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December 2017 E-Newsletter

Business Corner: Bank Accounts to Open for Your Small Business

One of the most important decisions you’ll make when starting a business is choosing the right bank accounts. As an entrepreneur, you’ll want to make sure you don’t mix your personal finances with your business money: If your cash isn’t kept separate, it could be hard to meet IRS recordkeeping requirements, and that could lead to tax penalties. Opening new accounts in your company’s name is typically a better practice.

Having separate bank accounts could also help limit your personal liability. Say someone were to sue your company; your business assets might be at risk, but your personal assets would likely be protected from legal action.

Here’s a look at three common types of accounts to consider for your company.

Business checking
For entrepreneurs, opening a business checking account means you don’t have to ask customers to write checks to you personally. Some customers could view checks written out to individuals as unprofessional, and that could hurt sales. With a business account, checks are made out to the company name.

Many banks offer business checking accounts for a minimal fee. Some even offer free business checking, though your company may need to agree to limit deposits and withdrawals to a set number — say, 300 transactions a month — or agree to keep a certain minimum balance.

When you sign up for business checking, many financial institutions will also offer online banking and payroll processing services.

Business savings
You don’t have to put all your company’s cash in a checking account. It may make sense to place money you don’t need to spend right away into a business savings account, where it may earn a better rate of return.
A business savings account could also serve as an emergency fund to help pay for business operations if your company goes through a sales slump. And, as with personal accounts, your money would be protected with federal insurance up to $250,000 per depositor.

Business credit card
Opening a credit card in your company’s name gives your business a chance to establish credit. When you first sign up, you may need to personally guarantee the debt because your company won’t have an established financial history. But your company will soon show a track record of payment as you put the card to use. Eventually, business loans and credit requests could be guaranteed by your company, and not your personal finances.

Opening bank accounts for your business can be an important step in establishing your company’s financials. By opening a separate checking account, savings account and credit card for your business, you’ll avoid the headaches that mingling personal and business money can create and you’ll make your company’s record-keeping easier and more robust for the future.

© Copyright 2016 NerdWallet, Inc. All Rights Reserved

How to Lower Your Energy Bill

Energy bill too high? It might be time to consider the physics behind your energy use. The scientific attributes of heat and energy mean particular appliances and factors affect your utility bills disproportionately.

If this all sounds like high school science class, don’t fall asleep; this lesson can save you money. The Energy Department estimates that the typical family spends around $2,200 per year on utilities. It also estimates that you can lower your energy bill by as much as 25% — that’s $550 — with a commitment to reducing your usage.

Reduce your summer and winter energy bills
You know what happens when you leave a hot cup of coffee in the snow: It gets cold. A physicist would point out that heat flows spontaneously from hotter to cooler objects until equilibrium is reached, i.e., until they are the same temperature.

This process is happening around your house all the time. Its 20 degrees outside and 70 degrees inside; left alone, your house will lose heat until it’s just as cold inside as out. To maintain the temperature difference, you’ll either need to stop the heat from leaving (insulation) or add more heat to your house (your heater). It’s the same principle in summer but in reverse: Keep the heat from coming in or remove the heat from your house (air conditioning).

Home heating and cooling are often the biggest culprits behind hefty utility bills — and the best places to look for cost-cutting opportunities. The more that heat stays where it’s supposed to, the less energy you need to move it where you want it to be.

With that in mind, you can do the following:
  • Make sure your fridge and freezer are well-sealed
  • Check seals around your windows and doors
  • Seal leaky heating, ventilation and air conditioning ducts
  • Insulate outlets and light switches
  • Insulate your water heater and its hot-water pipes
  • Set your fridge to 38 degrees and your freezer to 5 degrees. The warmer the setting, the less work the fridge and freezer have to do to maintain the temperature. Of course, you still want them to be cold enough to keep your food fresh.
  • Set your thermostat a couple of degrees lower in the winter and higher in the summer
  • Upgrade your home insulation
  • Install double-pane windows
  • Plant shade trees outside your house to reduce heating by summer sunlight
Wherever there’s a difference in temperature, you’ll likely want to keep it that way. In some cases though, you should flip the principle on its head. For example, you’ll want to open your blinds in winter so the sunlight can help heat your home.

Less water means less power
If you think back to high school chemistry, you might remember something about water having a high “specific heat.” This means water can absorb relatively significant amounts of heat without its temperature rising by much.

This property is helpful if you want to, say, cool down a nuclear power plant. It’s less helpful when you need to apply a significant amount of energy just to boil water for your tea.

It comes as no surprise then that the Energy Department estimates water heating to be the second-largest expense in powering your home, making up 14% to 18% of your power bill.
So as mentioned earlier, if you use energy to heat water, you’ll want that water to stay hot. You’ll also want to reduce your home’s demand for hot water in the first place.

Here are a few things you can do:
  • Shorten your shower time, using a waterproof timer in your shower to alert you
  • Wash your clothes in cold water
  • Fix leaky pipes
  • Install efficient shower heads that maintain water pressure while using less hot water
  • Install an efficient dishwasher; most of a dishwasher’s energy use is from heating water
  • Install an efficient water heater and lower its temperature to 120 degrees; usually, it’s set at 140 degrees
When you consume power, do it wisely
If you’re going to use power, make sure you use it well.

The upfront investment for new, more efficient appliances can be high, but you also can wring efficiency easily out of other things around the house. If you do shell out for more efficient appliances, buy the ones that run most often, like the fridge, HVAC system, water heater, dehumidifier, television, washer and dryer.

One big item to check on is whether your utility provider offers discounted rates on power during certain times of the day. If you can move energy-intensive chores, such as laundry, to low demand or off-peak times, prices on energy can be 5% to 25% lower.
Other ways to find efficiency:

  • Check your HVAC air filters regularly — once a month if you’re serious about it — and replace them if they’re dirty
  • Clean and maintain your refrigerator coils
  • Install a programmable thermostat to manage your home’s temperature even when you’re out
  • Replace your burnt-out lightbulbs with energy-efficient compact fluorescent or LED bulbs
  • Install motion detectors for outdoor lights instead of leaving them on all night
  • Install dimmer switches on your lights so you can brighten the room only as much as you need
Some electronic gadgets don’t turn off; they go into “standby” mode while still requiring a trickle of power that can add up over devices and time. These are usually — but not exclusively — items with a remote control because the remote sensor needs power while waiting for your input. Plug these electronics into a smart power strip, which cuts off the current when the devices aren’t in use.

You also can see if a local company or utility will give your house a full energy audit — sometimes for free. It can help you with the supplies and strategies necessary for a more efficient home.

Check out the Energy Department’s in-depth Energy Saver Guide.

The article How to Lower Your Energy Bill originally appeared on NerdWallet.

Coulee Bank's Q-Tip: Three Steps to Strong Passwords You Can Remember

Passwords are the house keys to your online accounts, and when they’re hacked, intruders can break in and wreak havoc.

To create strong passwords, you have to strike a balance between making them difficult for others to guess and making them easy enough for you to remember. Many people favor simple ones at their own risk: “123456” and “password” have remained the two most common passwords for six years, according to password security company SplashData.

Unlike many other security measures on websites, a password is one you have full control over. And given that over 1,000 data breaches happened in 2017 alone, according to the Identity Theft Resource Center, it might be time to strengthen your passwords. Here’s how.

How to make a foolproof password
1. Start with a sentence
Despite the “word” in “password,” it’s better to think of starting with multiple words. Some websites require only six or eight characters for passwords, but that doesn’t mean it’s a recommended length.

When it comes to passwords, “longer is better,” says Richard Crone, a payments expert and CEO of Crone Consulting LLC. “And the way to do that is to use a sentence structure.”

Pick a sentence that’s memorable but doesn’t have details that relate too closely to you. Avoid using birthdays or the names of pets or family members, and feel free to be creative. Here’s an example: “cats do not like cucumbers.” Then, take out the spaces, “catsdonotlikecucumbers.”

“It’s really the length and the unrelatedness that gives you the best protection,” Crone says.

2. Avoid using real words
Change how your sentence looks by removing all the vowels, or only use the first one or two letters of each word. Don’t use dictionary words, which makes your password easier to guess.
The previous example becomes “cadonolicu” if you’re using the first two letters of every word in that sentence.

3. Mix in numbers, symbols and uppercase letters
Bring in a variety of characters to your password. Some websites have minimum requirements so you need to use at least one capital letter, one lowercase letter and a number. You might have to add a symbol like a period or exclamation point, too. As you mix it up, don’t repeat letters, numbers or symbols right next to each other.

By capitalizing some letters, replacing the “l” with an exclamation point and turning an “o” into a zero, the sample password becomes “CaD0No!icU.”

Use a password manager
The steps above help when you’re creating one really strong password, but remembering a dozen or more such passwords might make your head spin. That’s why you might want to consider using a password manager such as LastPass or Dashlane. There are free options, but some features are available only for purchase.

Think of a password manager as a bank vault that creates and stores long and complex passwords so you don’t have to. The only password to know is the one that unlocks the vault. Once you type that one, you can log into whatever online accounts you decide to keep on the password manager.

If you don’t use an online password manager, consider writing down complex passwords and storing them in a safe place such as a locked cabinet at home or in an encrypted file on your computer. These passwords should be difficult to access as well as to guess.

A password is “like scrambled eggs,” Crone says. “The more you fluff it up and spice it up, the better.”

The article 3 Steps to Strong Passwords You Can Remember originally appeared on NerdWallet.

Q-Tips are provided by Coulee Bank's IT Network Risk Manager, Quentin Fisher. He is always on the lookout for ways to keep our customers' information safe, here at the bank, at work and home.

Five Financial Rules to Live By

Are you among the 65% of Americans being kept up at night by money worries? Managing your money can definitely be overwhelming, especially with so much conflicting advice out there.

The good news is, you don't actually have to do much to get your finances under control. You just have to follow a few simple rules to streamline your spending and tackle all of your biggest money issues.

Here are five basic financial rules to live by that will change your life and put you on the path toward a more prosperous future.

1. Spend less than you earn
More than 3/4 of full-time workers were living paycheck to paycheck in 2017, and 71% of U.S. workers were in debt according to a CareerBuilder survey.

Unfortunately, it's impossible to ever get ahead if you're spending as much -- or more -- than you're bringing in. To be able to save, you must have money left at the end of the month. This means you need to either increase your income or reduce your spending.

Boosting your income could come from asking for a raise, doing overtime, taking on side gigs, or starting a new business. Spending less than you earn usually requires tracking your spending, setting a budget, and sticking to self-imposed spending limits.

Or, to force yourself to spend less than you earn without hassling with a budget, automate your savings and have money withdrawn directly from your paycheck before you ever see it. You can't spend what you don't have. Just don't get out the credit cards to make up the difference!

2. Institute a 24-hour rule for big purchases
More than half of all respondents to a 2013 Credit Donkey survey reported regularly feeling guilty after making purchases. Spending a lot of cash on something that doesn't bring joy to your life is a waste.

To stop the guilt and make sure you're getting your monies worth out of every buy, institute a waiting period of at least 24-hours before you make a big purchase. Your definition of a "big" purchase will vary depending upon your income. Around $100 is a good number for many families.

The 24-hour waiting period gives you time to think about whether it's really worth such a big outlay -- do you really need that new iPhone or is there something better you could do with all that money?

A waiting period also gives you time to shop for a better deal. If you can't get the item out of your head and decide to purchase, you may save a few bucks anyway.

3. Get on the same page with your spouse
Money is the number one cause of relationship stress. Not only does fighting about money make it hard to get along with your spouse, but it also makes it difficult to accomplish financial goals. If you're trying to save or get out of debt and your spouse is hitting the mall, you'll never get ahead.

To ensure you're on the same page, set aside time for regular money talks. Agree on the big stuff, like how much you want to save and what your big financial goals are for the future -- then find ways to work together to achieve your plans.

If you're constantly fighting about spending, it may be best for each spouse to have a separate account with a mutually agreed amount of "fun" money. Make a deal that once the money is gone, spending will stop.

4. Save for a rainy day
Emergencies absolutely are going to happen. In fact, 60% of Americans responding to a 2015 Pew Survey indicated they'd experienced a financial shock during the prior year and the median cost of the most expensive financial shock was $2,000 for these households.

Unfortunately, almost 60% of Americans don't have $500 in the bank to cover an emergency, and more than half of all households reporting a financial shock still hadn't recovered their financial equilibrium six months later.

If you don't have rainy day savings, you'll perpetually end up in debt when you have to put your emergencies on a credit card. This will derail repayment efforts and make saving harder.

An ideal goal is to save enough cash to cover around 3-6 months of living expenses. If that sounds insurmountable, start with saving a little money each month until you have at least $1,000. You can grow your emergency fund over time, but at least this will cover most financial disasters without sending you reaching for your credit cards.

5. Prioritize your retirement savings
Even if you don't follow any of these other rules, this is the big one. You absolutely must save for retirement.

You cannot live on Social Security alone. Unfortunately almost half of all American families have nothing at all saved for retirement, according to the Economic Policy Institute. Once you cannot work anymore, there will be nothing you can do -- so you need to act now.

Before paying for anything else other than the most essential bills, divert a portion of your paycheck toward a workplace 401(k), an IRA, or other tax-advantaged retirement account.

Ideally, you should try to work up to saving at least 15% of your income, but start with whatever you can spare. Aggressively increase your savings -- including diverting your raises to your retirement funds -- until you've reached your savings goal.

Living by these five golden rules of money management is easier said than done, but if you can pull it off, the rewards are worth it. A happier marriage, more financial security, and the ability to stop worrying about money are benefits that will pay big dividends once you get your financial life under control.

Source: CNNMoney

Coulee Investment Corner: Surviving the Holiday Spending Season... Debt Free

As the traditional giving season approaches, there is one important item to add to your to do list: Create a holiday budget. Before the gift shopping and wrapping begins, take control of your wallet through financial preparation. Remember, you can avoid the credit card crunch and the dangerous pitfall of borrowing against your company's retirement savings plan or IRAs.

Here's how to establish a holiday wish list and spending budget:
  • Start by determining the total amount of money that you want to budget for gifts. Carefully evaluate how much money your budget will allow for holiday spending. Be honest and be realistic. The idea is not to spend more than you plan for during the holiday season.
  • Next, make a list of people that you will be buying gifts for this year.
  • Write down ideas for each person on the gift buying list. Set an amount that you will spend for each person on the list, than estimate the cost of each gift idea. Create an alternative gift idea for each person if your first idea is too expensive.
  • After making the purchase, write down the exact cost of the gift, totaling your expenditures. Be sure to include the price of gift wrap and cards.
  • Prioritize your holiday wish list and consider your plans in light of your budget. You may have to choose between gift-giving, entertaining, or travel. Families can decide together how much to spend for the holidays, including gifts, decorations, and food.
  • Take a radical step to hide your credit cards. For example, put your credit cards in the freezer.
  • Don't forget inexpensive gifts, such as themed baskets. An Italian gift basket can include a colander, spiral pasta, gourmet spaghetti sauce, a pasta spoon, and garlic bulbs.
Whether you celebrate Christmas, Chanukah, Kwanzaa, or even the Winter Solstice, you can make a commitment to sharing holiday presents with family and friends, attending your place of worship, and giving to your favorite charity, without worrying about credit card bills or repayment of bank or 401(k) loans.

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Because of the possibility of human or mechanical error by Wealth Management Systems Inc. or its sources, neither Wealth Management Systems Inc. nor its sources guarantees the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. In no event shall Wealth Management Systems Inc. be liable for any indirect, special or consequential damages in connection with subscriber's or others' use of the content.

© 2016 DST Systems, Inc. Reproduction in whole or in part prohibited, except by permission. All rights reserved. Not responsible for any errors or omissions.

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