Welcome to Bank Notes, the place where our staff offers up some banker's insight to help you reach your financial goals, plan a budget, or whatever else may seem relevant as the year goes on. Check back each month as we add new "notes" and cover new topics.
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Ah, February. It’s the month of love, romance, hearts, and flowers.
You may be thinking it’s time to take your relationship to the next level….by adding them to your bank account. The convenience of sharing an account can be beneficial to pay shared bills or buy groceries, or show how much you trust your partner, but it can also cause problems if things go sour. Here are some important tips if you are considering taking a leap in love...
There are a few different options when adding your significant other, or anyone else, to your account.
With a Joint Account, you will both become owners of that account. Both parties will have access to any and all funds available, meaning that they will be able to deposit money into and withdraw money out of the account, without each other’s knowledge or consent. Just remember that with a joint account, credit scores of both account holders can be impacted should the account not be kept in good standing. Also, with this type of account, neither person can be removed if the relationship goes south, so you would have to close your joint account and open a new one.
Alternatively, you may choose to add your sweetie as a Signer on your account. A signer is able to make withdraws, sign checks, and obtain information on the owner’s behalf. However, signers cannot deposit any of their own checks, such as a payroll check or direct deposit, into that account. An important thing to remember is that a signer’s privileges are only good while the account owner agrees. If the account owner changes their mind or passes away (morbid – I know!), the signer’s privileges would immediately cease, no new account necessary.
Ok, so what if you want to make sure your honey is taken care of if something happens to you, but aren’t ready to share that much information yet? A POD Beneficiary (payable on death) might be what you’re looking for. This would mean the account is still yours alone and your significant owner can have no access without you being present but they would receive any money that is left in the account if you pass. This way, your mind can rest at ease about the future even if you aren’t so sure about where you stand today.
Want more info on other “joint” endeavors, like buying a home? We’re covering that next month!
Customer Solutions Representative
New Year… New You!
The New Year brings about reflection of the past and hope for the future! As we reflect on the past, we should celebrate our successes as well as the lessons learned. As we look forward to the New Year, we often set goals and make resolutions. Maybe you want to lose weight, exercise more, or renew friendships; all goals to become a better you. Have you thought about taking control of your money? If you haven’t made finances part of the “new you” plan, perhaps you will when the Christmas bills arrive! I encourage you to make 2018 the year you become financially empowered. After all, lack of financial understanding can lead to late bills, wasted money, and a lot of stress that can negatively affect both your health and relationships.
Understanding what money you have and where it is going is the first step towards financial empowerment. Here's where you should start:
- List all of your income.
This is the money you have coming in each month to spend or save. Account for wages, benefits, retirement, alimony, child support, interest and any other income.
- List all of your expenses.
This is where it gets tricky! When you're watching your budget, you must be as honest about what you spend as you are about the calories you consume when you're watching your waistline!
Your expenses include rent or mortgage payments, utilities, food (groceries and eating out), insurance, taxes, medical bills, cell phone bills, clothing, entertainment and any other ways you spend your money.
Once you have made a list of all the money you are spending, it is important to review each item. Is the expense a need or a want? You need shelter or a roof over your head; food, water and basic healthcare to maintain your health; and appropriate clothing for your body. You may want a new winter coat and they are on sale; but if you have one that keeps you warm in the winter, a new coat is a want, not a need!
List your needs and how much you have committed to each item. Now compare the total dollar commitment for needs to your monthly income. If your needs exceed your income, you must find less expensive ways to meet your needs (or find a way to increase your income such as getting a second job or finding a better paying job). If on the other hand, your income is greater than your needs, congratulations, now you have some extra money to play with!
- Save, save, save!
With the remainder of your income, you can take care of some of your wants and save for a rainy day (actually I tend to stay home on a rainy day so...). There are always unexpected expenses, such as car repairs, housing repairs, and medical bills. And sometimes they all hit at once – when it rains, it pours! A good rule of thumb is to save up 3 months living expenses. This "nest egg" would tie you over if you lost your job, became ill, or had an unexpected expense.
They say money can’t buy happiness and I believe that is true. But lack of money sure can cause a lot of stress which adversely affects our health, relationships, and happiness. Check out this budgeting template to get started! Figure out where your money is going and make smart decisions about how you spend your money. Make 2018 the year you take control of your money!
April Russell Perry
Chairman of the Board