How To Work Smarter, Not Harder
Most people equate being productive with long hours at work drinking unlimited caffeine to maintain concentration and focus. This mentality actually leads to being less productive because of the sacrifice and dread this evokes. Being productive does not need to be such a challenging or time consuming dilemma if approached with the right mindset and plan. Following are some ideas and tips to maximize your time and productivity.
1. Tackle your toughest job first. Assess your list of tasks for the day and eliminate the one that will be most difficult, or most unpleasant to complete first. This will reduce time spent procrastinating to avoid the task as well as negativity throughout the day from dreading the task.
2. Avoid Multitasking. Depending on your position, it may be difficult to focus on only one task at a time, but focusing on several at once reduces productivity by up to 40%. In fact, splitting your focus between several tasks also impedes your memory, increases stress and greatly escalates mental fatigue.
3. Schedule Breaks Often. Although it may seem as if you are wasting valuable time, pausing all work related activity for a short time actually leads to greater productivity. A short break enhances concentration, creativity and memory. Working without breaks can result in difficulty making decisions, physical stress and mental exhaustion.
4. Plan a To-Do-List. Having a realistic game-plan for the day sets the tone for what needs to be prioritized, no matter what other distractions or tasks develop. Your list should be short and manageable. If it is too long or detailed it will be overwhelming and no longer seem a priority.
5. Use All of Your Time Efficiently. Time spent at the office does not need to be the only time used for productivity. Small increments of time gathered throughout the week can add up to significant amounts of work completed. Time during exercise, shopping, commutes, childrens’ sports practices, etc. can all be used to catch up on a podcast or e-mail, review a presentation or do some
6. Set Deadlines. Sometimes having a set end point is the challenge needed to complete a project. The deadline can even be in a couple hours and several times a day for different projects. Deadlines can be motivating when completed as they increase satisfaction.
7. Be Organized. A disorganized workspace usually leads to misplaced or lost information, which in turn, leads to wasted time and productivity. An organized desk space, including e-mails, allows the user to quickly pull the information needed at a moment’s notice, without delay.
8. Avoid Distractions. Everyone has different triggers to distract them but for most nowadays, social media is a main focus. In fact, the average American spends up to 25% of their workday on social media. Constant alerts and notifications continuously draw users to check for updates. While at work, disable app notifications and put your phone on silent mode to avoid being interrupted by the distraction of an update.
9. Get Your Sleep. Being sleep deprived decreases your ability to be productive and increases the likeliness of making mistakes. Sleeping seven to nine hours per night boosts mood, creativity and memory while reducing overall stress.
10. Exercise. Just as you need to take care of your mind to reach it’s full potential, you must also take care of your body. Regularly putting our body in motion improves attention span as well as learning potential and memory capability. In fact, science has proven that those who exercise regularly have greater volume in the parts of the brain that control memory and thinking.
To achieve maximum productivity, one would ideally be well rested, focused, motivated and alert. Since that cannot always be the case, using some or all of the tips explained would help keep you on track to accomplish more work in less time. As the wise saying states, “Productivity is not the number of hours you work, but the amount of work you put into those hours.”
Advantages and Disadvantages of being a Homeowner Versus a Renter in 2019
The United States is going into its 2nd official year as a renter dominated market. What does that mean? All across the country from the West coast to the East coast, more people are renting than owning their homes for the first time. This is due to a combination of several factors such as escalated home prices, less availability and increasing interest rates.
The scale of growth for renters over homeowners has shifted so dramatically that in 2018 the growth in renters was 23.7 million as opposed to the growth in homeowners at 700,000. This huge growth for renters over homeowners occurred in 97 of the 100 top cities in the United States.
The Chicago market has it’s own unique traits to consider when deciding how to best invest your money in a home purchase. While the city is afflicted by high taxes and limited inventory, Chicago’s economic growth over the past 5 years has been remarkable. The Chicago housing market is also overwhelmed with more underwater mortgages than any other city. Almost 250,000 houses, condos and apartments are worth less than their mortgages. Acquiring a foreclosure is also a realistic consideration for homeownership in the Chicago market.
The flip in the housing market favoring renters means there are several different types of factors to consider when weighing your options. Here are some considerations to take into account when making your decision to become a homeowner or renter.
- Typically, a home will increase in value and build equity as an investment for the future.
- A mortgage payment will be fixed and more stable than renting long term (based on a fixed rate mortgage).
- Interest and property taxes are a tax deduction.
- Homeownership brings a sense of pride and satisfaction.
- You will be more likely to create roots in your community.
- Purchasing a home is a long-term commitment.
- Financial responsibility of all maintenance for the home is yours.
- Owning a home makes it more difficult to leave when you choose to do so than renting.
- Mortgage payments are usually higher than rent payments.
- The purchase of a home requires a lot of upfront fees such as a down payment, closing costs and realtor commission.
- The value of your home may not increase for years.
- Renting is generally less expensive than home ownership. Rental payments usually include utilities.
- Rental contracts can be negotiated for periods of time that suit you, giving you the opportunity to move to a better option when your lease is completed.
- As a tenant, you are not physically or financially responsible for maintenance or repairs to the property. Anything that needs to be repaired or replaced is taken care of by the landlord.
- There is not a large upfront payment other than a security deposit to initiate a lease.
- There aren’t any tax advantages for renting.
- Your rent cost will most likely increase from year to year or at least over the course of time, unlike a fixed rate mortgage.
- You will not have a growth in equity or home value if you rent your home.
- You cannot truly claim a home as yours.
- A landlord can decide to sell at any time and you can be forced to move.
Homeownership is a rewarding experience but also a huge responsibility. Anyone considering it should have a stable income, a calculated budget and savings accounted for. Your lender will determine the amount you are able to spend on the purchase of a home based upon your credit score and on what terms. If your preferences lead you towards the option of renting, be sure to inform yourself regarding the building and landlord before signing a contract and confirm the terms and conditions you’ve both agreed upon.
Freelance Niche Grows To Mainstream Workforce
The number of freelance and self-employed workers is estimated to reach an all time high of over 50 million by the year 2020. As the fastest growing labor group in the United States, accounting for about one-third of the population, the traditional idea of an office cubicle is a notion of the past. Companies and organizations are realizing the benefits of contracting this type of alternative work source for all levels and various departments. The most concentrated areas currently employed by freelance workers are in Information Technology, Operations, Marketing and Research and Development.
Intermediate organizations such as Upwork and Fiverr have greatly facilitated and spurred the onset of this industry trend. These companies have answered the demand of this new industry by perfecting the niche of attracting high-level talent and vetting their qualifications and expertise. The result is a large selection of high quality candidates for business owners and larger corporations that is simple to navigate and efficient to use.
The average weekly hours logged by freelancers per week is currently averaging 1 billion and rising. This group is mainly the younger generation, which is cleverly using their skills to maximize their valuable hours to earn high wages.
The obvious appeal of freelancing is freedom. Choosing to complete assignments at locations of convenience and at times that revolve around your lifestyle are priceless. Not being restricted to the confines of an office, eliminating commutes and creating a schedule that does not include limited vacation days are other huge advantages. Freelancers are also able to control their workload, once established, therefore determining how which and how many employers to work for and their income potential. Over 30% of freelancers earn $75,000 or more, most likely due to the increased use of freelancers by larger corporations. In fact, up to 30% of Fortune 500 companies are relying on platforms such as Upwork to hire freelance workers for senior level positions. The use of this alternative work force has even led to hybrid positions that did not exist even ten years ago. Talents are being truly analyzed to create positions that will fully utilize the capabilities of the candidate rather then just fill standard positions. For instance, if a freelancer is hired to be a financial advisor but is also capable of motivational coaching, that may be a supplemental role implemented into their job. This is a great way for those with multiple talents and interests to utilize and explore their potential. This also maximizes their earning potential. Most freelancers claim they could never return to the restrictions of a traditional job after the independence of being self-employed.
The freelancing trend is also proving to be advantageous for the corporate world as well. Organizations are reaping the benefits of employing freelancers as part of their workforce. By doing so, they can reduce the size of the physical office space they require, thereby lowering overhead expenses, as well as the costs associated with some of the benefits provided to full time employees. Of course, incorporating freelancers requires a new office culture to be implemented. It must be easy for a freelancer to communicate and insert themselves into the existing office dynamic, promoting work efficiency and ease.
Overall, the freelancing movement will most likely continue to grow as more college graduates seek to maximize their skills while valuing their time and prioritizing life experiences over office time. In fact 46% of Generation Z, those born between 1995 and 2012 and therefore just beginning to graduate college in 2017, are entering the workforce as freelancers.
Accounts to Consider When Planning for the Future
When planning for retirement, there are several options to consider and the most effective way to save your money is paramount. Various types of accounts are available that earn interest and provide tax savings but many also stipulate limitations and disadvantages you should be aware of. Here is a breakdown of the most popular accounts and some unnoted accounts that might be worth considering.
401(k), 403(b), 457 – These plans are offered by employers and usually the easiest way for most to begin investing for retirement. Your contributions are automatically deducted from your paycheck, pre-tax, and if you are fortunate your employer will match a part, or all of it. The contribution limit for 2019 is $19,000, unless you are over age 50 in which case your limit is $25,000. Unfortunately, the average employee does not utilize about $1,336 per year of employer match contributions. Over the span of your career, this can result in a nearly $1 million loss of retirement savings.
SEP IRA – SEP stands for Simplified Employee Pension and is designed for those who are self-employed or small business owners. Up to 25% of your income or $56,000 can be contributed to the account per year, whichever amounts to less.
Simple IRA – Business owners with less than 100 employees can offer this tool for their companies. Many business owners feel that their budget is usually too tight and they are already overwhelmed with the responsibilities of their new business to consider retirement plans. However, the tax savings benefits are enormous and the long-term advantages are priceless.
This plan is not as difficult or expensive to implement as a standard 401 (k) plan. As an employer, a contribution match is required but it does not have to be equal to the employee contribution. Employees can contribute up to $13,000 in 2019 and there is a $3,000 catch-up contribution for those age 50 and older.
IRA – An Individual Retirement Account is for anyone that can contribute up to $6,000 ($7,000 for age 50 and over) per year and have their money increase, tax free while it remains in the account. Taxes are paid when money is withdrawn from the account.
Roth IRA – This IRA functions differently than the others. Contributions will be made post-tax, therefore you will not receive a tax advantage when you put money into the account. However, your money will still grow in the account tax-free and the advantage of this account is that your money will be withdrawn tax-free after you reach age 59.5. This type of account does not have a minimum required distribution so you will not be required to withdraw funds at age 70.5. To contribute to this account, a single person must earn less than $135,000 and if married and filing jointly you must earn less than $186,000.
HSA – A Health Savings Account is generally used for health and medical expenses, however, those with high deductible health insurance plans can use this account to save money, tax free. Contribution limits are $3,500 for an individual and $7,000 for a family. Those 55 and older can contribute an additional $1,000. The money can be used at any time for allowable expenses. Money not used rolls over for subsequent years. It can accumulate to be used later in life when medical costs are assumed to be higher and will remain tax-free. If the funds are withdrawn before age 65 for non-medical expenses, a 20% penalty will be incurred.
Cash Balance Pension Plan – This account was designed for those earning a high income and wanting a personal pension. Small business owners can implement this plan to reduce their tax liability if they combine it with a Profit Sharing 401 (k) Plan. As a business owner, you would have to contribute towards your employees’ plans as well. Of course, this account is only useful if you to save sizeable amounts of money which would be pre-tax. Before utilizing this account, it is beneficial to maximize the previous accounts described.
Non-Qualified Annuity – These types of plans are beneficial for those seeking guaranteed income that is not promised from a mutual fund or ETF. While they may seem enticing because of the guarantee, you must also consider that it comes at a high guaranteed cost in fees. Annuities are often advised by stock brokers who will benefit from their high commissions. However, there is hope. There are newly regulated Fiduciary Rule compliant annuities that will be fee-only. Ask to have your old policy reviewed to reduce your ownership cost, or if starting a new one, be sure to request a fee-only annuity. Again, this type of plan should be used once all of the other basic types have been utilized for maximum long-term advantage.
Should You Consider Starting A Business After Retirement?
The traditional idea of retirement has drastically changed from previous generations. Most who retired in the years between 1960 and 1970 were about age 65 and ceased working altogether, lived off of their pensions and looked forward to years of life without a boss. Today people retire at various ages, young and old, with plans to travel and increase relaxation, but many maintain ties in the industries they left, for good reason. Some have found that their career experience serves them well as advisors and consultants, allowing them flexible, highly paid hours on their terms. Others are getting a second wind by starting new businesses. This trend has actually grown in recent years. In fact, one-third of all small businesses in the United States are owned by 50 to 59 year olds, 17% by 60 to 69 year olds, and as much as 4% by 70 year olds and older.
There are several advantages to becoming a business owner after retirement.
The most obvious is additional income. Supplemental cash to cushion your retirement savings can help reduce the ways you might need to adjust your budget. There are so many productive uses for extra income that can benefit your retirement years such as paying down debt, avoiding the sale of investments to pay for expenses or paying for health insurance if under the age of 65.
Keeping your mind engaged after years of constant stimulation may seem like the last thing you want to do, but studies show an idle brain slows quicker than one that is active. A business would be ideal to keep your mind sharp. Keep in mind your new business can be completely different from the industry you retired from, perhaps even in a different location, so that you feel as if you’ve cut ties from the job you needed a break from. In fact, a new profession may be the key to keeping your brain young. Learning new skills, computer programs and meeting new people will boost your sense of self and stimulate your brain into high gear.
Starting a business at retirement age can be a good time to involve family. Since your time can be fully dedicated to the business, this can be a great opportunity to create both an income and purposeful interaction with your children. The ideal scenario of eventually having the business prosper and provide a financial opportunity to the next generation is a priceless asset to leave to your heirs.
Retaining your sense of value
Many fear retirement for fear of feeling useless. Years of accumulated knowledge and experience should never be left untapped. Using that wealth of information in some capacity is beneficial to your sense of self as well as those who are fortunate enough to receive it. Continuing a business of any type in which your expertise can be used for a profit after retirement will keep fear of inadequacy at bay.
Things to consider when deciding to start a business
How will you fund the start-up expenses of the business? Investors are a great option so as not to use your precious retirement savings. Overestimate start up costs so as not to risk debt or depletion of your savings.
Are you prepared to commit the amount of time necessary to this business to ensure it is a success? Launching any business is time consuming and stressful. Choose a business type that you are passionate about and the effort will be much more enjoyable.
What is your long-term plan for the business? Decide if your goals for the business are to reach a certain profit amount, or for a designated amount of time. This plan may evolve over time but having an initial business plan to refer to as challenges arise will help the decision making process as you move forward.
Solutions to Economic Trials Many Women Face Throughout Their Career
Consider the following statistic:
Women aged 35 and older in the United States earn, on average, only 74% to 80% of the earnings of their male counterparts.
This fact, along with many other factors that affect a woman’s career pursuit, take a negative toll on life long earning potential and retirement saving that can be attained.
Let’s review some of the most common situations women encounter that lead to career regression and possible solutions to resolve them.
The corporate world has made efforts to improve regarding gender inequality but there is still much work to be done in that arena as well as many other aspects of the work force. Many professions and trades today are still predominantly female or male. For example, jobs in childcare and education are typically filled by women. These types of jobs often pay less than other male-dominated trades such as electricians or plumbers. Most females do not consider many higher paying trades or professions due to the fact that they are predominantly male.
To avoid such stereotyping, it is crucial from childhood to implement a sense of confidence in young girls to aspire to any profession. Parents must remove the stigma limiting careers based upon a stereotypical bias. This concept should also be reinforced through their school and counselors.
Women are more likely to be underpaid for their professional contributions than men. Unfortunately, women are also most likely to undervalue themselves and therefore not ask for the raise or promotion they deserve. To avoid being taken advantage of, do your research. Ask a recruiter for a salary average. Keep notes of all the ways you add value to your team or company, financially or otherwise. Include ways you plan to do so in the future. Once you feel confident in all the ways you have proven you are worth the raise or promotion you are seeking, arrange a time with your manager. Present your value and reasons for your request ending with an invitation for his/her feedback. If you are denied, ask what areas you could improve upon or learn more about to earn your request. Also ask when you can revisit this topic again. Always keep in mind if the situation is truly not fair, you may need to consider changing jobs.
Women often stop working or reduce their working hours from full time to part time when they have a child. Financially, this is a time period with increased expenses but a decrease in income. As a result, unless you have a very detailed, accurate budget to which you adhere very strictly, debt can very easily accumulate. Planning ahead is one way to avoid this scenario. Looking over all of your bills and expenses to determine what may be avoided or reduced, as well and projecting the additional expenses that will be added once the newest member of the family arrives, will help avoid the unexpected onslaught of new costs.
Lowering cable bills, finding better rates for insurance and avoiding entertainment costs are just a few ways that can reduce expenses. Some women have transitioned to working from home rather than cutting hours completely to avoid a decrease in income.
Also consider that women who leave the work force for an extended period of time to raise children not only lose the income that would have been earned during that time frame, but also the salary increases, retirement savings and professional worth of the years absent. This total can amount to a great deal in the long term. If one were to decide to focus on motherhood, it should always be a consideration to remain knowledgeable and relevant by taking classes, maintaining certifications and/or maintaining relationships with professional colleagues. When the desire or need does arise for a woman to return to the work force, these steps will ensure that the transition will be easier and the financial aspect should not be below market value because of absence.
Tactics Used by Efficient Executives to Manage Their Overwhelming Email Inboxes
The constant ding of an incoming email is commonplace for most business people. The time it takes to read and reply to every e-mail received is not only impossible but unproductive for a busy entrepreneur. Here are some solutions discovered by some highly successful CEOs and business owners who have figured out how to stop the email madness.
Tamara Mellon - co-founder and Chief Creative Officer of luxury footwear brand Tamara Mellon, as well as co-founder of Jimmy Choo, recommends having a trusted second set of eyes to avoid missing anything important. She gives her assistant access to her inbox so she doesn’t have to worry about skimming e-mails in a hurry. She has also implemented an internal communication system within her company called Slack to avoid additional e-mails. Slack is a cloud base collaboration tool that allows users to separate messages, discussions and notifications by type, purpose, department or topic.
Joshua Harris – founder of Agency Growth Secrets, stresses the importance of eliminating junk mail. Unroll.Me is a great tool that lists everything to which you are subscribed and allows you to choose which you would like to unsubscribe from with one click. Follow that with a regular batch approach of archiving, deleting and responding. Lastly, he answers e-mail only once per day, requesting notification only for important e-mail for the rest of the day. This reduces anxiety and compulsive e-mail behavior.
Jason Capital – best selling author, high-income coach, online marketing expert and founder of High Status, suggests to not feel compelled to respond. His theory is, if it truly is urgent or important, the person will call or text. His e-mail box is so overwhelming it would be impossible to respond to everyone. The result? More time, more freedom, less guilt.
Patch Baker – founder and CEO of Mobius Media Solutions, refuses to read or reply to an e-mail longer than 3 lines. If it requires longer than 3 lines, he’d rather use the phone. He has a zero e-mail policy within his company. Instead they use Skype and Basecamp.
Andres Pira – real estate developer, author and CEO of Blue Horizon Developments and owner of 19 companies, Andres must trust and delegate. He includes his various management teams on his emails so they can reply on his behalf. He also used flags, categories, labels and shared folders to stay organized. He primarily uses instant messaging apps on his phone to stay organized. This avoids long threads and formal replies. It also eliminates the need to spend time on punctuation, salutations and signatures.
Keri Shull - founder of the Keri Shull Team which has sold over $2 Billion in real estate and co-founder of real estate coaching business HyperFast Agent. Keri’s advice is to learn to let go and trust that it will be okay. For several years, she refused to give anyone access to her e-mail, fearing lack of confidentiality and worry that she would no longer be on a personal, authentic level with her recipients. She finally realized she needed help when she couldn’t even enjoy a day of vacation without checking e-mail because it was so overwhelming. Since letting go she has experienced an incredible sense of freedom. To keep her personal touch, she has written scripts in her own words for her staff to use when replying on her behalf.
Unfortunately, not everyone can avoid e-mails altogether or have someone else respond for them. If that’s the case keep these guidelines in mind:
Does the email really require an e-mail response? Would a call be a better approach to eliminate further emails?
Avoid lengthy e-mails. Get straight to the point. Unnecessary e-mail writing and reading are a huge source of unproductivity.
Carefully consider the recipients of the e-mails you send. Many times “Reply All” is selected or executives and co-workers are CC-ed or FYI-ed. This doesn’t make it clear if an action is required by them or if they are only being made aware of the topic, which leads to many more e-mails. Most times, many of the people included do not need to be.
Bullet point is preferable over sentences. It makes it easier for most to grasp the info while reading through quickly.
Check spelling and punctuation! Keep in mind an e-mail can be forwarded easily and end up in anyone’s inbox. You don’t want to make a bad impression. The way you write does create an impression of you.
Excerpts regarding entrepreneurs from Money.com
Achieving Your Ideal Credit Score
The perfect credit score! Achieving 850 seems like an impossibility. Most people would be thrilled to have a score in the 800 range, even a score in the 700s is considered impressive. Following is an explanation of what your credit score objective should be based on your financial aspirations, as well as strategies to reach those goals.
A credit score can range from 300 to 850. That range is generally divided into the following categories:
Excellent Credit: 750 – 850
Good Credit: 700 - 749
Fair Credit: 650 - 699
Poor Credit: 600 - 649
Bad Credit: below 600
These category ranges differ based on how lenient a lender may be. For instance, some lenders may only approve loans for scores over 700, while others may consider scores as low as 600.
In any case, your credit score determines not only how likely you will be approved for loans and credit, but those with a higher credit score will be able to take advantage of a lower interest rate when they borrow. That means those with good or excellent credit will pay less interest over the course of a loan than those with bad credit. For example, a much higher rate on a 30-year mortgage could result in an additional $90,000 in interest paid over the course of the loan than a lower rate given to someone with excellent credit. This is the key reason to prioritize having a higher credit score.
Here are a few simple concepts to ensure your credit score will not only increase, but remain at a higher level. Use these habits as a guideline for your finances and your credit score will reward you for it.
Plan for a Rainy Day
Always consider what you earn when contemplating what you spend. Your margin of expenses should always be low enough that you have enough to put aside reserves. No matter how low your income is, never consider using all of it for expenses. In the event of an unexpected financial misfortune, you’ll have your reserves to continue payments on your debts. Missing a payment or making a late payment will decrease your credit score, but having a reserve will ensure that will never happen.
Don’t Borrow Money You Can’t Repay
Overextending your finances through credit card purchases is the single easiest way to fall into debt and ruin your credit score quickly. Any purchase made on a credit card should be made with the intent that it will be repaid within the same billing cycle to avoid interest, returning your balance to zero each month. The use of credit cards has increased with the added benefits of travel rewards, cash back bonuses and other incentives. However, most of those gifts are a fraction of the interest paid to the card if you are maintaining a balance. In addition, if your payment is late or not made, your credit score will be negatively affected.
Only Borrow Funds for Items That Do Not Depreciate in Value
Using credit does not decrease your credit score. As long as you are continuously current with your payments, your credit score will actually strengthen from your responsible financial history. However, borrowing for a vacation, car or intangibles, such as cosmetic surgery that you cannot afford, will not help your financial record. When you borrow money to purchase something that increases in value, you increase your wealth. If instead, the value of the item you borrowed for decreases, you become poorer. If you find yourself in a situation where you cannot repay the debt, your credit score will plummet.
10 Types of Insurance That Can Be Avoided
Most people can safely avoid certain types of insurance without risking regret or consequence. The claims related to these policies are typically covered by more common types of policies or very unlikely. There is, of course, always the possibility that one large claim could justify buying any of the insurance policies below. However, it would be highly recommended to instead invest what you would pay in premiums in an emergency investment fund to use as you wish.
1. Rental Car Insurance
Those that have full insurance coverage on their vehicles do not need rental car coverage because it transfers over to their rented vehicle. Your credit card may also offer coverage if used to pay for the rental car.
2. Children’s Life Insurance
Life insurance policies for children provide the beneficiary with a benefit if the child passes away. When the child reaches adulthood, the policy can be converted to an adult policy without the need for a medical interview or examination. The need for this coverage is minimal unless the child has a substantial financial worth that sustains a family or group of individuals. A young adult usually qualifies for a life insurance policy easily and the odds that a child will die at a young age are minor.
Guide for Graduates to Reduce Student Loan Payments
According to expert JPMorgan Chairman and CEO, Jamie Dimon, "The impact of student debt is now affecting mortgage credit and household formation – a $1,000 increase in student debt reduces subsequent home ownership rates by 1.8%. Recent research shows that the burdens of student debt are now starting to affect the economy.”
$1.5 Trillion dollars in student debt is owed by about 44 million people in the United States. This is the second highest consumer debt category in the U.S. after mortgages, followed by credit cards and auto. The average student will graduate college with about $25,000 in student debt. Considering the average salary for a college graduate is approximately $50,000, the cost of being independent, with the added long-term burden of a student loan payment, can hinder several types of economic decisions. For instance, many may choose to rent an apartment rather than buy a house or delay pursuing further education to avoid added debt.
There are several strategies recommended to optimize student loan payments, which can result in a faster payoff and reduced total debt paid. Here are a few methods:
- Whenever possible, add more than the minimum payment
Most graduates are excited at the prospect of leaving their dormitory, earning a salary and upgrading their lifestyle. However, the longer you can continue to live the sparse routine of a college student and use your salary to pay off your college loans, the more grateful you will be in the long run. Sharing an apartment with roommates and having inexpensive meals most nights of the week will allow you to can use your income to pay down a significant portion of your debt within the first couple years after graduating. Use any additional funds you save to add to your student loan payments. Do not escalate your lifestyle immediately upon obtaining a job, without regard to your looming debt.
- If possible, find a side or weekend job to afford additional payments towards your student loan.
Making more than one payment per month saves you interest and speeds up your payoff date by months or years. You might opt to have an automatic payment made with every paycheck. Payments can also be made randomly throughout the month. However you choose to make repeated payments, the key is to have more than one payment per month applied to your student debt.
- Consolidate or refinance your student loan
Refinancing may not be ideal for everyone, but many have been able to shorten their payment periods and save money by refinancing. There are issues to be aware of, however. For instance, if you are refinancing federal loans with a private lender, you may no longer benefit from federally funded advantages such as income based repayment, deferment and forbearance. Also, confirm you’ll be receiving a superior interest rate.
- Make a lump sum payment whenever possible
While it may be hard to give away a large sum of money to your dreaded student loan, doing so will not only reduce the length of your student payments but the amount of interest you are accruing, therefore reducing the amount of money you will owe overall. This will also shorten the amount of time you will need to sacrifice to pay off your debt. Therefore, if you receive a bonus, raise or cash gift, consider applying it toward your student debt. This will be a short-term sacrifice for a long-term gain.
- Accepting a job that offers loan forgiveness
While it may not be typical, negotiating student loan repayment with a job acceptance is becoming more popular with current graduates searching for jobs. Also, some government positions offer up to $10,000 per year of student debt forgiveness through the federal government’s Student Loan Repayment Program. If you are in the nursing field, research the Nursing Education Loan Repayment Program for repayment options and teachers can access assistance through Teach for America. Graduates who are employed in the public sector can also look for debt relief help through the Public Service Loan Forgiveness Program.
Points to Consider When Choosing a Financial Advisor
We are continuously bombarded with ads and tips from brokerage firms, financial advisors and franchised firms wanting to manage our hard earned money. All of them promise significant returns and personalized customer service. With so many offering the same service, what is the best way to go about choosing someone to manage our life savings? This choice is not only worrisome but personal. Every person’s needs and goals for both their current and future situation varies, so the right advisor for your neighbor may not be ideal for you. Before selecting an advisor, take the time to meet with a few different ones to ask questions and express your needs before making a decision. Consider the following when making your choice.
Trust your instincts. We don’t choose our doctors because of television ads and their rankings aren’t determined by the number of procedures they’ve done, but rather by the success of their patient outcomes. However, financial firms use exactly this type of info when trying to appeal to potential consumers in their advertising. At the base of their business concept, they are not focused on the outcomes, so much as the quantity of people they can manage. It is all about the number of sales.
Most of these large banks and brokerages are often publicly traded organizations whose advisors have sales goals, sales incentives and sales managers. This means their paychecks are based on volume. If this approach doesn’t interest you, ask for local references or research local, independent advisors in your community. Check their backgrounds, confirm how the advisor is compensated and ask for references. Knowing this information should lead to a greater feeling of trust, which is essential to the success of the relationship.
In any situation where money is involved, critical listening skills are imperative. You must feel as though your advisor is not only experienced enough to guide you in the right direction, but also empathic to your needs and goals. He/She must be receptive to your concerns, fears or lack of. Some investors might be too high risk while others might not be maximizing their potential. A good advisor will know what types of questions to ask to give you the tools to make decisions based on realistic expectations.
For example, if you tell an advisor that you’re a high-risk investor, the advisor could ask you to imagine losing a quarter of your investment tomorrow, playing out how that would affect your financial situation. Your reaction would help the advisor gain a greater comprehension of your risk tolerance. Asking these types of deeper questions also creates a better understanding between you and your advisor, which may help avoid emotional reactions or disappointments in the future.
Many advisors have designations and letters after their name. Some are more prestigious and more difficult to earn than others. For example, the Chartered Financial Analyst (CFA®) designation and the Certified Financial Planner® (CFP) certifications, take several years to complete and include a proctored, multi-hour exam.
Other programs are self-study through online programs with finals that can be completed at home. Therefore, although an advisor may have a lot of letters after their name, it may not mean much. It’s best to research each designation, which organization sponsors it and how it was earned.
Education and Experience
FINRA requires all financial advisors to pass a Series 7 licensing exam, which is necessary in order to sell securities. Shockingly, there is not an academic requirement prior to the exam. For this reason, it is especially important to ask about education and relevant work history when interviewing for an advisor. Their previous professional experience will contribute greatly to how they manage your portfolio.
For example, an advisor who was a banker may have experience with real estate or the challenges business owners face; someone who served as a trust officer may be well versed in inter-generational wealth transfer; and an advisor who previously trained as a family therapist may understand family dynamics and the role of money in relationships.
The method by which advisors are compensated has become a point of contention. Due to this, a ‘fiduciary standard’ offers some level of protection for clients who prefer a level fee-compensation option rather than the commission-based type. Legally, a fiduciary must follow a higher standard of care than a traditional broker. Level fees help the consumer know that the advisor is not biased toward a given product or service based on the amount of commission they will receive. For a variety of reasons the industry is moving more toward this fee-based standard.
Choosing the correct financial advisor for yourself is incredibly important to ensure the success of your financial future.
Having a high level of trust, a strong sense of communication, confidence that he is knowledgeable and capable and a clear understanding of how he/she or is compensated are all essential pieces of information for a client. By knowing all of this information, you will be able to develop a true relationship with your chosen advisor, and therefore able to obtain a better result from the relationship.
Prized Skill of an Admirable Leader
Hopefully you’ve had the good fortune of interacting with a leader you highly respect and admire. If so, you have probably studied them, pinpointing the qualities that you find so inspiring. Leaders and those in superior positions that command respect in such a positive way usually have a common skill. They are able to connect with others, making them feel understood and on common ground. The ability to develop such a connection, no matter how superior the position, level or experience of the leader is fundamental in gaining the respect of your colleagues.
This is not an easy skill, nor is it unintentional.
In a workplace environment, having such a relationship is beneficial in so many respects. By developing a mutual connection between parties, communication is facilitated, therefore strengthening relationships and building trust. This entire scenario allows the leader to guide the team easily in the direction of his choice, creating little resistance inspiring motivation.
The ability to connect is an asset to a leader at any level. Here’s a few key points to focus on to achieve that goal.
1. Focus on listening
While your advice as a leader may be appreciated, if you want to connect with someone, give them the opportunity to be heard. You can’t connect with another person if you’re having a one sided conversation. This will also help you to understand things from the other person’s perspective. Keep in mind that people will naturally side with leaders who make them feel heard and understood.
2. Be authentic
As a leader, it’s difficult to admit failure but admitting you are human is what will allow people to relate to you most. Most accomplished leaders like to present a successful persona: they are always dressed meticulously, punctual, prepared and ready for anything that may be presented to them. In reality, everyone has personal struggles, bad hair days and nervous moments. By allowing others to see that you are vulnerable and experience the same emotions and hardships as those you manage, will allow employees to connect to you as a leader rather than be intimidated by the image of someone they cannot measure up to.
3. Value people over products
Ultimately, having employees that are content and satisfied will lead to success much more so over focusing on the bottom line. Companies that primarily focus on product and sales numbers typically do not have happy employees or much success. If the employees selling your products are not happy they will not sell it well. A positive culture and true connections established in a company will determine the ultimate success of a company.
One of the most fundamental ways to connect with another person is to have empathy. Empathy is the capacity to understand or feel what another person is experiencing. This requires a leader to not only be aware of the situations of his employees, but to also identify issues and be sensitive to their emotions and needs. Having empathy makes a person a better communicator because it helps in the process of relaying information in a way that best relates to the other person.
Demonstrating empathy is difficult for a leader in a superior position. It requires vulnerability and sensitivity, which many fear can be mistaken for weakness. This is a fine line, which few great leaders can balance. Only a truly confident leader can retain their sense of authority through admiration and respect yet maintain their connections through empathy and authenticity. Those that can achieve this happy medium are the inspirational leaders that effortlessly command respect, admiration and motivation.
Are you Financially Well?
Hopefully you’ve heard of the most recent craze called Financial Wellness. This concept encompasses learning how to successfully manage your finances. Money plays a critical role in our lives and not having enough of it impacts health, as well as academic and professional performance.
Just to clarify, financial wellness is not based upon income, net worth or credit scores. Instead, it is your mindset regarding your financial situation. So how do you determine if you are financially well?
Here are some factors to consider:
Do your finances cause you stress? This is a primary point to note. If paying bills causes you anxiety and you have debt that feels insurmountable, you cannot be financially well. The feelings derived from a negative financial situation will affect you physically and lead to consequences in other aspects of your life.
Are you spending beyond your budget? Financial wellness depends upon respect for your personal financial situation, no matter how minimal. Spending above your means will lead to debt. The subsequent stress and anxiety will definitely result in being unwell in many aspects of your life, both physically and mentally. The ideal is to live under budget, so as to not only reduce stress but also contribute to savings.
While most people have the best intentions to adhere to a budget, it’s often the small and unexpected expenses that are not factored in that add up to accumulate debt. Setting aside time each month to account for monthly expenses in detail will force you to realize how quickly overspending can occur. Larger, infrequent expenses such as vacations can be divided by 12 and factored into the monthly budget so all expenses are accounted for. After adding up your actual expenses, your total debits will ideally be lower than your income, allowing a remainder for savings. If not, your budget should be adjusted to result in this scenario.
Do you have an emergency savings account? A huge stress reliever is the knowledge that should the unexpected occur, you have an emergency fund. The purpose of such a fund is to keep you from incurring debt or losing your home in case you were unemployed or had a large unexpected expense.
Now that you know your monthly budget, an emergency fund should contain enough to pay for 3 to 6 months of your expenses. The longer you do not have to worry about your mortgage, car payments, groceries, utility bills, etc., in an emergency, the more peace of mind and financial wellness you will have. To start an emergency fund, simply open a bank account or money market fund and add to it as often as possible, even if it is in small increments. Do not choose to allocate your emergency funds in an account that could diminish in value or be restricted from withdrawals when you need it. It may take an extended period of time but your stress will reduce with every addition to the emergency fund.
Do you have debt and do you understand it? Debt is the biggest inhibitor of financial wellness. It not only causes stress but it is a huge hurdle towards reaching personal financial goals. There are two types of debt. High interest debt, which should be avoided at all costs, such as personal loans and credit cards. This type of debt negatively impacts your credit score and can be difficult to pay down.
Low interest debt, such as most mortgages and even student loans can be considered advantageous if the purpose of their expense can result in income or appreciate in value over time. This type of debt usually has a low interest rate, allowing it to be more easily paid off.
Are your future financial goals realistic? Most people have the best intentions; they just don’t know how to plan to make those intentions a reality. Small savings now can add up to large gains later. The future seems far off when you’re young but waiting too long to save for retirement is the worst mistake most people make. By the time you’ve started wondering if you’ll have enough time to save enough, it’s probably too late. Its never too early to begin saving for retirement. Educate yourself on the best options for long-term savings, take advantage of tax savings plans and benefit from plans contributed to by employers. Prioritize savings for retirement over education, seeing as that there’s no financial aid for retirement.
If your financial wellness is not at a level at which you are satisfied, reach out to a qualified professional who can help you put together a plan to improve your financial wellness. Even those that are financially well could benefit from a thorough review to be sure there are not any missing links in you financial net, such as insurance coverage, credit score, estate planning, taxes and your investment portfolio.
Insight and Expectations of Generation Z
As we continue to adapt to the tech savvy ways of the Millennial generation, we should already be anticipating the modern ways of Generation Z. Born between 1995 and 2010, Gen Z, also called “iGen”, “the Selfie Generation” and “Post Millennials,”came into the world after the internet already existed. They learned how to operate tablets and smart phones as toddlers and they’ve never experienced a world where people were disconnected from technology.
The social expectations for Generation Z are much higher than any generation in the past. For this age group it is commonplace to be continuously connected to the world through photos, texts and messaging. Due to social media, Gen Z is exposed to and expected to have an opinion regarding mature topics such as political views, violence, racism and sexual orientation at a much younger age than in the past. There is enormous pressure to be successful academically, socially, athletically, financially, etc. all while maintaining a positive social media image.
A Gen Z is typically individualistic, which is not surprising given the fact they are used to having everything customized for them. Most apps and technology are personalized in detail. So many everyday items used today are user-friendly and adapted to individual needs. For someone from Gen Z, who has never known otherwise, it is an expectation.
Once a member of Gen Z reaches adulthood, they are very ambitious and have a fast paced career mindset. Their two greatest aspirations after college are to be financially stable and to find their dream job. Gen Z members highly value stability. Many Gen Zer’s witnessed their parents’ net worth cut in half during the recession. They prize a college education and when polled, 80% believed a Bachelor’s degree is necessary to attain a job that pays well enough to live comfortably. Once starting a career, they hit the ground running and are expecting to work hard and reach that first promotion within 6 months to a year of starting their first job. If they do not reach that goal, they are prepared to look elsewhere.
Up to 60% of Generation Z members in the workforce aspire to become managers. However, they are very selective in the types of managers they would like to work for. Most say they would leave a position, even one they enjoyed, to avoid a manager that instilled fear in his subordinates. Instead, they highly value a manager that will not only dictate, but also coach, therefore teaching them managerial skills they will be able to apply in the future.
While in high school, the majority of Gen Z students typically plan to start their own business rather than work for a company. By the time they graduate college, the number of students that maintain their entrepreneurial drive settles to about 60%. Those that choose to be part of the corporate world do so assuming they will be working for several companies over the course of time.
If given the choice, they would prioritize a position that would allow them a good balance of work and life rather than a position they preferred, knowing that it would disrupt their personal life greatly. As an employee, a Generation Z is highly appreciative of communication and feedback. Workplace environments that allow employee and management to collaborate in this way will receive the highest potential from a Gen Z employee.
Generation Z has already shown that they are smart with their money. By the age of 13, many begin savings accounts and research financial planning. Most avoid college debt by living at home, going to a state school and working while going through college.. Typically, Gen Zer’s have a savings account, checking account, health insurance and credit card. They have not only learned lessons from living through the recession in their childhood, but from observing the Millennial Generation.
2019 Tax Reform Considerations
The month of March is eventful, bringing many fun filled annual events such as Spring Break, parades and March Madness. However it also marks everyone’s least favorite chore of the year: Filing your taxes.
The Impressive YWCA Metropolitan Chicago
Child Care Provider Training & Assistance
Resources & Community Outreach
Business & Entrepreneurship Services
Financial Management Services
Technology Access & Training
Young Parents Program
Medical and Legal Advocacy
Rape Crisis Hotline
Sexual Assault Education
Training and Sexual Violence Counseling
Women’s Health Exchange
The YWCA has grown to employ more than 120 employees who service 9 locations throughout the Chicagoland area and are trained to help more than 200,000 women, children and families every year through the use of the effective programs offered. As the website states: “... while our services are broad and varied, they are linked by a common thread, our dedication to promoting racial justice and personal empowerment across everything we do.”
YWCA Loop Center
1 North LaSalle Street, Suite 1150
Chicago, Illinois 60602
YWCA RISE Center
820 W. Jackson Blvd., Ste. 550
Chicago, IL 60607
YWCA Cynthia B. Lafuente Center
2754 W. Fullerton Ave.
Chicago, IL 60647
YWCA Julian Grace Innovation and Technology Institute
3517 W Arthington
Chicago, IL 60624
YWCA Laura Parks and Mildred Francis Center
6600 S. Cottage Grove Ave.
Chicago, IL 60637
YWCA Englewood Satellite
641 W. 63rd, Lower Level #34-35
Chicago, Illinois 60621
YWCA Patterson and McDaniel Family Center
2055 West Army Trail Road, Suite 140
Addison, IL 60101
Project HELP DuPage
1815 W. Diehl Road, Suite 900
YWCA South Suburban Center
320 West 202nd Street
Chicago Heights, Illinois 60411
Visit ywcachicago.org to learn more about the YWCA.
Strategies To Run an Efficient Small Business
Owning a small business is demanding, to say the least. This is especially true during the start-up phase when the proprietor is wearing most, if not all the hats, while also juggling the financials, inventory and ultimately trying to maintain the highest quality of customer service. It can be a very overwhelming scenario that is overcome only by the resolve of the extreme passion that inspired the business. Here are some innovative ways to make running a small business more efficient and therefore, more manageable.
What Do Successful Female Entrepreneurs Have in Common? Check Out These Traits That Lead To Success
Remarkable Women in Business Who Have Created a Legacy
Throughout history, women have pioneered new ideas, movements and business platforms. Today, more than ever, they continue to contribute to the progressive and rapid paced world of business. Some of these women may not be well known, but their efforts have revamped societal norms. All of these women faced enormous hurdles, and because of their perseverance, were able to carve paths that led to more opportunities for women today.
The following women have not only made their own personal mark in history, but have also created a legacy to inspire others.
Eliza Lucas Pinckney
Eliza Lucas was the United State’s first significant agriculturalist, recognized for introducing blue indigo dye to North America. At the age of only 16, Pinckney took control of her father’s 3 plantations near Charles Town, South Carolina, after her mother’s death and her father’s deployment to the West Indies. She realized the textile industry’s need for new dyes and created a high-quality blue indigo in 1739. Her creation was successful: Indigo immediately ranked second to rice as a South Carolina export crop. She also produced flax, hemp, silk and figs. She became the first woman inducted into the South Carolina Business Hall of Fame in 1989.
Pinkham's Vegetable Compound became one of the best-known patented medicines of the 19th century thanks to Lydia’s focus on women’s health. In 1875, Lydia Estes Pinkham of Lynn, Massachusetts, turned her herbal home remedies into a profitable enterprise by tailoring her products toward women and educating them about health issues. During an era when women’s health was rarely discussed, Pinkham was regarded as an advocate for women by the medical community. Pinkham's products can still be found at some drugstores.
Madam C.J. Walker
As the daughter of former slaves and an orphan by the age of 7, the 20th century's most successful female entrepreneur started her company from nothing. She invented a product called Madam Walker's Wonderful Hair Grower in 1905. Walker created the scalp conditioning and healing formula because she had lost most of her hair due to an ailment. She ultimately began exporting her product to Central America and the Caribbean. In 1917, Walker achieved a milestone by holding one of the first national conventions of businesswomen in Philadelphia. Walker's hardships and determination molded a standard for women entrepreneurs. She opened doors for the African-American hair-care and cosmetics industry, as well as the African-American community. At the time of her death, her net worth was approximately $600,000, (about $8 million currently) making her the wealthiest African American female in all of America.
Dame Anita Roddick
Roddick was inspired by her world travels to engage in environmental activism. Her new way of living led Roddick to open the doors of The Body Shop in Brighton, England in 1976. Roddick’s pledge from day one of founding the company was always the quest of social and environmental change. Since it’s founding, The Body Shop has established community trade relationships in more than 20 countries. Recently, it launched a campaign with MTV to raise HIV and AIDS awareness for those under age 25.
Blakely spent years struggling to have her innovative idea of women’s shape-wear accepted and dealt with repeated rejection in business before discovering unbelievable success. Her brand, Spanx, is now famous worldwide and Sara’s net worth far exceeds any aspirations she might have ever had for herself, about $1.25 billion.
Sara’s dream from a young age, before she even thought of Spanx, was to be able to help other women. A portion of Spanx’s profits is set aside to fund the Sara Blakely Foundation, which has donated millions to charities throughout the world to empower underserved women and girls. The foundation’s mission is to support women and help them SOAR through education, entrepreneurship and the arts. Sara Blakeley is also the first self-made billionaire to sign the Bill and Melinda Gates’ and Warren Buffets’ Giving Pledge, promising to give at least half her worth to charity.
Women in Business Overcoming Challenges
All those in the business world tackle obstacles, but women have distinctive challenges due to their gender. This is especially true of women in the work force with children, because of the obvious demands on their time, energy and resources. However, even with these challenges, statistics prove that women are starting businesses at more than twice the rate of male-majority-owned businesses.
Following are some of the ways women can overcome these challenges.
The term “Millennials”, describes the generation born between the early 1980s and the year 2000. These are the decades in which technology had the fastest, most influential growth and impact throughout history. Because of this, the 80 million people that pertain to this generation are naturally inclined to adapt well to the huge shift in our society towards technology. Having grown up at a time where all of these changes were taking place, millennials are very technologically savvy. They are, therefore, huge assets not only in the workplace, but also in the way the world will operate in many ways in the future.
Society as a whole has already been undisputedly altered by the creativity and inventiveness of millennials. Some of today’s largest companies in the world were not only founded by millennials, but have influenced people worldwide. Their ideas and products have changed how individuals, enterprises and societies communicate, share information, market themselves and choose their lifestyles. It is truly revolutionary and will most likely be noted as one the most influential generations.
Some well known millennials to lead this movement are:
Mark Zuckerburg – Creator of social media site Facebook
David Karp – Creator of blogging platform Tumblr
Ben Silbermann and Evan Sharp – Creators of content sharing site Pinterest
Brian Chesky – Founder of lodging rental site Airbnb
Daniel Ek - founder of music streaming service Spotify
Evan Spiegel and Bobby Murphy - The founders of photo sharing app Snapchat
Millennials continue to make waves in the workplace, no matter which industry they choose. However they are showing a tendency to prefer certain sectors over others. Technology is obviously the favorite, but close seconds are finance and healthcare. Positions in nursing, business analysis, accounting and corporate finance are attracting millennials. Industries that seem to be losing interest for millennials are retail, government, education, nonprofit and media.
Aside from these established sectors, millennials are known for recognizing a need or demand and for creating a niche sector that becomes highly successful. These startups have all taken off successfully from their launch, most to sales in the range of millions of dollars. For instance, recognizing the preference of organic food and the increase in food allergies and intolerance, 21-year-old Daniel Katz founded his startup, No Cow in the year 2015, a company tailored to create products such as protein bars, cookies and nut butters that are sugar-free and dairy-free.
Another in demand niche dominated by millennials is influencer marketing. A technology driven group highly engaged by social media would easily be able to create and invent software and products to engage consumers. Nathan Barry for instance, created his company called ConvertKit, an email-marketing tool for professional creators, designed to increase their consumers across various social media outlets.
Siqi Mou founded consultation company, HelloAva, which works with individuals to determine a personalized skin-care regimen based on information provided by the client and a photo. The idea came to her during her college years after failed attempts and wasted money trying to find the right skin care products to suit her. HelloAva provides a consultant to research through the numerous third party skin care lines available to find the perfect products to suit each client’s needs. The company profits a percentage of the products purchased by the client.
Another revolutionary way of providing a service was initiated by the founding of DotCom Therapy, a company based online that provides various therapies such as speech, occupational and mental health services. The concept has been well received, as millions of dollars in services have been booked worldwide.
Millennials will continue to revolutionize the ways we shop, communicate, are entertained, travel and so much more. Many more inspiring startups are surely in process, about to change society in ways we haven’t even thought of. It will be interesting to see what 2019 unveils!
The Positive Effects of Shopping Local
As the holiday season approaches, consider the positive impact of spending your dollars locally. By shopping at small businesses where you reside, you are helping to build and improve your own community and in turn, the local economy. By doing so, residents are also creating opportunities for entrepreneurs and generating job growth for themselves, their families and their neighbors.
Economic Effects – When you purchase locally, a significantly larger percentage of the dollars spent remain within the community than when purchases are made from a national retailer. This directly results in new business growth, increased profits for existing businesses and added jobs. In addition, a higher percentage of tax dollars are funneled back into your community. This will result in better funded schools, safer and well maintained communities and ultimately higher property values.
Decreased Pollution – The exchange of goods and products from around the world is a huge factor in global pollution. The United States transports an estimated $2.2 trillion worth of products from more than 150 countries per year, which produces approximately 25% of our global C02 emissions. Studies have shown that if there was even a 10% change by consumers to locally sourced meats/produce, it would result in the annual reduction of 310,000 gallons of fuel as well as reduced CO2 production.
Community Relationships – Local businesses are more likely to share common interests with you, and are therefore more likely to contribute towards local causes and the betterment of your neighborhood. Stores owners and shop keepers are likely to offer a much more personalized service than you would receive elsewhere. You definitely won't get that level of service from most online or national chain retailers.
A community Farmers’ market is an ideal place to shop locally for many reasons.
Nutrition - Farmers’ market produce is usually fresher than the goods sold at supermarkets. This is because the food has been grown locally, and hasn’t spent days or weeks in transport. The fresher fruits and vegetables are, the better they taste and the more nutrients they retain.
Less Pollution. Locally grown food doesn’t have to be shipped long distances, which reduces its carbon footprint.
Direct Source. Buying directly from a farmer is the best way to know exactly where and how your food was grown. At a farmers’ market, the farmer can answer questions that a clerk at a supermarket can’t.
Banking Locally - Another way to keep your money in your community is to keep your money at a local community bank. Banking locally offers several benefits:
Reduced Costs. Many locally owned banks offer the same services as the big national banks, such as credit cards and online bill payment. However, their rates and fees are typically quite a bit better. Furthermore, according to Bankrate, community banks have lower fees than “mega-banks,” and their rates on car loans are better.
Personalized Service. Community banks offer more personal service because they serve a much smaller area. At a community bank, you can expect to be recognized by staff and they will always take time to answer your questions.
Supporting the Local Economy. Community banks make most of their money from loans to local people and businesses. More than 60% of all loans to small businesses come from small to mid-sized banks and credit unions. Because small local banks make most of their loans within the community, they have an interest in helping that community prosper.
When you invest money in your local economy, you’re not just helping local business owners, you’re also benefiting from your own investment. You’re making your town a better place to live, with higher property values, a thriving economy and a tightly knit community. And the more local businesses prosper, the more new ones will open – making it even easier to continue shopping locally in the future.
7 Ways to Enjoy the Holidays Without Financial Anxiety
Holiday spending obligations can cause stress and ruin your holiday spirit. Try this advice to glide through the season without worrying about your bank account.
The Budget. When budgeting for the holidays most people immediately think of all the gifts they’ll be purchasing. While that may be the bulk of their added expenses during the holidays, there are several other extra costs that need to be accounted for. For instance, food. There is a lot more grocery shopping and eating out around the holidays. People like to have holiday dinners, ordering out, cooking extravagant food for guests or going out to dinner. Another added expense is decorations. Most can’t resist buying a few extra lights, a few extra decorations, or even hiring someone to string lights around their home. Other miscellaneous holiday expenses to consider when creating a holiday budget: holiday clothing, holiday pictures, holiday cards and postage, wrapping paper & bows, holiday baking supplies, holiday travel expenses, pet boarding, hosting and holiday entertainment.
Credit score. While this might be an unusual way to start your holiday shopping, knowing your credit score (FICO is the one most used by lenders) may be a deciding factor in how you make your purchases. You may be less likely to charge purchases or open new credit lines while holiday shopping to maintain or improve your score.
Be smart with your holiday gift list. If your list is short you can be a bit more generous. If you are extending your list to a large number of people, reduce the gift amount significantly. Your gift total should not exceed your budget total. If you feel like you’ll have a hard time sticking to your budget, bring only the exact amount of cash you have budgeted for your purchases when you shop so you won’t have a choice.
Set a per-person shopping budget. Aside from having an overall holiday budget, you should also have a per person gift budget. Once you've reached the total dollar amount, stop shopping for that person, period.
Clip those coupons. There are so many options to ensure a discount, it’s ridiculous not to use them. Paper coupons are sent in the mail, apps can be downloaded such as Retail Me Not and Snip Snap, and websites such as Ebates which will give you money back just for clicking on their website first before going to whatever site you decide to shop on. If all else fails and you find yourself at a checkout in store or online, you can even just google a promo code for that store. Taking an extra couple seconds can add up to big savings.
Do some research before you make a purchase. Online shoppers have the convenience of searching several stores within minutes for the best price for the same item. Using online shopping carts is also a good way to avoid impulse purchases because you can keep items in your cart to think about before purchasing. Additionally, many websites will email coupons or discounts to those who have left a full cart on their site, making a future purchase less expensive.
To avoid impulse purchases for offline shoppers, try going to the stores without bringing your credit cards or cash. Just browse to see what’s out there and to get ideas. Both methods also help consumers avoid the scenario in which they buy a gift only to find something else they like better later.
Shop with a list. Try to have a list of every person you are buying for and a gift idea for each person. This will avoid wasted time roaming store to store searching for ideas and money wasted on an item that could have been purchased at a less expensive price elsewhere. Having a list will also avoid stress and overspending.
Have a plan for credit usage. While most people budget for the holidays, they also factor credit into their plan. Credit is usually used to supplement holiday spending and paid off in the months after the holidays. These options are perfectly reasonable as long as the amount of credit used isn’t more than can be repaid.
Scrap the store-bought gifts. One of the best ways to avoid being financially stressed during the holidays is to avoid overspending. This approach has benefits beyond simply saving money. Time together and memories created is the most valuable gift of all. Families can engage in crafts, baking, games, music and so many other wonderful activities that create enjoyment without the hefty price tag. Giving experiences can be just as joyful.
The holidays are approaching, but hopefully these positive tips will avoid a financially stressful situation.
The Federal Trade Commission's Guide To Developing A Cybersecurity Plan For Your Business
Businesses of all sizes can be adversely affected by a data breach. Such an attack can also negatively impact consumers, therefore it is vital to be knowledgeable and proactive to avoid such occurrences. Here is a concise summary of invaluable information provided by the Federal Trade Commission. Please follow up on their website www.ftc.gov to learn more about what can be done to protect your business and your consumers.
Most companies keep sensitive personal information in their files and databases -- names, Social Security numbers, credit card or other account data -- that identifies customers or employees. This information is used to fill orders, meet payroll or perform other business functions. However, if sensitive data falls into the wrong hands, it can lead to fraud or identity theft. Given the cost of a security breach -- losing your customers' trust and perhaps even defending yourself against a lawsuit -- safeguarding personal information is just plain good business.
Some businesses may have the expertise in-house to implement an appropriate plan. Others may find it helpful to hire a contractor. Regardless of the business size, a security plan is needed.
A sound data security plan is built on 5 key principles:
1. TAKE STOCK. Know what personal data is in your files and on your computers.
2. SCALE DOWN. Keep only what you need for your business.
3. LOCK IT. Protect the information that you keep.
4. PITCH IT. Properly dispose of what you no longer need.
5. PLAN AHEAD. Create a plan to respond to security incidents.
1. TAKE STOCK. KNOW WHAT PERSONAL INFORMATION YOU HAVE IN YOUR FILES AND ON YOUR COMPUTERS.
- Inventory all computers, laptops, mobile devices, flash drives, disks, home computers, digital copiers and other equipment to determine where your company stores sensitive data. Also inventory the information by type and location.
- Track personal information through your business' sales department, information technology staff, human resources office, accounting personnel and outside service providers. Get a complete picture of:
1. Who sends sensitive personal information to your business.
2. How your business receives personal information.
3. What kind of information you collect at each entry point.
4. Where you keep the information you collect at each entry point.
5. Who has -- or could have -- access to the information.
2. SCALE DOWN. KEEP ONLY WHAT YOU NEED FOR YOUR BUSINESS.
- Use Social Security numbers only for required and lawful purposes -- like reporting employee taxes.
- If your company develops a mobile app, access only essential data.
- Don't keep customer credit card information unless you have a business need for it.
- Scale down access to data. Follow the "principle of least privilege." That means each employee should have access only to those resources needed to do their particular job.
3. LOCK IT. PROTECT THE INFORMATION THAT YOU KEEP.
- Store paper documents or files, as well as thumb drives and backups containing personally identifiable information in a locked room or file cabinet. Limit access to employees with a legitimate business need and control who has a key.
General Network Security
- Identify the computers or servers where sensitive personal information is stored and all connections to those computers.
- Encrypt sensitive information sent to third parties over public networks (like the internet), and encrypt sensitive information that is stored on your computer network, laptops, or portable storage devices used by your employees. Encrypt email transmissions within your business.
- Run up-to-date anti-malware programs on individual computers and servers on your network.
- Restrict employees' ability to download unauthorized software.
- When you receive or transmit credit card information or other sensitive financial data, use Transport Layer Security (TLS) encryption or another secure connection that protects the information in transit.
- Require that employees use "strong" passwords. Use multi-factor authentication.
- Adopt a company policy that prohibits employees from sharing or displaying their passwords.
- Use password-activated screen savers to lock employee computers after a period of inactivity.
- Lock out users who don't enter the correct password within a designated number of log-on attempts.
- Immediately change vendor-supplied default passwords.
- Caution employees against transmitting sensitive personally identifying data via email.
- Restrict laptops to those employees who need them to perform their jobs.
- Assess whether sensitive information really needs to be stored on a laptop. If not, delete it with a "wiping" program.
- Require employees to store laptops in a secure place, especially when on the road.
- If a laptop contains sensitive data, encrypt it and configure it so users can't download any software of change the security settings without approval from your IT specialists.
- Use a firewall and "border" firewall to protect your computer from hacker attacks while it is connected to a network, especially the internet.
Wireless and Remote Access
- Limit who can use a wireless connection to access your computer network.
- Encrypt the information you send over your wireless network, so that nearby attackers can't eavesdrop on these communications. Look for a wireless router that has Wi-Fi Protected Access 2 (WPA2) capability and devices that support WPA2.
- Use encryption if you allow remote access to your computer network by employees or by service providers, such as companies that troubleshoot and update software you use to process credit card purchases. Implement multi-factor authentication for access to your network.
- Buy or lease a copier with data security features such as encryption and overwriting.
- To detect network breaches, consider using an intrusion detection system.
- Monitor incoming and outgoing traffic. Keep an eye out for activity from new users, multiple log-in attempts from unknown users or computers, and higher-than-average traffic at unusual times of the day. Watch for unexpectedly large amounts of data being transmitted from your system to an unknown user.
- Check references or do background checks before hiring employees.
- Require every employee to sign an agreement following company confidentiality and security standards.
- Create a "culture of security" by implementing a regular schedule of employee training.
- Teach employees about the dangers of phone and spear fishing.
- Require employees to notify you immediately if there is a potential security breach.
- Impose disciplinary measures for security policy violations.
Security Practices of Contractors and Service Providers
- Before you outsource any of your business functions, investigate the company's data security practices and compare their standards to yours. If possible, visit their facilities.
- Insist that your service providers notify you of any security incidents they experience, even if the incidents may not have led to an actual compromise of your data.
4. PITCH IT. PROPERLY DISPOSE OF WHAT YOU NO LONGER NEED.
- Effectively dispose of paper records by shredding, burning, or pulverizing them before discarding, even for employees that work from home.
- When disposing of old computers and portable storage devices, use software for securely erasing data, usually called wipe utility programs.
- If you use consumer credit reports for a business purpose, you may be subject to the FTC's Disposal Rule. For more information, see Disposing of Consumer Report Information? Rule Tells How."
5. PLAN AHEAD. CREATE A PLAN FOR RESPONDING TO SECURITY INCIDENTS.
- Have a plan in place to respond to security incidents.
- If a computer is compromised, disconnect it immediately from your network.
- Investigate security incidents immediately and take steps to close off existing vulnerabilities or threats to personal information.
- Consider whom to notify in the event of an incident, both inside and outside your organization.
Teaching Youth the Value of Money
In an ever-changing world of new currencies, technology and more credit options than ever before, one factor remains constant: financial management skills are extremely important!
Considering how essential knowledge of the economy and managing personal finances is, it’s surprising that it is so briefly touched upon in school. For this reason, it is not shocking that students owe 1.1 billion in student loan debt and Americans overall owe almost 9 times that amount in credit card debt.
Therefore, it’s up to us as parents to educate our children. We must prepare them to be good managers of their financial resources.
How do parents go about this task? Keep in mind that as with most things, parents are the prime example for their children. By being sensible with your finances you are providing the best example for your child.
Remaining within your budget, and perhaps pointing out an item you want but don’t buy because it would be over budget, would be another great way to demonstrate mindful spending. Money should be discussed with your children openly. Children should understand the hard work that goes into earning the money that is deposited into the bank account that funds the swipe of the credit card they witness. Appreciation for what they have should be acknowledged. The difference between what they need and what they simply want is another important concept that should be addressed.
The value of money can and should be taught beginning at a very young age. It is much easier to establish a good habit early than to try to change a bad habit later on.
Here are a few age appropriate lessons that can be implemented at various age levels.
Preschool - Saving to Buy Something You Want
Delaying indulgence is an important concept. Kids at this age need to learn that if they really want something, they should wait and save to buy it.
Before walking into a store, the purpose of the visit should be clear. If you are purchasing a gift or simply grocery shopping state that before the visit. Children need to understand that every trip to the store will not result in an item being bought for them. If they see an item they truly want, they can set a plan with you to save up for that item or do chores or tasks to earn the right to eventually have that item purchased. The financial examples demonstrated at this age set the precedent for future lessons.
A great way for a young child to understand how to understand the value of money is to use 3 clear containers.
Label each Saving, Spending and Donating. Each time your child receives money, for doing chores or as a gift, divide the money equally among the containers. Have him/ her use the spending money for small purchases, like candy or stickers. Donating money can go to someone special in need. The saving container should be for more expensive items he/she is saving up for.
Elementary School - Making Choices About How to Spend Money
Around this age, children should be given the opportunity to make choices regarding money so they can better understand it’s limits. For instance, engage your child in the decisions you make while grocery shopping, explaining the reason you might choose to purchase a fruit that is in season rather than one that is not because of the huge price difference. Ask them to choose a vegetable or dessert that would serve the entire family that is within a set amount. Point out the reasoning of buying certain items in bulk but not others. Ask them where the best store to purchase an item would be based on price.
This is also a great age to introduce them to banking. The containers they’ve been using can be transferred to actual checking and savings accounts.
Pan American Bank & Trust has designed an account specifically for this purpose: The Relationship Junior Savings Account.
This account can be opened for anyone from age zero through 21. There is no minimum balance for this completely free account and it earns an Annual Percentage Yield (APY) of 0.35%1.
Excited account holders can deposit as little as they’d like to see their total grow, even 50 cents!
Middle School - Understanding Long Term Goals
By this age they are old enough to understand more mature concepts such as compound interest. Parents can explain the idea of earning interest both on your savings as well as on past interest from your savings.
For instance, starting at 14 years old, if you saved $100 every year, you’d have $23,000 by age 65. In comparison, if you started at age 35, you would only have $7,000 by age 65. Encourage your child to do more compound interest calculations with different amounts. It may motivate them to save their money, rather than spend it on the latest gadget.
High School - Planning for College Costs
College expenses are intimidating but without a college degree, most will have a harder time finding a job and their pay over the span of their career will average to much less.
Every family’s circumstances are different but communication is the key to tackling the hardship of college tuition. Have an honest conversation with your child regarding your intended contribution towards their education early on. If your child knows before even applying to colleges it can help them decide where the best choices would be. Some schools are more generous with financial aid, scholarships and grants. This will also give them plenty of time to seek outside sources for financial assistance.
This is also the point where your child will most likely need a debit card to facilitate day-to-day expenses while they are at school. Those lessons they learned as a child of dividing their money into savings and spending still apply, and the savings account they’ve had accruing interest might not meet their needs any longer.
Pan American Bank & Trust offers a Relationship Student Checking Account specifically for this reason. Both parent and student are named on this free account with no minimum balance that offers an APY of 0.10%2. The student can use his/her debit card at any ATM (fees up to $25 will be reimbursed per statement cycle). For convenience, account holders can download a mobile app to access their account.
College Grad - Credit Cards
The worst situation your college graduate could be in is to have both credit card debt and student loans. Aside from risking their credit score if they can’t keep up with their payments, which could affect their long-term financial goals, you want to avoid starting their adult life on the wrong foot.
When choosing a credit card, do your research. If possible, select one that that offers a low interest rate, no annual fee and cash back rewards. Reserve the credit card for emergency expenses, not daily use.
1APY may change after account is opened. Rates are accurate as of 6/5/2017. Fees may reduce earnings.
2APY may change after account is opened. Rates are accurate as of 6/5/2017. Fees may reduce earnings.
Small Business Strategies for Success
For most new entrepreneurs, the dream of starting a new business is just as exciting as it is daunting. While you may have no doubts as to your dedication and willingness to put in the long hours needed, you hope you’re making the right decisions to give your business the most financial advantages. There are so many aspects to running a successful business, especially when you’re first starting out and doing most things yourself. It is easy to fall into bad habits due to lack of time and to lose sight of important tasks that will lead to consequences down the road. We’ve summarized a list of the most crucial points a new business owner must consider to guarantee financial stability as he/she launches and grows.
Seek Expert Advice
Small business owners often find themselves in situations in which they don’t realize the implications of their decisions. This is why it is essential to have an expert available to ask questions in the key areas where a wrong decision could lead to a long term consequence. Your network of experts should include at the very least a lawyer, an accountant and a tax advisor.
Also keep in mind that having a great relationship with your Pan American Bank & Trust representative is key as you navigate through the changing needs your business will require as it grows.
Plan Ahead for All Possible Scenarios
Inevitably, your business will have to suffer through periods of higher expenses or lower profits in order to reach certain goals or milestones. A successful business owner will be prepared for lean times, knowing they are a fundamental aspect of a business' long-term existence. Ideally, attempt to have at least 6 months of your expenses in liquid reserves. Also, do not minimize the importance of having the correct protections and plans set up, such as disability and health insurance.
Use Tax Advantages
Your tax consultant should ensure you and your business are paying the minimum tax you are required. Also make it a priority to establish tax-advantaged retirement plans such as IRAs and self-employed 401(k)s. Ensure your tax consultant has all of your tax information in plenty of time to be filed to avoid any surprises. Small business owners must take the initiative and project what your business will make in the coming year. To save yourself an overwhelming tax bill, be extremely conservative with your estimate. Be aware of the 9 percent failure to comply penalty if you don’t pay 90 percent of what you owe. Also, you may have to pay additional self-employment taxes, which includes the Medicare tax and the Social Security Tax. Your tax advisor will be especially important to your business, therefore choose an expert you trust to guide you through this process.
Put Yourself on the Payroll
Most small business owners believe they should sacrifice by reinvesting all their profits into the business. By denying yourself pay, you are risking personal financial crisis, which in turn will inevitably affect your business finances. Also, while this may seem the best way to help grow your business, it is only a short-term strategy. At least 10% of your gross income should be allocated for your long-term goals.
Separate Personal And Business Finances
Intermingling obligations and assets often is a result of an insufficient amount of money coming in to meet either household or company expenses. This includes expenses, inventory and debt. Mixing the two domains can lead to strict tax, liability and accounting problems. Try to avoid this scenario by having at least six months worth of both business and household expenses saved before opening day.
Adhere to a Budget
Budgeting is the basis by which a business owner can track crucial data to carry a business forward. Budgeting can tell you if you’re making a profit, client spending habits and the result of business decisions.
Planned budgeting helps you assess expenses over time, so you can avoid excess spending to increase your profit margins. You can also use it as a tool to determine whether you have enough funds to grow your business or perhaps consider a loan to reach your next career step.
Know Your Business!
As skilled as you may be in your trade, you must also know how to manage the financial aspects of your business. Even the most talented chefs and artists need to comprehend the balance sheet information of their business. Not understanding the basic concepts of accounting means you must completely trust others that do not have the passion for the business you are laboring for.
Understanding how money flows through your business or where it is tied up will help you run your business more efficiently. Perhaps you have accumulated too much inventory or you have allowed too much credit to be owed to you? Take an active role in your business’ finances even if your main focus is a service or product being sold. Knowing the financial basis of the business will help you adjust how you manage your trade, ensuring a more cohesive business strategy.
Guide to Using Credit Cards to Your Advantage (While Avoiding The Disadvantages)
The use of a credit card in your planned spending may be a valuable asset in enhancing your financial goals. Many enjoy several perks such as free vacations and gift cards from purchases they would have made regardless. Credit cards are also great tools for budgeting and to track spending. In order to reach such goals, one must have a clear understanding of how credit cards function and your personal financial limits. Without such discipline and knowledge, credit card use can quickly lead to debt.
According to the most recent statistics, the average American household has about $7,200 in credit card debt. A study by Drazen Prelec and Duncan Simester titled "Always Leave Home Without It" came to the conclusion that individuals using credit often spend twice as much for the same exact item. The fact that you have the possibility of spending more, even if it isn't within your realistic budget, entices most to overspend.
Here are a few simple rules that will allow you to fully take advantage of all of the perks of using a credit card without falling prey to the many pitfalls.
Never, ever pay your bill late
Avoid paying your credit card bill late at all costs! Aside from high late fees added to your bill, late payments affect your credit score. This is very important because a third of your credit score is based on your payment history.
You can also use this to your advantage. Paying all of your bills on time and keeping your interest rates low is a great way to improve your credit score.
Pay your bill in full every month
First and foremost, you must stay out of credit card debt! The only way to do so is by only charging as much as you can afford and paying off your entire balance each and every month. You may even pay this off multiple times per month. This also avoids you paying more for your purchases than they actually were by not accruing interest. The jeans you bought on sale for 20% off aren't a deal if you are paying an 18% finance charge.
Use your credit card for set costs only
Set up automatic payments such as tuition, utilities, insurance payments, etc. to be paid on your credit card. The same day your credit card is charged, have an automatic payment scheduled from your bank account sent to your credit card to pay off the balance in place of the payment you would have sent to the school, utility company or insurance company. By doing so, you've accrued points or miles, but not increased interest or debt on your card and stayed within your budget.
This also allows you the benefits of using your card without the accumulated debt that results from unexpected expenses and expenses with undetermined amounts such as groceries, gifts and entertainment.
Be diligent and mindful of your budget
If you don't trust yourself to stay within budget, ask your credit card company to lower your credit limit to an amount you know you can easily pay off on a monthly basis. You can also self-impose a limit restraint by checking your spending on a daily basis and removing the card from your wallet and use when you've reach your spending limit.
Check your account regularly
Another reason credit cards can be a valuable budgeting tool is because it is easier to keep track of all of your purchases. You can check your online account to see exactly what you've spent as often as you'd like, which will help you keep track of how much has been spent for various categories.
If you've overspent, avoid using the card until you're able to pay off the balance. Most credit cards offer powerful tools on their websites to track your spending, yet another advantageous budgeting tool.
Do your research, which card is right for you?
Those who benefit the most from credit card perks do their homework. Before choosing a credit card, determine if it is in your best interest. Are the perks it offers really beneficial to your lifestyle? Some credit cards even offer perks such as free travel insurance, rental car coverage and extended warranties, even if you pay your card in full and do not have a balance. If you are not one that travels often, it may be best to choose a card that offers cash back bonuses. Some prefer the gift card options so they can be used as gifts. When choosing cards that offer miles, be sure to read the fine print. You don't want to have accumulated several thousand miles only to find out that because of blackout dates or restrictions, they are practically useless. By researching the various options offered, those that are smart and stay within budget can enjoy the rewards.
Credit card rewards and budgeting tools can be a wonderful bonus to any budget or lifestyle if used as a tool and not abused. Rewards and perks can be forgotten if you accumulate debt and have the misfortune of accruing interest, resulting in a financial pitfall. Before using a credit card as part of your budget, be sure you plan to use it accordingly. If you find that it is not working favorably in your budget as planned, return to using debit cards and cash. The rewards are not worth the debt.
Best Banks To Work For
Pan American Bank & Trust has been selected by the nationally renowned industry publication, American Banker, as one of the Best Banks To Work For in 2018 throughout the United States. "Being selected is a tribute to the strength of our culture, including our commitment to each other, our clients and our communities," stated Frank C. Cerrone, President & CEO of Pan American Bank & Trust. "We are truly grateful for this honor and will continue to be one of the best banks working for you!"
Pan American Bank & Trust has approximately 60 employees servicing 6 offices throughout Chicago and the surrounding suburbs. Pan American Bank & Trust's "Dream Bigger" philosophy and mission are instilled in our daily practices, reinforcing the mindset of our culture throughout every level and department. This has been essential throughout PAB&T's growth over the past ten years as we welcome new talent to the organization. Pan American Bank & Trust team members highly respect and care for one another and have created a sense of family. Aside from work hours and the numerous volunteer opportunities for which team members spend time together, they also choose to socialize outside of the office.
President & CEO Frank C. Cerrone's mindset for Pan American Bank & Trust's culture is to be positive above all else. Senior management consistently discusses issues and acknowledgements with employees. "We strive for every employee to have a voice and to work together for common goals. If every team member feels appreciated and puts forth their best effort in every task, success is definite." Ensuring an employee is recognized for their contributions guarantees their motivation to strive harder. Cerrone continued to state, "Dedicated employees at every level of our organization have, and will continue to be the goal for Pan American Bank & Trust. Add the incentive of a happy work environment and you have the ideal scenario for success."
Pan American Bank & Trust also embraces the communities it serves with its positive philosophy and it shows. With its outstanding rating as a Community Reinvestment Act (CRA) lender, and as one of only 137 Certified Community Development Financial Institutions (CDFIs) in the country, Pan American Bank & Trust is centered in its mission to expand economic opportunities and revitalize the areas it serves in the process.
Taking all of this into consideration, it's no surprise that Pan American Bank & Trust was selected as one of the country's Best Banks to Work For in 2018.
The Best Banks to Work For program, which was initiated in 2013 by American Banker and Best Companies Group, identifies, recognizes and honors U.S. banks for outstanding employee satisfaction. Full results of this year's program are available at American Banker and in the September issue of American Banker Magazine.*
"Our annual ranking recognizes the financial institutions that are committed to investing in employees' job satisfaction, career development and personal growth - a 'return on assets' that can be hard to measure by traditional means," said Rob Blackwell, editor in chief of American Banker. "One of the most valuable assets for any organization is the team of people it employs, and banks are no exception."
Determining the Best Banks to Work For involves a two-step process. The first step involves an evaluation of participating companies' workplace policies, practices, and demographics. In the second step, employee surveys are conducted to directly assess the experiences and attitude of individual employees with respect to their workplace. The combined scores determine the top banks and the final ranking. Best Companies Group managed the overall registration and survey process and also analyzed the data and used their expertise to determine the final ranking. The program is open to commercial banks, thrifts, savings banks and other chartered retail financial institutions with at least 50 employees in the United States.
*From AB Magazine, September 2018 © Source Media, Inc. All rights reserved. Used by permission and protected by the Copyright Laws of the United States.
Tips to Stretch Your Retirement Savings
Save as much as you can, at every point of your life
This may seem like an obvious piece of advice, but many people do not take into account the unknown amount of time they will be relying on retirement savings. Even during periods where you may be financially comfortable, do not take spending for granted. The extra few hundred dollars per month that you unnecessarily spend earlier on could make a difference in your quality of life down the road.
Downsize your Home
Once retired, most people prefer to use any extra funds in their budget to travel and enjoy their newfound extra time socializing with friends and family. Maintaining a home larger than needed can be an avoidable expense and use of time. Many retirees opt to move to a smaller home to reduce taxes, upkeep and expenses. Also, by doing so, they can take advantage of the equity from the larger home they sold to add to their nest egg.
Choose the Right IRA
You might also consider converting money from a traditional IRA to a Roth IRA. Kiplinger.com's articles regarding Tips for Spending Down Your Retirement Savings explains that, "Converting deductible contributions to a Roth IRA means you'll owe tax on the money. But by paying Uncle Sam now, you're cutting him out later. If at retirement you expect to be in the 25% federal tax bracket, you'll owe $2,500 to Uncle Sam when you take $10,000 out of a traditional IRA (assuming you have no nondeductible contributions). However, if you are currently in the 15% bracket, converting $10,000 into a Roth would mean you'd owe a $1,500 tax bill to Uncle Sam now. But in retirement, you could tap that $10,000 plus its earnings tax-free."
Delay Social Security Benefits
Delaying your Social Security benefits increases the monthly amount you will eventually receive. If you wait to collect after your full retirement age, you will receive an additional 8% bonus per year you wait, up to age 70, along with accrued cost-of-living costs.
If you decide to roll over your 401(k) to an IRA or a new 401(k) when you change jobs, take care to transfer your balance directly from one account to another via a trustee-to-trustee transfer. If a check is cut to you, 20 percent of your savings will be withheld for income tax. You only get 60 days to put the distribution, including the withheld 20 percent, in a new retirement account. If you don't meet the deadline you will owe income tax and potentially an early-withdrawal penalty on any amount that doesn't make it into another retirement account. A trustee-to-trustee transfer allows you to avoid the tax withholding and the potential to trigger taxes and fees. "You want to do a trustee-to-trustee transfer and have the check going to the new custodian directly, so that way you can avoid that withholding," says Mary Erl, a certified financial planner for Nest Builder Financial Advisors in Gurnee, Illinois U.S. NEWS AND WORLD REPORT.
The Importance of Banking Locally
The benefits of banking local are advantageous not only for clients, but for communities as a whole. Pan American Bank & Trust strives to be a foundation in the communities it serves, offering support, services and resources.
Having a true relationship with your Community Bank is instrumental in the success of your small business and/or personal financial goals. For instance, your Relationship Executive has an understanding of the changes taking place in your local market and how it may affect your business or home loan, offering advice or projecting market trends to avoid issues. Your Relationship Executive can also offer a wealth of referrals and connections to other local business owners and service providers.
Reinvestment in the Community
Community Banks invest in the community by utilizing deposits to lend to local small businesses. This allows the local market to benefit from the creation of new jobs and reinforce the existing community establishments. A Community Bank's efforts function as a funnel to continuously keep money flowing locally, lending and funding in the communities where their clients live and labor, unlike corporate banks which invest nationwide.
Community Banks fund more than half of small businesses in the United States under $1 Million, according to the Independent Community Bankers Association (ICBA). The ICBA also reports that Community Banks employ 765,000 Americans and create countless jobs thanks to their role in lending to small businesses and agricultural enterprises. Without community financial institutions, which make up 99.5% of all banks, these jobs would not be possible. Pan American Bank & Trust has contributed to the creation and retention of 1,158 jobs in the communities they serve through $40.5MM in small business lending.
The Bank also produces positive outcomes for its borrowers by providing technical assistance and loan counseling. By helping borrowers increase their financial understanding in advance of their loans, Pan American Bank & Trust helps set borrowers on the path to successful repayment. The Bank estimates that a total of 411 people received developmental services in 2017, including business counseling and consumer credit counseling.
Sustained Community Organizations
Because local banks are dedicated to assisting the communities they serve, they are often dedicated and willing to donate time, funds and services to local organizations that work to reinforce the community. Pan American Bank & Trust and its employees truly want to be part of their communities at the grassroots level and do so by cleaning up parks, helping at food pantries, offering their services at senior events, sponsoring local sport teams and hosting free informational seminars. The Bank also has a network of partners through which it provides financial education and volunteer opportunities. These programs benefit over 100 individuals per year. Our goal is to help provide a strong anchor for the local economy. Corporate banks rarely give money or volunteer time at such a grassroots level. During both prosperous and poor economic periods, Community Banks remain foundations for members of their communities.
As an individual or small business, choosing to utilize a local bank means you will be working with people who reside and do business in your area. Community Banks are fundamental to the communities they serve because they have personal experience and familiarity with the events occurring in the community, offering that knowledge in their daily service. They gather this information from their involvement, volunteerism and sponsorship in local events.
This type of information is priceless in determining market trends, housing decisions and business strategies. A Relationship Executive at a Community Bank is also a trusted advisor. Pan American Bank & Trust prides itself on developing relationships with each and every client, ensuring their unique needs are identified and met.
Facilitated Loan Process
Corporate banks base their decisions for small business loans or mortgages on information stated on paper such as credit scores and tax returns.
Community bankers want to know your personal history and character, taking those factors into account when deciding to approve the loan request. Often, the decision-makers are in the same building, therefore it's easier to adjust their decision based on your individual circumstances and the entire process is more streamlined.
Pan American Bank & Trust appreciates our clients. We strive to go above and beyond to ensure our clients have a wonderful, satisfied banking experience. We are confident that the level of client support offered by our staff is unparalleled. Come in and meet us or stop in again to enjoy a cup of coffee or lemonade while we handle your banking needs.
How CDFI Banks Help Clients Thrive
Pan American Bank & Trust recognizes that we can only thrive if our clients do. We are a grassroots bank offering our clients a personalized banking experience and customized financial resources to dream bigger.
As a certified Community Development Financial Institution (CDFI), Pan American Bank & Trust is able to make a powerful impact in our communities and to the people who need it to most. CDFI certification is a designation given by the United States Department of Treasury’s CDFI Fund to specialized organizations that provide financial services in low-income communities and to people who lack access to financing. CDFIs provide a range of financial products, like mortgages for low-income and first-time homebuyers and commercial loans for small businesses.
CDFIs’ goal is to broaden economic opportunity by providing access to basic financial services for individuals and businesses. Pan American Bank & Trust has had proven success impacting its target market. In the last four years, Pan American Bank & Trust has originated $181.8MM in loans within its target market. It is estimated that this lending has generated the following outcomes:
304 affordable housing units created.
324,655 square feet of commercial real estate developed, based on $56.5MM in CRE lending.
1,158 jobs created or retained by $40.5MM in small business lending.
Between 2018 and 2020, our projected lending is expected to generate an additional 170 affordable housing units, 316,000 square feet of commercial real estate developed and 869 jobs created or retained. As a CDFI, Pan American Bank & Trust contributes to building a healthy and stable local economy. And more importantly, we can help you pave a path to get you to where you want to be. Everyone flourishes by having the breadth of resources to dream bigger.
The Benefits of Banking With a CDFI
When it comes to helping a community, a Community Development Financial Institution (CDFI) can provide enormous benefit. These private financial institutions are a dedicated force in helping communities enter and stay in the economic mainstream. What benefits are there to banking with a CDFI? Let's take a look!
CDFI's Specialize in Helping Disadvantaged Sectors
A CDFI is dedicated to helping low-income and low-wealth parties to achieve a stable financial foothold. Many times, these groups are not able to be serviced by standard banking methods. A CDFI can reach into a distressed community, giving it the tools and resources to grow from within.
Opportunities can flourish in places where none existed before, all from internal community growth. This directly impacts the residents of a community, allowing for reinvestment back into the area. In turn, this maximizes the potential for the funds invested.
CDFI's Put the Community First
CDFI's are designed to maximize the community response, not their own profits. While CDFI's are a profitable business model - they need to be able to stay in business, after all - their focus is the community. CDFI's serve as a spark to ignite developmental growth, creating the jobs that are the lifeblood of a vibrant community.
CDFI's Focus on Community Businesses
Banking with a CDFI creates jobs and community growth by focusing on the businesses of the area. Small businesses and microenterprise can lead development in a community, and CDFI's strive to give them the resources they need to flourish.
Nonprofits and affordable housing is another area that CDFI's help grow. Nonprofits often provide essential services that provide a higher quality of life to the people that live in an area. People also need a place to live, and this is where the affordable housing helps. Together, these can make a community a very desirable place to live once the opportunities start to build.
CDFI's also invest in commercial real estate for a given area. Businesses need a place to blossom and grow, and commercial real estate gives them a place to call home. An active commercial real estate market in a community acts as an invitation for even more businesses to come into the area, bringing jobs and other opportunities to the region.
CDFI's Tap into the Pioneering Spirit
Many times, a new business will fail to get the funding it needs from banks. If the struggling small business is forced to turn to the high-interest market for funding, their chances for success are minimized. In the past, exceptional ideas have failed to find their way because of high debt from such predatory institutions of lending.
Instead of turning to high interest and online funding solutions, those businesses can turn to CDFI's for help. In many cases, small businesses aren't even aware of the assistance available from the community centered CDFI!
These small businesses that can be helped by CDFI's represent the pioneering spirit that created the country. These dreamers and builders hold the keys to an imagined yet unrealized future of prosperity, and CDFI's can help to make it a reality.
Smart Banking with a CDFI Through Pan American Bank & Trust
Pan American Bank & Trust specializes in communities. We are an Equal Housing Lender and a Member FDIC. To better serve our communities, Pan American Bank & Trust has invested in six locations in very diverse areas. We understand and believe that our greatest asset is the people of the community, and we back up that belief with both investments and services to make those dreams come true.
Pan American Bank & Trust works hard to build a healthy and beneficial relationship with every one of our clients. We dedicate ourselves to our clients living their dream. That is the high mark by which we judge ourselves, and together we know we can be very successful. Don't just take it from us - please take a look at our testimonials to see how we've helped a multitude of clients achieve their dreams.
Our Premier Money Market Account is a Powerful Savings Tool
Though you may have heard about interest rates rising recently, they remain near historical lows. This poses a challenge for finding a home for your savings. On one hand, you want the safety, security, and liquidity that a traditional savings account can give you. On the other hand, it would be nice to earn a return on your hard-earned nest egg.
A Premier Money Market account from Pan American Bank & Trust may be the right option for you. In this article, we explain what a money market account is, what it's not, and how it can help you meet your savings goals.
What is a Money Market Account?
As this page from the Consumer Financial Protection Bureau explains, a money market account is an account offered by banks and credit unions that pays interest based upon current money market rates. It is FDIC insured just like a traditional bank savings or checking account, and has many of the same functional features as those accounts, such as check-writing ability and ATM withdrawals. However, there are certain limits on how many withdrawals you can make from a money market account per month, and minimum deposit amounts do apply.
For example, our Premier Money Market account requires a minimum $2,500 deposit to open, and features money market interest rates, complete liquidity, tiered interest rates as your balance rises, and no minimum balance fee so long as you maintain at least a $2,500 balance.
What is the "Money Market"?
The "money market" is a financial market in which participants buy and sell short-term highly liquid debt securities, such as certificates of deposit or commercial paper to meet their short-term financial needs. The rates paid in the money market determine the interest rate your money market account funds will earn. You can learn more about the money markets in this detailed publication from the Federal Reserve Bank of Richmond.
What is the Benefit of a Money Market vs. a Traditional Savings Account?
The principal benefit of a money market account over a traditional savings account is that, historically, the rates paid for funds in the money market -- and paid to you on your money market account deposits -- are higher than the rates banks pay depositors on savings accounts. The minimum balance and fees offered in a money market account may also be more suited for your savings needs than a traditional savings account, particularly when -- as with our Premier Money Market account -- you can earn higher interest rates and your balance rises. And, because a money market account is FDIC insured, it offers the powerful combination of both security for your savings and a desirable rate of return.
If you are weighing your savings options and think a money market account may suit your needs, stop by a Pan American Bank & Trust location today. Our friendly bankers will be happy to walk you through your options and select the savings vehicle that meets your needs. With our competitive rates and attractive terms, we're confident you'll find a solution that works for you.
Financial Terms You Should Know but Don't and Are Too Afraid To Ask
Principal - The original amount of money put into an investment or borrowed from a loan.
Compound Interest - This term pertains to investments, deposits or loans. It's best defined using an example: if you invest $100 with a compound interest rate of 10% per year, after one year your investment would now be worth $110. Since compound interest accrues based on the new value of the investment, next year's value would add 10% of $110 (equaling $11), rather than the original $100. So at the end of the 2nd year, the investment would be worth $121. This means the investment grows at a faster rate, which can really make or break your finances when it comes to larger investments or loan rates, depending on the situation.
APR - APR stands for "annual percentage rate" and applies to loans, mortgages and credit cards. Regarding credit cards, it's best expressed as the cost that you pay for borrowing money, aka your interest rate. But for mortgages, it's a bit different. Interest is the cost of borrowing money based on the principal loan, making it easy to figure out your monthly payments, whereas APR is based on the total cost of the homebuying process -- broker fees, closing costs, mortgage insurance premiums, etc.
Credit Score - A number representing your financial history, indicating your ability to repay debts in a timely manner. It takes into account payment history, debts owed, length of history, new lines of credit and types of credit used. the number is used by lenders to determine if you qualify for loans, mortgages or credit cards.
Assets - An economic resource that's owned by an individual or business. For most individuals, assets include bank accounts, investment accounts, retirement accounts and their home.
Liabilities - Financial debt or obligations.
Equity - The value of an asset after taking into account its liabilities. Simply put, Assets - Liabilities = Equity
Amortization - This refers to loan payments over a determined period of time. An amortization schedule will allow you to see how much you owe and when you owe it during the course of any given loan. For example, if you take out a 30-year mortgage for a new home, your amortization schedule will outline what you'll owe each month during the course of that 30-year loan.
Loan to Value Ratio - The loan-to-value (LTV) ratio is a financial term used by lenders to express the ratio of a loan to the value of an asset purchased. The term is commonly used by banks and building societies to represent the ratio of the first mortgage line as a percentage of the total appraised value of real property. For instance, if someone borrows $130,000 to purchase a house worth $150,000, the LTV ratio is $130,000 to $150,000 or $130,000/$150,000, or 87%. The remaining 13% represent the lender's haircut, adding up to 100% and being covered from the borrower's equity. The higher the LTV ratio, the riskier the loan is for a lender.
Debt to Income Ratio - Your debt-to-income ratio is all your monthly debt payments divided by your gross monthly income. This number is one way lenders measure your ability to manage the payments you make every month to repay the money you have borrowed. To calculate your debt-to-income ratio, you add up all your monthly debt payments and divide them by your gross monthly income. Your gross monthly income is generally the amount of money you have earned before your taxes and other deductions are taken out. For example, if you pay $1,500 a month for your mortgage and another $100 a month for an auto loan and $400 a month for the rest of your debts, your monthly debt payments are $2,000. ($1,500 + $100 + $400 = $2,000.) If your gross monthly income is $6,000, then your debt-to-income ratio is 33 percent. ($2,000 is 33% of $6,000.)
4 Ways to Save Money While on a Tight Budget
If you're longing to have financial success but already follow a strict budget, you may feel that your goals are too hard to attain. But this isn't true -- anybody can save money without going hungry. Sure, taking advantage of online promo codes, eating out less often and riding your bike more than driving are great ways to cut costs. But there are some more long-term money saving strategies that will make a significant impact on helping you live the dream.
Maintain good credit score.
A good credit score is an essential asset that permeates into all facets of your financial well-being. It may not be commonly considered, but a good credit score is crucial to saving money in the long run. Applying for any type of loan or credit card with poor credit means you are more likely to have a higher interest rate, meaning by the time your loan is paid off, you will have paid significantly more than if you had good credit. A lower interest rate means you'll have more disposable income to put toward your debt payments to dissolve it sooner.
Payment history makes up the largest portion of determining your credit score, so take it seriously and work on paying off your debts. Create a schedule of when you need to have all of your bills paid and plan your expenses as best you can to ensure you can pay on time.
Work on paying off debt
High interest debt can dry out the financial well rather quickly. Instead of using your credit card to purchase things outside of your means, try to put more effort into paying off your already-outstanding debts. Even a little bit goes a long way. Switch to paying for daily expenses with cash only and put any extra toward your debts. It'll make saving easier and it's good practice toward saving for an emergency fund once your debts are close to being paid off.
Build an Emergency Fund
With an emergency fund on hand, you won't need to take out loans for everything you do. An emergency fund is a savings account you put small amounts of money into that slowly builds over time. The idea is you never touch that money unless it's an absolute emergency -- if you lose your job, if you become seriously ill or injured, if your car gets totaled, or if disaster strikes your home. Emergency funds are NOT for entertainment, eating out, vacations or shopping. Be honest with yourself about what constitutes an emergency. Rationalizing purchases is a surefire way to break the bank and normalize financial irresponsibility. As motivation, remind yourself that having a bit of financial cushion as a safety net not only eases your money stresses, but also eliminates the need for taking out payday or other high interest loans.
Switch to a community bank
Community banks are structured to benefit local communities, families, and small businesses. The loans that they grant are directly invested back into your local neighborhoods. Their everyday processes are more efficient since they aren't bogged down by corporate bureaucracy. Your banking representatives are people directly involved with, and probably live in, your community.
Certified Community Development Financial Institutions (CDFIs) have a mission of expanding economic opportunity in low income and distressed communities. Pan American Bank & Trust is a community bank and proud CDFI within the communities we serve. We live by one rule: RELATIONSHIPS -- and long-lasting ones, at that. We are committed to strengthening and enhancing every relationship we have with our clients, communities and our colleagues. When our clients live the dream, we live ours.
What is a CDFI and What Does it Mean For You?
Pan American Bank & Trust is part of a select group of community banks holding the designation of Certified Community Development Financial Institution (CDFI). Certification is obtained annually from the United States Department of Treasury's CDFI Fund and allows the CDFI to obtain grants from the CDFI Fund which are then used to provide vital sources of new capital into economically underserved areas. Each grant awarded is matched by private sector capital which maximizes the impact in the community. Moreover, this unique program ensures that decisions are made locally by the organizations that know their communities best. This combined investment in communities meets crucial needs such as the development of affordable housing and the creation of jobs and local businesses.
Pan American Bank & Trust is proud to be a CDFI. We are a community bank dedicated to building relationships, strengthening communities and providing economic advantages to those who may not find opportunities elsewhere. In 2016, we originated 197 loans, totaling $85 million in lending. Seventy-eight percent of this money was located directly in our communities, resulting in 893 local jobs created or retained. Additionally, through commercial real estate loans, more than 204,000 square feet of commercial real estate space was developed or rehabbed. This is how we reinvest in our communities and build lifelong relationships with our clients and this is why we have earned an "Outstanding" rating from the FDIC under the Community Reinvestment Act.
Our mission is to enhance the economic environment of our local communities. If you're an aspiring business owner and need to find the means to start living your dream, Pan American Bank & Trust is here to help. Get in touch with one of our Relationship Executives today to see how we can help you start to grow your business.
What You Need to Start Your Business
You've finally decided to be your own boss. You've got a great idea, have done all the necessary market research, and even know the name of your future business. Now what? Well, the first couple of things you'll need are a sturdy business plan and, of course, financing.
A coherent business plan will make you think critically and realistically about your new venture. Despite being a long and somewhat arduous process, it is absolutely essential to draft a solid outline for the future if you plan on seeking financial support from banks, investors or by other means. Even if you are 100% self-starting with no outside capital, a good business plan acts as a road map to which you may refer in the near future. Here are the basics of what it should include:
1. What your business is and what your goals are, and what sets you apart from the competition
2. Projected cash flows and profitability
3. Initial investments for the next two years (i.e. permits, rent, travel, salary/salaries, legal fees, marketing, insurance, etc.)
4. An outline of your overall marketing strategy
In order to start your business, you'll probably need a business loan. Being prepared before you consult with your community bank is key. Here's what you'll need to bring:
1. Your (aforementioned) business plan. Be sure it includes the information noted above
2. Past 3 years of personal financial statements of owner(s) including tax returns, income statements, personal bank statements
3. Business licenses
4. Resume of principal(s) with relevant business management experience
5. Commercial lease details
Pan American Bank & Trust is a certified Community Development Financial Institution (CDFI) dedicated to creating jobs, building businesses and revitalizing neighborhoods by providing access to affordable financing through the U.S. Department of Treasury's CDFI Fund. This certification allows us to promote economic opportunity and revitalize the communities we serve. Successful community development requires community based decision making. If you're starting your own business, contact us to find out how we can help.
The Difference Between a Personal and a Business Credit Card
As a business owner, many complex decisions are made in order to ensure your success. One of those decisions is whether you should get a personal or a business credit card. We'll outline the difference between the two below so you can make a more informed decision.
Business Credit Card
Here are a few of the pros and cons of business credit cards:
1. The credit limit is usually higher.
2. Easily separates personal and business expenses - this will come in handy during tax season.
3. Business cards usually have great benefits through bonus point systems, focused on business
expense like office supplies, travel, etc.
4. Your personal credit score is still taken into account when applying for a business credit card. This means that you'll be personally responsible for any debts your business incurs.
5. Sole proprietors can get business credit cards.
6. Issuers are not required to notify you of rate increases.
7. Payment due dates can change.
8. You can't build your personal credit score using a business credit card.
Personal Credit Card
1. Bonus rewards are geared more toward consumer spending rather than business expenses.
2. Personal credit cards are optimal for sole proprietors with low overhead costs and no need for higher credit limits.
3. It will not build business credit.
3 Ways to Be a Smarter Mortgage Applicant
Home ownership is a part of the American dream. If you feel that you're finally ready to take that step to start living the dream, you'll need to get a mortgage. Here are some tips that will help you be a smarter mortgage applicant.
Improve Your Credit Score
Understanding the factors that determine your credit score before beginning the lending process is crucial to how they impact your ability to qualify for a loan. If you have outstanding debts, it's best to pay them off to bump your score before you apply for a mortgage. At the same time, avoid applying for unsecured revolving lines of credit and other short-term loans. When lenders do credit checks, your score temporarily dips. Avoid the impulse of applying for that in-store credit card until after you get your mortgage.
Keep an Emergency Fund
If all your money dries up due to down-payments and closing costs, you may be in trouble. More often than not, unforeseen costs will rear their ugly heads and missing your house payments won't reflect well. Lenders like to know that you have backup money to pay your mortgage on time, even if you run into some costly bumps in the road.
Pre-Qualification Can Be Your Best Friend
Loan pre-qualification will confirm exactly how much you can afford before shopping around and bidding on houses. It also shows the seller that you're serious about buying when you actually do put an offer on the table. It tells them that you're guaranteed to be able to afford the property and it makes the home buying process go much smoother.
As an Equal Housing Lender, Pan American Bank & Trust is dedicated to helping you live the dream by getting the home you deserve. Contact us today to find out how we can help.
3 Common Money Mistakes Made by New Entrepreneurs
You're finally taking the plunge and starting your own business. Being a successful entrepreneur is arguably one of the most difficult tasks you can take on because there's a lot to overcome. Financial success is the ultimate goal of any entrepreneurial endeavor -- here are some common financial mistakes that new business owners commonly make.
Frugality and Frivolity
There are good times and places to spend or save money, depending on the situation. Every day will cost you money -- overhead expenses, paying employees, even rent will all add up. Being too frivolous with your money is counterproductive, and will deplete your funds unnecessarily. On the flipside, there's no reason to skimp out on smart investments that will help your business. Your business' bank account isn't your personal one -- be confident enough to spend your money on products, services and employees that will make your life easier. Free yourself from the tedious small stuff so you can develop the bigger picture. Taking on too many tasks will burn you out. Finding a balance between frugality and frivolity is key.
Set Money Aside for Expenses
Finishing your first contract or receiving your first payment is extremely rewarding and exciting. One major mistake that many make is spending that money on themselves. Instead, try taking out only what you need to live and then reinvesting the rest back into the company. Spend it on marketing, overhead costs, or pay your taxes. Or even better yet -- save it!
Get Professional Financial Advice
Using the right bank, attorney, financial planner and accountant can make all the difference in the world when it comes to your business' financial security. They'll help you create budgeting plans and keep track of your cash flow. Consultations are not always free, but their advice will keep you in-the-know, out of legal trouble, and save you money in the long run.
As a FDIC member and Equal Housing Lender, Pan American Bank & Trust offers business checking and savings accounts, business loans and other business services. We are dedicated to helping your business thrive and to you living the dream. Contact us today to speak with one of our Customer Service Representatives.
Conversation Starters: Talking Finance with Aging Parents
There are some conversations that we would all rather not have. As elderly parents age, often adult children become involved in their care and finances. It’s important to have a conversation with your parents as they age about their finances, so you can gain a better understanding of their situation. It’s important to have the information you need if you ever have to take care of their finances. How do you begin this conversation?
Schedule a time to talk. You don’t want to make it feel too formal, but you want this to be a serious, meaningful conversation. By scheduling time to talk about this, you’re giving them time to digest and prepare for anything that you may need to talk about. It won’t be a surprise that catches them off guard.
Outline the discussion. Have a few talking points in your head and questions you want to ask. It is easier said than done as this is a difficult discussion to have, but try your best to keep your emotions in check.
Have a two way conversation. Share information about your financial situation and how you handle things. You have learned many lessons in your lifetime from your parents. Maybe this time, you can teach them a thing or two.
Offer your help. Take over some of their financial responsibilities, like doing their taxes. This can help you understand more about their financial situation as a whole. Offer to help them create a spending plan so that you will know how much money they have coming in and what they are spending it on.
You’re not trying to control your parents, you're doing this out of love and that is an important point to get across to them. The team at Pan American Bank & Trust is a valuable resource for you and your parents when planning for a stable financial future.
Safe Mobile Banking
Online banking is so convenient when it comes to monitoring and managing your money. Sometimes it seems that it is almost too good to be true. Pan American Bank & Trust’s Mobile Banking is a secure platform, but you can never be too safe in this day and age. So, be sure you are taking the proper precautionary measures to keep your money safe.
Password strength . This goes for your online banking account as well as the device you use to log onto the account. When creating a password, be sure to use a combination of upper and lower case letters, numbers, and symbols. If you are creating a PIN, 1234 is a little too easy and don’t try the last four digits of your social security number either; you would not want that getting out. Choose a random number and change it periodically.
Phishy Links . Never follow a link sent to you in an email or text message to log into a banking account or provide you with some other “amazing offer.” There are fake websites out there to mimic legitimate banks. Many times these scams make you feel like it is time sensitive so that you give them your information. Before you do so, look at the back of your card or a recent banking statement and follow the link provided on this formal and official documentation.
Public Networks. Avoid doing online banking when you are on a public WiFi network. It is better to do your banking when you are on your own personal WiFi network or on cellular data. You never know who is hanging out on the public network.
Lost phone . Keep track of your phone. Call your provider and know what steps can be taken to lock your phone if it ever is lost, so no one else can get in and use the device.
Improving Your Credit Score
When it comes to credit scores, better scores mean bigger budgets. Your credit score, or FICO score, is an analysis of your payment history, number of delinquent debts, total existing debt, and length of time you have had different credit accounts. This number plays a key role in how lenders set a line of credit for homebuyers and when insurance companies decide if they want to do business with you. Check out a few of our quick tips to improve your score.
Check your credit report . If you are lucky enough, no work is needed and your score is good as can be. However, there are times of error so it is important that you check so you are correctly represented. It is a free assessment you can do online, so there is no excuse.
Set reminders. Never be late for another credit card bill again. Late payments negatively impact your score.
Reduce debt . It is easier said than done. Rule of thumb: if you don’t have the money to spend, then do not spend it. Stop using your credit cards until you have the money to pay the bills.
Opening and closing cards. If you have an unused credit card, do not close it because this can negatively impact your credit score. Only open new cards when necessary.
Are You Ready to Take Out a Home Loan?
For many, purchasing a home is part of the American dream. It’s one of the largest financial investments you will make in your life and can be one of the most rewarding. A home is so much more than four walls and a roof over your head, it is a place where memories are made with family and friends. But, are you ready for this big investment?
Are your finances in order?
Maybe you have some debt or too many credit card bills. That is not to say that you can not buy a home, but it is a red flag to a greater problem. If your credit score is not as high as it could or should be, it might be time to put a pause on home buying and get that score up. Not only is there a down payment and closing cost that come with buying a home, but ongoing monthly payments, insurance, and taxes. It may sound like you can handle the down payment, but deadlines for continuing costs will approach quickly and frequently.
Are you here to stay?
Unless you are flipping houses, a home is not something you buy and sell soon after if you change your mind or something comes up. It is a long term investment. Are you job hunting, or will be in the future? That could take you to a different location, a longer commute, or a different state altogether. Homes appreciate at about 3% annually, meaning that if you try to sell shortly after you buy, say 2 years, the likelihood that you make anything on your home is pretty slim.
You want to be prepared when buying a home because it should be a happy and joyous experience. Speaking with a lender is a great way to understand your options for financing a home. Talk to one of the lenders at Pan American Bank & Trust today!
Why Our Clients Matter Most
At Pan American Bank & Trust, we find it instrumental to put our clients first. By facilitating the growth of our clients, both on a personal and professional level, we help formulate a plan that works best for each individual.
With a strong banking strategy, we understand that client engagement is at the forefront of our operations. We take the time and energy to invest in our clients and their personal interests, and by doing so, we’re building relationships with the people that make our community bank the great institution that it is.
An exchange with a client should be meaningful and authentic. We pride ourselves on having engaging conversations with our clients and building lasting relationships. At Pan American Bank & Trust, we step out from behind our desks and counters and in front of our clients to ensure that we’re there for them when they need us most.
With so much of our lives conducted online today, it’s nice to know that you can come into your local community bank and actually know the people that you’re working with. And that’s why we’re extremely proud to know our clients and their families by first name.
An organization’s culture is crucial to the success or failure of that organization. That’s why we make a culture of positive client engagement and superior client service top priorities at Pan American Bank & Trust. When we say that our clients matter most, and that we do everything we can to establish strategic relationship building, we mean it. To us, it’s about developing, nurturing and earning rapport with our clients. After all, clients matter.
What You Need to Know About Financing Your Business
As a community minded financial institution, Pan American Bank & Trust specializes in financing a variety of businesses. Whether it’s a commercial real estate loan, line-of-credit, or letter-of-credit, we assist with finding the right funding option for your business needs. Here’s what you need to know about financing your business:
Start right away. It’s important to start the loan process right away, even if it’s before the loan is needed. At Pan American Bank & Trust, we want to start building a relationship with our clients right away to better understand their business, their needs and their goals. It’s important to establish this trusting relationship as soon as possible.
Decide how much your company needs and what the money is for. You’ll want to establish right away how much you’ll need and what specifically the loan will be used for. Whether it’s financing real estate, software or equipment, determine how much you need and where the money will go towards.
Find the right partner. You’ll want to do your research on the different types of lenders and what’s the best fit for you and your business. If you’re looking for a partner that is invested in economic development and the local community, then partnering with Pan American Bank & Trust could be the right option for you.
Starting your own business is an exciting venture. You may need a business loan to get up and running and if so, you’ll want to be educated on the topic. Use these tips to be better prepared when going into the loan application process and ensure you find a partner that can help meet your needs.
Know the Difference: Top 3 Advantages of Banking with a Community Bank
It can be a difficult decision choosing a bank that you can trust, that’s convenient for you and is invested in your best interests. Big mega banks seem to be everywhere, but the truth is that community banks are relevant and thriving, and could be a great match for you. So, what are the advantages of banking with a community bank?
1. Pan American Bank & Trust invests in the community. Local banks, like Pan American Bank & Trust, are built on the idea that community matters. When we invest in our communities, we’re building assets of local small businesses. Which means we’re helping make the local economy and community stronger. Furthermore, Pan American Bank & Trust supports local organizations that make a difference in the community. We’re dedicated to supporting local nonprofit organizations that provide a strong foundation for our communities.
2. Pan American Bank & Trust provides state-of-the-art technology. It’s a common misconception that smaller community banks can’t support and provide the latest technology. But at Pan American Bank & Trust, we offer online banking, mobile banking, bank by phone, and a number of other tools to make banking fast and convenient for you.
3. Getting a small business loan or home loan is easy. We are committed to providing business solutions tailored to the specific needs of our clients, establishing a foundation they can use to focus on success. Additionally, we help finance the future you've always dreamt of. Whether it’s a business loan or mortgage, we’re here to help you.
These are just a few advantages of banking with a community bank over a larger mega bank. What are your favorite reasons to bank locally?
4 Reasons to Switch to Pan American Bank & Trust
Bigger isn’t always better. If you’ve considered switching from a large bank to your community bank, you have your reasons. If you need a few more reasons to switch to a community bank, here they are:
1. Get the personal service you deserve. At Pan American Bank & Trust, we are known for our superior client service compared to larger financial institutions. We take the time to get to know you, what your needs are, and help you reach your goals.
2. Establish a lifelong partnership. A bank shouldn’t just be a place to make financial transactions. It should be a place where you can build a strong relationship, a lifelong partnership, and a trustworthy resource.
3. Reinvest in your community. When you bank with a larger national institution, your money circulates across the entire country. When you bank with your community bank, your money helps support the local economy. Small businesses are the backbone of the nation’s economy, so by reinvesting in your community, you can be assured that your money is staying local.
4. Switching isn’t difficult. Many people think that switching their bank is a hassle. If you’re switching from one mega bank to another, it certainly can be a challenge. But when you switch to a community bank like Pan American Bank & Trust, we’ll ensure it’s hassle-free.
If you’re looking for a more personalized banking experience, switching to a community bank could be the right option for you. You’ll establish a real partnership and relationship that will help you reach your personal and financial goals. Stop worrying about the switch and take action today!
Are You Getting What You Deserve from Your Bank?
Most people begin a relationship with their bank and years or decades go by, and they suddenly realize they’re not getting what they deserve. Here’s what you need to know to determine if your bank is a well-oiled machine, and if you’re getting what you deserve from your bank.
Based on an analysis by Sageworks, a financial information company, “the best-run community banks in the U.S. are mostly small, independently owned banks with fewer than a dozen retail branches and less than $500 million in assets.”
At Pan American Bank & Trust, we’re committed to helping you reach your goals, whether it’s opening a checking or savings account, financing your future through Home Equity Lines of Credit, Home Loans, Auto Loans, Certificates of Deposit Loans, Overdraft Protection Loans, or financing your new business.
A key question to determine if you’re getting the most out of your bank is whether or not your bank facilitates growth. Most banking institutions will call themselves unique, but will do nothing to customize their products and services to fit their clients’ needs. Pan American Bank & Trust creates products tailored specifically to the needs of our clients. It’s part of our ‘relationships first’ business model, and it helps us stay focused on being as efficient and effective as possible.
If you’re unhappy with your current banking partner, make the move to get what you deserve. Not all financial institutions are well run. If you’re noticing signs of inefficiency at your current bank, contact us today to get the products and services that matter to you.
When it Comes to Banking Locally, Relationships Matter
When it comes to choosing a banking partner, bigger isn’t always better. Trusting an institution with your finances means that relationships are key, and that trust can go a long way. At Pan American Bank & Trust, we value the relationships we’ve worked hard to form with our clients. We’re committed to meeting the needs of our clients and strengthening the valued relationships that we have with them.
Larger financial institutions don’t always offer better service. In fact, we feel that at Pan American Bank & Trust, we’re able to give the proper attention and focus that our clients deserve. We can also offer coveted financial services that mainstream financial institutions simply cannot offer. Whether it’s a basic checking and savings account with higher rates, or a loan to get your dream business off the ground, our deposit and loan products have lower fees and fewer hassles than those offered by larger institutions.
At Pan American Bank & Trust, we pride ourselves on quality service. Large banks don’t typically emphasize in-person service, but we invest in doing business person-person, known as relationship banking. We’re here for the average consumer, and we have the resources to help our clients reach their goals.
When you bank with Pan American Bank & Trust, we have an opportunity to build a collaborative banking relationship, and we’ll make every effort possible to reinvest back into the communities that we proudly serve.
Fostering Community Development: Bloomingdale to See Significant Job Growth in the Next Decade
Bloomingdale is home to Pan American Bank & Trust's newest office, which is committed to offering our services to local communities while continuing bank growth. Our goal in Bloomingdale is to reinvest in the community and build long-lasting relationships with individuals, businesses and families. Most importantly we will support Bloomingdale in the various ways they strive to LIVE THE DREAM
What is CRA and what are the percentage of banks with Outstanding CRA ratings?
Are you familiar with the Community Reinvestment Act? If you're not in the banking industry, you may not be. Enacted by Congress in 1977 and most recently revised in 2005, the Act was created to encourage financial institutions to meet the credit needs of entire communities and not just those at higher economic levels.
At Pan American Bank & Trust, we pride ourselves on delivering quality service to individuals, families and businesses throughout the communities we serve. In 2015, we originated 194 loans totaling $90 million in lending, resulting in 864 jobs either created or retained. As a community bank, giving back ensures the future development and growth of the dreams surrounding our institution. 2016 Impact statistics will be available in the 2nd Quarter of 2017.
How does a bank get an outstanding CRA rating?
According to the FDIC, "A financial institution's performance is evaluated in the context of information about the institution (financial condition and business strategies), its community (demographic and economic data), and its competitors." A bank with an outstanding CRA rating has demonstrated its commitment to its market by redeploying deposits in the form of loans to the community, with excellent dispersion throughout its market area. A substantial majority of these loans must be in the bank's designated market and demonstrate excellent penetration among individuals of different income levels and businesses of different sizes.
Currently, Pan American Bank & Trust is one of only 26 banks in Illinois with an outstanding CRA rating. As a member of this group, we can proudly say that we take pride in the communities and residents we serve. We believe in building lasting relationships with our customers for the improvement of the community.
As we move through 2017, we will continue to serve you and the local economy for the better, promoting deep and lasting relationships that foster not only success of the individual, but also the community as a whole.
Young Entrepreneurs: Access the Funding You Need to Grow Your Business
When starting a business as a young entrepreneur, one of the first challenges you’ll face is accessing the funding needed to grow your business. You’ve worked hard to get your business up and running, but now that you’re in the growing phase, how do you find a committed partner to provide business solutions tailored to your specific needs? Pan American Bank & Trust can help you finance your business and focus on long-term success in the following ways:
Commercial Real Estate Loans
As a community minded financial institution, Pan American Bank & Trust specializes in financing a variety of commercial real estate projects. Commercial real estate loans can be short or long term, and can be used to buy property for your business operations.
Commercial Real Estate Lines-of-Credit
Commercial real estate lines-of-credit are for business owners or real estate investors interested in leveraging the equity in commercial property. Our Line-of-Credit loans have interest-only monthly payments, and the advance rates on these loans are collateral dependent.
Making financial transactions is a core responsibility of an entrepreneur. That’s why Pan American Bank & Trust walks you through the complexities of the global market and helps you understand how letters-of-credit work. We issue collateral secured letters-of-credit that ensure buyers get what they paid for and sellers get paid. Letters-of-Credit may be issued for a total up to 100% of the amount of the collateral.
Growing your business is a challenge that almost every entrepreneur faces. It’s crucial to find a trusted partner like Pan American Bank & Trust that is committed to finding new ways to fund the growth of your business. Interested in talking to someone about how to receive financing for your business? Call or visit one of our offices today and ask about how we can help your business grow.
A New Year Message to Our Clients
With the start of a New Year, it’s an important time to reflect on the accomplishments of the past year and our areas of focus for 2017. But instead of highlighting our events and accomplishments in the past year—and there were several—we’d like to take the opportunity to highlight the important people that make Pan American Bank & Trust the great relationship focused institution that it is.
Pan American Bank & Trust has supported our communities in a multitude of ways throughout 2016, and will continue to make strong relationships with our clients and colleagues the main focus for the New Year. We like to say that the true success of Pan American Bank & Trust is based upon the great people who serve it on a daily basis—our colleagues and our clients.
To our clients, colleagues, neighbors and friends, this new year message is for you. You help make Pan American Bank & Trust a Community Development Financial Institution that focuses on delivering quality service to individuals, families and businesses, enhancing the economic environment of the communities we serve. Your daily efforts make all of this possible.
The true sense of community is a group of people with common interests, ideas and goals coming together to support one another. The success of our business is built on the idea of relationships. And the higher the quality of relationships that we develop, the more support we can provide to worthy local causes.
What we have accomplished in 2016 couldn’t be done alone, and we know that in the New Year, the efforts of our colleagues and our clients that we serve will play a major role in our success. From all of us at Pan American Bank & Trust, thank you for your continued support. We ask you to pass this New Year’s message along to your family and friends encouraging them to bank local, as well.
As we turn the calendar to 2017, our optimism for hope and prosperity continues to flourish. And that sense of hope stems from our exceptional colleagues and clients, whom we promise to continue to serve in the New Year.
Nicholas S. Giuliano Frank C. Cerrone
Chairman & Co-CEO President & Co-CEO