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MONEY RULES |
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Understanding the rules of money is important when it comes to
achieving such goals as obtaining a home, education, car or a secure
retirement. We want to help you better understand how to budget,
save, invest, borrow and spend wisely. This will enable you to more
readily achieve your financial goals.
Money Rules is a program aimed at helping our customers become more
savvy about your finances. We want to share useful financial
information with you, and offer financial tips on subjects such as
budgeting, using credit wisely and achieving your saving goals.
Of course, if you would like to talk to someone about your financial
questions, your community banker is always ready to listen.
Recent studies demonstrate the need for improving the financial
skills of all Americans — young and old. In one such test of
financial knowledge, adults scored 57 percent on average and high
school students scored 51 percent. |
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For instance, do you
know that: |
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Revolving or unsecured loans, such as credit card loans carry a
higher interest rate than car, home equity and mortgage loans. |
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When shopping for a credit card you should evaluate all fees, as
well as both the introductory and regular interest rate. |
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If you only make minimum payments on your credit card, you may never
pay off the debt. Try to set up a payment calendar and work toward
paying off your balance. |
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Ideally, you should be saving some percentage (e.g., five percent)
of your annual income for retirement. |
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In many cases, it will take 80 percent of your pre-retirement
income to maintain your current lifestyle in retirement. |
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Being denied credit for no apparent reason or having routine
financial statements stop arriving in a timely manner may mean
you’re an identity theft victim. |
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A checking account with your local community bank may help you save
money by avoiding costly check cashing firms, and also by making it
easier for you to itemize and budget |
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Your income, debt ratio and credit rating are all factors that will
be considered when you apply for a mortgage loan. |
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A minimum of three months in funds should be set aside to carry you
through such emergencies as illness or job loss.
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Experts recommend emergency funds not be kept in stocks, but rather
regular savings accounts, money market funds and certificates of
deposit.
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IF YOU WANT MORE INFORMATION: |
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Talk to your community banker. You also can check out the following
online resources:
www.asec.org
The American Savings Education Council offers aid with retirement
planning, saving. Retirement calculator.
www.fdic.gov
The Federal Deposit Insurance Corporation offers Money Smart, a
free, comprehensive financial literacy curriculum. The curriculum is
available in both English and Spanish.
www.chicagofed.org
The Federal Reserve Bank of Chicago’s website features Project Money
Smart, which is designed to help consumers make good choices about
their personal finances.
www.consumer.gov/idtheft
The Federal Trade Commission offers tips on how to avoid identity
theft and what to do if you get stung.
www.hud.gov
The Department of Housing and Urban Development offers a number of
publications to assist consumers in the homeownership process.
Materials are available in both English and Spanish.
www.jumpstartcoalition.org
The Jump$tart Coalition for Personal Financial Literacy seeks to
improve the personal financial literacy of young adults.
www.nfcc.org
The National Foundation for Credit Counseling has tips for what to
do if you find yourself in financial hot water, and also provides
credit report examples.
www.operationhope.org
Operation HOPE, a national non-profit self-help organization, seeks
to bring economic self-sufficiency and a sustained spirit of
revitalization to America’s inner city communities.
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YOUR CREDIT |
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We are your Community Bank. As members of the community we are
vitally interested in the well being of the consumers and businesses
that are our customers and neighbors.
That is why your Community Bank is involved in a financial literacy
program called Money Rules. This newest pamphlet in the Money Rules
series provides tips on building, maintaining and repairing your
credit.
Please contact us if you have any questions about this information.
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Money Rule I – Building Good Credit |
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When used properly, credit can be a useful part of your financial
strategy. Getting credit, and how much of it you will get depends,
on your track record of handling money and your ability to repay the
debt you are seeking to incur.
Basic credit building blocks include:
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Paying your bills on time. |
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Living within your means. |
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Having the income to comfortably carry
debt load. |
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Staying within credit limits, and not
charging up to the limit |
Being financially responsible will help you obtain credit initially
and establish a good credit history, which is necessary for your
future credit needs. |
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Money Rule II – Following A Budget Is Key To Maintaining Good
Credit |
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The best way to achieve your financial goals is to develop a
financial plan and stick to it. Here are some budgeting tips to help
maintain your good credit:
Get an accurate picture of your finances by making a budget. Know
how much you earn and spend each month.
List:
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Actual take home pay, what’s left after items
like Social Security, benefits, savings and all taxes are
deducted.. |
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Fixed expenses such as your rent or mortgage,
car payment and utilities. |
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Variable expenses like groceries, entertainment,
and lunch. |
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Periodic expenses such as car and health
insurance. |
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Rainy day savings set aside for emergencies. |
Learn where your money goes:
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Use a computer or a ledger to track income,
savings, expenses and debt. |
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Review financial statements – checking and
savings account, credit card, mortgage –to evaluate spending
habits. |
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Know your credit limits and stay within them. |
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Money Rule III – Recognizing Debt Disaster Signs |
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You could be on the road to financial ruin if you:
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Having difficulty, or finding it impossible, to
make even minimum payments on what you owe. |
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Making payments late. |
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Borrowing from credit card or other lenders to
make ends meet. |
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Finding that more cash is going out than coming
in. |
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Money Rule IV – Don’t Get Burned By Financial Hot Water |
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If you find yourself in financial hot water for any reason – too
much debt, loss or change of job, divorce, military deployment, etc.
– contact your creditors before you miss a payment and before they
contact you. |
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Money Rule V – Credit Repairs |
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Please contact us at the first sign of financial difficulty. The
earlier you recognize your money problems and bring them to our
attention, the sooner we can begin working together
to maintain your good credit rating and secure your financial
future.
There a number of ways we can help you put your financial house in
order. Among the options that may be available, depending upon your
situation, are:
Modified loan
term;.
Limited partial
payments;
Refinancing of home
loans;
Home equity loans;
Debt consolidation
loans; and
Assistance with
financial counseling. |
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Money Rules VI – Don’t Get Scammed |
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Beware of advertisements claiming that for a fee your bad credit
rating can be erased. It can’t be done! Accurate information
damaging to your credit rating can only be
erased by time and your commitment to repay your bills and rebuild
your credit record.
Don’t let concerns about financial problems allow you to become a
victim of these "get out of debt free" scam artists.
Bring your financial concerns to your community bank instead. |
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