Author Archives: ISBTC Blogger

How to Tackle Student Loan Repayments

What they didn’t teach you in school, was how to pay for school. Many know what it’s like to look excitably into your direct deposit account or open that envelope on payday to only be dissatisfied by the large withdrawal that was taken towards your student loan debt.

Confronting what seems like the impregnable wall of debt can be overwhelming. And many can feel unprepared – even duped by the debt to income ratio their college degree has given them. However, it doesn’t have to be this way forever. By changing your strategy and perspective on your educational investment, you can eliminate your monthly payments at an accelerated rate. Learning to tackle debt in the right way will become muscle memory for future financial discipline.

Choose the Right Repayment Plan

Americans owe 1.45 Trillion in student loan debt, spread out among 44 million people. While this may seem counterintuitive, choosing the right plan for your income can make a large difference in how much you pay over time. 85 percent of student loans are either: Stafford, Perkins, PLUS, & Direct Consolidated. They have 5 repayment options, with the lowest minimum payment starting at $50 for ten years, to the income based plan that takes a “fair” percentage of your salary (decided by the Federal Government) and forgives any debt left after 25 years.

Although it’s tempting to pick whatever has the lowest monthly payment, it isn’t the wisest. How much you pay and on what terms can seriously impact future investments like a home or being able to put enough away for retirement. Try to pay 10% of your gross (pre-tax) income towards your debt. By biting the bullet now, you will give yourself freedom in the future.

Scrap for Savings

There are some basic practices you can implement to prevent being delinquent on payments. One of those is consolidating your Federal loans. This won’t initially save you on interest, but it will help to relieve you from the headache of keeping track of many different loans. Having them all in one place with one simple payment will enable you to stay on track. Second, sign up for automatic withdrawals from your checking account. Doing so will cut your interest rate by .25 percent. If you would like to establish a college fund repayment account, contact one of our loan specialists at Iowa State Bank & Trust Company of Fairfield to help.

Keep Your Eye on the Prize

The average student loan monthly payment is $351 a month, and we recommend you paying more than that if you can fit it into your budget. The most important thing you can do is to not fall off the wagon when it comes to tackling your debt. Stay focused on the goal set before you. The impulse purchases and comforts of the present are alluring, but ridding yourself of a financial burden is more rewarding. The more you take hold of your debt, the sooner it will be conquered.

Common Cyber-Security Threats While Traveling

Whether you are traveling for work or pleasure, the last thing you want to battle with is having your cyber-security compromised. If knowledge is power, Iowa State Bank & Trust Company of Fairfield has created a list of potential threats to your private information and steps to prevent damage while away from home.

Before You Go

Along with remembering to pack a toothbrush, you should also prepare your devices for travel. You should ensure all updates are completed. This will make your systems harder for hackers to penetrate.

You may consider backing up your information on cloud storage. You would hate to have forever lost important documents and photos. Should your information become compromised, having these copies of your private information will be useful. We would also recommend changing all of your passwords prior to leaving and again when you return. It is also extremely important, especially when traveling abroad, to let Iowa State Bank & Trust Company of Fairfield know where you will be traveling and when.

While You’re There

Unfortunately, you are at higher risk the more you travel and use the internet abroad. However, this shouldn’t stop you should you use the proper precautions from these threats.

While convenient, public wireless networks are not secure. Nevertheless, if you need to connect, be sure it is a legitimate network by verifying the account with employees. However, your mobile connection is going to be more secure. You are going to want to turn off auto-connect for wifi and Bluetooth as well. If you are able, purchase a VPN (Virtual Private Network), so you have peace of mind while surfing the web. We would recommend staying away from public computers-even the hotel and library. You cannot trust that these are on secure networks, and that Keylogger Malware is not present.

To many people’s dismay, you are being watched in ways like never before. You should get into the habit of guarding yourself at all times. When traveling to fun places, it is tempting to share your location. But waiting to share this information is best, so hackers don’t follow where you are, and maybe even make their way up to your hotel room to take your computer when they know you’re away. This is another reason why you might consider eating meals outside the normal hours, as that is when most hotel thefts occur.

You can’t avoid purchases while on the road, but be aware of ATM skimmers, point of sale compromises and hidden cameras. ATM skimmers have been on the news frequently. If you can avoid using this altogether by sticking to credit cards or Apple Pay on the road, it may make the experience easier. Business card readers may be compromised or a hidden camera could be tracking your pin input, so it’s important to always be aware.

We hope that these tips have informed you to be a cyber-secure traveler. For more information about anti-fraud services, please stop by and speak with our helpful staff!

Gloomy Day Fun for the Budget-Conscious

You made it! It’s finally the end of the work week, you can’t wait to do anything that doesn’t involve sitting in an office. Maybe you can get that hike in you’ve been thinking about all week. Disappointment sets in as you peek out the window to gaze upon a blustery, cloudy and plain gloomy day. And as misfortune would have it, there isn’t room left in the budget this week for a trip to the movies or an indoor game park.

However, this doesn’t have to call for an uneventful day. Iowa State Bank & Trust Company of Fairfield is here to give you some options to make the most of your day off! Here are some great low-cost activities you can do now.

Local Adventures

While you may not want to spend the gas money traveling out of town, this is an opportunity to explore places in the community you may not normally think of visiting. Local museums are typically low-cost and if you make it on certain days, they have discounts for the kiddos! You’d be surprised at how entertaining local history and innovation can be. Bring some friends with you so you can discuss what you learn.

Let’s not forget about the neglected library. They may even have free events going on! Join a book club, rent a book or take a free class about computer literacy. Nothing is easier on your wallet than the library.

If the library is closed on your gloomy day, check out local department stores. They may have a free class for you to take to learn about a DIY home improvement project. They teach a variety of classes from how to install a home security system to woodworking projects.

Host an Activity

Can’t go out? Bring people to you! There are probably others who are not digging the gloomy day, so invite them over for a game night. Everyone can bring their favorite board game and an appetizer to share.

What’s your favorite movie? Host a movie night or show marathon to watch with your friends. If you have kids, you can have two different movies playing. You can center your snacks around the theme of the movie with what you have in the pantry, or buy some generic items from the store. With a little creativity, you can make this a memorable event.

Plan a Vacation

“But it’s not in the budget.” This day is the perfect opportunity to not just daydream about a vacation, but get the wheels turning for how to practically get to the white sand beach or ride that elephant in Thailand. Break down what you want and how much you need, so you know what you need in savings to get there. Research average flight prices and best places to stay for the price – don’t forget to read those reviews! Maybe look around your place to see if there is anything worth selling that you are willing to part with. Once you have where and how, build an itinerary of everything you want to see while you are there! Adjust the budget sheet accordingly. Making your travel dreams become a reality is sure to boost your mood.

Any of these activities will be kind to your budget, and hopefully, boost your mood on this not so bright day.

It’s the Season to Save Money: Tax Deductions

While it might not be on your radar, now is the perfect time to starting thinking about taxes. You may be thinking you just wrapped up tax season but April 15 will be here before you know it. The end of the year is the perfect time to make a few financially savvy moves to help trim down your tax bill.

While not all of the ideas below apply to everyone, they can help you fund your retirement account or even put you in a charitable mood.

Contribute the maximum to your retirement account(s) – If you have a tax-advantaged retirement account (meaning your contributions aren’t taxed), contributing the maximum lowers your taxable income, meaning you pay less on your tax bill. Even better? You’re helping contribute to your retirement savings fund!

Give to charity – As long as you have over $250 in costs directly related to helping a charity plus their acknowledgement (a receipt, statement, etc), you’re in good shape. Just be sure you also have the receipts from making all those meals or purchasing supplies. Remember, donations to individuals doesn’t count when claiming a charity deduction.

Job-hunting costs – If you were job hunting at all this last year (and have the receipts on hand), these costs can be deductible. Eligible expenses include transportation costs, food, lodging, cab fare, employment agency fees, costs of printing resumes, business cards, etc.

Give to family or friends – This category is a two-for-one! Not only do you give the gift of money but you reduce your tax burden. You can give up to $14,000 without having to file a gift-tax return, which lowers your taxable income, thereby reducing your tax bill.

Energy-saving home improvements – Made some energy-saving modifications to your home this year and have the documentation and receipts to prove it? You can claim a credit up to $500. While this isn’t a tax deduction, you can use the credit to help pay your tax bill if need be.

This list is just a start of tax deductions you can start planning for. For more information or questions, you’ll want to talk to your tax professional or an Iowa State Bank to help guide you. We hope this list provides you with a little inspiration to find some deductions this tax season!

6 Ways to Maximize Online Holiday Shopping

Let’s face it, Black Friday—and Cyber Monday—aren’t for everyone. You rise at the crack of dawn and either have to fight the crowds or hope you have faster WiFi than other shoppers.

Luckily, these aren’t your only options when it comes to getting deals around the holidays. We have compiled this list of online resources to help you stretch your gift-buying dollar:

1) Use Coupon sites.

The most popular site is Groupon, but there are other online coupon sites that can save you money as well! Sites such as Couponcabin.com, coupons.com and RetailMeNot.com all have thousands of deals and coupons for online retailers.

2) Buy discounted gift cards.

Places such as Sam’s Club have gift cards for restaurants that are up to 20% off, and can make great stocking stuffers. If you don’t have a membership, there are other places where you can buy retailers’ gift cards at a discount, such as Gift Card Granny and Card Cash.

3) Free shipping offers.

If you’re an Amazon Prime member, you’ll already be able to take advantage of this. But if you’re not a Prime member or are shopping elsewhere online, FreeShipping.org has coupon codes for free shipping on some 4,000 stores.

4) Cash back.

If your credit card offers cash back, the holidays are a great time to rack up points. We would caution that you have enough cash on-hand to pay off everything you charge to the card, as you don’t want to start the New Year with debt.

Credit cards aren’t the only way to earn cash back. Sites like Ebates.com and Extrabux.com offer cash-back for online purchases at certain stores.

5) Buy used.

Sometimes, a new iPad isn’t in the budget. If that’s the case, you can buy gently-used electronic equipment at Glyde.com. You can even set up price alerts for certain items. Another gently-used online retailer is Swap.com. Items such as toys, games and DVDs still in the original box can be purchased for a fraction of the original cost.

6) Deals on electronics.

Online retailers such as NewEgg.com and Fry’s Electronic are well-known among IT and tech professionals for their steeply discounted prices on everything from laptops to component computer parts. If you’re looking for a reputable place to buy inexpensive electronics, these websites are worth checking out.

Remember, the holiday season doesn’t have to break the bank! Next year, you can start planning ahead by starting a Christmas club account. This special savings account makes it easy for you to put aside the money you need to check off everyone on your list!

Four Ways to Raising Your Financial Game

Whether you’re a football fanatic who’s happy that your favorite team is finally back on the field or you can’t tell the difference between a quarterback and a punter, football can actually teach you a lot about managing your finances. Don’t believe us? Check out the Iowa State Bank game plan that can help you get a financial win.

It’s Important to Win on Offense, Defense and Special Teams

Good teams need to play well in all three aspects to win games. In your finances, your offense is your income. If you think of dollars as yards, the more money you generate, the more secure you can be. If income is your offense, then spending is your defense. Coaches don’t want their defense to be on the field too long, so keeping the spending to a minimum is the best way to keep your finances in check. Your special teams are items like investing. You only need them a few times per game, but you need them to perform well when they’re on the field.

Defense Wins Games

If spending is your defense, controlling spending is the best way to ensure your defense is successful so you can get a financial win. Taking a defensive approach to your finances that controls spending and saves a little each and every month may not seem like the most exciting thing, but it will get you a win. Slow and steady saving can help you be successful for a long time.

Understand the Game Clock

The game clock can dictate how a team plays. At some times, you can be aggressive, while other times may call for a more conservative approach. Taking an aggressive approach, such as making a smart investment, can help you improve your financial situation quickly. However, a more conservative and steady saving approach can help you accrue wealth, too, it may just take a little longer.

Surround Yourself with Good Coaches

A good coach trusts others to develop players and game plans. There are a lot of financial experts that have a wealth of knowledge that you can take advantage of by providing a unique perspective, including right here at Iowa State Bank. Trust these financial experts to use their experience to help you get a win.

Just as a good game plan can help your favorite team on the gridiron, it can help you with your finances. If you have any questions, contact Iowa State Bank and we’d be happy to help you develop the right game plan.

6 Ways to Save on Your Study Abroad

study abroad

Are you or your child dreaming of learning of abroad, perhaps on the coasts of Spain, or the mountains of Italy? As a young adult now is a perfect time broaden those horizons, and explore new lands while continuing an education. Unfortunately, all of these great experiences don’t come for free! If you’re searching for some innovative ways to scrimp and save to make a potential study abroad a reality, we have a few strategies to help you make it happen.

Scholarships, scholarships, scholarships. Whether it’s through a prospective program, current university, or perhaps even an area Amvets organization, make it a dedicated part-time job to apply to any and every study abroad application that is relative to your upcoming study abroad. You can save anywhere from a couple hundred dollars up to the entire cost of your travel and tuition through a combination of various scholarship programs.
Work study. This is a fantastic opportunity many foreign programs offer. In exchange for a small amount of work during the week, such as AV management or library maintenance, you can reduce your educational costs by thousands! Be sure to apply for these early as they’re typically capped at a specific number of students.
Plan your own excursions. Many study abroad opportunities also offer pre-planned excursions to go to neighboring cities or countries. Instead of footing an inflated travel bill, plan your own excursions with a group of friends and split the costs. You may find yourself having a better time than the official itinerary attendees!
Pay with cash. Once you’ve arrived at your destination, continue your savings journey, by only taking the amount of cash you need for your planned purchases. It does help to have an international credit card such as Mastercard or Visa for emergencies, but when shopping day-to-day, spend less and pay with cash.
Pack your staples and buy your conveniences. When packing for several months, it helps to include clothes which can be combined for multiple outfits. Couple this with versatile shoes and accessories, and a two-week wardrobe can easily last you a whole semester! Other amenities such as toiletries, snacks, and basic school supplies can be much easier to purchase once you arrive.
Use apps to call home instead of expensive calling cards. Helpful apps like WhatsApp, Skype, and Facetime make it simple to connect with loved ones back home without having to pay costly fees. If you can find a local wifi hotspot, or happen to have internet where you’re staying, there’s no need to pay for an international cell phone or expensive cell phone fees. If you plan to use your regular U.S. based cell phone while abroad, just be sure to keep it on airplane mode to avoid astronomical roaming charges.

No matter where you or your child are planning to study abroad, the key is to enjoy it! Iowa State Bank can help you set-up a dedicated savings account, all we ask is you make the most of your time and explore as much as you can! We’ll help you take care of the rest.

Why Your Child’s Allowance Should be Tied to Their Chores

allowance

There are literally thousands of how-to’s and self-help books for parents, but truly the only real way to learn how to raise a child is to do it! Luckily our growing team of parents at Iowa State Bank have some true hands-on experience when it comes to upbringing and explaining money management to little ones.

One of the most common fiscal questions parents have concerning their child’s financial education is, “How do I teach them about money using an allowance.” The simple answer is, however you want. There are a number of ways you can utilize a recurring allowance to help your children understand both the importance of good money management and a sound work ethic. Below are two of our favorite strategies:

Example #1: Earn Your Extras

In this scenario, allowances are guaranteed to an extent. Every two weeks give your child a pre-determined amount of cash, say $5.00. That money then has to be split evenly between their educational savings and their retirement savings (yes – retirement savings!) While this money is technically theirs for future use, they have no tangible money to immediately spend. Where the fun part comes in, is the commission. Assign a small dollar value to various tasks around the house. Ensure things like making their bed, or doing their homework are givens, and they are required to do them no matter what. However, extra work such as mowing the lawn, cleaning the bathroom, or cooking dinner, earn a predetermined amount of commission. Paid every two weeks, this commission is then there’s to spend between three areas, save, spend, and donate, but they MUST allocate at least $0.50 in each area. This lesson teaches three primary lessons; the first is housework is a part of everyday life and it doesn’t come with a paycheck. The second lesson is that working hard pays off, and the third is that creating a plan or budget for your money allows you to use it as a tool instead of using debt as a burden.

Example #2: Ambition Is Important

There is a viral story trending about a young boy who’s allowance was determined by how many self-help books he read and wrote a report on. This simple lesson offers many variations and proves an important point on the dedication to values at a young age. For this example, there is no guaranteed allowance on a weekly or monthly basis. In this scenario, all funds are accumulated via commission. How that commission is earned is determined by you. This can be the number of extra assignments completed or the amount of successfully replicated YouTube tutorials. It could even be the quantity of miles your child is dedicated to running each week. Through this valuable learning experience, you can showcase to them that a solid work ethic is pinnacle to success, and can at times even out earn an education.

However you decide to help your children understand the complexities of personal finance, Iowa State Bank is here to support you. Stop in today, and ask about our designated children’s savings accounts. We’d love to help your family get started on their journey to financial success.

Money Magic Tricks

money magic

Magic is one type of entertainment that will never go out of style. Whether it’s David Blaine and his shocking stunts, or newly famous films such as Now You See Me, this classic art has proved to truly stand the test of time. While Iowa State Bank may not be the best at slight of hand, we do have a few savings tricks up our sleeves! See if you can understand the steps to these financial stunts and make your fiscal success appear out of thin air.

Make your money disappear (into your savings!)

Before you’re tempted to spend those hard earned dollars, we’ll show you how to make them vanish, and then reappear! By logging into your online banking, you can set-up recurring monthly transfers for a set amount from your checking to your savings. This way, your funds will get tucked away before you even knew they were there! The extra money saved can contribute to your retirement, education, or even an exciting getaway.

Cut your debt in two.

Tired of paying pesky credit card debt, a mortgage, or student loans? This helpful hack can show you how to saw that number in half, and potentially make it disappear. Financial talk show host Dave Ramsey has a proven method called Snowballing Your Debt. By continuing your monthly minimum payments, and using extra funds to “attack” one debt at a time, you can then rollover extra money from the fully paid loans into paying off the next biggest debt and then the next. Before you know it you’ll be debt free, and looking for another financial trick to master!

See double dollars on your retirement plan.

If you’re like most Americans and need to play a little catch-up on your personal retirement savings, this trick is sure to impress! To really maximize your saved dollars, we recommend diversifying your retirement accounts, by allowing one to be maintained by your employer (401k) and creating a separate account for you to contribute to on your own (IRA.) By automatically withdrawing money from your paycheck through your 401k, you can potentially invest MORE while having it managed through your employer. In addition to this, creating a dedicated IRA to store personal savings dollars in allows you to explicitly manage the growth of your continued contributions. Know what’s better than one retirement savings account? Two!

Pull extra money out of a hat.

Just like magicians, a good budget can help you find things you never knew were there – like money! Whether you’re using traditional methods like the envelope system, or more digital options like the YNAB, the end goal is still the same. To help you save even faster, you can couple your budget with additional savings tips and tricks on common recurring expenditures such as groceries, and you’ll see the savings in no time!

The DO’s and DON’TS of Using Credit Cards

creditcard

Using a credit card is a great stepping stone to help boost your personal credit history. By proactively managing your ongoing finances, you can showcase to potential lenders that you know how to fulfill your repayment promises. What many people don’t know, is that simply having a credit card does not automatically indicate an increase in your credit score. To help you succeed with your credit, Iowa State Bank has put together our most commonly asked do’s and don’ts of using credit cards.

DO: Pay your balance in FULL every month or every two weeks.

DON’T: Keep a balance even if the interest rate is low

While keeping a balance less than 30 percent won’t drastically harm your credit score, it’s always better to be safe than sorry. We recommend never spending more than you can pay off each and every month. By keeping yourself to this standard you can make certain to never become a victim of expensive credit card debt.

DO: Choose a card that will compliment your lifestyle.

DON’T: Pick your credit card based of mail or TV offers.

There are countless websites and app centered around helping you find the ideal credit card. Instead of signing up for a credit card through the mail, start perusing sites like NerdWallet to discover which card fits not only your spending but your rewards preferences too! Before you start applying, remember to only apply for a credit card if you need one If you plan on using more than one, wait six months or more before applying for a new line of credit. This will help to keep your credit score on track and assist in preventing any unwanted dips.

DO: Use reward points to save money.

DON’T: Spend more just to get additional points.

While some credit card options certainly do offer some great sign-on rewards, remember that added debt and expenses are never worth the hike in points. The money you manage is yours, and it’s real! While the points are truly a great perk, never let them outweigh the tangible money you currently have in your individual accounts. If you allow this to happen you may find yourself with a mountain of debt, the equivalent of half the vacation you can no longer afford to take.

DO: Have more than one card when you can pay them all off on time.

DON’T: Cancel a credit card without researching its history.

There are certain cards that boast the best rewards when utilized for specific industries, and others that can add extra perks for those all-encompassing purchases. To make the most of these various benefits, we recommend using multiple credit cards for your household’s purchases, only once you’ve maintained a zero balance on one for more than six months. If you feel confident in managing multiple credit cards, you’ll find great advantages of using the rewards behind the various programs and their associated bonus structures. However, if you close a card, always check and see if that card holds your longest history of a credit line. Should that be the case, you may not want to cancel it, as it could create a slight dip in your credit score.

Did you know Iowa State Bank offers credit cards too? If you’re looking to boost your credit, or want to begin building your history with a local institution, our dedicated staff would love to help you get started. Simply stop by your nearest location, and we’ll help find the perfect fit for you and your spending.