By Matt Kelly
Savings accounts are a vital component of anyone’s financial planning. By putting aside a portion of your earnings into a savings account, you can grow your wealth by taking advantage of interest rates so that you can be assured you’ll have the funds necessary when a need arises. Whether you’re saving up for retirement, planning to put your children through college or even just looking to take a vacation, it isn’t necessarily important why you’re saving—it only matters that you do it.
But based on recent data released by the Saint Louis Federal Reserve, Americans are having a hard time amassing money in their savings accounts. According to the Fed, 70 percent of Americans have less than $1,000 set aside in savings. In addition, the Fed found that Americans’ personal savings rate is only 5.7 percent. While that number has remained steady over the past few years, it is only half the amount saved by Americans 50 years ago.
Financial experts have made a number of recommendations to help people protect themselves during periods of financial turbulence. Individuals should be saving between 10 and 15 percent of their income. Additionally, it is prudent to have six months’ worth of your annual salary to avoid a pitfall in the event of job loss or other unforeseen expenses.
With the holidays coming up, these statistics are particularly alarming. According to a recent Gallup poll, the average American plans on spending $785 on Christmas gifts this year. That means a majority of Americans are planning to deplete their savings accounts in order to get gifts for friends and family members.
But what happens when your car needs a new transmission? What happens if your furnace dies in the middle of winter? While these are worst-case scenarios, your financial strategy should follow the mantra, “hope for the best but plan for the worst.”
And while it may seem impossible to begin accumulating more money in your savings account, there are a number of simple steps you can take to start heading in the right direction.
For starters, stop by a Milford Bank branch location and speak with a financial advisor. An experienced financial planner will be able to help you isolate the problematic areas of your budgeting and offer additional advice on managing any existing debt you may currently owe.
There are also numerous budgeting tools available for free today that can help you accumulate data and track your progress in real-time, meaning you can get a more comprehensive understanding of your spending habits that might not otherwise be easy to spot on a day-by-day basis.
If you can’t seem to stay disciplined enough to stop pulling money from your savings account, you may also want to consider an alternative investment vehicle. Certificates of deposit, for instance, are ideal. You can select a term limit that best reflects your needs. During that time period you will not be able to withdraw your funds, but will enjoy high yield interest rates upon completion of the term.
To learn more, stop by any office of The Milford Bank or check out our online Learning Center here.
By Pam Reiss
According to the United States Department of Energy, Americans will drive 3.17 trillion miles this year. And whether a majority of the miles on your odometer were accrued by your daily commute or a cross-country road trip, the fact remains the same—you’ll be putting a substantial portion of your paycheck into your fuel tank.
Of course, there are ways around the expense—mass transportation is available in many areas. You can opt to purchase an electric vehicle. You can carpool to reduce your costs or even call a cab. But for many Americans, getting behind the wheel is simply a fact of life. Don’t worry though—if you don’t have the means or desire to trade in your vehicle for a more efficient model, there are still plenty of simple steps you can take to improve your fuel efficiency and drastically decrease your annual gasoline costs.
Here are five simple steps you can take to improve your fuel efficiency.
- Make sure your tires are properly inflated. You don’t need a puncture hole to lose tire pressure. Variations in weather, as well as typical wear and tear, can cause them to lose 1 PSI every month. If your tires aren’t properly inflated your car has to work harder to propel itself, consuming more fuel in the process.
- Conduct routine preventive maintenance. If you treat your car well, you will likely be rewarded in kind. Don’t put off your regular oil changes, change your air filters and make sure you replenish depleted spark plugs.
- Keep your gas gauge in the sweet spot. Fuel efficiency is at its lowest when you have less than a quarter tank of gas. But that doesn’t necessarily mean you should keep it full either. Gasoline adds weight to your car—10 gallons is roughly equivalent to 60 pounds. If you keep your tank halfway full, you can reach peak performance.
- Be conservative with heat and air conditioning. Have you ever blasted your heat to warm up your car, gotten too hot and switched over to air conditioning to balance the temperature? If so, you’re greatly reducing your fuel efficiency. Take advantage of nice weather and roll down your windows instead. Or if you’re worried about the cold, wear an extra layer until you get comfortable.
- Keep clutter to a minimum. Inspect the contents of your vehicle. Do you have items that you leave in your car on a regular basis out of convenience, even if you don’t use them? Every additional pound that adds to the weight of your vehicle is reducing your fuel efficiency. Schedule some time every week to clear the clutter out of your vehicle and the engine won’t have to work as hard to carry you down the road.
To learn more simple ways to reduce wasteful spending in your life, stop by a Milford Bank branch location to speak with a financial advisor, or check out more helpful hints at our online Learning Center here.
by Celeste Lohrenz
With the end of October just around the corner, it’s time to start preparing for the spookiest time of the year—Halloween! In the coming weeks there’s a lot to do—carve pumpkins, decorate the house, plan costumes, parties and trick-or-treating routes for the kids. But in the midst of all the holiday excitement, all the added expenses of the holidays can go unnoticed. In order to make sure you don’t get a fright when you look at your bank statement come November, take a look at these helpful hints for a cost-effective Halloween.
Cut down on energy-consuming decorations. Every neighborhood has one—the family that goes all out creating a nightmarish scene on the front lawn with decorations and lights. If that happens to sound like your home, consider making a few adjustments to your décor this year. Ditching the inflatable witches and ghosts will help keep your energy costs low. If you must, be sure to unplug them during the daytime to conserve electricity. Also consider swapping out old string lights with energy-efficient LED bulbs.
Coordinate trick-or-treating with several families. Toting your kids around town to go trick-or-treating is a Halloween tradition. By planning with your family, friends or neighbors, you can pool resources to keep your costs lower. Carpooling will help save gas and keep the streets safer. Sharing supplies like flashlights and refreshments will also make sure nobody has to spend extra cash on items that are readily available.
Participate in candy buyback programs. There’s nothing quite like the look on your children’s faces after they empty their pillowcases after a long night of trick-or-treating and see a heaping pile of candy sitting in front of them. But trying to eat it all can cause quite a bellyache. You can help offset some of your holiday expenses by looking for candy buyback programs near you. Many doctors, dentists and charitable organizations will pay you to turn in your candy so you can make some extra cash, promote a healthy lifestyle while helping others at the same time.
Make your own costumes. Trying on Halloween costumes at the store can be a blast, but it can also get expensive quickly. Don’t ditch the store altogher—it is part of the fun, after all—but go in with a different mission. Get an up-close look at the costumes that you enjoy the most and figure out how you can make them yourself with items you already own. You can even find many garments to help you piece together a costume at Good Will or other consignment shops. You’ll only be wearing your costume a few times at the most, so don’t lose sight of your financial investment in your costume.
Keep the chill out of your house. Whether you’re hosting a costume party or passing out candy to the neighborhood kids, the odds are good that you’ll be opening your front door a lot on Halloween. And while it’s not quite winter yet, that doesn’t mean you want the brisk fall air blustering through your home. You’ll have to crank up your thermostat to compensate, which means you can expect a nightmarish energy bill next month. Direct foot traffic to your garage, mudrooms or seasonal porches in order to avoid opening doors that lead directly into the heart of your home.
For more tips on managing your finances, stop by a Milford Bank branch location or check out our Learning Center here.
By Cortney Meng
Anybody in a relationship knows that love and money will invariably intersect. Relationships are partnerships, and managing finances simply comes with the territory. But the results of a recent survey conducted by SunTrust Bank revealed that finances are the primary culprit for many couples’ relationship stress. According to the survey, 35 percent of respondents cited financial management as the biggest cause of friction with their partner—ten percent higher than second place finisher, annoying habits.
The issue is much bigger than figuring out whether or not to split a restaurant bill. Financial management underlies most of the big decisions that couples will make together, from marriage, having children, purchasing a home, to taking a vacation or planning for retirement. Without developing a stress-free financial planning strategy, couples may end up overwhelmed, stressed out and never attain the goals they set for themselves.
In order to make sure that you and your partner don’t let finances become a bone of contention in your relationship, consider adopting some of these practices for managing your money together.
Set your budget around shared financial goals. If only one partner in a relationship is concerned about reaching a financial benchmark, your finances are likely to become a stressor. To make sure you and your partner are saving in synch, set a series of short, medium and long-term goals which you both aspire to achieve. That way, you’ll be able to stay on track and budget accordingly to reach the carrot dangling in front of you.
Leave room in your budget for separate spending too. Nearly half of respondents to SunTrust’s survey reported that they had different spending habits than their partners. Disproportionate spending is a breeding ground for resentment, so be sure when you’re planning your monthly budget to allocate an equal amount for each partner to use as they see fit, no questions asked. That way, an individual inclined to save more will have that chance, while someone inclined to spend more won’t need to ask permission. And because there’s a set cap on personal spending, the couples’ finances won’t get out of control.
Seek the services of a financial planner. Managing finances within the context of a relationship can be stressful because it is difficult to take the emotions out of a purely mathematical process. In such cases, consider consulting with a financial planner. You’ll receive an objective third-party opinion from an individual that can give you a clear path to meet your goals, as well as investing strategies that will be best suited for your lifestyle needs and wants.
Stop by any office of The Milford Bank to learn about the products you need to achieve your goals. You can also check out more information on our Learning Center here.
by Mark Attanasio
Even if you never actually see your paycheck and it is automatically transferred to your bank account each week, you may still know how much you’re making—maybe even down to the penny. Most people are fully aware of their income. But when it comes to net worth, the story is entirely different.
This is problematic because, unlike your income, net worth encompasses all your assets and debts. Calculating your net worth can provide you with a true measure of your financial well being, as well as providing you the information you need to improve your fiscal standing.
To help you figure out what you need to know about net worth, here are some of the questions others are asking too.
What, exactly, is net worth?
There is a simple formula that easily defines net worth. Add up all your assets—income, savings, investments and property. Then subtract all your existing debts. The total is your net worth.
When will I need to know my net worth?
While you won’t need to keep track of your net worth on a day to day basis, there are critical moments when it’s a good idea to have a firm grasp of your true value. You may want to understand the long-term trends for your net worth (how quickly you’re making or losing value) when planning your retirement or your estate. You may need it when looking to secure a mortgage or apply for student loans on behalf of your children.
I can’t touch my retirement accounts for 30 years. Do they count?
Your liquid assets are only one part of the net worth equation. Even if you don’t receive a distribution from your 401(k) or IRA accounts now, they’re still considered a part of your net worth.
Do I have the same net worth as my spouse?
Depending on how you and your spouse manage your household finances, your net worth may be identical or it could be drastically different. If you’re both listed as co-owners of your home, share a credit card or car, those assets will be attributed to both of you. If you both purchased vehicles separately, only the vehicle to your name will be considered for your calculation. However, if you add your partner’s net worth to yours, you’ll know your household net worth, which itself is important to track.
How do you account for outstanding car loans and mortgage payments?
When incorporating existing loans into your net worth calculation, you cannot truly consider houses or vehicles as assets until they’ve been paid for in full. So if you took out a $100,000 mortgage and have paid off $99,000, your home is still considered a $1,000 liability. But once you’ve made your last payment your home becomes a $100,000 asset.
Now that you have a better grasp on your net worth, stop by any office of The Milford Bank to see how you can continue to improve your financial standing today. You can also learn more at our online Learning Center or check out more financial calculators here.
by Celeste Lohrenz
Regardless of whether or not you’re the owner or an employee of a small business, do not make the mistake of thinking that your organization is under the radar for cybercriminals. While large attacks on businesses like Target or Home Depot might dominate the headlines, smaller organizations may be just as likely to be targeted.
In fact, 43 percent of all cyberattacks in 2015 targeted small businesses—a significant increase from five years ago, when that number was a mere 18 percent. There are a confluence of factors making cybersecurity even more pressing. The size and sophistication of cyberthreats continue to increase, while technology continues to play a larger and larger role in business operations.
A cyberattack can cause a network outage that may cost your business money through lost worker productivity, infrastructure repairs or a breakdown in communications. Privileged data can be stolen, leaving your organization, customers or employees vulnerable. Your brand may suffer a tarnished reputation if any of these circumstances come to pass, and your revenue stream could dry up.
Most small businesses do not have the budget to resolve these problems if they occur, so the need to improve your organization’s cybersecurity efforts should be a top priority.
Here are a few of the biggest cyberthreats to small businesses today, as well as measures you can take to ensure your organization is protected.
Phishing: If you’ve ever received a strange email from one of your contacts with a strange link embedded in it, you have likely experienced a phishing scam. The email wasn’t really sent by your contact—and if you click the link, your device may become infected with a virus that can grant a hacker access to any other device connected to your network.
The best way to protect against phishing scams is to educate all employees about what to look for when it comes to opening suspicious email.
Ransomware: Ransomware is malicious code that infects a computer and encrypts important data so that it cannot be accessed by the appropriate party. Hackers will demand payment for the safe return of your files—but may not follow through with their side of the transaction even if your business antes up.
Once you’ve been hit with ransomware there isn’t a lot you can do—even the FBI has gone on the record stating that in some cases, the best thing to do is to pay up. Instead, you’ve got to be proactive. Make sure any device connected to your network is regularly updated with the latest security patches, and if your budget permits, back up vital information in a secure data center.
Denial of Service (DoS): During a DoS attack, a connected group of computers infected with malware will rapidly send traffic to your website, flooding your page with more bandwidth consumption than you have available. The result is that your site effectively goes offline. If your business relies on Internet traffic as a means of generating revenue, you can’t afford to let your page be impacted by a DoS attack.
You may mitigate the impact of a DoS attack by quickly scaling up your bandwidth to handle strain of the added traffic. Check with your service provider for the appropriate connectivity package for your security needs.
Unfortunately, no business today is exempt from the threat of cyberattacks. Small businesses can be particularly vulnerable, though, because they generally have fewer resources to alleviate the financial hardship caused by a cyberattack. To learn more ways to effectively manage your business, check out our Learning Center here.
By Karuna Kasbawala
When Forbes put out its latest list of the 500 wealthiest people around the world, the individuals selected had a collective net worth of $4.7 trillion. While you may not be in a position to ask for their advice on where to bring your private jet for maintenance, there is plenty for the average person to learn about wealth management from the people who do it better than anyone else.
Below are the five individuals that topped Forbes’ list, as well as a wealth management lesson you can apply in your own life.
Bill Gates: Gates is an annual contender for the richest person in the world. But his path to success wasn’t always clear. After enrolling in Harvard in 1973, he dropped out of school two years later to start a company you’ve probably heard of before—Microsoft. While earning a college degree can have a tremendous impact on your earning potential, don’t make the mistake of thinking it is the only way you can become successful.
Carlos Slim Helu: While lesser known than Bill Gates, Carlos Helu’s net worth is nearly identical. How has he done so well? The key was starting early. At 12 he was investing in bonds, stock and learning how to do book-keeping and read financial sheets from his father. If you have young children, don’t shy away from teaching them the importance of wealth management. Click here for additional resources to getting your kids educated about banking today.
Warren Buffett: Buffett owes much of his fortune to his ownership of Berkshire Hathaway. Much of the corporation’s work revolves around real estate, but Buffett himself is not a customer. He still lives in the home in Omaha, Nebraska that he purchased 60 years ago for just $31,500. Take a look at your own life—are there more cost-effective and practical ways to handle your assets?
Amancio Ortega: As the founder and chairman of Inditex—a famous fashion company in Europe—Ortega knows that when it comes to accumulating wealth, every step you take is important. As a young teenager in Spain, Ortega started working as a shop hand for a shirt maker in his town. He perfected his craft for years before finally launching his own line of bathrobes and opening his own business. Amancio Ortega’s success proves that all work has value. Even if you’re at the bottom of the ladder now, the hard work you put in can pay dividends down the road.
Larry Ellison: Larry Ellison is a testament to the notion that giving up hope should never be an option. Even though he is a successful Silicon Valley magnate today, Ellison was not exposed to computer sciences early in his life like other high-earning tech innovators. In fact, he was only introduced to computer design during his second attempt at higher education.
You don’t need billions of dollars to have a high quality of life. But if you’re like most, having a little extra money in your savings account wouldn’t hurt either. The wealthiest people in the world all had to earn their first dollar at one point, just like everybody else. It is their discipline, hard work and humility that helped them keep the momentum moving forward. Find more ways to manage your wealth at our online Learning Center by clicking here.
by Pat White
With Labor Day coming up on September 5—the first Monday of the month—many of us will be taking advantage of the impending three day weekend. Whether you’re using the chance to take one last weekend getaway to the beach before the end of summer, hosting a backyard party with your friends and family, or heading out to the mall to take advantage of Labor Day sales, we all have one thing in common—we’re grateful to have a little extra time for ourselves.
However you choose to spend your Labor Day, be sure to take a few moments to remember the meaning behind the holiday. We wouldn’t have the wages, benefits or time off that we enjoy today without the activism of our ancestors.
Here are five things you may not know about Labor Day to better educate you on the origins of the holiday.
- The idea for Labor Day is believed to have begun in Canada in 1872—22 years before it became a national holiday in the United States! In a show of solidarity for striking workers, 1,500 citizens from Hamilton, Ontario demonstrated in the streets. Their aim? A nine hour work day.
- Even though Labor Day became a national holiday in 1894, it was first celebrated in New York City by the Central Labor Union in 1882. Over the following 12 years, 23 states marked their own celebration before the Federal government opted to make it a universally recognized holiday.
- Congress voted unanimously to make Labor Day a national holiday in 1894, just six days after the conclusion of the Pullman Strike. During the strike, 125,000 railroad workers walked off the job to protest wage cuts without a corresponding decrease in rent and utility costs in their company-owned housing. During the strike 30 workers were killed, 57 were wounded and property damage exceeded $80 million.
- The average wage for a laborer during the 1890’s was 15 cents per hour. A skilled worker, such as a carpenter, would still expect to bring home an average of only 32 cents per hour.
- President Cleveland, though he supported the establishment of the Labor Day holiday, was fearful that empowering workers would give rise to strikes, riots and strengthen socialist and anarchist movements.
- The first minimum wage law was passed in New Zealand the same year that Labor Day was established as a national holiday.
Ultimately, we should not celebrate Labor Day without forgetting the activism and difficult conditions that workers endured in our recent past. Because those individuals were willing to stand up and fight for their rights, we now enjoy the fruits of rising wages, shorter work hours and better benefits.
All offices of The Milford Bank offices will be closed in observance of Memorial Day. Be sure to download our mobile application though, and you’ll be able to conduct your banking conveniently without having to stop at one of our locations. You can download the application here.
By Mark Attanasio
When thinking about the path to retirement, we tend to assume a typical trajectory: go to school, get a job and then work tirelessly for the next 40 years. But in reality, there are many different paths to the same destination. Today, many people are opting to find alternate ways to retirement, opting out of the traditional decades-long grind.
Putting an early end to the punching of time cards used to be considered the luxury of Powerball winners. But these days, there are many options for people with the desire to cash out early.
For instance, many people are opting to change the language of work altogether. Instead of going into retirement, many are seeking instead to achieve financial independence—being in a position of having sufficient personal wealth to live without having to actively work for basic necessities.
So how can you achieve financial independence? Here are a few ways to get started.
Put your money to work for you: You may need to work tirelessly early on to amass enough money to start investing. But once you do, make investments that will provide you with supplemental income. For instance, if you opt to invest in stocks, aim for companies that pay shareholder dividends. If you’re going to invest in real-estate, consider a multi-family unit or in-law apartment that you can rent to cover your own mortgage.
If you’re interested in owning your own home but aren’t interested in making it part of your investment strategy, consider joining the tiny house movement. Ranging from 100-400 square feet, tiny houses provide many of the creature comforts of a home—but on a much smaller scale. Ideal for those who simply need a place to hang their hat at the end of a busy day, tiny houses are optimal for anyone willing to go to unusual lengths to achieve financial independence.
Transform passion projects into side jobs: How would you spend your time if you didn’t have to work? If you love to create art, there’s likely a market for your work. If you like to travel, consider becoming a contributor for a travel blog. No matter what your passion project happens to be, there’s likely a way you can capitalize on the hobbies you’re already enjoying.
Live below your means: This is ultimately the lynchpin of financial independence. No matter how much income you have coming in, you’ve got to be willing to keep growing your savings. You never know when an unexpected expense might arise. If you remain disciplined about your spending, you won’t have to start filling out job applications every time you need to bring your car into the mechanic or buy a new hot water heater.
To set out on your own path to financial independence, stop in to a Milford Bank branch location and speak with one of our team members about setting up a strategy that will work for you.
by Lynn Viesti Berube
There’re reasons dogs are considered man’s best friend: They give their owners unconditional love, are intelligent, provide countless hours of entertainment and are highly loyal. If you’re thinking about adding a puppy to your family unit, consider all these charming attributes. But also think about whether you can afford to own a dog. According to Pet Education, out-of-pocket expenses for just the first year of your puppy’s life can be as high as $6,600.
Certain costs, such as for services provided by a veterinarian—from vaccines to heartworm shots, to spaying or neutering—are unavoidable. Yet, you can mitigate other costs by taking the following measures:
Find an alternative to pet stores: Buying a puppy from a pet store could cost you $1,000. For a dog with a lower price tag, explore alternative options like animal rescue shelters or adoption clinics. Have a specific breed in mind? Consider contacting a rescue group. All pedigrees are available in shelters and foster homes. Adoptions are usually low cost or free.
Double your dinner recipe: Purchasing food for your dog isn’t cheap. The good news is that you can add some of the common foods you already cook—rice, vegetables and meat, for example—into their diet for a healthy and cost-effective solution. Be sure to consult with your veterinarian first, though, to make sure the ingredients you use are dog-friendly and offer enough nutrition.
Invest in proper training: Taking the time to properly train your dog will have long-lasting positive effects for all of you. Don’t think of spending money on training as an expense, but rather, an investment. If your dog isn’t taught to respect you and your property, it might behave in unfriendly, even dangerous, ways. Dog’s have lots of energy and need to learn how to channel it appropriately so they don’t do damage when you’re not around. In addition, dogs in new surroundings often experience anxiety and might express their feelings by chewing on furniture, or behaving in other destructive ways. In other words, a well-trained dog is less likely to require frequent shopping trips to IKEA.
Make your own toys: Trekking through the aisles of a pet store, you’ll see a multitude of expensive dog toys made from common household items. Instead of spending money on a piece of rope, for example, check your garage for a similar “toy” first. Another tip: Purchase out of season toys at the pet store. Your dog does not care if you give him/her a snowman toy in the summer.
Be proactive about healthcare: Just as you do for yourself, take a proactive approach to your dog’s healthcare. Regular check-ups can prevent illness from impacting your dog’s quality of life, and help you avoid more-expensive medical treatments. A balanced, nutritious diet and daily exercise will also go a long way toward keeping your pet in top shape. Also be sure to brush your dog’s teeth, administer heartworm and tick prevention medications, and strictly follow any recommendations made by your veterinarian.
These measures will ensure that adding a dog to your family won’t upend your financial stability, and will allow you to enjoy your new pet for a long time. For more ideas on managing your money as you go through life, check out the Milford Bank Learning Center.