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Blog Archive September 2020



Checking Account Considerations

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Although using a checking account seems like a standard task, there are factors to consider in order to achieve the most out of your account. Choosing the right type of account and managing it well can make a positive difference in managing your finances. Here are some tips to consider when evaluating your checking account for its greatest potential.  

Choosing a Bank with an account that works best for You

Convenience is a top priority. Typically you’ll prefer a bank with a branch near your home or office to allow you daily access for deposits or person-to-person interaction with a personal banker. Ideally, your bank will also offer many modern technological conveniences available today, such as a convenient app. The PAB&T App, for example, is user friendly and brings everyday banking needs to your fingertips. Access your balances, set up alerts and transfers, deposit checks, pay bills, view statements, and send secure messages with just a few taps on your smartphone!

Online banking is also a must-have in today’s age of technology. Long gone is the period of going to the actual bank to conduct the majority of your financial tasks. The convenience of online banking has taken off and is used for most daily transactions. The PAB&T Online Banking system is a great tool to navigate resources and assist in managing your finances.

One of the main reasons people still swing by a bank Drive-up is to deposit or cash or check. When choosing a bank, stress the importance of convenience, consider one that can offer remote deposit for checks. Simply snap a picture with your smartphone, and PAB&T clients can remotely deposit checks into their accounts without ever leaving the comfort of home. 

Monthly Fees*

If you’re paying a monthly fee for your checking account, do a little research. There are several free checking accounts available. Sometimes it’s as simple as knowing the guidelines. A minimum balance sometimes needs to be maintained in the account or a certain number of debits need to be applied per month. Sometimes it’s as simple as asking your personal banker which other types of accounts are available. PAB&T offers free personal checking accounts without a minimum balance requirement and low opening balance requirements.

ATM Fees*

All banks charge ATM fees in some capacity. Those fees can add up to a hefty sum. It’s essential to choose a bank that will have a network of ATMs to choose from, so you have the option of withdrawing cash without a fee. For instance, PAB&T will reimburse up to $25 of non PAB&T ATM fees per cycle so you can feel free to use an ATM anywhere it is convenient.

Negative Account

It’s a good idea to maintain a balance of at least $100.00 in your account at all times. This will help to avoid your account being overdrawn and unnecessary charges accruing. Try to make it a point to check your account daily to prevent your balance dipping below $100.00.

Account Excess**

Keeping track of your money is vital to making the most of it. A checking account should be used for daily expenses. There should not be too much more in the account than what is necessary. Any additional funds should be held in a savings account where interest can be accrued in your favor. Money can always be transferred to your checking account from your savings account if you are having a costly month. Still, overall, any additional money you have should be stored in your savings account for maximum benefit.

*See your Account Agreement and Disclosures for terms and conditions.

**Federal law restricts the transfers from certain accounts. See your Account Agreement and Disclosures for terms and conditions.


How to Have a Positive Understanding Towards Your Finances

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For many, the emotions evoked when considering an expenditure are negative. Stress, guilt, entitlement, worry, and hesitation play a role in every transaction. This reaction is not derived only for those financially strained, but can also result for many ulterior reasons. For some, no matter how financially stable they may be, their upbringing has ingrained habits of frugality, they cannot dispel in adulthood. For others, lack of self-confidence may instill a sense of inferiority, causing oneself to feel unworthy of expenditures. For all of these reasons and more, bad habits can easily be created regarding your perception of money.

Ideally, we'd all like to feel confident in our money management and consider our finances to be a source of reassurance. To accomplish this level of positive health towards finances, you must first identify and then eliminate the habits that prevent you from achieving a healthy relationship with money. Recognizing unhealthy financial habits is difficult for many, as they truly are unaware of their negative behavior.

Typically, the foundation of our financial habits is due to the examples witnessed in childhood. People tend to create their basis for handling their finances from the foundation they've seen. Parents should keep this in mind when discussing finances with their children and modeling money in front of their children.

The first step to improving your finances is to have an optimistic perspective. Focus on what you do have instead of what you don't. Consider what you can do to improve your situation, not your limitations. Do not let yourself feel guilty when you spend on necessities. Promise yourself you will find a way to contribute to savings another way. Do not focus on a number amount regarding salary, savings, etc. to consider yourself happy.

Disregard comparisons to others. The only person you should be trying to improve upon is yourself. Rather than resenting those that are financially wealthy, use them as inspiration to achieve more. Many have stories of failure, hard work and determination and took years to reach their status.

If you are financially stable but still feel guilt, focus on yourself as an individual. You are deserving and worthy. Force yourself to splurge occasionally and do not allow yourself to feel guilt. Some enjoy spending for others but feel guilty spending for themselves. Try setting money aside specifically for yourself so that when you do purchase something for yourself, it does not feel like a large expenditure because the money is already allocated.

Avoid premature spending if possible, such as purchasing an unnecessary or luxurious item before or instead of necessities resulting in insufficient funds and debt. The general rule of thumb is only to buy a luxury item if you have the funds to buy it several times worth.

Try to make it a habit to look through your bank and credit accounts daily. Not doing so can lead to an unexpected accumulation of expenses or insufficient funds. The last sign of a healthy relationship with your finances is to be a consistent saver. Pay yourself first! Have a regular automatic transfer set up from your checking to your savings account or set up another standard method of adding to your savings. Once the funds are in your savings, consider them inaccessible for expected monthly expenditures.

Your relationship with money is reciprocal. The more you put into the relationship, the more you will get out of it.  Once you can identify and implement these positive habits, you'll reach a balance that will lead you to a path of confidence and contribute to an overall healthy lifestyle.


Why It’s Still Essential to Balance Your Checking Account

Close up of someone balancing a checkbook.

Due to the various means by which finances are disbursed today, it is difficult to grasp how your money is spent. Whether through your bank’s online bill pay, a quick Venmo to a friend, a swipe of your credit or debit card or pay by cash or check, the breakdown of your expenditures can be complicated to pinpoint. Years ago, most expenses were paid solely by check, which made finances easier to track. Most balanced their checkbook for his very reason. This allowed one to clearly understand where the greater chunks of their money were being spent by reviewing transactions and making adjustments to reach goals.

In today’s management of personal finances, the estrangement between spending and acknowledgment of expenditures can lead to issues. By not taking accountability for your spending, you may miss out on opportunities to use it to your most significant advantage. Balancing your checkbook forces one to think about the expenses made and decide if they are in your best interest if you have the option again in the future, as well as giving you an in-depth feel of your personal financial situation.

Regularly checking your finances also provides other benefits. Keeping such a close eye on your transactions will allow you to detect fraudulent charges instantly, notice incorrect charges on your accounts and confirm direct deposits and other income. Most payments and charges are automated, and mistakes regularly occur if one is not attentive.

Where does one begin to balance a checking account without using a checkbook register and considering the various payment methods not used years ago? Luckily, there are several types of software that have simplified the process. A detailed spreadsheet works well if that is your preference, or a basic ledger completed on pen and paper will also do the job.

First and foremost, you must keep your records separate from your financial institution’s so that you can compare them to be sure they are equal. It is crucial that every transaction is recorded, both income and expenses. This can be accomplished in a variety of ways. You can save receipts, take a picture of them with your phone, or save them to a file. 

At least monthly, compare your ledger to your bank and credit card statements to verify that all of the transactions match.

To facilitate your ledger, you can separate it by category.

  • Deposits: Compare the deposits on your bank statement with all of the deposit transactions you recorded yourself. 
  • Debit card transactions: Compare these with your records, including ATM withdrawals. 
  • Written checks: If you have written checks, compare them with what has cleared through your bank. If a check hasn’t cleared yet, you’ll need to note that because you don’t want to overspend later.
  • Review fees and interest: Pay attention to whether your bank or credit union charges a maintenance fee. You might also have been charged an overdraft fee if you spent money that wasn’t quite in the account yet. Additionally, if you’re paying overdraft fees because of the order your bank records debits and credits, you might need to adjust how you manage your spending. Pan American Bank & Trust encourages clients to take proactive measures by reaching out to personal bankers for an account review to minimize service charges, overdraft fees, and maximize your money’s earning potential. For instance, an alert can be set up to let you know if your account falls below a certain amount to avoid a negative balance. Overdraft Protection is also available as well as Bounce Protection, which provides an automatic transfer from another account to cover the discrepancy. A periodic account review will also guarantee that you utilize the correct accounts to benefit your financial situation as it evolves. 
  • Compare your total and the bank’s total: If there are significant discrepancies, go back through to see if you can find where the problem is. Additionally, if you notice a purchase that you’re sure you didn’t make, contact the financial institution immediately. That could be a sign of a fraudulent purchase, indicating that your account might be compromised. If you detect a problem, call your trusted PABT personal banker immediately at (708) 865-5700 or schedule an appointment online. Appointments may also be scheduled through Online Banking or our Mobile App for your convenience. If the questionable transaction was on your debit card or through Online Banking, the information could be obtained by calling our 24hr by Phone option at (888) 245-0400. The time it takes to balance your finances will be minimal compared to the frustration of unexplained or fraudulent charges that need to be corrected when your finances have been neglected. 

Tools to Balance Your Checking Account 

One of the easiest ways to balance your accounts is to utilize personal finance software. This can be done without connecting it to your bank accounts.

The best-rated ones are YNAB, Mint, Quicken, Moneydance, and Personal Capital. Some of these software options allow you to schedule recurring payments and deposits automatically and set up to balance your account.

Your online account access will allow you to view your statement online, allowing you side-by-side comparisons to compare items as you go.

There is still a lot to gain from balancing your accounts. Make it a monthly task, and you will be pleased with the improvements you see over your money management. 


Is This the Best Time to Start a New Business?

Closeup of business people at table looking over financials.

There are several scenarios for which one may consider initiating a new business in the current pandemic climate. You may have already been on track to do so, with plans in place long before the Coronavirus's first case was reported.

Perhaps you were inspired by a brilliant concept or idea amid the pandemic craze and realized an unfulfilled need that can be marketed for a profit. The idea may result from a group of individuals who were left unemployed by the pandemic layoffs that would like to fulfill their dream of becoming business owners finally.

Whatever the reason may be, the concept of rising from the ashes is not unheard of. Several current successful businesses began during recessions. Uber, for instance, was created as a means to facilitate peoples' lives during a downturn. If offered at a reasonable value, no matter the economy's state, a company can achieve success if marketed properly. Studies show that the desire to run a business for Americans is on the rise. This has spiked more since many have lost their jobs, and the opportunities to work from home are endless. The cost to begin a new business is less because office space is not necessary and so much can be accomplished via phone and computer.

The first step to starting a new business is financing. There are several options to obtain the funding based upon your personal and business needs. PAB&T has several options available such as…

  • Line of Credit – to assist with cash flow and purchases
  • Term Loan – typically used to purchase equipment
  • Commercial Mortgages - used for commercial property

Other options may be to use savings. This isn't always the first choice, but if handled correctly and there's a secondary financial back-up plan, this may be considered. Another option is to borrow from family, with the understanding that the family member is then entitled to interest or a portion of the eventual profits when the business is thriving.

As you develop your business plan, consider any tools or support that can assist you in becoming successful. For instance, Microsoft offers six months of Office 365 for free. Several grants are offered by institutions such as Facebook and Hello Alice for small businesses. Lastly, know that you can always count on your Business Banker and Commercial Lender at PAB&T for guidance and advice. 

After the long process of establishing your business, you will want to ensure that your finances are maintained correctly. Personal finances should always be separate from business. PAB&T offers a small business program with a low fee structure. We have a checking account that will fit your business needs, whether you are a startup or an established business. Our Bizunity™ Bridge Checking account has a low minimum balance requirement and a minimal fee structure perfect for a startup or a smaller business. We also offer Bizunity™ Analysis Checking geared towards established businesses that have more activity and offers an earnings credit to offset fees.

We also offer a full array of Treasury Management products that will assist with managing your day to day finances and cash flow.

If you've always wanted to own your own business and you have the tools and resources you need, consider your options carefully, but don't let the pandemic stop you. There is never perfect timing or guarantees that a business will be a success. Determination, a great idea, a sound business plan, and an effective marketing strategy will achieve success in any economy.

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