Tips for Cutting Costs and Better Saving This Year

By Lynda Mason

The dawn of a new year is always exciting.  For one thing, it offers a fresh opportunity to break bad habits and think about new ways to make our own lives better.  Some people decide to eat healthier or visit the gym more often.  Others decide to spend more time with loved ones, or make an effort to contribute to the community.  But, if there’s one change we all can benefit from, it’s saving a little more.

Inflation, rising gas prices, and supply chain hold-ups are driving up costs across the board, making it harder for regular people to pay for everyday goods and services.  In fact, consumer prices are higher than they have been in 40 years.  Reducing spending and putting more into your savings can help balance these challenges, and can help you maintain financial stability in the coming months and years.

While certain spending is necessary, luckily, there are a number of simple solutions to help reduce expenses and build up your savings, without making major lifestyle changes or requiring significant effort.  Here are a few useful tips for cutting costs in 2022, ensuring your financial goals aren’t thrown off as a result of the current economic climate.

Monitor your subscriptions

Subscription services are incredibly popular, but there may be a few, or even several, you can cancel.  Whether it’s Netflix, Amazon Prime, Blue Apron, Spotify, or even magazines, there are subscription services for virtually every need.  Although many of these services are fairly affordable on their own, it’s easy to forget about how many subscriptions you have and how quickly they can add up in your monthly expenses.  Some people have so many subscriptions they forget about some of them altogether, leading them to waste money on services they don’t use.  Cancelling unused or rarely used subscriptions is one of the quickest ways to cut costs.  If you subscribe to multiple similar services, consider whether you actually use and need both or all of them.  Additionally, sharing services with family is a great way to reduce monthly costs.  Many services have individual and family plans that allow you to save on the overall expense.  Many also offer savings if you pay up-front for the year.  If you can afford that one-time larger payment, it’s a way to reduce your monthly spending even more.

Keep an eye out for deals

After two years of stale growth, many businesses are attempting to draw in new customers by offering specials and sales.  While mail has historically been a primary source for receiving coupons or promotional items, digital resources like social media and email have become more popular and many retailers have shifted to digital coupons.  It’s easy to disregard many advertising campaigns as nuisances but, there can be many great deals out there for products or services you purchase on a regular basis.  Be aware of promotions your favorite businesses are running; you may be able to find great deals to support your budget.

Free digital resources

Almost everyone has access to a smart phone or a computer, which means anyone can take advantage of a wide range of digital resources to make better financial decisions.  For instance, as gas prices rise, many people will go out of their way to find the lowest price when they need to fill up.  Apps like GasBuddy and Waze make it easy to determine which stations offer the lowest prices, without a fee.  In fact, app stores are flooded with price-checking resources to help you save on everyday goods.  Consider checking them out.   There are also digital savings apps, like Plinqit, which can help you stick to your saving goals.  The Milford Bank has partnered with Plinqit to make it simple.

Track Your Spending Habits

Cash used to be king, but digital payments are quickly becoming the norm.  They can also provide greater visibility into your spending habits (and debit/credit cards can provide a layer of purchase protection cash can’t).  Using your online banking account, you can consolidate your weekly and monthly purchases to analyze how much you’re spending and on what.   If you find you’re spending too much on certain items, you can consider cutting or reducing them from your budget to see how much can be added to your savings.  Analyzing your purchasing habits is a great way to make smarter spending decisions, and can keep you on the right path for financial stability.  There are also plenty of online tools for tracking your weekly or monthly spending.  You can also use a spreadsheet.  Regardless of how you do it, tracking you spending is a great step in setting and sticking to a reasonable budget that will help you save.

It’s common for people to make New Year’s resolutions, but incredibly rare for them to follow through for the entire year.  But nothing good comes easily and success requires work and dedication to see positive results.  Cutting unnecessary spending may seem easy, but it should be a priority.  Plus, once you’ve done it, you may be surprised at how little you miss those things you’ve cut out.  You’ll also be pleasantly surprised at how quickly small reductions in spending can add up.  Even if you think you’re comfortable with your monthly spending, saving more may help you fund larger expenses, like vacations, college tuition, home improvement projects, and more.  Regardless of what you are saving for, consider these tips to help make it a little easier.  And if you need advice, your local bank’s specialists are always happy to offer their advice.

Are You a Renter Looking to Become a Homeowner?

By Paul Mulligan, SVP, Retail Lending

Last year, while many businesses and industries suffered, the real estate market in Connecticut had a phenomenal year, with a 17% increase in home purchases.  The 38,641 single-family homes bought was the highest in the state in 15 years.  One factor certainly was the fact that the number of people moving into Connecticut in 2020 was more than double what the state enjoyed during 2019.

One of the byproducts of the trend was an increase in home prices, which also grew. As a result, many people may feel they are being priced out of the home market.  Renters, in particular, are feeling less confident that they will be able to buy homes.  Just over a third of current renters say they are “not very confident” or “not confident at all” in their ability to buy a home.  The majority say their lack of confidence comes from home prices being too high or an inability to afford a down payment.

But, that shouldn’t mean renters should stop thinking about buying a home.   There are many benefits to owning, including:

  • Freedom to renovate/decorate
  • Building equity
  • Potential tax benefits
  • Value could increase over time
  • Stability of ownership
  • Predictable monthly loan payment (with a fixed-rate mortgage)

There are also many variables to consider when buying a home; including location, size and type of home, features, and of course, cost.  If you’re ready to buy a home – or even if you’re just starting to consider it – one of the first things you may want to consider is your priorities?  That includes what are the must have, nice-to-have, and unnecessary features.  If you’re willing to add flexibility to your process, you should enjoy greater home selection opportunities.

In addition, your local community bank may be able to offer you better mortgage terms that may make it easier for you to get out of paying someone else for your living space and start building equity in your own home.  For instance, The Milford Bank offers highly competitive rates with no-cost lock-in, low down payment options, free prequalification to make your home shopping experience easier, decisions made locally by a bank with a long history of serving the local community, and mortgage professionals that focus on your individual needs as a local customer.

In addition, if you’re a renter looking for your first home, The Milford Bank offers a First-Time Homebuyer program within Milford, Stratford, West haven, and Orange; that includes a rate reduction from the standard rate, application fee refund on closing, and low down payment options. The Milford Bank also offers a special rate for single family dwelling purchases, regardless of location throughout the state of CT.

You may also want to consider current versus future plans.  When looking at homes and talking to your bank, consider how you might be able to expand a potential home in the future to meet additional needs or to add some of the nice-to-have features that might not be feasible initially.  You may even be able to use the equity you build in your home over the years to take out a home equity loan or line of credit to fund home improvement projects.  Alternatively, The Milford Bank offers a construction-to-permanent one closing loan option, which includes the option of a fixed rate and an interest only period of up to 12 months during the construction phase.

The bottom line is, if you are looking to buy a home – whether you’re tired of paying a monthly rent to a landlord or association or you simply want the freedom and convenience of owning your own home – don’t let your lack of confidence keep you from achieving your dream.  Talk to The Milford Bank’s local mortgage specialists, who can provide you with the information and assistance you need to make a truly informed decision to assist you in purchasing a home that fits your needs and budget.

Four Ways to Pay Off Your Student Debt Faster

By Celeste Lohrenz

Did you know that the average student loan payment is $393? That’s a major expense in and of itself — but as most borrowers know, the real cost of student debt is much higher than their monthly bill.

The burden of student debt can hold borrowers back from major life events and financial goals, including buying a home, opening a retirement fund, going back to school, and even getting married and starting a family. And because it takes the average borrower 20 years to pay it off, student debt can negatively impact borrowers for decades.

With so much at stake, you may find yourself wishing you could pick up the pace on your payoff. Luckily, The Milford Bank offers FutureFuel.io as a value-added service to help you manage and repay your student loan debt faster and smarter.

Here are four ways you can pay off your student debt faster with FutureFuel.io:

Make extra payments

It may sound like a no-brainer, but making extra payments can get you on the fast track to a student debt-free future in more ways than one. That’s because the lower your overall student loan balance, the less you’ll pay in interest over time. Depending on your specific situation, it may make sense to budget to pay more than your required minimum payment amount each month, or use any unexpected extra cash to give yourself a boost. If your workplace offers a student debt repayment employee benefit, taking advantage of their contribution can help you get ahead faster, too.

Tip: Auto-Crush from FutureFuel.io makes it easy to send one-time or monthly recurring payments to any or all of your student loans from one central dashboard.

Turn spare change from everyday purchases into student loan contributions

Pennies and dimes can add up to a big impact fast thanks to Round Up from FutureFuel.io. Simply connect your debit or credit card, then Round Up will go to work rounding your purchases up to the nearest dollar and stashing the spare change. At the end of the month, those funds will be sent as an extra student debt contribution.

Convert cash back rewards into student loan payments

Love online shopping? Take your purchases the extra mile by activating Giveback by FutureFuel.io. Giveback collects cash back rewards from hundreds of your favorite online merchants and sends them to your student loan debt.

Switch to an income-driven repayment plan

The Department of Education offers four different income-driven repayment (IDR) plans for federal student loans. While these won’t technically help you pay off your student debt faster, they can help you get rid of it faster. That’s because IDR plans forgive any remaining debt after a set period of time (20 or 25 years, depending on the plan), and can make your monthly payments more affordable in the meantime.

Tip: FutureFuel.io’s Reassess tool can help you check your eligibility for, compare, and apply for federal income-driven repayment plans in a matter of minutes.

What the Federal Student Loan Payment Freeze Extension Means For You

By Jorge Santiago

If you have federal student loans, you probably already know that emergency payment suspension has been extended to January 31, 2022.

Between recent student loan servicer shakeups, the Covid-19 surge, and 90 percent of affected borrowers saying they’re not prepared to resume payments, the decision to extend the payment freeze beyond September (as previously scheduled) comes as a relief for many borrowers.

But do you know how to use this additional extension to your advantage? Don’t just think of the extension as extra time without federal student loan payments — think of it as extra time to plan, to save, and to get ahead.

Here are some things you can do help put your best financial foot forward until federal student loan payments resume:

Get in touch with your student loan servicer

Contact your student loan servicer to confirm your payment due date, reconnect a payment method to auto-pay your bill, and learn about any new policy changes. If you’ve moved since March 2020, be sure to update your mailing address, too.

If your loans are serviced by FedLoan, Granite State, or Navient, be advised that these servicers have announced that they will transfer their student loans to other servicers before the end of the year. With that in mind, you may want to keep an extra watchful eye out for updates about the transfer in the event that you need to take any action with the new servicer.

Make sure you’re on the best path forward

Now is a great time to explore your eligibility for new federal repayment plans and forgiveness programs.

Switching to an income-driven repayment plan, for example, could lower your monthly payment and get you on track to have outstanding debt forgiven after a certain number of years. If you work for a non-profit, government, or public service organization, you may also qualify for Public Service Loan Forgiveness, which forgives remaining loans after ten years of qualifying payments.

Tip: FutureFuel.io’s Reassess tool can help you find, compare, and enroll in alternative repayment plans and forgiveness programs in minutes.

Consider making payments

It may sound counterintuitive, but for some borrowers, the suspension period is the perfect time to make student loan payments.

That’s because the interest rate for federal student loans is still 0%, so any payments you make during the freeze will apply directly to your principal — which can ultimately lead to paying off your student debt sooner.

Tip: FutureFuel.io makes it easy to set up monthly recurring or one-time student loan payments — of any amount — with Auto-Crush. If you want to make extra payments but want to keep your budget on track, use Giveback and Round Up to convert cash back rewards from online shopping and spare change from everyday purchases into student loan contributions.

Get ahead on other financial goals

The average monthly student loan payment is $393 — a major expense that often forces borrowers to delay other financial goals until their student debt is paid off. For example, did you know that more than half of non-homeowner borrowers say their student debt has delayed their ability to buy a home?

Without the expense of monthly student loan bills, now could be the perfect time to get ahead on other priorities like saving up for a down payment, making extra retirement fund contributions, opening an emergency savings account, or setting aside cash for a major purchase.

Learn how The Milford Bank can help

When it comes to student debt, you don’t have to go it alone. The Milford Bank has partnered with FutureFuel.io, the leading student debt repayment platform, to give customers the tools they need to help make managing their student loans easier than ever before. Visit milfordbank.com/other-services/future-fuel/ to learn more and activate your free account today.

Do You Plinqit?

By Celeste Lohrenz

We all know we should be saving money.  From the time we got our first summer jobs during high school, our parent’s almost certainly tried to convince us to put most of it in the bank.  Even though we know we should be saving, most of us probably didn’t do it as well then, and probably aren’t doing it as well as we should or would like to now.

Almost 60% of Americans have less than $6,000 saved (42% have less than $1,000).  Only 14% of people under 54 see retirement savings as a priority, even though we should be saving 10-17% of our income in order to retire at our current standard of living – that’s if we start saving at the age of 25.

Without a plan for saving consistently, it’s hard to cover any larger expenses, including emergencies, college tuition, weddings, a new home, vacation, and many other things.  It’s important to start saving early for all of these things so that when they happen, you’re prepared.

One of the best things you can do is automate your savings.  For your retirement account, you can have contributions deducted from your paycheck and deposited into your account.  For other saving needs, have you considered Plinqit?

Plinqit is a digital savings tool offered by The Milford Bank and HT Mobile Apps to make saving easier and more fun.  You simply set up your Plinqit account and define specific savings goals.  You can even set up five different goals, so you can track progress towards each individual target separately.  Your Plinqit account is connected to your checking account, so once the saving goal is set up, you don’t have to do anything other than watch it grow.

In addition, you can earn small bonuses by watching videos or reading articles designed to help increase your financial education, so you you’ll learn more about money while earning, too.  You can also earn bonuses by reaching your savings goals and referring others to use Plinqit.

Plinqit is free to use, and you can download a mobile app to your Apple or Android device to manage your account easily.

Most importantly, though, using an automated tool can help you save more effectively without having to remember to add to a separate account manually.  Once you set it up, it just happens and your vacation, emergency, or other savings will grow.

If you have questions about Plinqit, savings accounts, or any other financial needs, our banking experts are here to help.

Student Loans 101

by Jorge Santiago

College is expensive. In the 2020-2021 academic year, the average private college’s tuition and fees was $35,087; public colleges averaged $21,184 for out-of-state students and $9,687 for in-state students. Multiply that by at least four years, and the total cost of a degree is one very few students — or their families — can afford out-of-pocket.

That’s where student loans come in. Student loans create opportunities for students who might not otherwise be able to afford their education, which can in turn lead to more stable, gainful, and fulfilling employment.

But student loans are just that — loans that must eventually be paid back. If you’re one of the 47.9 million Americans carrying a combined $1.71 trillion in student debt, you probably already know that repayment can be a strain. And if you’re considering applying for college loans, you should understand your options before taking on student debt.

So let’s get back to the basics. Here are four questions everyone with student debt — or considering taking out student loans in the future — should know how to answer:

What types of student loans are available?

Types of federal student loans

As their name suggests, federal student loans are offered through the federal government via the Department of Education’s Office of Federal Student Aid (FSA). Three different types of federal student loans are available: Direct Subsidized, Direct Unsubsidized, and Direct PLUS.

  • Direct Subsidized Loans are available for undergraduate students with financial need (the difference between your school’s cost of attendance and your household’s expected contribution). Interest rates are fixed for life when the loan is first disbursed and are generally lower.
  • Direct Unsubsidized Loans are available for both undergraduate and graduate students, regardless of financial need. Interest rates are fixed for life when the loan is first disbursed and are generally higher.
  • Direct PLUS Loans are available to parents financing their child’s education, and to graduate or professional students funding their own education. The application process requires a credit check, but borrowers with low credit scores can still qualify if they have an endorser or can document extenuating circumstances. Interest rates are fixed for life when the loan is first disbursed and are generally the highest rate compared to other federal student loans.

Types of private student loans

Private student loans are offered through financial institutions like banks and credit unions. The terms of private student loans are controlled by the lender, so there are lots of different options available. Private loans often entail higher interest rates and stricter eligibility criteria, but they can be a helpful tool for borrowers who have already maxed out their federal aid.

 

How does student loan repayment work?

Federal student loan repayment

If you have federal Direct Unsubsidized or Direct Subsidized Loans, your loans will be in deferment while you’re still in school and for six months after you graduate or withdraw. After this grace period ends, you’ll be responsible for making monthly payments through your loan servicer (FSA will assign your servicer — a third-party company that manages student loan billing — after your first loan is disbursed).

Direct PLUS Loan borrowers can expect a very similar process, with the exception that you must request deferment through FSA or your student loan servicer. Otherwise, you’ll have to start making payments while you are or your child is still in school.

All federal student loan borrowers will have the opportunity to select a repayment plan when they first start making payments and adjust their repayment plan later on. There are eight different federal student loan repayment plans available, including income-driven repayment plans, which cap monthly payments to a manageable percentage of your discretionary income.

Private student loan repayment

Private student loan repayment varies based on your lender’s terms. Some require payments while you’re still in school or immediately after graduating, some manage repayment through a servicer or in-house, and repayment plans vary. If you’re considering private student loans, be sure you understand the lender’s repayment policies.

Can I get my student debt cancelled, paused, or forgiven?

If you have private student loans, your options for getting your loans cancelled, paused, or forgiven are limited.

But if you have federal student loans, it’s possible — provided you meet certain eligibility requirements.

You may be eligible to have your federal student loans partially or totally cancelled if:

  • Your school closed while you were a student or shortly after you withdrew or graduated
  • You develop a total and permanent disability
  • You were defrauded by your school
  • You declare bankruptcy

You may be eligible to have your student loans paused if you apply for and are granted temporary deferment. You might qualify for deferment if:

  • You’re enrolled in a graduate fellowship
  • You’re undergoing cancer treatment
  • You’re serving in the Peace Corps
  • You’re on active military duty
  • You’re receiving welfare assistance
  • You work full-time but earn 150% below the poverty line

You may be eligible to have your student loans forgiven through special forgiveness programs if:

  • You’re a teacher
  • You work at a nonprofit organization
  • You work for a federal, state, local, or tribal government agency
  • You’ve been on an income-driven repayment plan for at least 20-25 years

How can The Milford Bank help me manage my student loans?

When it comes to student debt, you don’t have to go it alone. The Milford Bank is excited to launch a new partnership to give our customers tools that make managing their student loans easier than ever before. Stay tuned for an announcement soon!

Financial Literacy: Teach Your Children to Save

One of the greatest gifts you can give your child is a financial education.  We all want our children to succeed in life, which means helping them become financially stable.  Once they reach college age and leave the comfort and safety of your home, a solid understanding of banking and financial best practices is critical to helping them avoid getting into debt at an early age.

More than three-quarters of adults live paycheck-to-paycheck, and 40% say they wouldn’t be able to cover a $400 emergency expense.  Looking towards the future, a third of Americans have no retirement savings, and almost a quarter have less than $10,000 saved for retirement.

Saving isn’t easy.  Neither is avoiding debt.  But it can be easier if children learn about banking and finance from an early age.  Currently, fewer than half of U.S. states require high school students to pass a personal finance course as a graduation requirement.  But, parents have to manage finances every month, which gives them an opportunity to teach their children good financial habits.

The American Bankers Association (ABA) understands that financial literacy is critical for children, and since 1997, the ABA Foundation has sponsored its Teach Children to Save program to promote financial literacy to millions of elementary and middle school students.

Today, April 22, is this year’s Teach Children to Save Day.  It’s a free national program that is designed to help young people develop savings habits at early ages and covers topics like saving, financial decision making, interest, banking careers, and more.  The goal of the program is to help children understand the value of saving and develop the knowledge, tools, and skills to make informed financial decisions throughout their lives.  The ABA has created a series of interactive resources for you and your children of all ages (including high schoolers and young adults) to help build their financial literacy.

The Milford Bank also supports financial literacy for children and offers its own Centsible Kids program designed to teach smart money habits to your kids.  The Centsible Kids program includes a free, kid-friendly mobile app – available for both iOS and Android devices – that encourages your children to become financially literate at an early age.  Key features of the Centsible Kids app include:

  • Games that teach financial knowledge and skills
  • Enabling kids to track spending, saving and giving goals
  • Foster positive family conversations around money
  • Allows safe tracking of money virtually without connecting to your actual bank accounts.

We know children pick up habits very quickly.  That means they will pick up good financial habits just as quickly as they will pick up bad ones.  So why not put them on a path to financial success early by helping them develop good savings and spending habits, encourage giving, and giving them a chance to practice their math skills in the process?

To learn more about the Centsible Kids program and app, contact any office of The Milford Bank.

When Should You Open a Savings Account for Your Child?

By Celeste Lohrenz

You’ve had your baby shower, the nursery is set up, the closet is full of onesies, and you’ve got what seems like a year’s supply of diapers and formula, which will actually only last you a month, and your baby is due any day.  The only thing you haven’t thought about is your baby’s long-term financial future.  But, maybe you should.  After all, it’s never too early to start planning by opening a baby savings account.

If you’re wondering when it’s a good idea to open an account for your child, the answer is it’s never too early.  Why?  There are several great reasons to start early, and as soon as your baby is born, you’ll have all the information you need to open an account.

Start small

There’s no question a baby will have a significant impact on your budget for more than two decades, so you may not have much to save.  You don’t have to put away a lot.  Compound interest works best the longer an account is open, so starting early is the key.  Even if you put away only $10 each week, the account will grow consistently.  By the time your child reaches legal adulthood, the account you started at birth could have $10,000 or more, depending on the actual rate of return.

Financial literacy

As your child grows, the savings account can become a teaching moment.  By teaching your child to save early – like setting aside a portion of allowances or birthday money – you’ll be providing invaluable financial education around saving, budgeting, interest, and balancing.  From an early age, your child will see the long-term benefit of regular contributions.  It will not only help them understand how and why to save, but also benefit them once they enter the workforce, when they can start contributing to their own retirement accounts. Financial literacy is important, and more than half of young adults say the most valuable course they wish they had been able to take in high school is money management.  So why not put your kid on the right track?

Automatic deposits

Since your child won’t be accessing the account for years to come, you have a long runway for building a great financial base.  At the same time, since you’re not withdrawing funds, it can be easy to forget to contribute to it regularly.  Consider setting up small automatic deposits into the account to ensure it grows consistently and, if you find you can spare more, you can always increase the deposits or add additional funds on a one-off basis.

Choosing the right account

There are many types of accounts with different interest rates and minimum balances.  Check with your local bank to see what options they offer.  Some have special programs for children savings accounts that are affordable for parents and geared towards building children’s financial literacy as they grow.

529 Plans

An alternative to a savings account that is specifically earmarked for education expenses, including college tuition, is a 592 plan.  At a time when student loans are at an all-time high, starting a college fund early can be a great way to at least partially fund your child’s education.  These plans come with the additional benefit of tax-free interest, as long as the funds are used to pay for education-related expenses.

Your child will most likely have a piggy bank at some point, and that’s a great way for them to save some spending money to buy a special toy or video game.  But for the longer term, and to really teach them about banking and the value of saving, a savings account it the smarter option.  In fact, as they accumulate cash in their piggy bank, you can even encourage them to deposit a portion into the savings account.

As parents, your goal is to set your children up for success.  Making sure they have a solid understanding of banking will benefit them for their entire lives, and starting a savings account early comes with a bonus of a potentially large savings account to help them get started on their own or to help pay for college tuition.

While it’s never too early, it’s also never too late to open an account for your child.  For more information on what your best options are, contact your local bank’s financial experts.

Setting Your High School Senior Up for Financial Success

By Tina Mason

Now that we’re in the second semester of the school year, the college applications have been submitted and high school seniors are waiting anxiously to receive a response.  Soon, they’ll take another step on the the path to their future and before you know it, parents will be be packing up cars to take them to college.

During the past four years, seniors have focused on school work and probably some extracurricular activities – sports, music, drama, or others – to prepare for the next stage of their life journeys.  Most likely, worrying about money hasn’t been a huge priority, which means you probably need to make it one now.  You don’t want to send your soon-to-be college freshman off to school without a solid financial understanding because, much like the college decision itself, understanding financial basics will have a long-term impact.

Here are a few things to keep in mind that you may want to talk about or do with your senior. (If you don’t have a senior, starting when they’re younger certainly doesn’t hurt.  If they’re old enough to have money, they’re old enough to understand banking.)

Savings and Checking Accounts

If you haven’t already opened savings or checking accounts in your child’s name, this is a good time to do it.  Your child will want access to funds and you want them to build financial awareness.  You can always add yourself to the account so you can stay involved with finances to whatever degree makes you comfortable.  Check with your local bank about rates, fees, and other benefits to determine which accounts are best for you.  That includes finding out about ATM fees.  Some banks charge high fees for using other ATMs, while others don’t.

Credit Cards

If you haven’t already, it’s also not a bad idea to open a credit card for your child to start building a credit history.  Make sure you explain how and when credit cards are to be used – and set very specific guidelines if you are paying the bills for now.  Regardless of who is managing payments, be sure to talk about how late and missed payments, balances, and other variables impact credit scores.  You may also want to warn them that college students tend to be heavily targeted with credit card offers claiming to offer unique or exclusive benefits.  Make sure they understand that, while credit cards can be valuable financial tools, they also carry risk if not managed properly, leading to debt.

Emergency Funds

While your child may not be financially independent, going off to college and living away from home does mean unexpected situations can arise.  This is a great time to help young adults understand the value of an emergency fund and you might even want to start one for them.  If they are working during school, adding just a few dollars from each paycheck, or they could dedicate a portion of birthday or holiday gifts to their funds.  It will help them learn at an early age that saving doesn’t have to be difficult, and they’ll have an emergency fund to fall back on if needed.

Budgeting

Budgeting and saving go hand in hand, so this is also a great time to make sure your children – even if they’re not yet heading off to college – about budgeting.  Most students have very limited sources of income.  The good thing is they also don’t have the same level of expenses they will have when they graduate and head off into the working world.  Teaching them to budget appropriately today will build a foundation for their financial stability in the future.

Privacy and Security

Your children have grown up in a digital world and cyber security is probably not a new topic for them.  As they enter the world of banking, it’s a good idea to highlight the need to keep all financial information secure and private.  They should never share their PINs or credit card numbers with anyone, for instance, even if they are doing it with the best of intentions, such as trying to help a friend in need.  There are many digital banking tools that make managing money convenient, but make sure you talk about appropriate password usage, two-factor authentication, which P2P apps are safe to use.

It’s never too early to start teaching children about banking and finances.  But, as you get ready to send yours off to college for the first time, they will be exposed to a new level of freedom.  Making sure they have a solid financial understanding is important and can help keep them from getting into risky financial situations and high debt.

If you have questions about which accounts are best suited for your children, contact your local bank’s staff for advice and information.

Why Mutual Banks Make Sense

By Jorge Santiago

Mutual banks have been around since the early 1800s.  There are currently about 470 in business across the country and nearly all of them are also classified by the FDIC as community banks.  They were initially created to provide savings opportunities to the working class, something they couldn’t easily get from commercial banks that focused on business customers.  Mutual banks offered individuals a safe place to deposit funds and earn interest, with a tradition of providing quality service to their customers.  Those values remain core to mutual banks today, which lead to several benefits that are passed on to customers.

Corporate Structure

The basic idea behind mutual banks is they are not controlled by stockholders or other direct owners.  Rather, their customers – the depositors that bank with them – are considered mutual owners.  As a result, mutual banks don’t make decisions based on shareholder interests, but focus on how they can deliver maximum value to their customers and support the communities they serve.

Customer Security

Nearly all mutual banks – like The Milford Bank – are insured by the FDIC, and on average, mutual banks have a Tier 1 capital ratio (an indicator of capital security) well above the minimum level and are considered “well capitalized” by the FDIC.  In addition, mutual banks are traditionally conservative when it comes to investments and spending, looking for safe opportunities and avoiding high-risk investments.  It’s one of the reasons mutual banks were almost the only banks that successfully navigated the Great Depression and why they continue to provide a safe banking option today.

Customer Service

Mutual banks have a longstanding reputation for quality service that stems from their focus on depositor value rather than corporate ownership.  Because customers are viewed as owners, serving their needs and delivering a high level of personalized service is their top priority – including a broad service portfolio, convenience, local access, and banking expertise.

Product Breadth

Today, mutual banks offer most of the same services private customers can get from larger commercial banks.  They are investing in digital banking technologies to make banking easier and more convenient, including tools to encourage saving.  They have knowledgeable local staff ready to provide valuable banking information and advice to help customers make responsible financial decisions.

Commitment to Community

Mutual banks are localized, which means they have a vested interest in their local communities.  Not only do their employees live and work in those communities, but so do their customers.  As a result, mutual banks tend to be very active in their communities.  Many offer special events in their towns – like The Milford Bank’s annual Shred & Recycle Days and the Milford Moves 5k – and regularly support local organizations and businesses through a number of initiatives.  Mutual banks espouse community values that reflect their dedication to their customers.  The Milford Bank, for instance, supports more than 100 local organizations throughout the year with not only financial support, but also time dedicated by its team to help these community groups.

When deciding where to put your money for safekeeping, you have options.  By nature, mutual banks can offer benefits that many larger corporate financial institutions cannot.  If you want to know exactly how you local mutual bank can support your banking needs, give them a call or go visit one of their offices for some firsthand detail.  Ultimately, the most important factor is that your money is safe and you have access to the services and expertise you need, when you need it.  As a client, that’s the commitment you’ll get from mutual banks.