How to Adult: Personal Finance for the Real World

Title: How to Adult: Personal Finance for the Real World

Author: Jake Cousineau

Paperback: 235 pages

Publisher: Independently published

Publishing date: March 23, 2021

Who is this book for? 

  • High school graduates, college students and any other young adult who needs to prepare for the financial realities of adulthood.
  • Young adults who’ve made money mistakes due to a lack of financial education and want to learn how to better handle their money in the future.

What’s inside this book?

  • A clear, easy-to-understand explanation of financial topics, like compound interest, mutual funds, insurance deductibles, Roth IRAs and more.
  • Practical examples and real-life anecdotes to bring financial lessons home.
  • Hands-on tools to help readers jump-start their financial journeys.
  • A “Build Your Skills” section at the end of each chapter inviting readers to test their knowledge and retention of the chapter’s material.

5 lessons you’ll learn from this book: 

  1. The foundational concepts of personal finance and building wealth.
  2. How to avoid costly financial missteps.
  3. How to budget, save and invest your money wisely.
  4. How taxes and insurance work.
  5. How to prepare for life’s big expenses.

3 questions this book will answer for you:

  1. What are the financial basics I need to know to make it in the real world?
  2. How can I avoid making money mistakes as a young adult?
  3. Can I learn about finances without breaking my brain over complicated jargon and complex concepts?

What people are saying about this book:

  • “This! This is what I needed when I was in high school. It is also what I needed when I was in college, and when I bought my first car, and when I bought my first house, and when I opened my first credit card. Every high school student in America should have to pass a class that uses this book. The real-world examples are relatable and make the reader feel like they are armed with the knowledge they need. It doesn’t just make you book smart. It makes you street smart.” — Stukent Personal Finance
  • “In How to Adult, Jake Cousineau engages readers using a blend of storytelling, analogies, charts and research to deliver key financial lessons. Whether it’s comparing index funds to sports teams, or interest to pineapple on pizza, Jake has a gift in delivering financial advice in a way that will educate adults, young and old alike!” — NGPF Personal Finance
  • “The author does an excellent job of explaining complex concepts in clear terms using common language. I learned something new about taxes despite having filed them for the past 15 years. Clever and approachable. Highly recommend.” — Zach G

 Your Turn: What did you think of How to Adult? Share your opinion in the comments.

Learn More:
amazon.com
thefishow.com

The Benefits of Using Mobile Payments

Why fumble for your wallet at checkout when you can just pay by using your phone?

With more than 81% of Americans owning smartphones, contactless payments by digital wallet and mobile payment apps are now more popular than ever. Contactless payment is also becoming increasingly available at checkout counters across the country, with six in every 10 retailers accepting digital payments, according to research by the National Retail Federation.

Switching over to paying for your daily purchases with a digital wallet is simple. You’ll need to choose between popular mobile payment apps, like Google Pay, Apple Pay and Samsung Pay. All of these apps are similar, but Google Pay is your app of choice for all Android phones, Apple Pay works with recent Apple devices, and Samsung Pay offers the widest acceptance of all digital wallet apps. Once you’ve downloaded the app, you’ll need to load your credit union credit and debit card information and then finish setting up the app with your personal authentication process. When this step is complete, your app is ready for use.

Here are some of the benefits of using mobile payments.

Convenience

The biggest and most obvious draw of mobile payments is their incredible convenience. No more pawing through cards at the checkout counter while the people standing in line behind you are growing impatient. No more hesitating over a stack of cash. Just pull out your phone, open your digital wallet app and tap or wave your phone near the payment-enabled terminal. It’s that easy.

Security

Using a mobile payment app to complete a purchase has several security advantages over traditional payment methods.

First, it eliminates the need to carry around cash or credit cards, which always has the risk of being stolen or lost. Misplaced credit cards in particular can be a nightmare for consumers, making them vulnerable to full-blown identity theft.

Second, mobile-payment apps use extra security measures to protect the user’s data, such as encrypting all personal information and utilizing bio-metric authentication features, like fingerprint scans and facial recognition.

Finally, each transaction that takes place over a mobile payment app is tokenized. This involves a one-time code generated by the payment terminal, or a “token.”  The token is used to complete the transaction in place of the buyer’s actual payment information. The token cannot be used for any other transaction and is effectively useless if hacked. The buyer is thus protected from fraud.

Speed

Mobile payments are super-fast. Instead of counting out cash or inserting a card into a payment terminal and waiting for the transaction to clear, it’s just a one-two-three tap to pay. With mobile payments, checking out in any store can take just seconds from start to finish.

Budgeting and expense-tracking

Digital wallets can be easily integrated with money-management apps, making budgeting easy. Every transaction will be instantly recorded for future reference and review. Additionally, retailers generally offer electronic receipts with mobile payments, as opposed to paper receipts which are easily misplaced.

Safety

Ever since the world entered the alternate reality of COVID-19, mobile-payment apps have enjoyed an enormous boost in popularity. In fact, retailers have seen a 69% rise in contactless payments since the beginning of 2020, according to a study done by the National Retail Federation. This is likely due to the fact that consumers are wary of shopping in brick-and-mortar locations and are hesitant to handle germ-infested cash. Inserting a debit card or credit card into a public payment terminal that processes payments for hundreds of cards a day is not much of a better option. All of this has made digital wallets the chosen method of payment now more than ever, with 67% of shoppers choosing self-checkout options from their own mobile devices over in-person payment.

Mobile payment apps enable consumers to complete a purchase without making physical contact at germ-laden terminals. There’s no need to use a wallet, cash or credit card at all. Just pull out your phone and your transaction is a quick wave or tap away. It’s the perfect way to pay for purchases without compromising your safety.

Mobile payments are the way of the future. There are so many reasons to love mobile payments. They’re convenient, secure, quick and safe.

Your Turn: Why do you use mobile payment apps? Share your favorite benefit of using digital wallets in the comments.

Learn More:
thefinancialbrand.com
mobilepaymentstoday.com
alacriti.com

All You Need to Know About Checking Accounts

The most obvious things in life are often overlooked, and your checking account is just one of them. Most people hardly give a thought to this important account and how to best manage it effectively. We’re here to change that.

Here’s all you need to know about checking accounts:

What is a checking account? 

Your checking account at Advantage One Credit Union offers easy and convenient access to your funds. The minimum balance required for opening a checking account can be as low as $25. Like most financial institutions, we also allow an unlimited number of monthly withdrawals and deposits.

Checking accounts are designed to be used for everyday expenses. You can access the funds in your account via debit card, paper check, ATM or in-branch withdrawals, online transfer or through online bill payment.

Making transactions using the connected debit card, or through a linked online account, will automatically use the available balance in your account and lower the balance appropriately.

A paper check is also linked directly to your account, but will generally take up to two business days to clear. It’s important to ensure there are enough funds in your account to cover a purchase before paying with a check.

Maintenance fees 

Many banks charge a monthly maintenance fee for checking accounts.

According to Bankrate’s most recent survey on checking accounts, only 38% of banks now offer free checking, compared with 79% in 2009. Monthly fees can be as high as $25 a month.

Interest rates

Most checking accounts offer a very low Annual Percentage Yield (APY) on deposited funds, or none at all. Institutions that offer checking accounts with interest or dividends will generally charge a monthly fee, with the fee being higher for accounts that have higher rates. They also generally require a minimum balance in the account at all times or a minimum number of monthly debit card transactions. According to Bankrate’s survey, you’ll need to keep an average of $7,550 in an interest-yielding checking account at a bank to avoid a steep maintenance fee.

Security

Funds that are kept in a checking account at a bank are federally insured by the FDIC for up to $250,000. Credit unions feature similar protection for your funds, with all federal credit unions offering government protection through the National Credit Union Association. State and private credit unions may be insured by the NCUA as well, or through their own state or private insurance. Advantage One Credit Union is insured by the NCUA to offer you full and complete protection for your funds.

Managing your checking account 

Managing a checking account is as simple as 1-2-3:

1 – Know your balance

It’s important to know how much is in your account at all times. This way, you can avoid an overdrawn account, or having insufficient funds to cover your purchases. Being aware of how much money you have will also help you stick to a budget and spend within your means. You can generally check your balance by phone [or via online checking or a synced budgeting app].

2 – Automate your finances

Make life a little easier by setting up automatic bill payment through your checking account. You won’t miss the hassle of paying your monthly bills, and you’ll never be late for a payment again. As a bonus, you’ll save on the processing fee that is often charged on bill payments made via credit card.

You can also set up direct deposit to have your paycheck land right in your account.

Finally, ask us about automatic monthly transfers from your checking account to savings so you never forget to put money into savings.

[You may also want to consider signing up for overdraft protection, or to have funds transfer from your linked savings account to checking when your balance is getting low.]

3 – Keep your account well-funded, but not over-funded

Financial experts recommend keeping one to two months’ worth of living expenses in your checking account at all times. This way, you’ll always have enough funds to cover your transactions without fear of your account being overdrawn. You’ll also be able to cover the occasional pre-authorization hold that a merchant may place on your debit card transaction until it clears.

It’s equally important not to keep too much money in your checking account. Once you’ve reached that sweet spot of two months of living expenses, it’s best to keep your savings in an account or an investment that offers a higher APY, such as a money market account or a share certificate.

Checking accounts offer the ultimate in convenience and accessibility. Now that you’ve learned all about these often overlooked accounts, let this financial tool help you manage your finances in the most effective way possible.

Your Turn: How do you manage your checking account effectively? Share your best tips with us in the comments.

Learn More:
investopedia.com
discover.com
bankrate.com
thebalance.com
kiplinger.com

Products for Managing and Tracking Business Expenses

Running a flourishing business means overseeing a constant flow of money. There’s revenue, payroll, suppliers, lease payments, taxes and so much more. It’s a lot to keep track of!  Luckily, though, there are lots of products on the market that can help you cover, manage and track your business expenses effectively and smoothly. Let’s take a look at some of these products and share some tips for choosing those that are the best fit for your business.

Business checking accounts

A designated business checking account makes a company look credible and professional while enabling it to manage and track expenses, taxes and revenue. Separate accounts also protect business owners from losing their personal assets if legal action is taken against the company. Business owners can use their checking accounts to deposit checks made out to their company and to cover business expenses, such as payroll or payments to suppliers.

Here’s what to look for in a business checking account:

  • Generous cash-deposit limit per transaction
  • Generous monthly transaction limit
  • Low or no maintenance fee and other costs
  • Online and mobile banking
  • Possible dividend rate

[If you’re looking to open a business checking account, a Advantage One Credit Union Business Checking Account can be a great choice. Our business checking account has [a low maintenance fee of $xx/month/ no maintenance fees] and convenient features like [XXX]. Call, click, or stop by Advantage One Credit Union to learn more.]

Business savings account

A business savings account is an account designated for funds to be used in cases of emergency or for future business expenses. The money in this account will grow at a greater rate, but access to these funds will be more limited.

Business owners can use a savings account to build a cash cushion for slower seasons, prepare for unexpected expenses or to save up for new equipment, tax payments or an expansion.  Many financial institutions also offer rewards and incentives for businesses opening a business savings account, such as cash-back programs, increased dividend rates for larger deposits and reduced fees.

Here’s what to look for in a business savings account: 

  • High dividend rates
  • Low fees and a transparent fee structure
  • Rewards and perks
  • Online and mobile banking

[Opening a Advantage One Credit Union Business Savings Account will provide you with a favorable rate of [x.x%], generous terms, and convenient features like [XXX]. If you’re ready to open a business savings account, call, click, or stop by Advantage One Credit Union today.]

Business credit card

A business credit card provides small business owners with easy and unsecured access to a revolving line of credit. Business owners can use the credit to withdraw cash as necessary, cover large expenses, make purchases, fund an expansion or meet their monthly bill payments.

In comparison to a business loan, a business credit card is easier to qualify for, but it will nearly always come with a higher interest rate. If business owners are careful only to use the credit card when it is absolutely necessary and pays the bill before it’s due, interest will not accrue. A generous line of credit can be a convenient way to increase a business owner’s purchasing power without risking any assets. Credit debt that is managed well will also build the company’s credit score and may provide the business with rewards and incentives.

Here’s what to look for in a business credit card: 

  • A low interest rate
  • Generous perks and rewards
  • A low or no annual fee
  • Interest-free introductory period
  • Purchase protection and insurance

[If you’re looking to open a business credit card, look no further than Advantage One Credit Union. Our Business Credit Cards feature a generous credit limit, easy qualifying terms, and great perks. Call, click, or stop by Advantage One Credit Union today to learn more.]

Tax software

Tracking business expenses and marking which of them can be deducted from a company’s tax liability can be super-challenging. Tax software designed for businesses makes this task easy. Business tax software, like H&R Block, TaxAct and TaxSlayer, can track all the expenses of a business and help owners file taxes efficiently and easily. The software allows businesses to upload all relevant tax documents, provides online support from tax specialists and helps the business calculate federal — and sometimes also state — tax liability. Businesses will need to pay a fee to download most tax software programs, but the cost is more than offset by the time and money the software can save a business.

Here’s what to look for in tax software for businesses:

  • Online tax filing
  • Low monthly cost
  • Assistance with filing federal and state taxes
  • Compatibility with your devices
  • Money-management apps

Managing expenses for a small business isn’t easy. There’s payroll, suppliers, monthly bills and so many other ongoing expenses that need to be covered. Fortunately, there’s an app for that! Money management apps like Mint, Truebill and ZohoBooks allow businesses to track and review all their expenses in one convenient location. Chart expenses on colorful graphs to visualize cash flow, see where the business money is going, categorize expenses for easier tax-filing and link accounts for automatic syncing of expenditures and income. Tracking business expenses on an app also makes for easy monitoring the business via mobile device.

Here’s what to look for in a money-management app: 

  • Manageable monthly cost
  • Easy-to-use interface
  • Synchronization across multiple devices

Your Turn: How do you manage your business expenses? Tell us about the products you use in the comments.

Learn More:
entrepreneur.com
investopedia.com
nerdwallet.com
patriotsoftware.com
brex.com

What Do I Need to Know About Medicare?

Q: My 65th birthday is approaching and I’m ready to apply for Medicare. What do I need to know before signing up?

A: Medicare offers affordable health care coverage to older Americans, but the application process and the various options can be confusing. We have answers to all your questions about Medicare.

What is Medicare? 

Medicare is a federally funded program that provides health care coverage to Americans over age 65. It is generally also available to younger people with disabilities and people with end stage renal disease.

What are the different kinds of Medicare coverage?

There are two government-funded parts of Medicare:

  • Part A – Hospital Insurance. This coverage pays for inpatient hospital costs, is usually premium-free and is available to anyone age 65 or older who has worked — or whose spouse has worked — and paid Medicare taxes for a minimum of 10 years.
  • Part B – Medical Insurance. Medicare Part B offers coverage for services from doctors and other health care providers, outpatient hospital care, home health care, medical equipment and some preventive services. Part B is not free. Premiums vary by income level but are generally affordable. The standard monthly premium for Part B in 2020 is $144.60

There are also two privately obtained parts of Medicare:

  • Part C – Medicare Advantage. This plan provides extra coverage over Parts A and B and is offered by private insurance companies contracted with Medicare.
  • Part D – Prescription Drug Coverage. Also purchased through a private insurer, Part D offers full or partial coverage for prescription drugs.

Both Part C and Part D have monthly premiums, which vary in cost with each provider. There may be an annual deductible as well. Some people love the low costs and robust coverage of these plans, but some others find that they only cover a limited number of providers and are not worth the cost.

How do I apply for Medicare? 

If you’re ready to sign up for Medicare, you can apply online or in person at the nearest Social Security office. Applicants will need to provide their birth certificate or other proof of birth and proof of United States citizenship or legal residency.

What do I need to know before I apply for Medicare?

Before signing up for Medicare coverage, it’s best to learn these important facts:

  • You have a seven-month window to enroll in Medicare. Medicare eligibility begins at age 65, but applicants can sign up three months before the month of their 65th birthday, and up to three months after their birth month. Benefits are retroactive dating back to the applicant’s 65th birthday.
  • It pays to enroll on time. Signing up for Medicare during the initial enrollment window is crucial. It ensures the applicant has coverage in place should the need for it arise, and it helps the applicant avoid lifelong surcharges on Part B premiums. Otherwise, applicants face a 10% increase on these premiums for each year-long period they were eligible for Medicare but did not enroll.

What if I missed my Initial Enrollment Period (IEP)?

If an applicant has missed their IEP, they’ll need to enroll during the General Enrollment Period, which runs from Jan. 1 through March 31 each year. Applicants can also make changes to their general coverage during this time.

Can I make changes to my Medicare plan?

If you’d like to make changes to your Medicare Advantage or Medicare Prescription Drug plan, you can do so during the annual Medicare Advantage open enrollment period. This year, open enrollment will be from Oct. 15 through Dec. 7, 2020. Any changes made during this period will take effect in January 2021.

Can I sign up for Medicare if I already have health coverage?

Many employees stay on at their jobs past their 65th birthday and will continue to enjoy the health coverage provided by their employer. These employees do not need to sign up for Medicare as soon as they hit 65 — they’ll be given a special enrollment period later on that will allow them to avoid the surcharges of late enrollment.

If an employee wants to keep their employer health coverage and also get coverage through Medicare, that is permitted as an option. In this scenario, Medicare would be used as a secondary insurance and the applicant would sign up for Part A, since that coverage is free and will be used to fill in the gaps of the employer’s insurance plan.

Your Turn: Have you recently applied for Medicare? Share your best tips with us in the comments.

HisandHerMoney.com

When two people with opposite money views marry, it’s the ultimate in “He said, she said.”

He wants to save every penny so they can afford their dream house within the next five years, and she would rather live it up today while pushing off their dream a little longer.

She wants to budget every dollar to track everything they buy, and he thinks they can trust themselves to keep within their spending limit without accounting for every single purchase.

He thinks golf clubs with a four-digit price tag are a reasonable want, and she thinks they’re a ridiculous luxury reserved for the very wealthy.

And on and on it goes.

For Talaat and Tai McNeely, a pair of high school sweethearts ready to take their relationship further, the money differences were more than just an occasional spat — they were an obstruction standing between the couple and marriage.

As the McNeelys share on their blog, hisandhermoney.com, here’s a sampling of some of the financial issues they were dealing with before they married:

  • Do we let our credit scores dictate if we are compatible for marriage?
  • How will our previous money habits play a role in our marriage?
  • Do we merge our finances?
  • How can we work together to become better at life and win with money?
  • Am I a loser because I have now made my debt problems my future spouse’s problems?
  • Can I change, or is my past really who I am?
  • Should I have a secret account just in case our money situation gets worse?
  • How will we purchase a home? Do we put it in both of our names and risk not having a low interest rate due to the lower credit score?
  • Do I have to take full responsibility for our finances simply because I’m better at it?
  • Will we have to rely on two incomes to run our home?
  • What will our lives look like five years from now?

Despite one partner being debt-free and the other carrying $30,000 in debt, the McNeelys decided to get married. They knew the financial road ahead could be bumpy, but they were prepared to weather the storms together for the sake of their relationship.

Today, after years of struggling to chart their own joint money path, the McNeelys are completely debt-free, have paid off their mortgage and run a 6-figure business online. They have learned enormous life lessons on their journey toward financial wellness, and they generously share these lessons on their blog, podcasts, videos and through their private community of couples seeking financial guidance.

The couple is passionate about helping others overcome their financial differences and build a better relationship and a better future together. Check out hisandhermoney.com to learn their secrets.

Your Turn: How do you and your partner deal with money differences? Tell us about it in the comments.

Learn More:
paychecksandbalances.com
hisandhermoney.com

All You Need To Know About Remote Deposit

Young woman using her cellphone to deposit a paper check to ehr checking account from her home office.In a world where you can order almost anything through your mobile phone — from a new pair of shoes to a dining room table to tickets to a Caribbean cruise — it only makes sense that Advantage One Credit Union offers mobile banking services for our members. You can now check your account balance and transfer funds between accounts, all from the comfort of your home or while on the road.

One of the most convenient features we offer through our mobile banking service is Mobile Deposit. There’s no need to squeeze a trip to the credit union into your already busy schedule. All it takes to deposit a check is a few minutes of your time and a phone that has internet access.

Remote deposits first made their appearance in the banking world back in 2003 with the passing of the Check 21 Act. This law afforded scanned images of checks identical legal standing as the original paper documents. While the law was passed with the intention of speeding up the check-clearing process between financial institutions, the concept was quickly adapted by large businesses that were handling loads of checks each month. In 2009, when smartphones were already being used by most consumers, financial institutions began offering remote check capture and mobile deposits to their members.

Advantage One Credit Union is proud to have been one of the very first credit unions in Michigan to have offered this service to our members. We believe this service makes our members’ banking easier and more convenient.

Let’s take a closer look at remote check capture and mobile deposits.

What is remote check capture?
Just like it sounds, remote check capture is a way for you to deposit a check into your Advantage One Credit Union Checking Account from a distant location using your smartphone or another mobile device that has internet access. You can be practically anywhere in the world and make your deposit at any time of day or night.

The process is remarkably simple: You’ll sign into your mobile Advantage One Credit Union account and prepare your check for deposit. Tap the Mobile Deposit icon and your phone will guide you through snapping a picture of both the front and the back of the check. You’ll also be asked to verify the amount on the check. Once you’ve made that confirmation, your check will be submitted to be deposited into your account.

It’s that easy.

The benefits of remote check capture
It’s not just another errand crossed off your list. Here are some of the benefits you’ll enjoy by using Advantage One Credit Union Remote Check Capture:

1. Convenience
You’re no longer bound by regular business hours. As mentioned, you can now make your deposit anywhere, and at any time.

2. Speed
Your check will generally clear more quickly through a mobile deposit than it will through an ATM deposit. You’ll also receive instant confirmation that your check has been submitted.

3. Accuracy
There’s no room for errors when it comes to remote check capture. You’ll be asked to confirm the check amount in case the character-recognition software is not reading it correctly. On the small chance that an error occurs, you’ll still have the physical check, which you can then deposit at Advantage One Credit Union.

But is it safe?
If you’re worried about sending a personal check through the airwaves, you can rest easy. Your safety is always our priority, and we take multiple precautions for ensuring your personal information is protected throughout the remote check capture process.

First, no one can sign into your Advantage One Credit Union mobile account without two-factor authentication. Always make sure to use strong, unique passwords and never allow your phone to “remember” the PINs and passwords to your Advantage One Credit Union account.

Second, our mobile app does not store your check images in your phone. As soon as your check has been submitted, the image is erased from your phone and stored only in our own software. There’s no need to worry about someone picking up your phone and helping themselves to your check.

Finally, as mentioned, if an error occurs with your check deposit, you’ll always have the physical check to deposit if necessary.

If you haven’t already done so, try Advantage One Credit Union Remote Check Capture. It’s quick. It’s easy. And it’s safe. You’ve got nothing to lose but one more errand crossed off your to-do list. Try it today!

Your Turn:
What do you love about Advantage One Credit Union‘s Remote Check Capture? Tell us about it in the comments!

Learn More:
thebalance.com
bankrate.com
digitalcheck.com

Checking Account Basics

What you should know about using checking accounts

Nowadays, it seems like nearly everyone has a checking account. It would seem, therefore, that most people are experts when it comes to checking accounts. That isn’t true; however, most people know how much money is in their checking account and not much else. The following information can help you learn about the different types of checking accounts and what options you have for opening checking accounts.

They offer more flexibility than a savings account
“A checking account differs from other bank accounts in that it often allows for numerous withdrawals and unlimited deposits, whereas savings accounts sometimes limit both,” according to Investopedia.

This flexibility is the tradeoff for having lower interest rates than savings accounts. Your checking account is the one that you will draw from when you need immediate money to pay for things like bills, groceries or online purchases.

Money can be deposited automatically, such as from your paycheck, or it can be deposited at an ATM or through a teller. Many financial institutions also offer mobile deposits, which only require taking a photograph of a check on your smartphone.

There are many options for withdrawing also, such as using a debit card or a check at a store or by using an ATM card to withdraw cash. You may also be able to pay bills online, directly from your financial institution’s website.

There are multiple types of checking accounts
Many people don’t realize that there’s more than one type of checking account, and that mistake can be costly.

“Checking accounts can include business accounts, student accounts and joint accounts along with many other types of accounts which offer similar features,” states Investopedia.

Making sure to open the correct type of account means that the account will best suit your needs. Student accounts are beneficial to people who may not meet deposit or balance minimums, while business accounts maximize the benefits that entrepreneurs need most and help business owners keep their personal and business finances separate.

Each person can have more than one
In addition to the fact that there are multiple types of checking accounts, many people don’t realize that they can have multiple of the same type of checking accounts at anytime. Having multiple checking accounts is even encouraged by some financial experts, as an easy way to budget and prevent overspending on certain expenses.

For example, many couples prefer to maintain separate accounts for each partner while also sharing a joint account for bills and other family-related expenses.

“This allows couples the flexibility to make independent financial decisions, since not every financial decision is going to involve both parties,” says certified financial planner Kristen Euretig for Fox News Business.

Other families may wish to split accounts even more, such as having one for account for rent and utilities, another for food and so forth. This makes it easy to see if there is enough room in the budget to head to a restaurant or if cooking at home is a better idea.

You can mix online and brick and mortar accounts
You may also wish to add an online checking account to your portfolio in order to earn money with a higher interest rate. This can be a profitable choice for people who find the restrictions of savings accounts difficult to adhere to, but who still want to find a great interest rate online. Using an online checking account, while maintaining your accounts at your local bank, gives you flexibility because your money is always nearby if you need to make a withdrawal or if you have questions to ask someone in person.

“It absolutely makes sense to open a second account with an online [institution] for a higher yield,” states Euretig. “In addition to higher rates, online accounts often have useful savings features that make it easy to set up automatic savings plans that draw from a traditional brick-and-mortar bank account.”

Many financial institutions offer online banking options
If you don’t wish to open an online only account because you like the option to make easier deposits and withdrawals, you may still be able to take advantage of the ease of online checking if your financial institution offers online tools. Many small community-based institutions now offer mobile tools and online banking options that rival or even exceed those offered by the national chains, so be sure to ask your bank about the options available to you.


Used with Permission. Published by IMN Bank Adviser
Includes copyrighted material of IMakeNews, Inc. and its suppliers.

Overdraft Protection 101

Learn the ins and outs of overdraft protection

Have you ever made a transaction and caused the balance of your account to dip below zero? That’s called an overdraft, and it’s a common occurrence among many. In fact, nine out of every 10 Americans have a checking account, and 18 percent of them have endured an overdraft within the year, according to a 2012 Overdraft America study.

Some of the most frequent times an overdraft can happen are when someone cashes a check before money was deposited, when an automatic payment withdraws money before money was deposited into the account or during other banking miscommunications — especially if your account has cash going in and out multiple times a day, things can certainly get confusing.

Financial institutions know this is a common situation. That’s why many of them offer overdraft protection, a protection program that covers the amount of an overdraft — whether it be ATM withdrawals, debit card purchases or electronic transfers and bounced checks. Essentially, overdraft protection will provide you with an instant loan instead of charging you a hefty fee for a bounced check.

Another option for overdraft protection is linking your account to a savings or other account, where money can be transferred over from in the event of an overdraft. Also, some financial institutions allow the use of a credit card as a possible overdraft protection.

“It’s a good idea, assuming the fees are reasonable and the credit card rates are reasonable,” says Jean Ann Fox, director of consumer protection for the Consumer Federation of America.

“It just gives customers another option,” says Mary Beth Navarro, a retail financial institution customer service manager. “Not every customer has a savings or money market account. And it’s less expensive than if you were to have an overdraft.”

However, there’s some controversy about overdraft protection programs. Some experts, like Greg McBride, CFA and Bankrate’s senior economic analyst, see a few bugs in the system.

“It doesn’t relieve consumers of the obligation to keep accurate tabs on their account balance,” he says. “Even though an ATM or debit card transaction won’t go through without our prior consent, if the balance is that low, the check written yesterday won’t clear and the online payment scheduled for tomorrow won’t clear.”

And keep in mind that if you’re consistently enduring overdrafts on your account, the fees could accumulate quickly, as many financial institutions do charge when the account balance is below zero (although the fee is typically less than that of a bounced check).

“A lot of people use their debit cards several times a day, so you could easily rack up hundreds of dollars worth of fees,” points out Leslie Parrish, senior researcher at the Center for Responsible Lending in North Carolina.

Either way, no one can argue the many pros that come out of overdraft protection. If you’re deciding whether you should get overdraft protection, give us a call or stop by today to see how we can help you.


Used with Permission. Published by IMN Bank Adviser
Includes copyrighted material of IMakeNews, Inc. and its suppliers.

Staying on Top of Your Checking Account

Chances are you haveCheckingAccount a checking account that you use all the time, depositing paychecks, using a debit/check card, maybe even making automatic payments for regular bills. But when’s the last time you sat down and went over your account to make sure it’s all in working order?

Under the law, every financial institution is required to send you a monthly statement for your checking account. It might be sent by mail, or if you chose the electronic option most financial institutions offer these days, you’ll receive a monthly e-mail notification when your new statement is ready to view online. However you get your statement, it’s important to actually look it over every once in a while.

“While balancing a checkbook may seem like a thing of the past, the principles behind this practice are as valid as ever,” says finance columnist Andrew Freiburghouse. “In addition to preventing overdraft fees and catching erroneous charges, properly reconciling your checkbook can also allow you to take a better look at your financial habits.”

In other words, staying on top of your checking account is about more than making sure your financial institution hasn’t made any mistakes. It will also help you plan and keep a monthly budget. And if simply looking over your statement isn’t enough to give you a firm grip on the ins and outs of your checking account, there are plenty of tools that can help — even a simple spreadsheet can do the trick.

“We have columns for rent, dining, groceries, insurance, etc., with monthly targets,” says business owner and household financer Mandy Minor. “As I input our expenses, they get added up, so we can see in a second if we were over, under or on budget. Each month is a new sheet in the workbook, so it has years’ worth of data that’s easy to get to.”

Keeping a weather eye on your checking account is worth the time, but if you have a nice handle on your budget and are familiar enough with your personal finances, a monthly check-up doesn’t have to take too long.

“If you’re pressed for time, you can get away with examining just the account summary,” says financial adviser Susan Zimmerman. “It’s usually listed at the top of the page and it recaps the state of your account: previous balance, deposits and credits, checks and debits, service charges, interest paid and current balance. At a bare-bones minimum, look over the summary information and see if the figures are in the [ballpark.”]

If a quick scan of your checking account summary shows any discrepancies, delve a little deeper. Be sure to contact your financial institution immediately if you see anything amiss — the sooner you start dealing with any problems, the easier they will be resolved.

So take the first step in financial control and make sure you’re checking in with your checking account regularly. Your savings and investments will thank you.


Used with Permission. Published by IMN Bank Adviser
Includes copyrighted material of IMakeNews, Inc. and its suppliers.