Category: Personal Finances

Building Your Financial Reputation

Personal Finances

Your financial reputation starts the day you are born with a social security number. Over years of saving and spending you build that reputation to showcase your fiscal responsibility to lenders. This is presented to potential creditors in a numerical form which showcases your financial risk and repayment capabilities. This number is a fluid piece of your personal information, adjusting with your incoming and outgoing financial endeavors.

There are five pinnacle pieces to your financial reputation, and at Peoples Bank & Trust we want to help you make the most of them!

35% – Payment History: This is the primary part of your financial reputation, which lays out your repayment patterns on various past and current debts. This can be anything from paying off your credit card each month, to keeping current on your mortgage payments. Companies that score your risk and liability potential take this into account first when determining your lending potential.

30% – Amounts Owed: This portion of your reputation is comprised of how much you owe on things such as your mortgage, credit cards, car payments, etc. There are certain areas of debt that are considered good, such as up kept loan payments, and other bad debt such as high credit card balances. By decreasing your bad debt and continuing to pay down your good debt, you can improve this important factor.

15% – Length of Credit History: This factor is simply how long you have been an established creditor. The longer your credit history, the more long-term habits can be observed. While this benefits those who have a well-rounded history, it makes it impossible for a new users to have a perfect financial reputation.

10% – Credit Diversity: This smaller portion of your financial reputation indicates the capacity you have for handling multiple types of repayment. If you pay down credit cards while staying current on your car loan installments and mortgage this shows that you are capable of managing more than one type of debt.

10% – New Credit: This final portion showcases your continuous use of credit through your personal finances. Occasionally having a new source of debt can be a positive thing to show that you haven’t paused your use of credit. However, applying to multiple credit cards within a short time period can raise a flag, potentially indicating financial trouble.

If you’re looking to improve your financial reputation there are three important things you can do!

  1. The best way to get started is to check your FICO score, and check it often. The best offense is a good defense, and knowing what obstacles are in front of you will help you prepare your best plan of action.
  2. Once you have this information in front of you, you can see where you still owe various debts. To help remind yourself when different bills are due, set alarms on your calendar to notify payment dates to assist you in staying current!
  3. The last and most effective thing you can do is to reduce the amount you owe. If you have a large amount of outstanding debt on various credit cards, paying them down can significantly affect how potential creditors see your lending potential.

If you have questions on how to get started, or what your next steps might be, drop us a line! We’re excited to help you get on the path to a successful financial reputation.

Peoples Bank & Trust Co.

Equal Housing Lender

Member FDIC

How to Create your Emergency Fund and When to Use It

savings

Creating a structured savings plan is one thing that can set apart the financial dreamers from the financial doers! By setting strict guidelines to your goal, and ensuring the correct follow through with a backed up savings plan, you can be certain of your success in accomplishing your future achievement! One of the biggest obstacles in these plans is the unforeseen, and there is a way to manage even that. Using a well-rounded emergency fund can ensure that you don’t dip into saved funds for unexpected costs such as auto repairs, or medical emergencies. Want to get started setting up your emergency fund today? Follow these simple steps and you’ll be on your way to financial success!

  1. Open a dedicated savings account.
  2. Deposit Funds each month without withdrawing anything.
  3. Start by saving $1000.

– Next save 3 months’ worth of income and expenses.

– Finally maintain 6 months’ worth of income and expenses.

The reason you have this fund is simple, to prepare for the unpreparable. Whether it’s an unanticipated job loss, a costly home repair, or other unplanned expenses, your emergency fund can help you stay afloat when the waters get rough.

The main objective of this account is to have it work for you and your needs! By specifically determining what you define as an emergency (job loss, vet bills, auto repairs) and what doesn’t (last minute birthday gift, broken TV, new clothes) you can generate a structured list to know when you feel safe using those funds, and when perhaps its best to leave them untouched. The idea of the emergency fund is to have it when you need it. By gaining access easily via checkbook or debit card, you can use the account more quickly when the unexpected strikes.

By generating your own emergency fund you can continue to save for milestones and pay bills, without worrying about the what if’s that lie along the road to the future. Get started with your emergency account today at Peoples Bank & Trust, we’ll help you get to your next savings goal!

Peoples Bank & Trust Co.

Equal Housing Lender

Member FDIC

 

Budgeting 101: Personal Finances for Young Adults

personal finances

You’ve taken all the tests, memorized all the vocabulary, and made your way across the stage. But what comes next? After graduation there are many questions that come with your diploma. Things like, how am I going to pay for rent? Or, how much should I budget each month for food? Not everything in life is as simple as A, B, C, or D. That’s why Peoples Bank & Trust is excited to help young adults with the complex questions of budgeting and personal finance. Find the answers to your financial curiosities with our handy Budgeting 101 study guide!

  1. Identify money coming in. Look past the salary or hourly rate on your contract and focus on take-home pay. How much will you bring in after taxes? When do you see this pay-off – weekly, biweekly, or monthly? Factor in other sources of cash flow too, like earned interest or paychecks from a part-time job. Understanding what you own dictates how you spend.
  2. Establish money going out. Divide monthly expenses into three major categories: fixed costs, savings, and discretionary. Rent, utilities, food, gas, and debt comprise the fixed costs and determine funds for the remaining categories. Savings should include an emergency fund as well as allocation for retirement or down payments on vehicles or homes. Discretionary – the Fun Fund – is the most flexible and can ebb and flow with changes in income and expenses.
  3. Balance steps 1 & 2. The purpose of budgeting is to provide control over your financials. That means ensuring that money going out doesn’t exceed money coming in to keep your head above the debt line. If you find your listed expenses exceed your income, pick one of two options: seek ways to boost income or scale back expenses.
  4. Pick a management system. Armed with a financial plan, equip yourself with tools to help you stick to it. Traditional but trusted, the envelope method helps you keep funds in physically separated expense categories. Once money runs out from that month’s envelope, it’s gone unless funds can shift from other envelopes. A number of free or low-priced mobile apps can give you even tighter control of your budgeting, providing real-time updates of spending and handy visuals of your progress.
  5. Track progress. A long-term financial plan is simply a series of short-term goals. Monthly check-ups help you gauge success from the month, making sure you stayed on target. You can adjust funds as income or expenses fluctuate and spot ways to economize your budget.

Want to take your budgeting up a notch? Meet with one of our new account representative to determine which type of bank account can help you optimize your budgeting and saving plans.

 

Peoples Bank & Trust Co.

Equal Housing Lender

Member FDIC

Renting v. Buying a Home

mortgages

Jumping into the ring of homeownership is an exciting milestone! There are many ways owning a home can impact you and your family. How do you know when to rent and when to make the move to purchasing your home? Peoples Bank & Trust is here to help with our handy guide to the pros and cons to renting and owning a home.

Renting

Cons:

  1. No wealth creation. As your payments go directly to your landlord and not the specific property, you are unable to build equity and reap the return on investments from the home’s growing value.
  2. No tax benefits. While homeowners can deduct property taxes and mortgage interest payments from their federal income tax, renters can’t claim deductions for housing costs.
  3. Dependent on the landlord. For everything ranging from utilities, to paint, to the rent dollars themselves, your landlord makes the majority of the decisions when it comes to renting a home. Depending on your lease, your landlord can increase the rent each year, or month!

Pros:

  1. Accommodates flexible lifestyles. If you travel frequently for work, leisure, or medical care, you may not have the time or availability to take care of a home. Renting allows an affordable accommodation without any hassle of renovations or repairs.
  2. Freedom in allocating finances. For renters, expenses such as mortgage insurance, real estate taxes, and home maintenance costs, can instead be funneled into savings, stocks or discretionary funds after the monthly rent and utilities are paid.
  3. Reduced insurance costs. Apart from renters insurance that covers the interior of a home, costly homeowners insurance and unexpected repairs belongs to the landlord, not the tenant.

Buying

Cons:

  1. Unexpected costs. Leaky roofs, backed-up pipes, and cracking foundations create thousands of dollars worth of unplanned repairs that stretch your budget to the limit.
  2. You’re locked in. Once you sign on the dotted line the house is yours, and so are the payments.
  3. Fluctuating home value. Despite your best efforts, your home can become less marketable based on circumstances out of your control. A declining neighborhood, housing surplus, or unstable market can decrease the value of your home despite well done renovations.

Pros:

  1. Fixed monthly payments. Homeowners with fixed-rate mortgages can trust that their mortgage payment will stay consistent each month, enabling the creation of a stable monthly budget.
  2. Financial gains. From tax credits to equity building, home ownership offers buyers a number of monetary perks and freedoms they wouldn’t receive as tenants.
  3. Freedom in expression. A kitchen remodel, a four-season porch addition, and other decorative transformations are all up to a homeowner’s discretion with no strings attached to a lease agreement.

Still on the fence? Our experts at Peoples Bank & Trust can sit down with you to help make a guided decision that suits both your lifestyle and your financials. Call and set up an appointment with us today!

Peoples Bank & Trust Co.

NMLS# 407724

Equal Housing Lender

Member FDIC

 

The Top 5 Budgeting Apps to Get You Organized

Budget

Have you noticed yourself hitting the “check out” button a little more frequently when you shop on your phone? You’re not alone. In 2015, mobile commerce grew to a staggering 30% of all U.S. online shopping. This shows a growing trend of mobile purchasing moving billions of dollars in sales via handheld technology.

While smart phones enable spending, they can also be powerful tools for strategic saving. Check out these top budgeting apps and learn how to easily keep track of your finances.

  1. Mint. By pulling all your balances and transactions into one simple design, Mint allows you to see the big picture. You can add accounts, cards, and bills and track spending patterns and investments in real time. A budget calculated by your average spending will break down where your cash is flowing from month-to-month and year-to-year so you can watch your savings progress over time. (Free)
  2. PocketGuard. If spur-of-the-moment spending is your weakness, PocketGuard is here for you. Connecting directly to your bank accounts, the app’s home screen tells you how much you’ve spent for the day, week, or month in relation to your income. With transactions automatically updated 24/7 you have an instant visual of your personal cash flow. (Free)
  3. Level Money. This helpful app aids you in spending for the short-term and saving for the long-term. By analyzing your income and expenses, Level Money reveals a daily allowance to help you save for a larger purchases or pay down debt. Connect the app straight to your bank account and create goals for saving and spending, all backed by a planning module that sends reminders and encouragements to help you stick to your goals. (Free)
  4. You Need a Budget. YNAB operates on four rules; give every dollar a job, save for a rainy day, roll with the punches, and live on last month’s income. This app adjusts your entire budget to prevent overspending. This app also ensures a constant safety cushion of funds so you’re never scrambling to cover unexpected expenses. ($5/month or $50/year)
  5. Good Budget. Unclutter your envelope budget with this exciting app. Instead of juggling a stack of envelopes for different expenditure categories, you can open digital folders on one simple screen. For joint accounts, you can easily synch the app with your spouse across multiple devices to prevent double dipping into funds. ($15/3 months or $24/6 months)

If you’re ready to take the first steps in re-evaluating your budget stop by Peoples Bank & Trust today, we’re here to help with your budgeting needs.

Peoples Bank & Trust Co.

Equal Housing Lender

Member FDIC

 

Taking Baby Steps to Eliminate Your Debt

Eliminating Debt

As of 2015, the average American with credit card debt owes $15,762 – and that’s just credit. Auto loans, student loans, and mortgages add thousands of dollars and years of repayment to your personal finances. However, debt doesn’t have to be a life sentence. Once you and your partner have made the commitment to work towards financial freedom, follow these steps from Peoples Bank & Trust to begin eliminating debts:

  1. Establish an emergency fund immediately. Unexpected events can take a harder hit on your savings than unbudgeted spending habits ever could. Even if you’re juggling a current debt or two, work to set aside $1,000 as soon as you can in a separate emergency checking account. As you chip away at remaining debt, this cushion can protect repayment plans from being flattened by a faulty car battery or flooded basement.
  2. Adopt the Debt Snowball method. Instead of listing them highest to lowest by interest rates, arrange debts from smallest to largest. Paying off a handful of small debts in the same time it’d take to chip away at a large one eases burdens, yields immediate results, and provides motivation to continue saving.
  3. Reduce your rates. Refinancing your mortgage and negotiating lower interest rates on credit cards can make a huge impact. Reevaluating your health, life, and auto insurance policies may reveal services you don’t need, or it can spur you to shop around for providers with lower rates.
  4. Chop extraneous expenses. Create a list of unavoidable monthly expenses – rent, utilities, gas, food, etc. Then create a second list of leisure expenses – gym memberships, cable, eating out, clothing. After budgeting for the necessities, pick a few discretionary categories you’d like to keep with reduced spending, but cut the rest. Putting your spending on a diet is easier when you allow yourself a few modest outlets.
  5. Evaluate progress monthly. Creating a multi-year financial plan for eliminating debt is the first step, not the only one. Perform a monthly check-up on your plan to continue spending within your budget. It can also provide a boost of encouragement when you see progress, and you might spot ways in your new financial routine to make your budget even more cost-effective.

It may be a long road to eliminate debt, but it’s within your ability to travel it. Don’t go it alone – contact Peoples Bank & Trust Co. today to help you create and stick to your financial plan.

 

Peoples Bank & Trust Co.

Equal Housing Lender

Member FDIC

 

Community Banks: The Advantages of Banking Local

Banking Local

At Peoples Bank & Trust we pride ourselves on providing the best and most reliable service to our valued customers. Being a local community bank we offer unique insight into the inner workings of both commercial and personal financing, giving you, the consumer, the most bang for your buck. The next time you’re considering working with a locally operated bank, remember these important characteristics that truly make community banks stand apart from the rest.

Financing Farmers: Did you know that community banks make up almost 90% of all agricultural loans in the United States? By providing local producers with the capital needed to operate their business, banks like Peoples Bank & Trust are doing their part to help feed America.

Employing Citizens: With 51,000 community banks nationwide, the local banking sector employs approximately 700,000 Americans in their immediate areas, while also creating endlessly opportunities through their small business financing.

Rooted History: Knowing how to predict markets and financial tangibles is something that only time can teach. With more than 2,500 community banks stretching well over their first century, community bankers work together to share a wealth of knowledge when it comes to analyzing the past and anticipating the future.

Supporting Small Business: America was founded upon hard work and dedication. The idea that you can create anything you want is the dream. Community banks continue to help make those dreams happen by financing more than 50% of all small business loans within the United States.

Lasting Relationships: When working with a community banker you are not working with someone under the thumb of management, who takes months for approval. By banking locally with Peoples Bank & Trust you speak one on one with your lender, no red tape guarding your next financial decision.

There are volumes of reasons why banking local can help secure you a better financial future. This April we celebrate Community Bankers month to showcase the advancing capabilities of local financing institutions and the unparalleled service they offer. If you want to start banking locally with Peoples Bank & Trust, call us at (636) 528-7001 or stop by today!

 

Peoples Bank & Trust Co.

NMLS# 407724

Equal Housing Lender

Member FDIC

Make the Most of Your Spring Projects with a Cash-Out Refinancing!

Refinance

How do you decide if cash-out refinancing is for you? Do you like your home? Do you need more funds for repairs or renovations? Do you have a portion of your mortgage already paid off? If you can answer yes to all these questions, then refinancing your mortgage with a cash-out may be the best fit for you!

How does it work?

Refinancing is a strategic and beneficial financial tool. By utilizing the equity built into a home, owners are able to negotiate new rates of their loan, and potentially borrow additional funds. These funds are typically limited to the amount of the original mortgage, minus the current outstanding loan. The difference between these numbers is the amount home buyers may be able to use for renovations and other current financial needs.

What’s the benefit?

Once you receive the funds you are not tied to any one project. So whether you want to build a new deck, remodel a bathroom, or pay for another planned purchase, the options are endless. With a home equity loans however, borrowers are required to take on an additional monthly payment on top of their existing mortgage. Unlike a home equity line of credit, a cash-out mortgage refinancing offers a specific amount that is tied within your mortgage, typically offering a lower comparable interest rate. This lending option also allows the home owner to replace their existing mortgage with updated rates, so they have one affordable monthly payment instead of two!

Get started today!

In 2015 the average kitchen remodel cost between $11,261-$28,716, and the average bathroom remodel totaled $9,285. With spring time approaching, now is the perfect time to look at the benefits of refinancing your home! With other projects such as a new deck, pole building, or landscaping project, spring is the perfect time to start evaluating your home refinancing to see what your equity is capable of.

We’d love to help get you started, call us at (636) 528-7001 or check us out online today!

Peoples Bank & Trust Co.

NMLS# 407724

Equal Housing Lender

Member FDIC

How-To Save for Your New Vehicle

auto savings

Purchasing a new vehicle is always an exciting venture. Peoples Bank & Trust wants to help you maximize your buying experience with a strategic and helpful savings plan! Before you start roaming the car lots, glance at our easy auto check list to see what type of vehicle both you and your budget are searching for.

Determine if you want a new or used vehicle.

Many auto dealers today offer both new and used. While new can offer updated technology and the assurance of no prior owners, choosing a used vehicle can drastically diminish cost and offers a comparable quality with moderate mileage.

Decide on a budget and a timeline.

When choosing the right vehicle to purchase, there are many questions to help you research which option may be best on your pocket book in the long run.

-How long do you want to drive this vehicle?

-What does your budget allow you to spend for the down payment and installments?

-When do you need your vehicle by?

-What type of MPG do you need to keep gas costs within your overall budget?

-How long do you want to be paying the loan off?

With these questions in mind you can better view the credentials needed in the ideal vehicle for you and your family.

Do your part to save.

Once you have your budget set, it’s time to start saving! By putting aside a designated amount from each paycheck towards your new car, you can create a timeline for when you plan on purchasing it! In addition to these savings, cutting any additional spending can help you allocate more funds towards your new ride. Eating in more, buying generic, and carpooling to work are just a few ways to save some extra change.

Talk to us!

If you have questions regarding your savings plan stop by your nearest location today. We’re happy to help, and look forward to making your auto buying dreams a reality.

Peoples Bank & Trust Co.

Equal Housing Lender

Member FDIC

 

How-To Make Your Spring Renovations with a Home Equity Line of Credit

Home Equity

Remodels can be an exciting and trying experience. If you’re looking to make some updates to your home, a Home Equity Line of Credit is the perfect way to use the equity you have already built in your house. Here at Peoples Bank & Trust we offer both Home Equity Loans and Home Equity Lines of Credit, let us show you which may work best for you!

Home Equity Loan: Using your home as your collateral you are able to borrow funds in addition to your mortgage to complete home projects or unexpected repairs. After speaking to a Peoples Bank & Trust loan officer, a loan amount will be determined along with a loan term for repayments. The funds from this loan are presented in one check to use as needed.

Home Equity Line of Credit: Also utilizing your residence as collateral this option allows you to obtain a line of credit, with an agreed upon loan amount. Accessed through the use of a checkbook, a credit line allows you to access funds as you need them instead of receiving one lump sum at the loan closing. With a designated cap there is a limit to your available funds.

Regardless of which loan type you choose, the loan amount will be determined by the current value of your home, your individual financial history and other factors.  If your home appraises for more than you anticipated, that’s great news; but remember, it is always recommended to secure a loan only for the amount you need, ensuring you don’t overextend your budget!

If you’re interested in beginning the process for your next home renovation, start the journey with Peoples Bank & Trust and our Home Equity options!

 

Peoples Bank & Trust Co.

NMLS# 407724

Equal Housing Lender

Member FDIC