Monthly Archives: April 2016

The Dos and Don’ts of Debit and Credit Cards

This week we are excited to dive into the do’s and don’ts of credit and debit cards! Offering two very similar, but uniquely different services for your financial needs, these cards can help you to reign in your finances and grow your credit score when used properly. Learn all about these tips and tricks courtesy of Iowa State Bank & Trust.

Debit Card: A card issued by a bank, that is tied directly to a checking or savings account, which allows money to be electronically transferred from one bank account to another when making a purchase.

Use for daily transactions. It’s always great to have a paper trail reminding you of your purchases.
Use for repeated expenses such as gas, groceries, and other costs you can plan for.
Balance your check book. Sometimes charges such as gas or dining can take several days to run through so be sure to keep track of your spending by balancing your checkbook weekly.

DON’T

Use your debit card online unless you absolutely have to. Having your credit card information stolen is one thing, having your bank information stolen is another.
Spend more than you have in your account. Overdraft fees are no fun for anyone!
Postdate transactions if funds are not readily available in your account.

Credit Card: A small plastic card that is offered by a bank or other financial institution, allowing the card owner to purchase goods and services on credit.

Use for online expenses through secured vendors. Many discounts may be offered online only and can save you and your family a bundle.
Pay your bill in full each and every month. Make to avoid hefty interest rates and other timely fees by not extending your balance over the next month.
Utilize points to help you earn while you spend. These points are great for supplementing costs of family trips or other extra activities.

DON’T

Spend more than you have allocated for the month. Paying more for interest and other fees is money wasted.
Open too many credit card accounts. Keep one or two cards that you use and payoff each month to help boost your score.
Max out your balance, even if you pay if off each month this can potentially damage your credit score and serve as a red flag to potential lenders.

Get started on your finances today with a secure credit or debit card from Iowa State Bank & Trust! We’ll help you understand the ups and downs of each and find the best solution for you and your needs.

The Journey to Home Ownership: First Time Home Buyers

The journey to becoming a first time owner is an exciting and personal process. With questions ranging from price, commodities, to neighborhoods and more, the task of finding your ideal property can seem daunting as you begin the search. At Iowa State Bank & Trust we want to help you make the most of your home buying experience with our guided route to home ownership. Sit back, relax, and enjoy the view as we take you step by step through the first time home buying process.

Assess your personal finances. Take a good hard look at your current sources of income, in addition to the underlying expenses you have each month. Determine if your funds can support the cost of a monthly mortgage, property taxes, home insurance, and all the other associated costs of home ownership.
Mortgage Pre-Approval. Once you’ve decided to make the jump into home ownership it’s time to determine what your ideal purchase price will look like. Work with your mortgage lender to decide on the best price range for you and your family. After determining your financing needs together, the bank will evaluate your credit history award you with a pre-approval letter for the amount they will agree to finance.
Find “The House.” Here comes the fun part – house hunting! Pair up with a reputable realtor from the area to look at houses that do not exceed the approved purchase price. You may look at six homes, or thirteen, but once you find the right property you’ll know it’s the one!
Get an approved offer. After touring the property and checking for any major repairs, speak with your realtor about putting in an offer on the house at price within your budget. The seller may counter with a different price point, and negotiations for the offer can be discussed with your realtor. When you and the seller have agreed to a purchase price and a finalized offer is signed you officially have an accepted offer to purchase your future home!
Speak with your mortgage lender. Now that you’ve found your new place, your mortgage lender can gather accurate tax information and further specifics for your mortgage financing. Reach out to confirm the terms of the loan prior to closing to help ensure a smooth transition.
Home Inspection. Since you and the buyer now have an accepted agreement it’s time to fully inspect the property you intend on buying. Speak with your realtor for recommended home inspectors in the area, and set up a time when both you and the realtor can be present. The home inspector will detail notes about the property concerning safety hazards and other important repairs that may be taken care of at the seller’s expense.
Close the offer. After all the paperwork is finalized, and you complete the final walk through of the home, it’s finally time receive your mortgage financing and close the home offer.
The House is yours. All your hard work has paid off and you are now a home owner! Celebrate this monumental achievement by inviting family and friends over for a moving or house warming party!

Whether you’re looking for a farmhouse in the country, new construction in your dream location, or your happy hideaway in town, Iowa State Bank & Trust can help you with all your financing needs. Stop by the bank or give us a call at (641) 472-3161 and get started on your home buying journey today!

Credit Union Tax Transparency

What is “House Study Bill HSB643” and why should everyone in Iowa support it? During this election year we’ve heard a lot about income tax, and paying one’s fair share. This concept is critical to the success of our state’s economy. Credit Unions pay very little tax on their income, unlike all other financial institutions which provide the same services. This Bill would require Iowa’s largest credit unions to disclose basic information about how they are using their substantial tax benefit. It will require the same disclosure of information that other “not-for-profit” entities must comply with.

The Bill would impact ten or fewer credit unions in Iowa. Those large, “complex credit unions” would then be required to disclose: total state income tax paid annually, information including executive compensation, and the basis for which they claim receiving a ‘low income’ designation.

The credit union industry does not currently report aggregate income tax paid as is required of other business industries. Moreover, while other not-for-profit entities report information such as executive compensation, only credit unions are allowed to keep this information secret from the public. Finally, the ‘low income designation’ greatly expands credit union powers (and their tax exemption) beyond their traditional charter but no one will clarify what the designation is based on.

The ten largest Iowa credit unions made in excess of $100 million in 2015, and paid a miniscule amount of income tax on those profits. Credit Unions were given non-profit status and chartered so that they could serve specific groups of people and to serve a social mission. They no longer serve only a select group of people and many now lack a specific social mission, to serve those that may not otherwise have access to financial services. Iowa taxpayers deserve to know just how much the credit unions’ tax benefit is worth and who is really benefiting from their subsidization.
The credit unions’ argument against this bill is that it “undermines Iowa credit union confidentiality laws”, however the language clearly states that the credit union regulator must use aggregate census data and not individual credit union member information. The credit unions’ real motivation in opposing this bill is they don’t want the Legislature, their members, or Iowa taxpayers to know anything about how they are using this very substantial tax benefit. All Iowans pay more when some don’t pay their fair share.

Please support HSB 643 and help shed some light on this issue for all Iowa taxpayers. I urge you to contact your State Representative, and ask for their support of HSB 643. Contacting your legislator is quick and easy, just click here – curt.hanson@legis.iowa.gov or dave.heaton@legis.iowa.gov
To search for other state elected officials, click here – https://www.legis.iowa.gov/legislators/find?address=&city=Fairfield

How-To Create Your Emergency Fund & When To Use It

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!

Open a dedicated savings account.
Deposit Funds each month without withdrawing anything.
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 unprepareable. 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 make 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 Iowa State Bank & Trust, we’ll help you get to your next savings goal!

Basketball Budgeting: Game Winning Financial Tips

Basketball season is in full swing and there are many comparisons to the sport that can apply to building your own personal budget. From knowing when to pass an expense, to hitting a three with an unexpected bonus, budgeting is a lot like basketball. Learn how to win at structuring your finances with this helpful game plan.

Brush up on your coaching.

Every team is built around the choices of its coach, just as your budget is. The coach selects the players based off merit, potential, and cohesiveness to create a well-rounded team structure. This coach represents you, you decide what direction your budget will take you, and if one piece isn’t working the way you desire it is your responsibility to make the change.

Recruit your team.

Every team has three key player types, centers, forwards, and guards. The center is going to be your all-around player, in the middle of all the action, just like your income. In your budget, this income is going to be after both taxes and your designated savings, this is your center player. Now those savings, giving you a financial buffer, are acting as your guard. Whether it’s a retirement savings, emergency fund, or personal investments, your guard player covers it all. Something additionally has to be driving your budget to financial success, and that is where your forward comes in. Spending is the determining factor to the successfulness of your budget. Just as in basketball, if no one takes the ball up the court there is no potential to score. By managing your spending, you create momentum through your forward player to move your money in a positive direction.

Keep your elbows in.

Every game comes with rules to keep the players safe, staying within these guidelines helps to protect you from receiving any unwanted fouls in the realms of finances.

Foul 1: Spending more than you earn. Penalty: Paying Interest and losing savings capabilities.

Foul 2: Not having a savings plan. Penalty: No structure for emergencies or retirement.

Foul 3: Carrying bad credit. Penalty: Added obstacles in gaining financial freedom.

Just as in basketball, practicing the fundamentals will push you to better your skills. If you work to create a successful budget based on what you can afford, your consistent monthly expenses, moderated spending, and a sound investment plan, you will be a winning coach in no time.

If you have questions on how to begin checking or savings account, give us at Iowa State Bank & Trust Company call today (641) 472-3161!