6 Financial Traps New College Graduates Should Avoid

Wednesday, July 13 at 10:25 AM
Category: Personal Finance

As recent college graduates start their careers, their financial lifestyle should be top of mind, says the American Bankers Association. ABA has highlighted six traps new college graduates should avoid to fortify their finances as they transition from the dorm to the office.

“Now is the time for college grads to get their financial life started on the right foot,” said Corey Carlisle, executive director of the ABA Foundation. “When it comes to managing your finances in the real world, pulling an all-nighter isn’t the best strategy. Forming positive financial habits today will set you up for lifelong success.”

According to ABA, new college graduates should avoid the following financial traps:
 
  • Not having a budget. Don’t spend more than you make. Calculate the amount of money you’re taking home after taxes, then figure out how much money you can afford to spend each month while contributing to your savings. Be sure to factor in recurring expenses such as student loans, monthly rent, utilities, groceries, transportation expenses and car loans.  
  • Forgoing an emergency fund. Make it a priority to set aside the equivalent of three to six months’ worth of living expenses. Start putting some money away immediately, no matter how small the amount. A bank savings account is a smart place to stash your cash for a rainy day. Use your tax refund for this instead of an impulse buy.
  • Paying bills late – or not at all. Each missed payment can hurt your credit history for up to seven years, and can affect your ability to get loans, the interest rates you pay and your ability to get a job or rent an apartment. Consider setting up automatic payments for regular expenses like student loans, car payments and phone bills.
  • Racking up debt. Understand the responsibilities and benefits of credit. Shop around for a card that best suits your needs, and spend only what you can afford to pay back. Credit is a great tool, but only if you use it responsibly. 
  • Not thinking about the future. It may seem odd since you’re just beginning your career, but now is the best time to start planning for your retirement. Contribute to your employer’s 401(k) or similar account, especially if there is a company match. Invest enough to qualify for your company’s full match – it’s free money that adds up to a significant chunk of change over the years.  
  • Ignoring help from your bank. Most banks offer online, mobile and text banking tools to manage your account night and day. Use these tools to check balances, pay bills, deposit checks, monitor transaction history and track budgets. 
For more tips and resources on a variety of personal finance topics such as mortgages, credit cards, protecting your identity and saving for college, visit aba.com/Consumers.*
 
The American Bankers Association is the voice of the nation’s $16 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2 million people, safeguard $12 trillion in deposits and extend more than $8 trillion in loans.
 
Links marked with * go to a third-party site not operated or endorsed by Arvest Bank, an FDIC-insured institution. 

Tags: Budgeting, College, Debt, Financial Education, Retirement, Savings
 

Regional Consumers Planning Major Purchases, Increase Savings

Thursday, June 30 at 09:00 AM
Category: Arvest News

Arvest Consumer Sentiment Survey measures respondents' spending and savings.

FAYETTEVILLE, Ark. – Consumers in the Arkansas, Missouri and Oklahoma region said they have plans to both make major household purchases in the next six months and to increase their household savings rate, according to final information released today from the Arvest Consumer Sentiment Survey. 

Those are among the more noticeable findings from the third installment of the Spring 2016 Arvest Consumer Sentiment Survey released today. This installment is the final piece of the survey, conducted in March and including Greater Kansas City, and focuses on consumers’ attitudes and behaviors concerning spending, saving and debt.

“It appears consumers are continuing a trend that started last year, that of small increases in making major purchases and taking on slightly more consumer debt,” Arvest Marketing Director Jason Kincy said. “But an increasing percentage of consumers have expressed a desire to increase their savings rate even after we have seen savings rates steadily going up over the past two years. So although consumers are feeling confident enough to start spending and accumulate more consumer debt, they are keeping an eye on the future by building a savings cushion between themselves and changes in the economy.”

Most notably, 34 percent of regional respondents indicate they plan to make major purchases in the next six months, compared with 28 percent in September. The percentage of respondents who report they made a major household purchase in the past six months rose from 38 to 39 percent. Among the remaining 66 percent who do not plan such major purchases in the next six months, 19 percent of those reported they were waiting for the right time to buy while 81 percent said they had no plans to buy at all. Major household purchases were defined as furniture, a television, refrigerator or other large items.

In Arkansas, Kathy Deck, director of the Center for Business and Economic Research (CBER) in the Sam M. Walton College of Business at the University of Arkansas and lead economist for the survey, said, “With gas prices and interest rates remaining low and incomes rising, Arkansans were most positive about the idea that buying conditions are at an attractive level right now.”

David Mitchell, director of the Bureau of Economic Research at Missouri State University, said similar things about Missourians.

“Although consumers’ outlook for the economy in the very near term might have appeared somewhat ambiguous,” Mitchell said, “they clearly see a brighter picture in the long term as evidenced by their desire to make purchases and acquire credit.”

Consumer debt within the region was divided among several categories – mortgage, home equity, auto, credit cards and student loans. In the region overall, more consumers reported having consumer debt of some kind, with increases in auto loans (from 32 percent in September to 33 percent in March), credit cards (from 40 percent to 41 percent), and student loans (from 14 percent to 21 percent). The percent of respondents who reported having no current consumer debt dropped from 27 percent to 22 percent. 

When looking at the savings rate, regional consumers reported they are saving 15.8 percent of their earnings, up from 13.6 percent in the previous survey. The overall savings rate for Arkansas is 16.4 percent, while Missouri is at 16.0 percent and Oklahoma 15.1 percent.

The majority of regional respondents, 68 percent, expect to maintain their current savings rate over the next six months and 22 percent expect to increase their savings rate. Only 10 percent expect to decrease their savings rate over the same time period.

In Oklahoma, a state largely dependent on the energy industry, economist Russell Evans said increased savings rates make sense.

“A hesitance to spend and notion to save are consistent with expressed expectations for a challenging present and uncertain future,” said Evans, executive director of the Steven C. Agee Economic Research & Policy Institute at Oklahoma City University.

The Arvest Consumer Sentiment Survey is conducted by the CBER, which also evaluates the Arkansas data, with the University of Oklahoma’s Public Opinion Learning Laboratory conducting 1,200 random phone and online surveys.

The survey is conducted twice a year, with the next results expected to be released in October. With each study, the Consumer Sentiment Survey Index score will be released first, followed by a second release on consumer outlook, including the Current Conditions Index and the Consumer Expectations Index, which are sub-indexes of the Consumer Sentiment Survey Index.

Arvest Bank’s sponsorship of this survey, which follows the model of the national Survey of Consumers produced by the University of Michigan, is due to its desire to provide beneficial data for its customers and communities. The data provides a reading of how consumers are feeling about the economy in the states where the bank operates. Additionally, with future results, consumers, as well as the business community, will be able to see how sentiment is trending.

The Bureau of Economic Research at Missouri State University provides state analysis of the Missouri data. The Steven C. Agee Economic Research & Policy Institute, Meinders School of Business at Oklahoma City University, evaluates the data for Oklahoma.

Information about the survey and research partners, copies of this release, summary documents and print-ready logos can be found at www.arvestconsumersurvey.com.

Data released as part of the Arvest Consumer Sentiment Survey, summary and news releases is free for broadcast, publication or use in presentations. Please cite “Arvest Consumer Sentiment Survey” as the source each time information is referenced.

Tags: Arkansas, Arvest Consumer Sentiment Survey, Debt, Missouri, Oklahoma, Press Release, Savings
 

6 Tips to Spring Clean Your Finances

Monday, April 25 at 09:50 AM
Category: Personal Finance

For many Americans, spring is a time to clean, sort and tidy up around the house. As you dust your shelves and rid your home of clutter, consider setting aside some time to organize your finances.

“The arrival of spring motivates people to renew their surroundings, and what better way to focus that momentum than to check off everything on your financial to-do list?” asked Corey Carlisle, executive director of the ABA Foundation. “Taking stock of your finances and planting the seeds of new saving habits today will go a long way toward alleviating pressures on your pocket throughout the year.”

The American Bankers Association* recommends these six tips to help you refresh your finances:
  • Evaluate and pay down debt. Take a look at how much you owe and what you are paying in interest. If there are better rates available now, consider requesting a lower credit card interest rate or refinancing your mortgage. Begin paying off existing debt, whether that’s by chipping away at loans with the highest interest rates or eliminating smaller debt first. 
  • Review your budget. A lot can change in a year. If you’ve been promoted, had a child, or become a new homeowner or renter, be sure to update your budget. Determine what expenses demand the most money and identify areas where you can realistically cut back. Develop a strategy for spending and saving and stick to it.   
  • Check your credit report. Every year, you are guaranteed one free credit report from each of the three credit bureaus. Take advantage of these free reports by requesting them at annualcreditreport.com* and check them for any possible errors. Mistakes can drag down your score and prevent you from getting a loan, or cause you to pay a higher than necessary interest rate.  
  • Download your bank's mobile app. Manage your finances from the palm of your hand. With the click of a few buttons, you can make a deposit or access a record of recent transactions. Be sure to download the latest updates when they are available.
  • Sign up for e.Statements and mobile alerts. Converting to paperless billing will help keep your house — physically and financially — more clean and organized.
  • Set up automatic BillPay. By signing up for automatic bill pay, you won’t have to worry about a missed payment. You can set it so money is withdrawn from your checking account on the same day each month.
As you spring clean your finances, you’ll receive that same satisfaction you get after doing a thorough cleaning of your home!
 
Information courtesy American Bankers Association.

Links marked with * go to a third-party site not operated or endorsed by Arvest Bank, an FDIC-insured institution.

Tags: Debt, Financial Education, Mobile Banking, Technology
 

5 Ways to Make Your Tax Refund Count

Friday, April 22 at 11:15 AM
Category: Personal Finance

According to the Internal Revenue Service*, the nation’s taxpayers received an average tax refund of nearly $3,000 in 2015. This year, with more than 70 percent of taxpayers receiving a refund, the American Bankers Association* is highlighting five tips to help them make the most out of their windfall.

“Tax season is a great time for consumers to reassess how they allocate extra cash,” said Corey Carlisle, executive director of the ABA Foundation. “It’s wise to take steps toward securing your financial well-being like storing your refund for rainy days or using it to get a jumpstart on saving for retirement.”
 
To help consumers make the most out of their money, the American Bankers Association has highlighted the following tips:
  • Save for emergencies. Open or add to a high-yield savings account that serves as an “emergency fund.” Ideally, it should hold about three to six months of living expenses in case of sudden financial hardships like losing your job or having to replace your car.   
  • Pay off debt. Pay down existing balances either by chipping away at loans with the highest interest rates or eliminating smaller debt first.
  • Save for retirement. Open or increase contributions to a tax-deferred savings plan like a 401(k) or an IRA. Where can you get one? Your bank can help set up an IRA, while a 401(k) is employer-sponsored.
  • Put it toward a down payment. The biggest challenge that most first-time home buyers face is coming up with enough money for a down payment. If you intend to buy a new home in the near future, putting your tax refund toward the down payment is a smart move.
  • Invest in your current home. Use your refund to invest in home improvements that will pay you back in the long run by increasing the value of your home. This can include small, cost-effective upgrades like energy-efficient appliances that will pay off in both the short and long term. If you have more substantial renovations in mind, your bank can help with a home equity line of credit.
Make your tax refund count so you can enjoy the long-term benefits by planning ahead how you’re going to use it. 

Links marked with * go to a third-party site not operated or endorsed by Arvest Bank, an FDIC-insured institution.

Tags: Debt, Financial Education, Retirement, Tax
 

7 Bad Spending Habits to Avoid This Holiday Season

Tuesday, December 15 at 10:25 AM
Category: Personal Finance

Amid the bustling holiday season, the American Bankers Association has identified seven habits shoppers should avoid to minimize their holiday spending debt.

“The holiday season is an exciting and inspiring time of the year that promotes giving, but spending within your means is the best gift you can give yourself,” said Corey Carlisle, executive director of the ABA Foundation. “Managing a realistic budget and developing a shopping list that complements it will help you start the new year with a clean financial slate.”

Steering clear of these bad spending habits will help you begin the new year fiscally fit:
  • Forgetting to plan ahead. Before you start shopping, develop a realistic budget. Consider your income, subtract your normal monthly expenses and then add any savings to whatever cash is left over. If you need to use your credit card, think about what you can afford to pay back in January.  
  • Losing track of other costs. Don’t forget costs beyond gifts, like postage, gift wrap, decorations, greeting cards, food, travel and charitable contributions.
  • Winging it. Make a list and check it twice. Keep your gift list limited to family and close friends, noting how much you want to spend on each.  
  • Waiting until the last minute to shop. Avoid shopping while rushed or under pressure, which can lead to overspending. Make sure to comparison shop online first, or download an app that lets you compare prices before you buy anything in a store. Before you head to the cashier (or online checkout), make sure your purchase is within the budget you set.
  • Shopping impulsively. Finding a spectacular sale on something you’ve been wanting can easily throw you off course. Stay strong and stick to your budget. And, don’t apply for store credit cards you don’t need just to get a one-time discount.
  • Using credit recklessly. Limit the use of credit for holiday spending. If you must use credit, use only one card — preferably the one with the lowest interest rate — and leave the rest at home. Pick a date when you can pay off your holiday credit card bills, and commit to paying off the balance by that time. Be sure to check statements for unauthorized charges and report them immediately.
  • Throwing away your receipts. Not only will you need them for possible returns, you’ll need them to keep track of what you’ve spent and to compare with your credit card statement. Knowing how much you spent will help you plan for next year, too.
Make your holiday season and the new year more joyful by avoiding these bad spending habits now.
 
Article courtesy of American Bankers Association. 

Tags: Budgeting, Credit Cards, Debt, Financial Education
 

Teens: How to Ace Your First Test Managing Real Money in the Real World

Monday, October 19 at 08:20 AM
Category: Personal Finance

As a teen, you're beginning to make some grown-up decisions about how to save and spend your money. That's why learning the right ways to manage money, right from the start, is important. Here are suggestions.

Save some money before you're tempted to spend it. When you get cash for your birthday or from a job, automatically put a portion of it — at least 10 percent, but possibly more — into a savings or investment account. This strategy is what financial advisors call "paying yourself first." Making this a habit can gradually turn small sums of money into big amounts that can help pay for really important purchases in the future. 

Also put your spare change to use. When you empty your pockets at the end of the day, consider putting some of that loose change into a jar or any other container, and then about once a month put that money into a savings account at the bank.

"Spare change can add up quickly," said Luke W. Reynolds, chief of the FDIC's Community Affairs Outreach Section. "But don't let that money sit around your house month after month, earning no interest and at risk of being lost or stolen." 

If you need some help sorting and counting your change, he said, find out if your bank has a coin machine you can use. If not, the bank may give you coin wrappers.

Keep track of your spending. A good way to take control of your money is to decide on maximum amounts you aim to spend each week or each month for certain expenses, such as entertainment and snack food. This task is commonly known as "budgeting" your money or developing a "spending plan." And to help manage your money, it's worth keeping a list of your expenses for about a month, so you have a better idea of where your dollars are going.

"If you find you're spending more than you intended, you may need to reduce your spending or increase your income," Reynolds added. "It's all about setting goals for yourself and then making the right choices with your money to help you achieve those goals."

Consider a part-time or summer job.
Whether it's babysitting, lawn mowing or a job in a "real" business, working outside of your home can provide you with income, new skills and references that can be useful after high school or college. Before accepting any job, ask your parents for their permission and advice. 

Think before you buy. Many teens make quick and costly decisions to buy the latest clothes or electronics without considering whether they are getting a good value. 

"A $200 pair of shoes hawked by a celebrity gets you to the same destination at the same speed as a $50 pair," said Reynolds. "Before you buy something, especially a big purchase, ask yourself if you really need or just want the item, if you've done enough research and comparison-shopping, and if you can truly afford the purchase without having to cut back on spending for something else."

Be smart about college.
If you're planning to go to college, learn about your options for saving or borrowing money for what could be a major expense — from tuition to books, fees and housing. Also consider the costs when you search for a school. Otherwise, when you graduate, your college debts could be high and may limit your options like where you can afford to live.

For more information on saving and borrowing for college, visit Federal Student Aid.*

Information courtesy of FDIC Consumer News.

Links marked with * go to a third-party site not operated or endorsed by Arvest Bank, an FDIC-insured institution.

Tags: Budgeting, Debt, Financial Education, Savings

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