Don’t Regret Financial Mistakes – Avoid Them In Advance

“If I knew then what I know now, I would do things differently.”

Does that phrase sound all too familiar? Do you have financial missteps that you wish you could do over?avoid-financial-mistakes-in-advance

Making questionable financial decisions is a part of life. That doesn’t mean however, that there aren’t some “warning signs” out there that could help you steer clear of some setbacks. Are you making any of these potential financial mistakes?

  • Not paying off your entire credit card balance each month. Credit card debt has become the “American way” for many people. It’s just too easy to pull out the plastic and pay for something now, and worry about the consequences later. And unfortunately, there will always be consequences, especially when the debt becomes unmanageable. That’s why financial experts recommend paying off card debt each month, and setting a maximum spending limit on each card that will prevent excessive use. By paying off your credit card in full each month, you’ll avoid paying interest on your purchases, and if your credit card has a rewards program, you’ll still get to keep any points earned from your spending!
  • Blindly investing. Putting your money in financial instruments you know little or nothing about could backfire on you down the road. Just like when you were in school, you need to do your homework if you want to get a “good grade” – that is, positive financial results. So do some research on the financial products you’re interested in, get second opinions, and meet with a financial adviser or investment planner to obtain a full understanding of how your investments will work for you.
  • Not having an emergency fund. As sure as there are going to be rainy days, there will be times when life will rain down on you with unfortunate circumstances. A leaky roof, a major car repair, an unanticipated hospital bill. Not having funds to deal with those events could create a financial nightmare. That’s why experts suggest setting aside at least three months of your salary so you’re prepared to deal with unexpected costs.
  • Failing to establish or follow a household budget. Having a reasonable spending plan in place can make it easier to manage your finances. It’s a matter of getting a firm grip of your income and expenses, and then working with those numbers to come up with a budget you can live with. The internet can be a great place to educate yourself about budgeting and help you find the tools and templates you need to make it as pain-free as possible.
  • Not saving enough – or anything at all – for retirement. Setting money aside in a 401(k) or similar retirement fund is something that you should consider as a necessary expense. And although you don’t need to go overboard with how much you put into the fund on a regular basis, you don’t want to shortchange it, either. After all, these are the funds you will be tapping into during your “golden years” so you’ll need enough to live comfortably. And the sooner you start saving the better, since you’ll be earning compound interest that can really add up over the years.
  • Paying too much for a new car. This is another one of those “doing your homework” situations. If you’re in the market for a new car, shop around before taking the plunge. The difference in prices could be significant from one dealer to the next. And don’t be inflexible when it comes to getting all the bells and whistles. If you’re willing to compromise on some features, that could help lower the cost, too. Keep in mind that it’s better to buy a new car toward the end of the month, when dealerships are focused on meeting their monthly quotas. One last thing – don’t settle for high interest rates. These days, it’s common to see zero or one percent interest on the life of a car loan.

Ways to Avoid Those Pesky ATM Fees

No one likes paying fees to access their own money, but if you use an out-of-network ATM, there’s a good chance that’s exactly what’s going to happen. And unfortunately, ATM fees continue to climb. When you withdraw cash from an ATM that’s outside of your bank’s network, you’re typically charged twice. You’ll likely be charged by the owner of the ATM, since you’re not a customer, and you may be slapped with a fee by your own bank as well. According to a recent Bankrate survey*, the average total cost of withdrawing cash from an out-of-network ATM in 2018 is $4.68, which is 36% higher than it was in 2008. That’s a pretty heft fee for withdrawing your own money.ways-to-avoid-those-atm-fees

The good news, is that there are surefire ways to avoid these types of ATM fees. The first and most obvious method is to refrain from using an ATM outside of your bank’s network. If you’re planning a trip, be sure to take out enough cash from your regular ATM or bank beforehand. Or, prepare yourself by checking to see if there will be any in-network ATMs around your destination. In this day and age, it’s easier than ever before to locate an ATM within your bank’s network. Most banks have this information available on their website or mobile app.

Some banks are also part of a “shared” ATM network. In a shared network, customers of one bank can usually use the ATMs of the other participating banks without incurring any surcharges. Bank5 Connect is part of the SUM ATM network, which includes thousands of ATMs across the country. Bank5 Connect customers can withdraw money at any ATM within the SUM network, surcharge-free. Visit http://www.sum-atm.com to find a SUM ATM in your area.

Another way to avoid ATM fees is to open an account that offers reimbursements for ATM fees. Many online banks are able to offer these types of ATM fee rebates because “online-only” accounts cost them less money to operate. With Bank5 Connect’s High-Interest Checking account, customers are never charged by Bank5 Connect for using an out-of-network ATM, and we reimburse other banks’ surcharges up to $15 per statement cycle.

If all else fails and you’re on-the-go and need fast access to cash, going the “cash back” route could also be a good alternative to using an out-of-network ATM. Many brick-and-mortar stores allow you to request cash back when you make a debit card purchase using your PIN number. So, rather than paying around $24.68 to take $20 out of an out-of-network ATM, you could buy a soda or a bag of chips for $1.50, and request $20 cash back. Your debit card gets charged $21.50, and you walk out with a snack and a crisp $20 bill.

So, stop giving your money away! If you do a little planning ahead, it’s easy to say no to ATM fees.

*Source: https://www.bankrate.com/banking/checking/checking-account-survey/

Send Money Fast With Person-to-Person Payments

There’s no question that online banking has transformed the way we handle money. And you don’t have to look any further than person-to-person payments for proof.send-funds-with-person-to-person-payments

Person-to-person payments, also commonly referred to as “peer-to-peer payments” or “peer-to-peer transactions”, have revolutionized the way people can send money to each other. It doesn’t matter if it’s a friend sitting next to you in a restaurant or a family member across the country – you can send and receive funds electronically in a matter of a few days, if not a few hours, depending on which person-to-person payment service you use.

If you have a bank account or credit card, you can use it to make a person-to-person payment using online technology that lets you transfer funds from your accounts via the internet, using a computer, smartphone, or tablet.

There are two basic approaches to person-to-person payments. With one approach, users establish secure online accounts with a trusted third-party vendor (such as PayPal or Venmo), designating which bank account or credit card they’d like to use to transfer and accept funds. The third party’s mobile app or website is then used to send or receive funds. Users typically are identified by their email address and can conduct fund transfers with anyone who is also a member of that same third-party network.

With the second approach, customers use their financial institution’s online banking interface or mobile app to designate which account they’d like to transfer funds from, and the amount of funds they’d like to transfer. The recipient is identified by either their email address or phone number, and they do not have to be a member of the same financial institution as the sender. Once the sender has initiated the transfer, the recipient will typically receive an email or text message with instructions on how to deposit the payment into their account. In some cases, the sender will have already designated exactly which account the money should be transferred to, and in that case the recipient will simply receive a notification alerting them that the transfer has taken place.

Before initiating a person-to-person payment, it’s a good idea to check into such things as fee structures, funds availability, and privacy practices.

  • Fee-related questions to consider before choosing a person-to-person payment service include whether there are charges to sign up, send money, or receive money. At Bank5 Connect, there is no fee for Standard Delivery of person-to-person payments, however fees may be incurred if Expedited Delivery is selected.
  • Check into the service’s policy regarding when funds will be deducted and when they will be available to a recipient once a transaction has been initiated. Some services are quicker than others in this respect.
  • Check out the service’s privacy settings and adjust them to your preferences if possible. And keep in mind that a service provider’s privacy policy may change, so it’s always a good idea to periodically recheck them after signing up. At Bank5 Connect, we take your privacy and security very seriously. You can view the privacy policy and terms of service associated with our person-to-person payment service here.

Bank5 Connect’s person-to-person payment service is called Pay People, and is available through our online banking system. To learn more about Pay People, or to sign up for online banking and begin taking advantage of person-to-person payments, visit us at http://www.bank5connect.com/home/online-banking/moving-money

Appointing a Beneficiary to Your Bank Account

You may not have considered adding a beneficiary to your bank account, but doing so can help you to protect the money in your account and ensure that it’s passed on to the appropriate person after your death.AdobeStock_49222902

Checking and savings accounts, as well as certificates of deposit (CDs), can have beneficiaries associated with them. Naming a beneficiary to your accounts clearly defines who gets the money once you are deceased. Without a named beneficiary, any bank accounts you have will have to go into probate court after your death, where the court will decide who your money should be transferred to. Probate can be a long, drawn-out process, and can also be expensive for your loved ones.

One way to avoid probate is for you to decide in advance who should receive the funds in your account after your death. This is referred to as naming a “payable-on-death”, or POD, beneficiary to your account.

Most financial institutions, including Bank5 Connect, will add a beneficiary to your account for free. Your Bank5 Connect account can only have one beneficiary listed, and that beneficiary must be a person, not an organization.

Most financial institutions allow you to change your named beneficiary as often as you like. Changing a beneficiary may be necessary if your beneficiary dies before you do. Or, you may want to make a change if you get a divorce and your ex-spouse is listed as your beneficiary. It’s generally a good idea to review who you have listed as your beneficiaries every few years, so you can make adjustments as necessary.

Naming a beneficiary to your bank account doesn’t require you to give up ownership or control of your funds. The beneficiary cannot withdraw funds from your account while you’re still alive, nor are they entitled to receive any financial statements or other correspondence regarding your account.

After your death, the funds in your account will be available to your beneficiary. They’ll just need to present photo identification and a death certificate before your financial institution will release the funds in your account to them.

To name a beneficiary to a Bank5 Connect account, you’ll need to obtain a form – either by email or regular mail – from the bank to fill out. The form then needs to be notarized, since it’s a legal document, and returned to Bank5 Connect.

For more information on naming a beneficiary to your Bank5 Connect account, or to obtain a form, fill out the contact form at https://www.bank5connect.com/home/contact.

Should You And Your Spouse Use Joint Accounts or Separate Accounts?

It’s a question that inevitably comes up when two people marry. Should they continue to utilize their own separate checking and savings accounts, or should they merge their finances into joint bank accounts?AdobeStock_90060964

What works for one couple may not work for another. Because both banking approaches each have their own set of advantages and disadvantages, it’s important to explore, discuss, and weigh all options before arriving at a mutually agreeable decision.

Some of the distinct advantages of joint bank accounts include:

  • Because a joint account generally results in more money being pooled together, it can help with avoiding account fees such as those associated with maintaining a minimum monthly balance.
  • With a joint account, both parties have access to the money in it. This can prevent you from having to frequently transfer money between your account and your spouse’s account, and it can also be convenient in an emergency, or if one spouse passes away.
  • It can make it easier to handle shared expenses and bills. Instead of having to determine how much money should come out of your individual accounts each time a payment is due, you can simply write a check, or schedule bill payments, directly from your joint checking account.
  • Because both spouses can see the spending habits of the other, there is an increased level of accountability with a joint account. With both of you viewing the money as “our” money instead of “my” money and “your” money, there’s also a higher likelihood of financial communication regarding the household’s budget and purchases.
  • If either you or your spouse is a stay-at-home parent, a joint account could help alleviate tension and resentment. Since the stay-at-home spouse doesn’t have a traditional salary to place into their own separate account, having access to the funds in a joint account could help them to feel valued and compensated for work they do inside of the home.
  • In the event that one spouse loses their job or is out of work on medical leave, having a joint account already in place can prevent you both from having to merge your money at the last minute. It can also prevent you from having to cancel and re-do any bill payments that may have previously been scheduled from the out-of-work spouse’s account.

On the flip side, merging your money into a joint account has some disadvantages as well. These include:

  • Some couples associate a joint account with having to surrender their financial independence. With a joint account you and your spouse could feel trapped without each having access to “your own” money.
  • With many couples marrying later in life, there’s a good chance of both parties coming into the marriage with their own finances already in good, working order. For example, you both may have bill payments scheduled from your own individual checking accounts, or you may have your pay from work directly deposited into your own account every week. These things could be a bit of a hassle to un-do and re-do, so some couples may prefer to leave their accounts “as is” after they tie the knot.
  • With a joint account, there is a lack of privacy in regard to your finances. You may not want your spouse nagging you about that coffee you buy on the way to work every morning, or maybe you just want to be able to buy them a present without them seeing the transaction details on your joint debit card statement!
  • If one spouse enters the marriage with student loan debt or alimony or child support obligations, the other spouse could become resentful if those payments or to be made from joint funds.
  • When bills are paid out of a joint account, it’s fairly typical for one spouse to manage the couple’s finances. This could eventually turn into a point of friction if the spouse who’s managing the money starts to view the job as a burden or chore.
  • In the event of a separation or divorce, a joint account can become a bit challenging. Because both parties have legal access to the money in the account, it’s possible for one spouse to drain the funds without the other knowing. Even if you both leave the money where it is, it can be messy determining who gets exactly what from a joint account after the relationship is over.

As you’re deciding which type of account is right for your marriage, keep in mind that there is a third option – having a combination of both joint and separate accounts. Some couples keep a portion of their incomes in separate accounts so they can still access “their own” money, while each contributing to a joint account as well. A joint savings account could be used to save for things like a down payment on a home, college tuition, or a vacation, while a joint checking account could be used exclusively to pay major monthly bills such as mortgage payments or utilities.

No matter what banking approach you decide to use, it doesn’t hurt to revisit the arrangement on a regular basis to determine if it’s still the best fit for your family.

You can learn more about Bank5 Connect’s High-Interest Checking Account here: http://www.bank5connect.com/home/high-interest-checking

You can learn more about our High-Interest Savings Account here: http://www.bank5connect.com/home/high-interest-savings