more expensive items.  The third option is a savings account at the bank to save for their future. 

This concept has worked well because they compete with each other to see who saves more and where it’s stored.  If it’s in the wallet, it’s typically spent on junk.  If it goes to the bucket, it’s very likely to accumulate for that special item; and if it goes to the bank, it’s secure and grows interest so they someday have money for education, a vehicle or there first home. 

So parents find a plan that works for your kids and have fun with it! 

By: Brant Drill, Assistant Vice President

Building Your First Budget

As a recent college graduate, I was forced to answer a very difficult question:  How am I going to pay all these bills without any help from Mom and Dad?  I’m still working on answering that question, and admittedly have had to return to the “Bank of Mom and Dad” for a small loan to help cover some gaps in paychecks.  One thing I have done that has helped me through this process immensely is to build and maintain a yearly budget. 

If you are a recent graduate of either high school or college, it is very likely that you have never developed a budget before.  No worries!  I found an interesting article from MSN.com that had some great pointers for building your first budget, and I have pasted a link at the bottom of this entry to the article.  I have also attached an Excel file with an example budget (https://www.citizensmn.com/custom/citizensmn/pdf/Budgeting101-ExampleBudget.xlsx) for you to use.  Simply enter in the amounts you expect to pay up top, and the amounts you actually paid in the bottom (you may need to add or delete some rows to tailor the budget to fit the actual expenses you have each month).  This will help you determine whether you’re able to keep your budget in check, and will help you identify where you’re spending too much if your budget is going awry.  I filled in January with some example numbers to show you the idea.  Erase those, enter your own figures, and the worksheet should do the rest of the calculations for you!

Notice that the example budget calculates a “Budget/Actual” at the very end?  This is a calculation of the difference between the amount you planned on saving versus the amount you actually saved.  Positive numbers mean you were able to save more than you planned, and negative numbers mean you may have to make some changes to your spending habits in order to reach your financial goals. (Notice in the example budget, my Budget to Actual was a negative $61.89, meaning I saved about 62 bucks less than I had planned on saving – better make some changes if I’m going to be able to afford that Ferrari I’ve had my eye on by the time I’m 30!).

http://articles.moneycentral.msn.com/CollegeAndFamily/MoneyInYour20s/HowToBuildYourFirstBudget.aspx?page=1

By Joe Geistfeld, Marketing Intern

Tips for Saving on Bank Fees

These 3 simple tips are very basic, but worthy of a reminder and a monthly check-up.

1. Read the information you receive from your bank. Remember to check your monthly account statements for new deposits or withdrawals that you did not know about.

2. Protect yourself from overdraft fees. Keep up-to-date records of your transactions, and make sure you have enough money in your account to cover checks you have written or other types of withdrawals.  If your funds are running low, consider a cheaper alternative to overdraft protection, such as, a checking account linked to a savings account or a small dollar loan.

3. Protect yourself from ATM fees. Only withdraw cash from your own bank’s machines.  If you have to use another bank’s ATM in an emergency situation, be aware of the fees you may be charged. Also consider checking with your bank to see if any products are offered that may refund ATM fees.

By Linda Kretsch, Cashier

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FDIC Insurance Coverage

Do you feel your money is safe and protected when you walk through the doors of your bank, much safer than if you kept it under your mattress?  You should, especially if you are a customer of Citizens Bank Minnesota.  By being FDIC insured, Citizens Bank Minnesota is committed to keeping its customers money safe and protected. 

What does being FDIC insured mean?

The FDIC (Federal Deposit Insurance Corporation) is an independent agency of the United States government that protects you against the loss of your deposits if a FDIC insured bank or savings association fails. The FDIC was created in 1933 in response to the thousands of bank failures that occurred in the 1920s and early 1930s.  FDIC insurance is backed by the full faith and credit of the United States government. 

FDIC insurance covers all deposit accounts at insured banks and savings associations, including checking, NOW, savings, money market deposit accounts and certificates of deposit (CDs) up to the insurance limit.  The FDIC does not insure non-deposit products such as securities, bonds, safe deposit box contents, mutual funds or other similar types of investments that banks may offer.  The standard insurance limit is generally $250,000 per depositor, per insured bank, for each account ownership category.  The FDIC’s online Electronic Deposit Insurance Estimator (EDIE) located at:  www.fdic.gov/edie can help you determine if you have adequate deposit insurance for your accounts. 

Citizens Bank Minnesota is also participating in the FDIC’s Transaction Account Guarantee (TAG) Program.  Under that program, through December 31, 2010, all noninterest-bearing transaction accounts are fully guaranteed by the FDIC for the entire amount in the account.  Also included in this coverage are NOW accounts with interest rates no higher than .25% and Interest on Lawyers Trust Accounts (IOLTA).  This coverage is in addition to and separate from the standard FDIC insurance coverage. 

No worries when you bank with Citizens Bank Minnesota, we have you covered!

By: Stacy Merkel, Auditor

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