Three Ways to Save Energy This Fall

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by Lynn Viesti Berube

With Labor Day in the rear view mirror, we’re now into fall and, with it, colder weather. After the winter Connecticut experienced in 2014, it’s safe to say that we’re all holding tightly to these last few days of warm weather. While you may not have turned on the furnace just yet, you might want to plan for the colder months sooner rather than later when it comes to financing your warm home.

To help you cut heating costs this fall and winter, here are three ways to conserve energy:

• Eliminate the cracks: You may not pay them much attention, but those tiny cracks below your door and around your windows are sucking the money right out of your home. These cracks allow conditioned air within your home to escape and cold air to seep in. By investing in inexpensive draft stoppers and by shrink-wrapping your windows, you can keep the warm air in, the cold air out and save big on your monthly energy bill.

• Optimize your heating system: One major way we waste energy and run up electric bills during the colder months is by overworking inefficient heating systems. Instead, optimize your heating system with a few at-home solutions that shouldn’t break the bank. First, consider placing area rugs in high-occupancy rooms (such as your family room) where you may otherwise have bare floors. Doing so will help retain heat and keep your feet feeling cozy. Second, change the filters in your heating system on a monthly basis to ensure you’re not forcing your system to work harder than it needs to. Finally, make sure heating vents aren’t being blocked by furniture—it may keep the couch nice and warm, but the furniture will draw the heat out of the air and keep the temperature in the room down.

• Opt for electronics with batteries: It’s no secret that during the colder months many of us prefer to wrap ourselves in a warm blanket and watch Netflix, rather than bundle up and brave the elements. However, the extra time we spend in our homes can have a major effect on our electric bills, based on our increased use of electronics alone. Instead of turning on the TV, or heading to your desktop computer this season, opt for electronics with batteries, such as laptops, tablets and other mobile devices. These devices often cost less to charge and, as long as you unplug the charger after you’re all juiced up, will save you big bucks over the course of the next few months.

As the holidays approach, don’t let good tidings be overcome by high electricity bills! These three steps will help you save on your monthly bill while staying warm. And, if you ever have a question of what to do with your new-found savings, consider a Milford Bank savings account!

Want more tips on energy efficiency and saving money on your power bills? Visit our Green Fair on November 14th!

Green-Fair-postcard

 

Three Things You Need to Know About Your Credit Score

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by Trish Townsend

If you have aspirations of one day owning a home, leasing a car or paying for college (either for you or your children) then you know the road to obtaining these goals leads directly through your credit score. Your credit score is the numerical evaluation of your lending history, and it is often the determining factor when lenders accept or deny your loan request. With a good credit score the sky is the limit; however, a poor score can make a task as simple as applying for a credit card become nearly impossible.

Considering how important a credit score is to an individual’s future, it’s surprising to discover that nearly 60 percent of adults haven’t checked their score within the last year. In the spirit of educating our account holders, here are three things you may not know about your credit score:

• Payment history: The largest chunk of your credit score—35 percent in fact—is based on your payment history. This should not be confused with your history of repaying loans, but rather it includes bill payments of any kind. That means if you still have that library book from high school in the back of your closet that’s rung up unimaginable late fees, it is possible that it could end up on your credit score and negatively affect it. Likewise, medical bills, parking tickets and even a late cable bill can be factored in to your credit score.

• Free reports: Your credit report—detailing your credit score and how it was calculated—can be freely obtained three times a year; one each from the three major credit-reporting agencies: Equifax, Experian and TransUnion. While you can contact the credit-reporting agencies individually, they can more easily be obtained through annualcreditreport.com, the only website explicitly directed by Federal law to provide credit reports. Knowing your score is the first step to improving it, and it’s a great way to monitor against identity theft.

• Constant change: Your credit score is alive, and it’s changing almost every single day. Many people are unaware of how a change in their credit score actually occurs, so having this knowledge will be helpful when seeking loans. As a best practice, check your credit score by using one of your free reports as soon to applying for a loan as possible. Doing so will allow you to address any glaring inaccuracies, as well as will offer you a better picture of how much money you’ll be allowed to borrow.

Your credit score can be your best friend or your biggest foe, but you’ll never know until you find out more.

Today’s Youth Grade Themselves ‘C’ or Below When It Comes to Managing Finances

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by Cortney Meng

Despite the fact that today’s youth have grown up in the era of mobile banking, digital wallets and financial services platforms—from Venmo to Splitwise—a number of millennials feel ill-equipped to handle their finances. In fact, according to a survey of 1,640 college students, as part of U.S. Bank’s 2015 U.S. Bank Students and Personal Finance Study, 50 percent of coeds would give themselves a “C” or below when it comes to how successful they are in managing their money.

What’s more, the survey found that:
• More than 60 percent of college students have little to no knowledge of investments or retirement savings.
• Twenty-one percent of students are barely keeping up on day-to-day expenses, with only 5 percent prepared for unexpected expenses.
• Only 39 percent of students correctly know that paying off a delinquent loan or credit card balance is not enough to remove it from a credit report.

So how can today’s millennials start better preparing for their financial future? To begin, young adults can get a good handle on their current financial situation by asking themselves questions like:
• Am I currently in debt? If so, if I continue down the same payment rate, at what point will my debt be paid off?
• Do I have any major financial decisions ahead that I need to start prepping for today, e.g., buying a new car, saving for a house or merging accounts with a soon-to-be spouse?
• How am I currently saving for retirement? Have I started a 401k investment? Am I investing in stock? Do I have an IRA?

The answers to these questions can help guide them down a specific financial path. Youth who are in debt can begin to set budgets and reduce their lines of credit to make payments more expediently. What’s more, they can create a detailed document listing the interest rate, balance and minimum monthly payment of all their debts to stay on track of payments.

In addition, young adults may want to consider consulting with a reputable financial advisor, either formally or informally. For instance, a lot of banks can pair members with financial coaches and advisors who specialize in everything from wealth and asset management to retirement planning. Here at The Milford Bank, for instance, our resident expert John Kuehnle is always on hand to make recommendations and provide financial direction based on the information provided to him.

Millennials can also spend more time discussing their finances with their parents, especially since the survey found that 91 percent of students learn about money from their parents, either directly or by example. Moreover, 55 percent of students identified their parents as the No. 1 influence on their financial habits, as well as their go-to source for financial advice.

Are you a millennial just starting out on his or her career? Are you looking for additional financial resources? Be sure to check out our learning center, where you can pick up tips and tricks on everything from how to pay for college to how to employ basic investing strategies.

How to Save on Back to School Supplies

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by Lynn Viesti Berube

It’s officially August, and that means parents are getting their kids ready for the new school year. And while the first bell is rapidly approaching, there is still one last obstacle for many people to overcome before students are back in the classroom… back to school shopping.

Anyone sending their kids back to school this fall knows just how expensive back to school shopping can be, but did you know it’s the second-largest seasonal shopping period of the year? That’s the word according to Statista, which ranks back to school shopping as No. 2, just ahead of Mother’s Day and Valentine’s Day. In fact, Statista estimates that $74.9 billion will be spent this year alone on back to school needs.

Here are a few ways you can save during this seasonal shopping period:

• Shop from Aug. 16-22: That is Connecticut’s tax free week. During this tax holiday, consumers can shop for clothing and footwear, tax free, on purchases up to $300.
• Buy in bulk: Not only will you be able to get a lot of items you need for the entire year by shopping in bulk, but leftovers can be used the next year as well, which can help save you some money a year from now.
• Check your inventory: If you already shop in bulk, or even if you don’t, chances are you have school supplies left over from the year before. Check your inventory and decide what can be reused and what needs to be replaced.
• Buy from dollar stores: It’s amazing that pens, pencils, markers and notebooks can be as expensive as they are, but they can also all be found at dollar stores. Consider forgoing the name brands for their dollar store counterparts to get the most bang for your buck.

Being strategic in your back to school shopping can net you big savings. Once you’ve done so, consider depositing your savings into a Milford Bank savings account for your future graduate.

Five Ways to Grow Your Savings Accounts

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by Becky Tudor

We get it… allocating a set amount of your income each month for your savings accounts may seem all but impossible. But it’s important to put money aside for a rainy day; you never know when emergencies (or even retirement) will creep up.

Here are five suggestions to help you save money:

1. Keep Track of Your Spending: To figure out how much you can put aside each month, pinpoint how much you are spending. Tally your monthly expenditures. Hold on to every receipt—no matter if you pay with cash or credit—so at the end of the month you can perform an audit. Take a look how much you spend on recurring items (think rent, cable and electric) as well as one-offs like lunches, movie ticket, and sporting events. Once you’ve aggregated this data, you can set a target for how much money you can put into your savings accounts.

2. Pay Your Savings Account: The best way to save is to make it automatic. For instance, when you receive your regular paycheck, schedule a portion of it to be automatically deposited into your dedicated savings account or 401K—instead of waiting until the end of the month to move it over. In other words, pretend as if that money is not there. When that money is not available, you cannot spend it and, thus, your savings accounts can flourish.

3. Be Careful With Your Credit Cards: All too often, individuals end up paying down the interest on loans, debts and credit instead of paying the actual sum of money borrowed. You may be able to avoid paying interest if you pay off the entire balance each month.

4. Get Creative With Your Social Events: While limiting your entertainment budget is a surefire way to pad your savings accounts, it is incredibly important to find ways to satiate your quest for social gatherings while doing so on a budget. So instead of limiting your social events, get creative with them. Consider going for hikes, playing board games or inviting friends over for a pot luck dinner rather than suggesting pricier social gatherings. Just swapping even one concert night for a karaoke night could save you hundreds of dollars in one month.

There are so many great money saving tips out there, so we want to hear from you! How do you suggest padding your savings accounts each month?

Make Your Business Truly Mobile With SpotPay

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by Pam Reiss

These days, smartphones and mobile devices have empowered us to stay connected no matter where we happen to be. Armed with these tools, we’re able to access the same wealth of information whether we’re watching the kids play soccer, putting the last minute touches on a project at the office or waiting for departure at the airport.

In other words, today’s world is an increasingly mobile one. As a business owner, you know full well how your customers are always on the go. Now, thanks to SpotPay, your business can cater to today’s mobile world without a hitch.

SpotPay, which is proudly offered by The Milford Bank, allows your business to accept charge card transactions no matter where you happen to be. All you need is a mobile device and an Internet connection and, voilà, your business can be wherever you want it to be.

By registering with SpotPay through The Milford Bank, all of your card and check transactions will be securely deposited in your business or personal account. As a result, you’ll be able to access your funds quicker.

With SpotPay, you can provide receipts and refunds as well as void transactions right from your mobile device. What’s more, the secure mobile point-of-sale system makes it so that sensitive customer data is not stored on your device.

In addition to the ability to accept charges on mobile devices, SpotPay also has plans to add remote check deposit functionality, mobile balance inquiries and transfers and more, so you’ll be able to better accommodate your customers in the future.

SpotPay costs $8.95 per month in addition to a 1.99-percent fee on most transactions. But that pales in comparison to the untold fortunes the technology can bring to your business. Click here to learn more.

How to Improve Your Credit Score

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by JoAnn Sabas

A good credit score is what each of us aspires to. After all, a credit score is one of the important determining factors when it comes to borrowing money for a home.

Mortgage lenders look at your credit score as one of the essential elements when determining whether or not to approve your mortgage application. A higher score reflects a strong credit history.

So how can you give your credit a boost to improve your chances of getting the lowest possible mortgage rate? Let’s take a look:
• Begin by getting your credit score: You have to know where you stand in order to improve. Get started by running your credit reports. By law, you’re allowed one free credit report from each of the three major credit reporting bureaus every 12 months. The reports will explain how your score was determined. For instance, your FICO score—which many lenders use to assess an applicant’s credit risk—is calculated using both positive and negative information in your report. That information is broken down into five main categories: payment history, amounts owed, length of credit history, new credit, and types of credit used.

• Fix errors on your credit report: This is a crucial step that can dramatically improve your score. If you find errors on any of your reports, dispute them immediately with the appropriate bureau. The first step is to inform the responsible credit bureau of the inaccurate information. Next, do the same with the creditor or information provider, and explain why you’re disputing the item.

• Pay down your debts and pay bills on time: Keeping your loan balances low can have a positive impact on your FICO score because your “amounts owed” category accounts for around 30 percent of your FICO score. If you can swing it, paying down your credit card debt balances to 30 percent of your total limit is an easy way to give your score a bump. Also, late payments and collections leave major blemishes on your credit report; paying your bills on time and avoiding late payment is the only way to keep a positive payment history. In addition to bankruptcy, foreclosure and judgments, collections and habitual late payments are the worst things to see on a credit report.

Undeniably, it’s important to go into the mortgage process with the best potential credit position. Just make sure to give yourself ample time to find and correct credit report errors. What’s more, doing this clean-up in advance will also speed up the mortgage process.

If you have questions about how to read your credit report, whether you might be eligible for a mortgage or any financial products or services, please contact us. We’re here to help!

Thinking about moving to Stratford?

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by Paul Mulligan

If you are looking to purchase a home in Stratford, CT, you would not be alone! This gem of a town is continually growing in population with 51,384 residents and 19,276 households, according to the Town of Stratford. So how do you go about finding affordable mortgages in Stratford, CT so you can start your Stratford life today? Here’s what you need to know:

• The median cost of a house is $250,000 in Stratford, CT, according to the aforementioned report. To determine a mortgage amount that will fit comfortably within your budget, take a look at your income, recurring monthly debts, and the percentage of a down payment that you can make on your purchase. One of our friendly bankers can help you calculate a payment that should be affordable for you.

• Set a realistic target date for purchasing your next home. Living the American Dream is possible, but it doesn’t come without laying the groundwork for a savings and budgeting plan. As you begin your quest for mortgages in Stratford, CT, take a look at your current financial standing to determine when you are ready to make your purchase a reality. If you can’t financially make it work until six months from now, that’s OK—just start saving today.

• Determine what type of mortgage you will need. For instance, are you looking for a fixed-rate home loan, which means you pay the same interest rate for the life of the loan and steadfast payments each month? Or do you want an adjustable-rate mortgage that comes with a changing interest rate over the life of the loan? We can help you determine which mortgage loan program might work best for you.

You can be moments away from securing your home mortgage; you just have to make sure to do your research first. For more on securing mortgages in Stratford, CT, click here. At Milford Bank, we are always a phone call away and ready to help you live the American Dream today.

The Federal Reserve 101: Here’s What You Need to Know About Our Central Bank

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by Jorge Santiago

To increase the ease with which commerce is conducted and to control inflation, countries need a strong banking system. After all, there has to be some force working to ensure a country remains fiscally sound. America’s finances are governed by the Federal Reserve, the country’s central banking system. The Federal Reserve Act was signed into law in 1913 by President Woodrow Wilson, largely in response to the stock market panic of 1907, in which the New York Stock Exchange lost nearly half of its value within a year.

The central bank was initially charged with ensuring maximum employment and keeping inflation and interest rates in check, but its role has expanded over the ensuing century. Charged with managing the stability in the American economy, the Fed manages the country’s monetary policy and regulates other banking institutions as well.
Just as we deposit our paychecks at our banks, so too do our banks deposit their money with the Fed. But the central banking institution also requires that banks have a certain percentage of their deposits on hand at all times.

Generally speaking, to increase the flow of money and credit, the Fed buys assets with America’s fiat currency: the dollar. These assets are usually treasury securities purchased from banks. To pay for those securities, the Fed will credit the bank’s reserve the cost of those securities. Banks then have to keep a percentage of those deposits while lending the excess amounts to stimulate the economy. In theory, the Fed could purchase any amount of securities because it creates money.

When the Fed wants to decrease the flow of money and credit, it sells these securities. In such a scenario, the Fed reduces the banks’ accounts. Banks then have less money to lend, which likely increases interest rates and thwarts spending.

The establishment of the Fed wasn’t America’s first attempt at forming a central bank. At the behest of Alexander Hamilton, then secretary of the treasury, Congress established the First Bank of the United States in 1791. Then a country made up of farmers and merchants, most Americans were against the idea of a central bank. After its charter ran out 20 years later, Congress didn’t renew it.

Five years later, public sentiment shifted toward support of the bank. In 1816, the Second Bank of the United States was established. Populist Andrew Jackson was elected president in 1828 and vowed to defeat the bank. He was successful, as it wasn’t renewed following its 20-year charter either.

But it would still take another 77 years for today’s central bank to be established.

Today, the Federal Reserve is chaired by Janet Yellen, who is head of the Board of Governors, the banking system’s seven-member governing body. Each member of the board is appointed by the president and confirmed by the Senate to serve 14-year terms.

Headquartered in Washington, D.C., the central bank also consists of 12 regional reserve banks that are positioned in major cities around the country, the Federal Open Market Committee and other private banks and advisory councils. The federal government is the beneficiary of the Fed’s profit, less dividends paid to stakeholders. In 2012, $88.9 billion was deposited by the Fed in the Treasury.

Is It Time For You To Start Planning Your Retirement?

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by Pam Reiss

When should you start planning for retirement?

Assuming you want to stop working one day—and still be able to provide for your family and be comfortable financially—the answer to that question may be yesterday. But the good news is that it’s never too late to start planning for the future.

If you haven’t started preparing for your retirement, rest assured you’re not alone. Believe it or not, more than half of Americans haven’t calculated how much money they’ll need to live comfortably during their elder years. That’s according to the United States Department of Labor (DOL), which also asserts that 30 percent of workers in the private sector don’t participate in a retirement contribution plan, like a 401(k).

According to the Social Security Administration, the average monthly benefit for retired workers was $1,294 in December 2013. Does that sound like enough money to live on? If not, you’re going to need an additional source of revenue to live comfortably during your retirement, which is why you may want to start planning now. With that in mind, let’s look at three steps you can take to invest in your future:

First things first: Make a plan. As with any other goal in life, to be successful in your retirement, you should plan a course of investment. The DOL recommends that you first calculate your net worth, or your assets minus your debts.

Next, you’re going to want to determine your retirement goal. How much money do you anticipate needing to live comfortably each month? Try to figure out a ballpark age around when you might retire. You might be able to work a few years past the age of 65. Heck, you might even want to.

Then, think about how you’re going to invest your money. Do you feel more comfortable buying into a 401(k) plan, or would you rather open a Roth IRA and invest your after-tax money on your own? There are no wrong or right answers; choose what you think will work best for you.

Consider taking advantage of any available retirement plans. Many employers’ generously invest in their employees’ futures. If your company offers such a plan, it’s definitely something you would want to consider.

For example, let’s say your employer matches half of your 401(k) contribution, up to 6 percent. So when you put 6 percent of your salary in your retirement account, your employer tacks on an extra 3 percent. This money is essentially a 3-percent raise to your base salary.

Try not to think about this money. If you touch this money before your retirement, you may have to pay a substantial penalty.

It might be easier said than done, but when you’ve got an account that’s diversified enough, you should set it and forget it. Thanks to compounding interest,  it is possible you may see your $100 per month, for example, grow into quite the sum. If you contribute $100 a month into your 401(k) and it earns 8 percent, that money could grow into more than $150,000 over 30 years.

By not thinking about the money—and thinking about it more as a savings account you can’t access for quite some time—you won’t stress over it. And when you do decide to take a look at how your nest egg is coming along, there’s a good chance you’ll be surprised by the results.

For more information about investing for your retirement, please feel free to contact us.