New Year, New Savings Approach

Friday, January 03 at 01:05 PM
Category: Personal Finance

Strike up a conversation about retirement with someone in their early working years and their thoughts often can be read plainly on their faces. It’s as if they’re standing at one end of the solar system and being asked to spot a galaxy 100,000 light years away and being asked to plan for how they’re going to get there. It seems unreachable, unknowable for now. They’ll figure it out later.

Unfortunately, later doesn’t work too well. The longer we put off saving for retirement, the more risk we take in not having enough assets as that once-obscure galaxy comes into view. Starting a disciplined saving routine is less painful than it sounds, and a new year is as good a time as any to begin.

The most practical way for most people to start saving is through an employer retirement plan. It might be a 401(k). It could be a 403(b) or a SIMPLE IRA. There are other employer retirement vehicles, but these are the most common ones that allow the employee to contribute his or her own money.

Employers want workers to participate in these plans because they know it promotes worker satisfaction and, hopefully, more productivity and less turnover. So most companies match part of the employee’s contribution. For instance, several Fortune 500 companies kick in an amount equal to as much as 6 percent of pay as long as the associate contributes that much. The account owner has doubled his money before it’s ever invested.

The government also encourages retirement saving by allowing contributions to be made from earnings without being taxed. Then all growth and income generated inside the account go untaxed until withdrawals start in retirement. Ideally, those funds will be coming out at a time in life when a person’s tax bracket is lower than when he was working full time.

How much money will be needed in retirement depends on each retiree’s spending and big-picture goals. A financial advisor can help with that kind of planning. The advisor’s advice when it comes to saving typically is going to be to take advantage of the employer’s match at a minimum and to do more over time.

As nice as the IRS is in allowing pre-tax contributions, that generosity is limited. The most that can be deferred into a 401(k) in 2014 is $17,500 for anyone under age 50. At 50 and older, an additional $5,500 catch-up contribution is allowed for a total of $23,000 a year.

People whose employers don’t offer a retirement plan can use either a traditional IRA or Roth IRA. Which one is more appropriate depends on several factors that a financial advisor or tax advisor can help you determine.

A few generations ago, the retirement-funding recipe usually consisted of an employer pension, Social Security and personal savings. Now, pensions are rare and Social Security isn’t enough by itself to make ends meet for most. The importance of personal saving is greater than ever.

And delaying can be expensive. Assuming 6 percent annual compounded growth, an investor who saves $6,000 a year starting at age 25 will accumulate $754,741 by age 60. Waiting to start until age 35, that figure drops to $374,689. Waiting to start until 45, the total is $162,414.

So start now. Start with something. Even if it’s a token contribution, do it so it becomes a habit as you move into your higher-earning years ahead.

Tags: Cash Management, Financial Education, Investing

The Basics of Accepting Money from the Public

Wednesday, November 06 at 07:45 AM
Category: Business Banking

As a small business, you've also got to think about how you will get paid. And when deciding which payment methods to accept besides cash, you should be aware of the costs and benefits, the different responsibilities connected to each (including privacy and data security requirements), and the protections that will cover your customers. Key examples follow.

Credit and Debit Cards: When you accept credit or debit cards, you'll work with a bank that will give you access to the card network payment system. That bank also will oversee your compliance with rules from the card networks themselves (such as Visa, MasterCard and American Express) that govern many different aspects of your card acceptance.

Recent rule changes made by the Federal Reserve Board under the Dodd-Frank financial reform law also limit the "interchange" (transaction) fees that large debit card issuers can charge to merchants. This means merchants like you may pay lower fees for debit card transactions than for credit cards. Also, merchants might be charged lower fees when accepting debit cards from larger debit card issuers than smaller ones.

Checks: In addition to the old-fashioned ways of depositing paper checks, you may be able to scan and deposit them to your bank account remotely. You can also initiate one-time or recurring debits from a customer's checking account.

Mobile Payments: "Mobile wallets" allow consumers to make payments using accounts — including traditional credit or debit cards — linked to a smartphone without using the actual plastic card. Along with the investment in equipment that would be needed to accept mobile payments, you'll also need to consider issues such as data security. Mobile payments also may mean dealing with companies other than card networks, which in turn may mean agreeing to different or additional terms for accepting mobile payments.

To learn more, start by familiarizing yourself with rules and procedures from your bank, Visa, MasterCard, PayPal and other payment companies you may use. Some of those requirements may be imposed by federal law, others by state law, and others by industry requirements.

The views of this article are for general information use only. Please contact and speak with a subject expert or your banker when specific advice is needed. Find articles like this and much more in the online Arvest Biz Center.

Tags: Arvest Biz, Business Banking, Cash Management, Credit Cards

Biz Spotlight: Scotts LawnService

Friday, October 18 at 11:10 AM
Category: Business Banking

In the fall of 2005, Trent Ragar decided to leap headfirst into a dream of being a small business owner.  At the young age of 24, Ragar decided franchising would increase his chances of success. Scotts LawnService, a franchise of the Scotts Miracle-Gro, was the perfect fit. Scotts LawnService provides residential and commercial customers with weed control and fertilization services as well as other lawn care services. Each year since 2005 SLS has shown double-digit growth in Northwest Arkansas and recently earned the “Best Lawn Care Services” award for 2013 from NWA Media. 

The tremendous products, lawn care training and branding from Scotts Miracle-Gro combined with the local customer service and hard work from Ragar and his wife, Amanda, resulted in the challenges of a rapidly growing business. What began in 2005 as a business with one employee and no customers has grown into a multimillion-dollar operation with 6,000 customers.

“We were really fortunate to start a home service business in Northwest Arkansas just as the housing market was thriving,” Ragar said. “The growth of the area really helped us get started, but the quality and service of our staff helped us to maintain growth even during the recession.”

As customer numbers and revenue began to rapidly increase each year, Ragar and Amanda became overwhelmed with the amount of bookkeeping and relied heavily on the treasury management services of Arvest. In 2009, after Amanda left her vendor job in Bentonville, she came to work for the company as the full-time chief financial officer. 

“One of the first things I did to organize the company finances was to fully implement the Arvest cash management system,” said Amanda. “This was a huge help in reducing my time with payroll, account receivables, managing my Arvest loans and really just keeping a close eye on the financials of the company.” 

With growth comes many challenges including keeping up with financing needs. Ragar and Amanda say their relationship with Chris Massanelli, loan officer at Arvest, has been huge in acquiring the proper financing for growth. In 2011, Scotts LawnService utilized the SBA’s 504 loan program along with Arvest to purchase an 18,000 square foot office and warehouse facility. 

“Arvest was with us every step of the way,” said Ragar. “I truly believe our relationship with Arvest has been a success over the years because we both believe in the same philosophy -- customers come first.”

The views of this article are for general information use only. Please contact and speak with a subject expert or your banker when specific advice is needed. Find articles like this and much more in the online Arvest Biz Center.

Tags: Arkansas, Arvest Biz, Business Banking, Cash Management, Lending and Financing

Sooner Rather Than Later

Wednesday, October 09 at 11:05 AM
Category: Personal Finance

You may have heard the phrase, “We tend to over-estimate what we can accomplish in the short-term and under-estimate what we can accomplish in the long-term.” Taking a little bit of time, deciding on a few actions to plan for the future and then carrying out those decisions can result in a more financially secure future and financial peace of mind.

Save money on a monthly basis
Most believe it would be wise to save more money every month for retirement, college expenses or another goal. However, it’s easy to put it off. 

Just consider the difference between starting to save $300 per month at age 30 compared to age 40.  Simplify the example by ignoring taxes and assume you can earn 5 percent on your money. If you start at 30 and continue until age 65 (420 months), then you will have accumulated $340,827. If you wait until age 40 and continue to age 65 (300 months), then you will only have $178,652.

What about the difference between saving $300 and $350 using the same assumptions?

Notice even if you save less, you are still much further ahead by starting earlier. Starting at age 30 and saving $300 per month is better than starting at age 40 and saving $350 per month.

Instilling discipline
Some of the most successful financial results are achieved with a simple formula of deciding on a wise strategy and then following it religiously. It often seems the “following it” part can be harder than the “deciding on it” part of the formula, especially if “following it” is inconvenient or causes us to feel as though we are making too great of a sacrifice. Here are some ideas to help provide discipline.

Automatic savings plans. Let’s face it, writing a check or going to a branch every month to take money out of your checking account and deposit it into a savings account is inconvenient and the chances of missing a month or stopping completely are high. Why not just have your employer or bank handle it for you?

Arvest provides several convenient ways to transfer funds from your checking account to your savings account; Account Information Line, Arvest Online Banking and Arvest Mobile Banking.  The most convenient way to schedule a recurring transfer between accounts is using Arvest Online Banking.  You can create, adjust and/or delete recurring transfers using the Transfers tab inside Online Banking.

Retirement plan contributions. By having a portion of (or a larger portion of) your wages withheld and deposited into a 401(k) or 403(b) retirement plan, you accomplish several things. You save every pay period, you pay less income tax because the contributions are not included in your taxable income and the earnings on the funds are tax deferred.

Dollar cost averaging when buying mutual funds. This simple strategy simply involves investing a constant amount in a mutual fund every month (or on some other time frame). Most mutual fund companies offer dollar cost averaging programs. Dollar cost averaging is a convenient way to consistently save. And, merely because of the mechanics, you buy more shares when the price is lower and fewer shares when the price is higher. The result is a lower average cost basis.

Value of good financial habits
“Time is money.” Compound interest – earning interest on your interest – has often been called one of the Wonders of the Financial World. The more time your money can work for you, the more productive it will be. A simple rule of thumb is money doubles when the product of the earnings rate and the number of years equals 72. At 5 percent, money doubles in 14.4 years. At 6 percent, money doubles in 12 years.  At 8 percent, money doubles in nine years.

You may not be able to control how much you earn on your money, but the decision of how long you want your money to work for you – when you start – is totally up to you. Sooner is better than later.

Tags: Cash Management, Financial Education, Savings

Federal Reserve Board Issues Redesigned $100 Note

Tuesday, October 08 at 09:25 AM
Category: Personal Finance

As early as today, you may begin seeing a new $100 note in circulation. The newly designed bill has new security features which makes it harder to counterfeit.

The Federal Reserve on Tuesday began supplying financial institutions with a redesigned $100 note that incorporates new security features to deter counterfeiters and help businesses and consumers tell whether a note is genuine.

Distance, demand, and the policies of individual financial institutions will influence how quickly the redesigned notes reach businesses and consumers around the world.

“The new design incorporates security features that make it easier to authenticate, but harder to replicate,” said Federal Reserve Board Governor Jerome H. Powell. “As the new note transitions into daily transactions, the user-friendly security features will allow the public to more easily verify its authenticity.”

The Federal Reserve, U.S. Department of the Treasury, U.S. Bureau of Engraving and Printing, and the U.S. Secret Service partner to redesign Federal Reserve notes to stay ahead of counterfeiting threats.

The redesigned $100 note includes two new security features: a blue 3-D security ribbon with images of bells and 100s, and a color-changing bell in an inkwell. The new features, and additional features retained from the previous design, such as a watermark, offer the public a simple way to visually authenticate the redesigned $100 note.

Consumers worldwide are advised that it is not necessary to trade in older-design $100 notes for new ones. It is U.S. government policy that all designs of U.S. currency remain legal tender, regardless of when they were issued.

For more information about the new design $100 note, as well as training and educational materials, visit

For media inquiries, please call 202-452-2955.

Press release reprinted from

Tags: Cash Management, Financial Education, Press Release

Makin’ a List, Checkin’ it Twice

Friday, October 04 at 10:40 AM
Category: Personal Finance

It won’t be long until the holiday lights start going up, and the merchandising in stores changes to red and green.

It seems like the holiday season kicks off earlier and earlier each year, and sometimes that also means the arrival of stress over holiday spending. But don’t let debt be the Grinch that steals your holiday fun.

Instead, follow these spending tips to make this holiday season – and the new year – a happy one:

  • Making a list is one of the best things we can do to maintain fiscal health for the holidays. By planning gift purchases, we can put aside sufficient funds to pay for the holidays and not carry over balances into the New Year. A list also helps keep us on track and minimize impulse purchasing when we just don’t know what to get Grandpa Joe. Consider using a register or tracking log to keep spending on track.
  • Many financial pundits eschew credit cards to manage spending, but consider this -- most credit cards offer some type of rewards program. As long as the credit card is paid off each month, there are no finance charges (interest) and no fees. Another good idea if you plan to buy with a credit card is to take that cash, put it aside in an envelope for that holiday gift list and use it to pay off the credit card bill when it arrives in the mail or inbox. Consider paying the bill right after the purchase to make sure the holiday money isn’t spent elsewhere and to stay ahead of the due date. Use online banking and bill pay services to make the payment any time. Then enjoy rewards points that can be used for gift cards or travel, and avoid that New Year’s credit card balance hangover.
  • Give more gift cards. It’s easy to spend an extra $5 here and $10 there as you search for just the right gifts. With a gift card, you’ll spend exactly what you intended to spend.
  • Here’s another great gift idea: Treat yourself to a Christmas Club account, available at select Arvest locations, to prepare for next year’s holiday purchases. Visit select Arvest branches to open a Christmas Club account that only allows deposits during the year. The lump sum saved throughout the year will be transferred into your Arvest checking or savings account just in time for holiday purchases. Set up an automatic transfer to the Club account each month or payday to build a holiday nest egg. It also helps develop the habit of saving.
  • Some of the most heartfelt gifts are the ones we make. Have a baking weekend with the kids! Oh what fun it is to … sprinkle colored sugar and nibble on chocolate chips as a family. The personal treasures made with love create a holiday to remember. Think of the joy a collection of digital photos will bring to family members that live far away – or even next door!
  • Instead of throwing a holiday party and buying silly gifts for friends or co-workers, why not organize a group volunteer day? Instead of wasting money on gifts that may or may not get used, spend some meaningful time with your friends or co-workers, and make the world a better place in the process. There are plenty of worthy causes, after all, and if you take a few pictures during your volunteer effort, you’ll have a truly worthy memento.

Hopefully, these spending tips will help prepare you for the holiday season and maybe even set off a few carols in your head. As the song, “Santa Claus is Coming to Town,” reminds us, “… makin’ a list and checkin’ it twice …” is good advice and not just for Santa and his elves!

Tags: Arvest Rewards, Budgeting, Cash Management, Credit Cards, Financial Education, Gift Cards

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