A Friendly Reminder From The Milford Bank: Beware of the ‘Grandparent Scam’

By Bob Russo

The scam usually goes something like this: You receive a phone call from someone claiming to be your grandchild. Or perhaps the caller is claiming to be someone contacting you on your grandchild’s behalf— like a police officer, for example, who says he/she has just arrested your grandchild and is requesting bail money for his or her release.

No matter what story line the culprits employ in this “grandparent scam,” the call always ends up with the scammer asking for money.

Countless times, this scenario—in which a criminal takes advantage of a typical grandparent’s concern for a grandchild—is being perpetrated against senior citizens, and many of them are becoming victims. They choose to immediately wire the money, usually through Western Union, to anywhere in the world that the caller dictates. In other words, they’ll do whatever the caller tells them to do to help their grandchild.

Unfortunately, once money is wired internationally, it’s very hard—if not impossible—to get it back.

Earlier this year, two nurses in Ridgefield, Connecticut, prevented an elderly couple from wiring $2,800 to a scammer—a caller that pretended to be their grandson. In this iteration of the scam, the grandson was injured while on vacation in Colombia and needed money.

The caller also instructed the grandparents to not contact any other family members. Should a similar situation arise—with someone on the phone saying they’re your grandchild and asking for money—do call a member of your family immediately to corroborate what you’ve been told.

With a call like this from out of the blue, there’s a good chance something is amiss.

We understand that our customers are so much more than their savings and checking accounts with us. We hope to be your trusted advisor. So, from time to time, expect that we’ll provide updates on these kinds of scams to make sure you’re aware of them and to keep you from becoming a victim.

Survey Shows More Customers Opting to Bank at Branches and on Mobile Devices in 2014

by Celeste Lohrenz

How do you prefer to do your banking?

According to a recent survey by the American Bankers Association, most Americans (31 percent) prefer to do their banking online. Surprisingly, that represents an 8 percent decrease from 2013. Additionally, this year, more customers prefer doing their banking at a branch (21 percent) than they did last year (18 percent). Other banking preferences include:

  • ATMs – 14 percent (up from 11 percent)
  • Mobile – 10 percent (up from 8 percent)
  • Telephone – 7 percent (no change)
  • Mail – 6 percent (down from 7 percent)

We love it when our customers come in to one of our branches to say hello or conduct their banking business. Our staff is always excited to see friendly faces, engage in good conversation and help answer any questions our customers might have. As such, it’s encouraging to see that more people prefer to do their banking at brick-and-mortar locations this year than they did last year.

But we also understand that in today’s digital world, not everyone has time to drive to the bank for routine financial transactions. While it’s likely you’ve conducted some of your banking business online before, have you ever given mobile banking a try?

At The Milford Bank, we are proud to offer mobile banking options. With our mobile deposit tool, you are able to deposit money into your savings account, for example, no matter where you happen to be—so long as you have a mobile device handy. You can read more about our mobile deposit program here.

In addition to that, we’re pleased to offer Popmoney, a peer-to-peer payment service that lets you send money to friends, family and whoever else from your mobile device. This is perfect for sending your kids money at college or paying your brother back the couple hundred bucks you owe him. Interested in learning more about Popmoney? Stop by or call us. We’re here to help you find the financial services that work best for your needs.

What’s the Difference between a Debit Card, a Credit Card and an ATM Card?

Credit-ATM-Debit-Card

By Pam Reiss

How big is your wallet? It might be quite large due to the amount of plastic it holds.

Believe it or not, 78 percent of Americans carry $50 of cash or less on them at any given time. That’s because these days, virtually anything can be purchased with credit cards or debit cards. Should a consumer find him or herself in a pinch where a business doesn’t accept charge cards, that person could always find the nearest ATM and take out some cash.

But what is the difference between all of those kinds of cards anyway? Let’s take a look:

An ATM card is usually issued by your financial institution. The card allows you to take money from your savings account or checking account from an ATM, depending on which account it’s linked with. Generally speaking, you can use your ATM card to withdraw money from any ATM machine. But be careful: Some of those withdrawals will cost you. If an ATM machine is not part of your bank’s network, there’s a good chance you’re going to have to pay a fee to access your money. Because The Milford Bank is a member of the Allpoint ATM Network, our customers are able to withdraw money from one of 55,000 machines across the world with no fees. You can find more information about that here.

• A debit card—also known as a check card—is linked with your checking account and generally has a Visa or MasterCard logo on it. As such, you can use these kinds of cards anywhere credit cards are accepted. It’s important you realize that debit cards are not credit cards, as the money that they draw from is the money that is on deposit in your bank account. Because you’re using your own money to make purchases you don’t have to pay interest on the things you buy with your debit card. But it’s important that you remember to keep track of how much money you have in your account because it is possible to spend more money than you have in your accounts, causing you to overdraw your account. .

• A credit card allows you to purchase things with a lender—like American Express, Visa or MasterCard—fronting you the money. The lender charges the merchant a per-dollar percentage on each transaction. They will also charge you interest if you carry a balance on your account. . Depending on your credit history, your credit limit may vary. The better your history, generally speaking, the higher your limit.

Different kinds of cards are the preferred method of payment for different kinds of people. There are some people who will only buy things with cash. When you pay with cash, you know exactly how much of it you have in your wallet so you don’t risk spending more than you have.

Other people turn to debit cards because they don’t like having cash on their person in case they lose their wallet, for example. On top of that, you don’t have to worry about carrying a high balance—though you might have to worry about overdrawing your account if you’re not careful.

Because of the freedom and rewards that come with some credit cards, many people feel comfortable buying with them. It is important to try and pay your credit card balance in full each month, however, if you wish to avoid hefty interest rates.

What is your favorite banking card to use and why? Keep the conversation going in the comments section below!

What is the difference between the mortgage rate and APR?

By Paul Mulligan

You are eyeing a 15-year fixed mortgage rate of 3.125 percent. But next to the mortgage rate there is another number that says 3.17 percent annual percentage rate (APR).

So what’s the difference between the two numbers, and how does it affect you?

Your mortgage rate is the baseline interest that you can expect to pay every month if you qualify for the loan. Mortgage rates are offered in increments of eighths (for instance, a sequence would go 3 percent, 3.125 percent, 3.25 percent, 3.375 percent, etc.).

This number can vary depending on several different factors including the health of the housing market and your risk as a borrower. Your risk can include the amount of the loan you are requesting, your credit score, the purpose of the loan and the property type. Other factors could include whether the loan is full, limited or stated, as well as the loan-to-value ratio.

Your APR is what you will actually pay once you factor in all of your third-party and closing fees like loan origination fees, processing fees, underwriting and premiums. It could also contain mortgage “points,” which are percentages of the loan that the bank can request. Different rates will come with different points that you as a borrower could have to pay.

All of these fees are typically bundled into a single APR. Banks are required to disclose the APR on their loans so that consumers can compare apples to apples.
So what can you do to secure the best mortgage possible?

Finding the best mortgage rate could mean saving thousands of dollars in the long run. A good place to start is to look at your bank’s standard mortgage rates to get an idea of what to expect prior to scheduling a meeting. Also, spend some time comparing mortgage lender rates, which will let you find the best deals in the region where you are looking.

Still have questions about mortgage rates and terms? Ask us. We are here to help.

Protecting your finances following divorce

By Celeste Lohrenz

Separating from a spouse is not an easy time. Still, important decisions need to be made related to your finances.

Following a separation, you should figure out how to live on your own income. You also should learn about what is going to become of your retirement assets, what Social Security benefits you might be entitled to and whether you are properly insured.

During such time, it’s important that you make informed decisions relating to your finances. Consider the following tips:

  • First thing is first: You’re going to need to make sure your financial accounts are registered in your name. That may mean closing previously shared accounts and opening new accounts in your name alone. You may want to consider consulting a tax professional to understand your tax responsibilities to avoid any unanticipated surprises.
  • You always need to look at your credit score. The financial burden of divorce may have impacted your credit. Be sure to review your credit history and take measures to repair your credit, if necessary.Chances are you’ll have to figure out how to live on one income. Figure out which expenses you can’t avoid paying every month—like food, utilities, transportation and housing—and then determine how much discretionary spending you can afford on top of that.
  • Try to live within your means, as you don’t want to find yourself accumulating more debt.
  • It’s probably time to update your estate planning as well. Have your beneficiaries changed following a divorce? Have you designated legal guardians for your children? It is likely time to update your will, as well.
  • You should also review your retirement planning. Following a divorce, IRAs are often split via a one-time distribution without early withdrawal penalties. You need to make sure that you’re financially secure over the long haul, so you might want to consider making use of investment services to begin planning for your future.
  • You still may be entitled to Social Security benefits. Under the government assistance program, you may be entitled to half of your former spouse’s benefits, assuming those benefits are greater than what you’d be able to get through your own benefits.

Separating from a spouse is never an easy thing for a variety of reasons. But by being aware of various monetary considerations that result from such a separation, you can thus begin making better-informed financial decisions.

How to turn your hobby into a home business

By Bob Russo

If you had all the money in the world, what would you choose to do for work?

That’s the question we’re supposed to ask ourselves to identify what we’d prefer to do for a living. Maybe your response to that question indicates that you’d like to become a photographer, for example, or that you’d like to make jewelry. Identifying your dream job is surely encouraged; there’s a good chance, however, that you’re not quite ready to quit your job and pursue your hobby full time. Perhaps because you cannot afford to do so.

But there’s no reason why you shouldn’t at least consider whether the possibility exists that you could make money by turning your hobby into a home business. Sure, you can’t expect that such a business would take off overnight. But who knows? Maybe after a few years, you’ll actually be able to quit your proverbial day job and focus your efforts on making a living while doing something you love.

Before you make a decision, you must ask yourself an important question: Are people willing to pay for what I make?

Prior to launching a home business, you have to be sure that there’s a market for the items you make or the services you offer. Ask your friends how much they’d pay for an item you made, for example. If you are comfortable with their responses, it’s time to ask a stranger how much he or she would pay. Satisfied with that answer? It might be time to begin looking into starting a business on the side.

In order to establish your business, you need to be able to prove that you’re trying to make a profit. If you lose money year-after-year and aren’t turning a profit, the IRS could very well view your business as a hobby, and may limit your deductions as a result (consult your tax advisor for specific information).

Here are some tips to help establish your profit motive:

• Create a business plan that clearly defines the fact that you are indeed trying to make money.
• Run your business like a business. That is, keep records of all your expenses and all of your sales.
• Make decisions to increase profits. After all, the goal of a business is to make money, so make sure your actions work toward that goal.

Turning your hobby into a business might be a fun way for you to bring in some extra cash. After that, who knows? The sky could very well be the limit.

How do I calculate my net worth?

by Patty Gallagher

Do you know how much money you would amass if you paid off all of your debts and sold all of your assets?

That number is referred to as your net worth. While we would all like our net worth numbers to be near those of Warren Buffet ($65.1 billion) and Bill Gates ($79.1 billion), the truth is there is no “magic” number we for which we should strive. Rather, we should aim for a year-over-year improvement upon that number.

Believe it or not, calculating your net worth is relatively easy. Here’s how you can do it:

  1. You will first want to put together a list of all of your assets. This will include things like your checking and savings account balances, the value of your stocks and bond holdings, any property you might own and expensive items like cars, jewelry, boats and valuable art. You can include whatever else you want into that mix, but for all intents and purposes, that list should likely suffice. (In other words, you might not want to include your DVD collection or that old guitar into this calculation.)
  2. Now it is time to figure out how many liabilities you have. Liabilities include any debts you have incurred such as: student loans, mortgages, credit card balances and car loans. Gather all of those numbers in one place and add them up.
  3. Now it’s time to subtract your liabilities from your assets. That difference is your net worth. No matter what the number is—positive, negative or zero—you should simply focus on improving it every year.

Be aware, that it’s not that uncommon to have zero net worth , as some estimates indicate as many as half of the country has zero net worth, meaning their assets equal their debts.

You might even have a negative net worth. After all, you might have just bought a new house and have a large mortgage or may have just graduated college or graduate school and are still carrying hefty student loans. Neither of those scenarios are necessarily bad things. The good news is that improving your net worth doable. Every time you chisel away at your liabilities, your net worth goes up. Similarly, every time you pad your assets, your net worth increases.

Facts About Current American Net Worth

Every quarter, the Federal Reserve calculates the net worth of American households. Most recently, the banking institution pegged that number at $81.764 trillion—the highest it’s ever been. Following the first quarter of 2009, collective American net worth stood at $55.71 trillion, meaning the number has increased by almost 50 percent in just five short years.

There are roughly 115 million households in the United States, which means that on a per household basis, Americans have $301,000 in assets and are free and clear of debt, according to CNN. Of course, those at the top of the proverbial financial food chain skew those numbers. In fact, America’s median net worth is $45,000. So while the country ranks fourth in the world in terms of average net worth, it ranks 19th in the world in terms of median net worth.

Hidden Ways to Save Money Each Month

By Lynda Mason

Today’s difficult economic climate has affected many individual’s finances. And it certainly doesn’t help that the prices of everything—from gasoline (did you know gas costs consumers 5 percent more this year than last year at this time?!) to electricity to food—seem to be increasing.

At The Milford Bank, we understand the realities inherent in today’s economy. We also value each and every one of our customers and want nothing more than to see all of their savings accounts grow every month.

While we might not be able to control your rising expenses, we can offer some advice as to how you can save more money. In this ongoing series, we’ll highlight a few tips that we hope will help:

  • Shop your car insurance. We’ve all heard the commercials, but how many of us actually shop car insurance? The truth of the matter is that, with the chaos and rush of day-to-day life, we’d rather let our policies automatically renew simply because it’s easier. But there are so many insurance companies out there, and they all want your business. Who knows how much money you stand to save annually by switching insurers?
  • Consider who produces your electricity. More than a decade ago, Connecticut deregulated the electricity market, allowing small energy producers to send their electricity over infrastructure owned by the utility companies. Did you know that you’re able to shop around and choose who produces the electricity that powers your home? You may be able to find cheaper rates and switch providers at no cost. Be careful, however, to understand how long the less expensive rate applies, the frequency and amount of any rate increase and how long you are committed to buy from a new energy producer.
  • Cook more meals. Sure, going out is fun. It’s nice not to have to cook, and perhaps even more so not to have to clean. But let’s say you spend $50 every time you go out to dinner, and you go out twice a week—that adds up to a hefty $5,200 a year. You can certainly reduce that expense by cooking more meals at home. And there’s a good chance it will be healthier for you, too.

Just Married: What to do with your finances?

by Chaz Gaines

Congratulations on tying the knot!

You and your spouse might find yourselves fortunate enough to wonder what to do with your newfound resources.

In either case, do you say “I do” to merging your savings and checking accounts or do you keep it all separate?

Years ago, it might have seemed like a no-brainer for newlyweds to merge their accounts. But today, it’s much more likely that both spouses have their own sources of income prior to getting married.

Either way, the answer varies on a case-by-case basis.

When it comes to your finances, you’ve got three options:

  • Completely merged accounts. There is certainly a level of comfort that comes with combining your savings and checking accounts. Both you and your spouse will know the current state of your finances, and every bill—from utilities to mortgages to groceries—can be paid from the same account. It’s important to keep in mind, that each of you will be supporting the other’s purchases.
  • Partially merged accounts. Is keeping some of your finances separate and merging others the best of both worlds? Couples can consider sharing some of their money while keeping personal accounts to use as they choose. But you still have to consider how you are going to fund that shared account. For example, will the higher earner contribute more?
  • Completely separate accounts. For couples who have both achieved financial independence prior to marriage, keeping completely separate accounts might make the most sense. But keeping finances completely separate still requires you to consider how certain bills are going to be split, for example.

Money is an important aspect of life, but the level of its importance varies from person to person. At the end of the day, it is critical you remember that no matter which option you choose, you should talk openly about your finances. The more conversation that occurs, the more likely your financial objectives will be the same.

Hidden Ways to Save Money Each Month

By Lynn Viesti Berube

Today’s difficult economic climate has affected many individual’s finances. And it certainly doesn’t help that the prices of everything—from gasoline (did you know gas costs consumers 5 percent more this year than last year at this time?!) to electricity to food—seem to be increasing.

At The Milford Bank, we understand harsh realities inherent in today’s economy. We also value each and every one of our customers and want nothing more than to see all of their savings accounts grow every month.
While we might not be able to control your rising expenses, we can offer some advice as to how you can save more money. In this ongoing series, we’ll highlight a few tips that we hope will help:

• Shop your car insurance. We’ve all heard the commercials, but how many of us actually shop car insurance? The truth of the matter is that, with the chaos and rush of day-to-day life, we’d rather let our policies automatically renew simply because it’s easier. But there are so many insurance companies out there, and they all want your business. Who knows how much money you stand to save annually by switching insurers?

• Consider who produces your electricity. More than a decade ago, Connecticut deregulated the electricity market, allowing small energy producers to send their electricity over infrastructure owned by the utility companies. Did you know that you’re able to shop around and choose who produces the electricity that powers your home? It’s likely that you can find cheaper rates and switch providers at no cost.

• Cook more meals. Sure, going out is fun. It’s nice not to have to cook, and perhaps even more so not to have to clean. But let’s say you spend $50 every time you go out to dinner, and you go out twice a week—that adds up to a hefty $5,200 a year. You can certainly reduce that expense by cooking more meals at home. And there’s a good chance it will be healthier for you, too.