Upgrade your life: Tips to get ahead financially

Lady holding bag of money and debt

I challenge you not to accept your financial life as it is. This coming year, aim to get ahead — start an emergency fund, build your retirement savings, pay off your debt or take control of whatever money situation is causing you stress.

The key to getting ahead is to get started. Here are some tips to help you make a financial change.

Invest in you

To build your wealth, start paying yourself first. When you receive money, before you spend a penny, put some of it in your savings account or retirement fund. Set up automatic deposits and watch your savings grow with little effort.

Changing your saving habits may require changing your spending habit, but the payoff – not worrying about paying your bills, taking a trip you’ve been dreaming of and retiring on your terms – is worth it.

Stop throwing money away

Paying late fees is like pulling money out of your wallet and throwing it into the wind. Start paying down debt, beginning with the highest interest debt. Pay your bills on time. If need be, call the company and see if you can adjust your due date. Never hurts to ask and it could save you from paying late fees.

Try the 50/30/20 budget plan

Harvard bankruptcy expert Elizabeth Warren suggests splitting your monthly income into three categories:

  1. Fixed expenses – survival needs – should total no more than 50 percent of your income.
  2. Non-essentials – wants like TV, morning coffee, hair appointments – should total no more than 30 percent.
  3. Savings – emergency fund, retirement – should be 20 percent or more.

Match your spending

Have a hard time sticking to a budget? Try this. Before you spend money on something you want, first put the same amount of money in a savings jar.  You will be able to see exactly how much money you are spending, or how much you could be saving or using to pay off your debt. If you cannot afford to match your spending, you cannot afford whatever it is you want to purchase.

Live within your means

Rich people stay rich by living like they are broke. It is a matter of what you value more, instant gratification or freedom from debt and having money when you really need it.

You work hard for your money. Do not waste it on things you do not really need.

50/30/20 Plan: Elizabeth Warren and Amelia Warren Tyagi. All Your Worth: The Ultimate Lifetime Money Plan. Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only. RCB Bank, member FDIC.
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Best Financial Advice

Get$Fit Tip: Sweat the small stuff.

Wise Monday Advice

There is a saying that wisdom comes from listening to advice, so I asked bankers to share the best money advice they have received and the impact it has made in their lives.

No. 1: Pay attention to your small expenses.

“Spend more time thinking about $20 decisions rather than $20,000 decisions,” shares Gregg Conklin, RCB Bank lender. “You’ll make $5, $10, $20 decisions daily. These add up. Learn to be wise in how you spend and save $20, so as you build wealth, you’ll be wise in how you spend and save $20,000.”

“I received this advice from a man who immigrated to the U.S. from Holland in the 1950s,” Conklin says. “He left Holland with $20 in his pocket and taught himself English by watching Saturday matinees. He eventually owned thousands of acres of ranch land, raising cattle in Kansas.”

No. 2: Invest in your future.

“Pay your obligations first, invest in your future second, indulge in non-essentials last,” shares Emily Dake, RCB Bank loan document specialist. “My grandparents taught me to see money as a tool that could guarantee future comfort. If I buy something, I want to walk away having gained something permanent such as knowledge, an experience or an asset.”

No. 3: Build an emergency fund.

“Build up a savings to cover at least three months worth of bills,” says Jessica Hamman, RCB Bank eServices. “After having ER surgery, I was without a paycheck. No savings and no paycheck can quickly put you behind on bills. It took three times as long to get caught up as it did to get behind.”

No. 4: Learn Rule 72.

Rule 72 will help you better understand the power of compounding interest over time,” shares Brad Ward, RCB Bank lender. “Take the number 72 and divide it by the annual rate of interest that your money is earning to determine the number of years it will take for your money to roughly double.”

No. 5: Pay yourself like a bill.

“Put money into a savings account directly from your paycheck so you don’t have time to spend it,” says Kim Harrison, RCB Bank loan assistant. “Since I started doing this I have been able to steadily save, and I was able to use part of it to buy my first house this year.”

No: 6: Start young.

“Early in my career, I was told about the value of saving now for retirement later,” says Jenna Louderback, vice president, eServices. “Putting that advice to work at a young age has paid off as I have watched my investments grow immensely over the years. Starting as early as possible has put me ahead of the game for my retirement plans.”

Invest in yourself. RCBbank.com/GetFit
You’re future self will thank you.

Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only. For specific questions regarding your personal lending needs, please call RCB Bank at 855-BANK-RCB, RCB Bank is an Equal Housing Lender and member FDIC. RCB Bank NMLS #798151.
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Your financial footprint leaves a trace

Feet with scale showing FICO score

By Jocelyn Wood, RCB Bank

Do you know your credit score? A good score matters if you want to want to qualify for lower loan interest rates. It may also improve your chances for lower fees on insurance premiums, like home and auto for example.

It’s important to understand a credit report and a credit score are two different things.

Your credit report is a compilation of credit-related information.

  • Identifying information like name, address, birthdate, Social Security Number.
  • Credit accounts, payment history, current and past loans, etc.
  • Credit inquiries – who has accessed your report within the last couple years.
  • Public records & collections – overdue debt from collection agencies, wage garnishment, liens, foreclosures, etc.

The information in your report provides a story of how well you manage your credit and debt and influences a lender’s decision to loan you money?

Your credit score is a matrix of your credit report – a 3-digit number, ranging from 300-850.

FICO® Scores are most widely used.

I asked Lender Jake Dwyer, AVP at RCB Bank, what is the easiest way to maintain a good financial footprint?

“The biggest influence on your credit score is payment history,” Dwyer said. “A record of ongoing, on-time payments will help your credit. Basically, pay your bills on time and keep your credit card balances low.”

Your credit score is generally calculated based on five factors, revealed in your credit report:

  • Payment history
  • Amounts owed on credit and debt
  • Length of credit history
  • New credit
  • Types of credit used

“Lenders want to know you can afford to make your monthly payments,” Dwyer said. “Owing too much debt, carrying high balances on your credit cards and having too many credit accounts opened at one time are high risk factors. We want to see a long history of you responsibly managing a variety of credit, like student loan, credit card and mortgage.”

He also mentioned your credit score reflects your risk at the time it was pulled. It can change depending on your credit behavior.

“The best way to repair your credit is to pay off your debts,” said Dwyer. “Pay your credit card bill in full each month. Don’t spend what you can’t pay. Lenders want to see responsible money management and self-control.”

The first step to improving your credit is to know what is in your credit report.

Request a copy of your credit report at annualcreditreport.com. Federal law allows you one free report annually from each credit reporting agency: Equifax, Experian and TransUnion.

Ask your lender for tips on how to improve your score, or give Jake Dwyer a call at 918.259.1342.

Source: Fair Isaac Corporation (FICO), myfico.com. FICO® Score does not factor in income, length of employment, alimony or child support payment and other things that lenders may consider when determining loan qualification. Having little payment history or only new credit can result in a lower FICO® Score. It is not always from missed payments or maxed-out credit cards. Talk to your lender for details. Learn more about FICO® Score at myfico.com
Opinions expressed above are the personal opinions of Jake Dwyer, AVP, Loans, NMLS #1413664, and meant for generic illustration purposes only. RCB Bank NMLS #798151. Member FDIC and Equal Housing Lender.
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