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November 2016 E-Newsletter

 7 Banking Tips for Millennials

Once you start receiving your first paychecks after graduation, knowing how to spend or save your money wisely can be tough. While you may be able to do your banking with just a few taps on your phone, managing money well is much more complicated. Here are a few tips to help you get started.

1. Budget using apps
Tracking how much you spend weekly and monthly shows you where your money goes and how you can save more. You can use a budgeting app that tracks your cash automatically or one where you enter information manually. Choose an app that lets you spend as little or as much time on budgeting as you want. From there, you can identify your total fixed expenses, such as rent and car payments, and more-flexible costs such as shopping and dining out.

2. Set up automatic transfers to savings
When you have a rough idea of how much you can save regularly, create a recurring transfer from your checking account to a savings account. By making savings automatic, you can get used to spending “below your means” and never have to worry about remembering to transfer.

3. Avoid overdrawing your checking account
Before you pay rent or spend any other big chunk of money, take a look at your checking account’s available balance. This can prevent you from spending more than you have in your account. If you overdraw, you may be charged a fee.

4. Establish credit
Student loans and credit cards can help you build good credit — as long as you stay current on monthly payments and don’t overuse your cards. Your credit score, which shows how responsible you are with credit, is an important factor that lenders check before approving car loans and mortgages. The better your score, the lower the interest rate you may be eligible for.

5. Repay debts strategically
If you have debts from multiple credit cards and student loans, pay the minimum on each and then contribute more to your higher-interest debts. By making those a priority, you can reduce how much interest you’re paying faster than by treating all debts the same.

6. Start an emergency fund
Being financially prepared in case of health emergencies or unexpected unemployment can save you from going into debt. Have a separate savings account just for this purpose; don’t mix it up with your regular savings. A good rule of thumb is to save enough to pay three to six months’ worth of living expenses.

7. Set long-term savings goals
Consider saving for retirement in an employer-sponsored 401(k) plan or individual retirement account. When you start saving early, you take advantage of compounded returns to make more money off your contributions overall.

From smart budgeting to setting goals, make good money choices now. Since time is on your side, you can benefit from building credit and saving early to be ready for big financial decisions in the future.

© Copyright 2016 NerdWallet, Inc. All Rights Reserved

 Is Fall the Best Time to Buy a House?

Sometimes it’s smarter to buy certain items according to the season, like sweaters near the end of winter and swimsuits in late summer. But what’s the best season for buying a house?
The answer: the fall. As temperatures cool and trees shed their leaves, enough factors break in the buyer’s favor to make it the No. 1 season for homebuying. Here’s why.

Less competition
Many homebuyers are families who want to minimize a move’s effect on their kids’ schooling. They want them to start at a new school on the first day, not midyear. And so if their spring and summer searching didn’t work out, they might well wait for the next go-round. This means fewer buyers bidding on the same houses you’re interested in and more negotiating power when you do. (A chart in this article shows how home sales drop starting in the fall.)

Of course, this works both ways: Sellers might not want to uproot their families in the middle of the school year either. But while this brings housing inventory down, you might just find it easier to focus and pinpoint exactly what you really want in a home.

Sellers are more motivated
Spring and summer are the high seasons for homebuying: Days are longer, the weather’s nice, and open houses are well-attended. And that means sellers can sit back and be a bit choosier with offers.

But as Labor Day recedes in the rearview mirror, sellers start to wriggle in their seats. The prospect of trying to sell during the holiday season or, more likely, waiting until the next year, is dispiriting. And so these sellers can become, in a sense, settlers — willing to reduce their prices and conditions. There is some variation by region, but overall in the U.S., prices have peaked by the end of August.

Buyers can use this increased motivation to their advantage, offering less and asking for more during negotiations.

Taxes and discounts
Buying a home costs a lot of money but comes with good tax breaks as well. The IRS allows deductions for the interest you pay on your mortgage, on the premiums you might pay for mortgage insurance, on property taxes and more, including some of these that went into your closing costs. Buying a home in the fall means seeing those tax breaks sooner, the following April.

Also, much like those motivated sellers, many homebuilders discount their inventories during this time of year to help them meet year-end sales goals.

The decision to buy requires serious consideration of where you are in life, what your goals are and how much you can afford. But if you are indeed ready, buying during the fall can be a good call. Just try to find time in between football games.

© Copyright 2016 NerdWallet, Inc. All Rights Reserved

 Security Q-Tip: They Will Click It...

Imagine a bad-guy targeting your organization; his ammunition hundreds of emails containing malicious links. Getting just one user to click is all he needs to succeed in getting a foothold on your network and compromise your systems, payday!

Typically, he’ll deploy emails designed to elicit a knee-jerk response from his human target, especially while they are not on guard:  “Wow, I didn’t order that from Amazon!” The adrenaline rush overruns the part of the brain that says “something isn't right.”  Before they know it, they have clicked - and their system is compromised.

Here’s how you can minimize the risk and impact:
  • Ensure your basic defenses are in order, and layered.  Up to date application patching (Microsoft, Java, Adobe, etc.), Firewalls, Spam filters, IPS, Antivirus, firmware are all up to date;
  • Continue to educate and train.  Periodically send reminders that refresh the message of the danger of clicking links in email, encouraging people to be especially suspicious of unsolicited email;
  • Let people know how to ask for help, and empower them.  Be available to answer the “Is this a legitimate email?” question.  Praise users who ask this question BEFORE they click a link.  On the other side, thank users who confess that they messed up and clicked the link, it’s better to know than not.
  • Perform periodic testing.  Send some test spam to your users, and see how they are doing.  Use the results to enhance your training. 

Humans are always the weakest link in email security.  Education and training, in addition to basic defenses, offer the best ways to minimize incidents and risk.
Source: https://www.10dsecurity.com/


 Saving for your Child's Education 

The cost of higher education seems to spiral upward every year. Here’s what you need to do to be financially prepared when your child heads to college.

Start early
The average cost of earning a four-year degree could top $205,000 by 2030, according to some estimates. Amassing that kind of cash takes time, so it’s important to begin saving as early as possible, perhaps even right after each child’s birth. The combination of consistent saving, compound interest and investment returns can add up to significant growth over the years.

Explore options
While any investment can be earmarked for college expenses, some savings accounts are designed for this purpose and can provide tax advantages as well:
529 plans
Run by states or schools, 529 plans let you save for a kid’s college costs with the money’s earnings growing tax-free. While there’s no deduction from federal taxes for contributions, that benefit is fully or partially provided by many states. There are no income or contribution limits, but the money has to be used for a designated beneficiary’s education expenses. Also, gift taxes may apply if you contribute more than $14,000, including any other gifts, to the recipient in a given year.
Coverdell Education Savings Accounts
Formerly known as Education IRAs, Coverdell Education Savings Accounts are trust funds that pay qualifying education expenses for a designated beneficiary. Contribute up to $2,000 annually until the beneficiary turns 18, then use all funds for education before the child reaches 30 years and 30 days old.

Contributions aren’t tax-deductible, but interest and returns earned are tax-free as long as the money is used for qualified educational expenses. To be eligible, your taxable income must be under $110,000, or $220,00 for those filing jointly.

Invest by age
Saving for college parallels retirement planning in that an aggressive investment portfolio, weighted with growth stocks, is recommended during early years with a shift to more conservative assets such as municipal bonds as the time approaches to start withdrawals. Start with equity and stock index funds and begin to adjust the mix once your child turns 9 by putting new contributions into less volatile things like muni bond funds. At 14, begin moving the money out of equities to beef up bond holdings, and aim to be completely out of stocks and equity funds by the time your child starts college.

Better late than never
Saving from an early age is best, but what if you missed that chance? These strategies can help you catch up:
  • To reduce costs, consider enrolling your child in a community college for the freshman and sophomore years
  • Explore available grants and scholarships
  • Keep adding to 529 plans after college expenses start
  • Have your child check out work-study and part-time campus jobs
  • Federal student loans can provide more favorable rates than private lenders
Further stretch your dollars by taking advantage of education tax credits. To avoid being disqualified, pay the first $4,000 of qualified college expense out of pocket before tapping into 529 funds. With a little planning, research and creativity, your child can earn that diploma while you keep your financial health intact.

© Copyright 2016 NerdWallet, Inc. All Rights Reserved
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Coulee Investment Corner: Social Security and Retirement


The Social Security Administration has announced that it will increase benefits in 2017 by 0.3%.  The 0.3% COLA (cost of living adjustment) is tied to the increase in the Consumer Price Index as determined by the Department of Labor’s Bureau of Statistics.  This represents the change in price of all goods and services by urban households. 1

This is not good news for all the retirees who are dependent on social security as their main source of income in retirement.  It might only take one expense increase or emergency to shatter the balance of a retiree’s income versus expenses. 

Medicare has not announced if there will be an increase in Part B for 2017 yet. If a person is enrolled in Part B and is receiving Social Security, then they likely would not have an increase in Medicare Part B if it does increase.  But, for those people who are enrolled in Medicare and are not receiving Social Security payments yet, are enrolling for the first time to Medicare Part B in 2017, are directly billed for Part B or their MAGI is above a certain amount2 there would likely be an increase in the person’s Medicare Part B premium if an increase is announced.

It is so important to save for your retirement if you don’t want to be living on the edge.  It doesn’t matter how old you are today, 25 or 50, you must save for your future if you want to have even just the basics of food, shelter, clothing and transportation.  It is heart breaking to see older adults struggling to make ends meet – especially when they say they can’t get help from their family or don’t have family to turn to for assistance. 

Take care of yourself and your children by saving for retirement.  You don’t know when you might be forced out of the workforce and don’t know what obstacles might come your way in your lifetime so don’t procrastinate with this important life event. 

Seek assistance from your CERTIFIED FINANCIAL PLANNERTM professional to create your retirement plan.

Securities offered through LPL Financial, member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates. The investment products sold through LPL Financial are not insured Coulee Bank deposits and are not FDIC insured. These products are not obligations of Coulee Bank and are not endorsed, recommended or guaranteed by Coulee Bank or any government agency. The value of the investment may fluctuate, the return on the investment is not guaranteed, and loss of principal is possible.

1 Social Security Administration, ssa.gov.  2 The Official U.S. Government site for Medicare, medicare.gov.

Source: Shari Hopkins, LPL Financial Advisor

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