Keith Bessette, Author at Country Bank- Made To Make A Difference

Most people ask, “How much does college cost?”—that’s the first mistake. It’s not to say this question isn’t answerable, but grouping college into one huge expense can be a little deceiving.

The cost of a degree is so much more than a singular bill—especially if you factor in questions like where you’ll be living, how you’ll get from point A to point B, and how you’ll satisfy your hunger for food and fun. Understanding and noticing how little things influence the final cost of college is extremely important.

Breaking down college expenses is the first step in creating an accurate and successful budget. Each collegiate expense can be put into the category of either fixed or variable. After some practice, it’s easy enough to spot the difference:

Fixed Expenses are recurring costs that can rarely be changed, meaning you know what to expect when the bill comes around.

Variable Expenses are costs that fluctuate monthly in price. Since variable expenses change, it’s important to stay flexible and track your expenses month-to-month. Let’s take a look at some examples of fixed and variable expenses and how you can account for them in your budget.

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Fixed Expenses

Housing

Rent is often the biggest fixed expense in a monthly budget. You sign a contract to pay, let’s say $800 a month, and your landlord has no right to change that price—it’s fixed (see where we’re headed here?).

Tips:

Try to live in a place that’s affordable and safe. If the rent is almost nothing but the crime rate is high it’s probably not worth the trade-off. If you don’t have enough money to pay for a nice place, living with roommates can be a great way to compensate for a lack of funds to support a nicer place. Another big help toward housing costs can actually come from your college. Work-study programs sometimes include options to help pay for room/board, so contact your school’s financial aid office and get details on what options they have available.

Utilities

You’ll find amenities like gas, water, and electricity are not always included in the monthly cost of rent. Meaning there will be an added amount for amenities of anywhere from $25 or more. For college students, this price is often fixed, but it could be a variable expense, meaning it changes in price each month.

Tuition

The cost of tuition depends entirely on where you want to go. For example, out-of-state tuition can be double the price of in-state tuition, meaning you’re paying double for your education. Out-of-state tuition for public universities averages to be roughly $26,427 while in-state tuition is $9,308. Private schools will almost always be more expensive, increasing to an average of $32,410 per year. Depending on the state, you could potentially live in the state for some time, become a resident, and avoid paying out-of-state tuition costs.

Tips:

Paying for tuition can be a challenge. Ideally, you would be able to cover the majority of this cost through scholarships or financial aid (such as the FAFSA). There are thousands of unclaimed scholarships out there just waiting for someone to apply for them. If those sources won’t be enough, you’ll likely need to take out student loans. Loans will give you the money you need right away, but it comes with a larger cost later. Use loans cautiously and only if absolutely necessary.

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Transportation: Bus, Car, Gas

General maintenance fees for a car alone could be enough to convince you to consider using public transportation. Some colleges provide either a discount or free bus passes so you can ride the bus. If you choose to drive yourself, don’t forget about parking fees. These could range anywhere from $40 to $2,500 per semester depending on what college you’re attending. That’s not even the cost of a year!

Variable Expenses

Books/Study Materials

Don’t forget, it doesn’t just cost money to go to class. More often than not, the study materials aren’t provided in the overall cost of tuition. Though it might be exciting to buy all of your college books at once, fresh out of the packaging, sometimes it’s best to wait until after the first day of class to decide how to go about buying your textbooks. Some professors will tell you the textbooks listed for the class aren’t mandatory, or they might also provide pdf versions for you.

Tips:

It’s also a good idea to check and see if they provide any of your textbooks in the school library. If you enjoy doing your homework at the library, odds are it won’t be too much of a hassle to rent it out when you need it.

Food

Everyone needs to eat! Though it might be tempting to eat out at restaurants every day, remember, most cheap fast food restaurants cost an average of $5-$10 per meal. Eating out once a day adds up to roughly $150-$300 dollars a month which is the same average cost for a full month of groceries that will feed you three times a day.

Tips:

Some schools will also offer meal plans that allow you to eat a certain amount of meals at a cafeteria or give you a reloadable charge card to use on campus. While this may be convenient, you should be careful to ensure you aren’t spending more on the meal plan than you would otherwise.

Personal Care

This is anything from bathroom supplies to clothes. When it comes to hygiene products, sometimes buying in bulk can save you a lot of money. But if that’s not an option, you can reduce this expense by purchasing products on sale or using coupons.

Entertainment

Yes—entertainment. Everyone needs to save a little money for themselves, there’s no shame in it. Typically, entertainment shouldn’t be more than 10% of your income—that’s the safest way to make sure you’re not overspending.

What this all comes down to…

Ultimately budgeting is the best way to prepare for the cost of independent college living. Understand the expenses and know what sort of income you’ll need in order to successfully support yourself.

 

To read the full article click here.

The Cost of Buying

The actual amount you’ll spend to buy a home depends on the part of the country you live in and the type of home you want. While the dollar amount will vary, certain guidelines apply wherever you buy.

It’s likely that you will need cash for a down payment and will get a mortgage—a long-term loan you use to buy a home. Traditionally the down payment has been between 10% and 20% of the sale price, though there are some government sponsored programs that let you put a smaller amount down. But the less you put down, the larger your mortgage payments will be and the greater the risk that you will default, or not be able to make your payments.

What a mortgage costs depends on three factors: the principal, or amount you borrow, the finance charge you pay for using the money, and the term, or length of time the mortgage lasts. You should also expect to pay an up-front interest charge to your lender, of one or more points. A point is usually 1% of the mortgage amount.

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Mortgage Requirements

When you apply for a mortgage, you will have to qualify to be able to borrow. Typically, lenders require you to spend no more than 28% of your monthly income to repay the combined total of your mortgage loan, property taxes, and homeowners’ insurance. For example, if your gross pay is $54,000 a year, or $4,500 a month, your housing expenses could be up to $1,260.

Most lenders also consider your other financial responsibilities, including car payments, personal loans, college loans, and other debts. They don’t want these expenses—plus your housing costs—to be more than about 36% of your monthly income. In short, they want to be sure you’ll be able to pay your mortgage before they let you borrow.

Be aware that affordability and qualification are not the same thing. Just because you qualify for a certain mortgage doesn’t mean it’s wise to borrow that amount of money. Establish a set budget to ensure that you can afford this new commitment and prepare an emergency fund to help bridge the gap if something unexpected happens.

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If you’re unsure where your credit stands, check your credit report. Everyone is entitled to one free credit report each year from each of the three major credit reporting agencies.You should check with potential lenders to find out which agency they use to determine your credit health, since scores from different agencies tend to vary.

What If You’re Turned Down?

If you’re turned down, ask why. The lender should tell you which credit score and credit report they used to check on your credit history. If there are any obvious errors, follow the instructions on the report to have them corrected and check up on your request. If the negative information is correct, and your credit history has flaws, at least you’ll know the factors that may be blocking your application and can begin to strengthen your credit credentials.

It is illegal for lenders to consider your age, race, gender, marital status, or religion as factors when evaluating your mortgage application. If you believe you’ve been discriminated against, take action. File a complaint with the U.S. Department of Housing and Urban Development, report the violation to the appropriate government agency provided by the lender, or check with your State Attorney General’s office to see if the creditor violated state laws.

Using a Real Estate Agent

A real estate agent can provide valuable assistance in buying a home. An agent knows what’s available in a particular neighborhood, what the price trends are, and how current asking prices relate to actual sales prices.

You can look for an agent the same way you look for a financial planner or other professional. Ask your friends and family for recommendations, check out your local resources and various real estate websites, and interview several people before you decide on the person to work with. It could turn out to be an extended relationship, and you want it to be a productive one.

Click here

Traditional real estate agents and the real estate firms that list homes for sale are paid by the seller and represent the seller’s interest. That doesn’t mean that, as a buyer, you can’t establish a good relationship with sellers’ agents or use them to find a home at a price you can afford. Some buyers, though, prefer to hire buyers’ agents to represent their interests and negotiate the sale price and contract terms.

Renting versus Buying

Because purchasing a home is a huge investment, you need to take the time to weigh the benefits of renting versus buying a residence.

Renting may be a smart financial move for these reasons:

Buying a home has its advantages ­as well:

To read the full article, please click here.

It’s crucial for your family to know the basics of financial literacy, but how do you approach teaching them? Luckily, you’re making financial decisions every day—you simply need to let your kids in on the conversation.

What is Financial Literacy?

Financial literacy includes many different financial skills and concepts; to be financially literate simply means having the know-how to make wise decisions with your personal finances—like managing a budget, borrowing money, paying for insurance, and saving for retirement.

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Make it Real

Teaching financial literacy doesn’t have to be a formalized lesson for your family. Experience is often the best teacher. You can give your children that experience by involving them in what you’re doing in a way that makes sense for their age.

For example, a trip to the grocery store is a great time for a child of any age to get some practice.

The key with these examples is getting your kids used to thinking about a budget and considering how much things cost when making decisions.

Have Some Fun

Many find that talking about finances causes either boredom or anxiety—or perhaps a mix of both. But it doesn’t have to be that way, especially not for you and your kids. Managing your finances correctly is the pathway to buying a new home, going on that vacation you’ve always wanted, or spending a fun night out with loved ones. Of course, it’s important to balance any conversations with the appropriate warnings and precautions, but the goal is to get your kids excited about the possibilities.

If you’re looking for some help in adding fun to the conversation, consider giving the Banzai Courses a try, which balance fun and education with choose-your-own adventure type options that allow kids to make financial decisions and manage their own budget.

Don’t Be Intimidated

Financial literacy covers a huge range of topics, some of which can get pretty complicated pretty fast. Thankfully, you don’t have to be an expert on everything in order to start the conversation. But the more you’re willing to touch on the tough stuff, the better foundation your kids will have when they’re forced to confront those things themselves. This could mean getting into a discussion about 401Ks, taxes, investments, housing costs, and plenty of other topics that may seem intimidating on the surface. You can use the resources on this site or visit a branch and chat with one of your local finance experts if you’re looking for help.

To read the full article, please click here.

Cyberbullying, cyberstalking, and internet scams are on the rise—how can we help kids navigate the internet safely?

Since the internet has grown integral to communities worldwide, the question is not how do we help children refrain from using the web, but how we teach them the dangers of the internet. Here are eight rules kids should know before having unchaperoned access to technology.

1. Cyberbullying: Report and refrain from rude online behavior.

The best way to dampen the effects of cyberbullying is to start teaching kids at a young age the effects of online negativity. Start by teaching kids what cyberbullying looks like:

2. Downloading: Don’t download anything without permission.

Malware, spyware, and ransomware are all delivered and downloaded by the victim via a network or an encrypted link. These are often email and social media scams that infect, steal, or perform virtually any behavior an attacker wants it to—including accessing webcams, collecting private data, and even holding certain files for ransom.

Malicious software can be received through any number of the following online ways.

Just like adults, kids are at risk of receiving clickbait—content that encourages them to visit a website that contains a virus. Some forms of clickbait actually warn against viruses, claiming another type of software needs to be downloaded to protect your computer.

Scams are all over the internet and a virus can be introduced to a computer in seconds from even just visiting a malicious website.

Try this worksheet: Clickbait & Phishing.

4. Phishing: Don’t share sensitive information.

Sharing personal information to anyone online—even if you think you know them—can be a huge risk. For example, phishing scams ask someone to verify specific personal details and scammers use that information to access personal accounts or records.

Use this visual aid to show kids the difference between a scam email and a legitimate one: Legitimate or Phishing?

5. Online predators: Choose your “friends” wisely.

Adults should actively be involved in a child’s online connections. Find or create a safe environment where any online safety concerns can be discussed. Without an understanding of the gravity of the situation, children might struggle to stick to any previously established boundaries.

Explain what online activities kids should avoid and why they should avoid them.

Kids need to understand that every online persona can be fake and know not to engage in conversation with an online stranger via social media, chat apps, or especially phone or video calls.

When to Act:

9 warning signs that a child might be the victim of cyberbullying or in communication with an online predator:

  1. They’re secretive about what they’re doing online.
  2. They’re consistently obsessed about being online at a certain time or place.
  3. They receive phone calls, packages, or gifts unexpectedly and won’t tell you who sent them.
  4. They’re withdrawn.
  5. They actively switch tabs or hide their screen when an adult is near.
  6. They have trouble concentrating.
  7. They get poor grades or are withdrawn in the classroom or at home.
  8. Intense mood changes and/or constant anxiety.
  9. Their self-esteem has plummeted.

6. Misinformation: Make sure the information you read on the internet is true.

There’s a lot of information out there and not all of it is true. It’s important that kids know how to find and check multiple sources to make sure that the information they learn and read about online is accurate.

7. Personal Information: Know when not to share personal information.

Oversharing personal information while posting or talking to someone online can have serious side effects. Instruct kids not to share or post any of the following:

  1. When they’re home alone for extended periods of time.
  2. Where they live.
  3. Where they go to school.
  4. What their class/school schedule is
  5. Compromising pictures of themselves.
  6. Passwords or login information.

8. Secure Passwords: Keep passwords secure and private.

Insecure passwords are subject to account hacks. It’s important that kids know that if someone gets access to an account it’s likely they get access to a lot of important information including phone numbers, addresses, important account numbers, etc.

Explain to kids that using the same password for multiple accounts means that if a hacker gets access to one, it’s likely they’ll have access to others that share similar passwords. Here are some things you can teach children to include in their passwords that could make them more secure:

  1. Long password combinations—a minimum of 12 characters is best.
  2. A variety of lowercase and uppercase letters.
  3. Special characters & symbols.

To read the full article, please click here.

The sooner you teach your children the basics about budgeting, the better, and the 3 jar money system is a great way to get started.

Kids and Money

To learn how to manage money in the 3 jar system, kids need some money to manage. How they get that money can vary. Some children earn cash by doing small jobs for friends or neighbors. Others start a career as an entrepreneur by opening their own lemonade stand or starting a window-washing business. Still others are given regular amounts of money from their parents as an allowance. However your child earns or receives money, remember to use it as a teaching tool. Done correctly, money can help a child learn to create a spending plan and live by it.

What should I give an allowance for?

If you decide to give your children an allowance, you’ll have to determine whether it will be contingent on them completing certain tasks or not. Those tasks could include regular chores like keeping their room clean or something more extensive like weeding the yard or getting certain grades at school. As fair warning, requiring your child to “earn” their allowance in this way is a topic of heated debate, so it’s worth doing some research and weighing what you’re comfortable with.

The biggest factor in determining how much allowance is appropriate for your child is what you expect them to use this allowance for. If it’s intended to only cover small treats or contribute toward saving for a long-term goal, the amount can be fairly small. If you expect an older child to use some of the allowance for necessities, like clothing and school supplies, they’ll need more.

The 3 Jar Money System

The 3 jar system is a popular way to begin teaching children how to budget. With this system, you give your child three clear jars, each representing a different fund: spending, saving, and giving. The child will then divide their money into the jars with your guidance. Budgeting their money in this way teaches children to actively plan for their current and future wants. Encourage your child to stick to their budget. If they fall short in one category, the goal is to help the child modify their behavior or budget instead of pulling from another jar. For example, if your child would like to spend more money than they have in the spending jar, they should re-prioritize their wants, earn more money, or rethink their budget instead of pulling from the saving or giving jars.

The Saving Jar

The saving jar teaches kids to set and work toward goals. This shouldn’t be money put away for a nebulous purpose. It should be specific. Does your child want to save up for a new game? Or perhaps a certain toy? Help your child determine what they want and then, every time they go to separate their money into their jars, remind them that the more money they’re willing to give up now, the sooner they can reach this goal.

It could help to create a general “rule” with your child, like 30% of their money should always go to saving or for every $2 in the spending jar, one should go to saving—however you and your child decide to prioritize and divide the money is fine. The goal is to impart the importance of saving and begin building the habit.

The Spending Jar

The spending jar is all about what kids want to buy now. This is how they finance little things like candy bars or trinkets at the grocery store. This budget can also include budgeting for bigger things like clothing, school supplies, or even food if you decide you want your child to pay for some of those things themself. Just remember that you need to give them an avenue to earn the money to cover whatever you expect them to pay for.

The Giving Jar

The giving jar encourages children to think about others. Help them choose a cause that’s important to them, perhaps a charity that supports an animal they like or a Secret Santa fund for a family in your community. The giving jar can also go toward gifts for other people—a birthday gift for a friend, a thank you present for a teacher, etc. When it comes time to donate the money they’ve saved, do your best to find a way to show them the impact of their generosity. Even a little goes a long way, and this is a great way to teach that principle.

Optional 4th Jar for Investing

Another option is to include a 4th jar dedicated to investing. The idea is for your child to set the money aside and you to help them invest it, perhaps by buying a few shares with their money in your portfolio. This crucial life skill helps people build their wealth and secure their future. Unfortunately, the idea of investing is intimidating to many, especially when you understand the potential for loss. While it’s always important to be careful, learning the basics early will help increase your child’s confidence and start them off on the right foot. If you feel unsure about how to start teaching about investing, check out this article about teaching children about money.

Moving Forward

Once your child gets the hang of the 3 jar money system and begins to master general budgeting concepts, the next step will be to bring them, and their jars, into a local financial institution to open their first account. This will give you the chance to teach them about interest and how storing their money at a bank or credit union will keep it safe.

With the money in an account, you can then help your child create more categories for their budget. Can they divide their spending budget into further categories? Can they create a fund for each individual savings goal? The three jar system is just the beginning or a lifetime of careful budgeting and money management.

To read the fill article, please click here.

Paying Taxes

Many major life changes, such as buying a new home, changing jobs, getting promoted, starting a business, having a child, and more, will have tax implications. But that doesn’t always mean you’ll owe more to the federal government.

If you plan ahead, you can make decisions that will reduce or at least postpone the tax you owe. The only catch is that you usually need to get everything taken care of by December 31.

As anyone who has ever filed taxes knows, tax season is in high gear from January to April. In January, you’ll start receiving the documents needed to complete your return. You should get a W-2 wage statement from your employer and Form 1099s from each financial institution that paid you interest, brokerage firms where you have earnings or losses, and corporations and mutual funds in which you own shares. As you get these documents, it’s smart to file them in a place where you can find them easily.

Tax day is always April 15, unless it falls on a weekend or holiday. In that case, taxes are due on the next business day. As the date approaches, you can use the information from your inventory to do some initial tax calculations. That will let you predict whether you’re going to get a refund or will owe money. And remember that the earlier you file your return, the sooner you receive a refund, if you’re owed one.

April 15 is also your last opportunity to contribute to your Individual Retirement Account (IRA) for the previous year. After that, the contributions you make will count toward the next year. Contributions to Simplified Employee Pensions (SEPs) and Keogh plans are also due by April 15, unless you have an approved filing extension.

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Did You Know?

As you think about your year-long tax concerns, it’s smart to keep the following things in mind.

Try not to make investment decisions just to escape taxes. For instance, just because a municipal bond pays tax-free interest doesn’t mean it will help you meet your financial goals.

Be sure you understand the difference between tax-deferred and tax-exempt investments. Tax deferred means that you postpone paying taxes on investment earnings until you withdraw them, while tax exempt means you will not owe federal tax on the earnings.

And finally, don’t overlook any tax saving you’re entitled to.

Start by defining your goals. Consider where you want to live, the features you’re looking for, what you can afford, and a realistic date for having the money you’ll need. Then apply your knowledge to making this key decision.

The Cost of Buying

The actual amount you’ll spend to buy a home depends on the part of the country you live in and the type of home you want. While the dollar amount will vary, certain guidelines apply wherever you buy.

It’s likely that you will need cash for a down payment and will get a mortgage—a long-term loan you use to buy a home. Traditionally the down payment has been between 10% and 20% of the sale price, though there are some government sponsored programs that let you put a smaller amount down. But the less you put down, the larger your mortgage payments will be and the greater the risk that you will default, or not be able to make your payments.

What a mortgage costs depends on three factors: the principal, or amount you borrow, the finance charge you pay for using the money, and the term, or length of time the mortgage lasts. You should also expect to pay an up-front interest charge to your lender, of one or more points. A point is usually 1% of the mortgage amount.

Click here

Mortgage Requirements

When you apply for a mortgage, you will have to qualify to be able to borrow. Typically, lenders require you to spend no more than 28% of your monthly income to repay the combined total of your mortgage loan, property taxes, and homeowners’ insurance. For example, if your gross pay is $54,000 a year, or $4,500 a month, your housing expenses could be up to $1,260.

Most lenders also consider your other financial responsibilities, including car payments, personal loans, college loans, and other debts. They don’t want these expenses—plus your housing costs—to be more than about 36% of your monthly income. In short, they want to be sure you’ll be able to pay your mortgage before they let you borrow.

Be aware that affordability and qualification are not the same thing. Just because you qualify for a certain mortgage doesn’t mean it’s wise to borrow that amount of money. Establish a set budget to ensure that you can afford this new commitment and prepare an emergency fund to help bridge the gap if something unexpected happens.

Click here

If you’re unsure where your credit stands, check your credit report. Everyone is entitled to one free credit report each year from each of the three major credit reporting agencies. You should check with potential lenders to find out which agency they use to determine your credit health, since scores from different agencies tend to vary.

What If You’re Turned Down?

If you’re turned down, ask why. The lender should tell you which credit score and credit report they used to check on your credit history. If there are any obvious errors, follow the instructions on the report to have them corrected and check up on your request. If the negative information is correct, and your credit history has flaws, at least you’ll know the factors that may be blocking your application and can begin to strengthen your credit credentials.

It is illegal for lenders to consider your age, race, gender, marital status, or religion as factors when evaluating your mortgage application. If you believe you’ve been discriminated against, take action. File a complaint with the U.S. Department of Housing and Urban Development, report the violation to the appropriate government agency provided by the lender, or check with your State Attorney General’s office to see if the creditor violated state laws.

Using a Real Estate Agent

A real estate agent can provide valuable assistance in buying a home. An agent knows what’s available in a particular neighborhood, what the price trends are, and how current asking prices relate to actual sales prices.

You can look for an agent the same way you look for a financial planner or other professional. Ask your friends and family for recommendations, check out your local resources and various real estate websites, and interview several people before you decide on the person to work with. It could turn out to be an extended relationship, and you want it to be a productive one.

Click here

Traditional real estate agents and the real estate firms that list homes for sale are paid by the seller and represent the seller’s interest. That doesn’t mean that, as a buyer, you can’t establish a good relationship with sellers’ agents or use them to find a home at a price you can afford. Some buyers, though, prefer to hire buyers’ agents to represent their interests and negotiate the sale price and contract terms.

Renting versus Buying

Because purchasing a home is a huge investment, you need to take the time to weigh the benefits of renting versus buying a residence.

Renting may be a smart financial move for these reasons:

Buying a home has its advantages ­as well:

To learn more, join us February 23rd, 2023 for a First Time Homebuyer Live Seminar! To learn more, click here.

The FTC and Country Bank joins the country in honoring veteran entrepreneurs and their families this National Veterans Small Business Week. Unfortunately, scammers are ready to take your hard-earned profits and steal your sensitive business data. So, this week, take time to talk to your employees about how scams happen.

For example, scammers send fake invoices for products no one ordered and hope that someone pays them. They try to trick businesses into paying for things that are free from the government, like occupational safety posters. Or they might call offering a spot in a non-existent local business directory, but it’s a scam. And utilities impersonators call businesses pretending to be the gas, electric, or water company and threatening to cut service due to unpaid bills. But that’s a scammer calling. One way to tell? They ask for payment with wire transfer, gift card, or cryptocurrency, which are ways scammers tell you to pay. And if you pay, you’ll lose your money to the scam.

Cyber scammers might be looking to trick you and your employees with phishing emails or calls that seem to come from a business you know. These business impersonators want sensitive information like passwords or bank information.

A trained workforce is your best defense.

Learn more at ftc.gov/SmallBusiness. Report any problems at ReportFraud.ftc.gov

Safeguard yourself against fraudulent access to your Mobile Phone. One of the recent techniques involves a fraudster taking unauthorized access of a victim’s mobile device to carry out fraudulent transactions via UPI using the AnyDesk App.

This is how they do it with AnyDesk app:

They could also:

Please be alert and follow the Dos & Don’ts listed below.

Dos

Don’ts