News for YOU!

The new year is a great time to take a fresh perspective on your life and your goals. It’s why people often set financial resolutions, such as spending less money, saving more, or reducing debt. There’s actually a pretty easy way to help you accomplish all those goals: improving your credit score.

Your credit score can have a big impact on your life. It can help you qualify for the loan you need to reach your goals, such as buying a home or a car. It can also help you get the best interest rate, saving you a lot of money.
If you have a strong credit score, you are at an advantage, however, if you have a poor credit score or haven’t yet established one, you’ll want to work on raising it.

Here are five steps that can help you:

1. Pay your bills on time. Every time. The biggest factor that impacts your credit score is your history of making on-time payments. That’s why you should always pay your bills by the due date. Automating your bill payments and setting bill payment reminders can ensure you don’t miss a payment.
2. Reduce balances on credit cards and other revolving debt. If you have revolving lines of credit like credit cards or home equity lines, work on reducing your outstanding balances. That’s because revolving debt impacts your credit utilization, which is the percentage of revolving debt you use. Paying down your credit card balances will lower your credit utilization, which can increase your credit score.
3. Keep older accounts. If you have an older credit card you’ve paid off, you may be tempted to close it, but doing so can actually lower your credit score. To keep the lender from closing your account, use the card now and again to make and pay off small purchases.
4. Avoid applying for new credit. Sometimes it’s tempting to apply for a new credit card, especially when it comes with a perk like 20% off your first purchase or 50,000 airline miles. But each time you apply for a credit card, the lender will conduct a hard inquiry on your credit, which can lower your credit score. What’s more, those hard inquiries stay on your credit report for up to two years.
5. Regularly check your credit report for errors. Mistakes and fraud can happen, which can hurt your credit score. That’s why it’s essential to frequently check your credit report for errors. You can obtain a free credit report every 12 months from each of the three credit bureaus at AnnualCreditReport.com. If you spot errors, contact the credit bureaus to dispute them.

Your credit score is key to your financial health, so make sure you give it the attention it needs. There are many companies, websites, and apps to help you keep track of and boost your score.

Saving for emergencies, retirement, or other expenses can seem difficult, but there are some strategies that can make it easier. Saving can start with identifying your savings goals, finding unnecessary expenses to cut, and deciding where to put your savings. Start by asking yourself some of these questions.

Knowing why and how much you want to save can help you stick to a plan. For example, if you have a young child, ask yourself if you plan to help pay for college. Research indicates that children who have a college savings fund are more likely to go to college than those who don’t. Start by looking at “529 plans” sponsored by your state (typically with cost and tax benefits for residents) and compare them to other education-related savings options, such as a Roth IRA. Learn more about savings for college-related expenses in the Consumer News article, Thinking About Upcoming College Expenses?

Perhaps you have shorter-term goals, like to plan a vacation or wedding, or to make a large purchase for your home. Establishing the amount and timeframe within which you want to save can help you break down a larger amount into more manageable amounts to save over time. Learn more about how Savings Are Great for Short-Term Goals Too.

Review how much you spent in the last few months and consider ways to cut back. Start by reviewing recurring expenses, even small ones, and determine what you might be able to cut out, downgrade, or find a better deal on elsewhere. Visit How Money Smart Are You to create a monthly spending and saving plan. Determine what you can change to help you reach your financial goals. For example, try to pay less in interest. If you have multiple loans or credit cards, pay off the ones with the highest interest rates first. Regularly reviewing your credit report and correcting errors can result in considerable savings on loans and insurance policies. 

Our free online financial management tool, My Money, can help you set goals, create a budget, organize your personal finances, and track your savings. Look for My Money in your KS StateBank Online Banking account.

Am I saving money on a regular basis? Automatic transfers into savings on a set schedule can help you save money before you spend it. You can arrange with your bank to automatically transfer a certain amount from your checking account into a savings or investment account on a regular schedule. Automatic savings programs help to build an emergency fund or save for the future. For example, if you are paid every other week and put $20 into your savings account each pay period, that adds up to $520, plus interest, to your savings each year. Read more about how Starting Small Can Lead to Big Savings.

Financial experts generally recommend that you have at least six months of living expenses in a federally insured product, such as a savings account or a certificate of deposit (CD). Just note that CDs generally have a penalty for early withdrawal, so be sure to check with your bank on fees. The idea is to help you withstand a major reduction in income, such as from a job loss, or to pay for a major, unexpected home or car repair. To build your emergency savings fund, consider a combination of regular, automated deposits and any “windfalls” you receive, perhaps from a tax refund or a bonus at work.

Tax refunds provide a great opportunity to start a new savings account, contribute to your emergency fund, or reduce outstanding debt. The IRS Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs offer free basic tax return preparation to qualified individuals. By assisting taxpayers to prepare their taxes, VITA/TCE providers ensure taxpayers are receiving all the credits for which they are eligible, such as the Earned Income Tax Credit, and that can lead to a large refund. The safest and fastest way to get your tax refund is to have it electronically deposited into your bank account through the IRS Direct Deposit Program.

A traditional FDIC-insured savings account is a great place to put money aside for savings goals, as it allows you to withdraw funds easily and earn some interest. These accounts do not come with checks and the bank may limit the number of withdrawals you can make, which helps you avoid the temptation to spend your savings before you’re ready. You can even set up automatic transfers from your checking account to keep your savings separate. This separation helps to avoid spending your money frivolously.

Investments such as stocks, bonds and mutual funds can produce higher returns than bank deposits over many years, but the value of those investments are subject to fluctuations in the market. (Remember, non-deposit investments are not insured by the FDIC.) In general, the longer you plan to keep money invested and the greater your tolerance for risk, the more likely these investments can help you reach your targets. Visit Understand What It Means to Invest to learn more.

For many, the answer is “no” even when they think it is “yes.” Options to save include workplace retirement plans, and Individual Retirement Accounts (IRAs) offered by many banks and investment companies. As with other savings goals, it is important to understand why you are saving and how much you need to save. Financial needs change through all stages of our lives. Start by determining what your expected retirement income will be and compare it to the expenses and debt you think you will have in retirement. Read Saving for Retirement for more tips to consider.

Visit our Deposit Rates page to view the latest checking, savings, CD, and IRA rates.

Our offices will be closed on Monday, January 20 in honor of Martin Luther King, Jr. Day. We will reopen during regular hours on Tuesday, January 21