Make the Grade on Back-to-School Shopping

Tuesday, July 18 at 11:00 AM
Category: Personal Finance

As kids prepare to return to class, it’s the parents who are gearing up for the shopping assignment.

Back-to-school shopping is one of the most significant shopping events all year, second only to the winter holiday season, according to the National Retail Federation.* Last year, total back-to-school spending was estimated to top $75 billion nationwide.

During the weeks leading up to the first day of school, parents generally spend hundreds of dollars per child* on clothing, accessories, school supplies, electronics and more. It’s no wonder that the winding down of summer can be a stressful time for many families. 

That’s why we’ve compiled a list of three easy tips to help you ace the school shopping assignment with confidence and perhaps a little less stress.

  1. Make a list and set a budget
    This step is paramount to your back-to-school shopping success. Gather your child’s school list of needed supplies and take an inventory of any leftover school supplies* that your child may be able to use again this year. Compile lists of clothing items, electronics and equipment that your child will need for the year. It’s also important to think beyond supplies, electronics and clothing—consider upcoming school activities or clubs your child may want to join and the costs associated. Examples could include field trips, basketball uniforms, a musical instrument, or fees for Spanish club. This will help you get the full picture and plan out your budget accordingly. 

    BONUS POINTS: Planning for back to school is a perfect opportunity to talk to your kids about money. Having your children develop and stick to a budget for back to school expenses can help instill good financial habits. Arvest’s Education Center also has a number of online calculators and links to useful articles to help families budget and save for the school year. 
     
  2. Plan ahead and find deals
    Be on the lookout for bargains, especially for big-ticket items that are on your list, like computers and graphing calculators. Experts note that deals on pencils and notebooks are easier to find. Consider following your favorite retailers on social media or subscribing to store e-newsletters to be among the first to learn of flash sales, special discounts and promotions announced via those channels. If you prefer to do your back-to-school shopping online, look for special “online only” deals and free shipping from many of the major national retailers. 

    Also, be sure to take advantage of tax free shopping days, where applicable. Shopping on those days will help you get the biggest bang for your buck on clothing and other qualifying items, even some online retailers participate. Many of the communities Arvest serves are located in states that have tax free holiday shopping days. Additional details are available at the links below.
  3. Spend wisely
    When it’s time to tackle your list, it’s easy to get caught up in the moment, but you should try to resist the urge to splurge, experts warn. Stick to your list and budget and you’ll be glad you did. It’s also a good idea to discuss how your family will pay for the purchases before hitting the store or buying online. Will you be paying with a debit card or charging the purchases on a credit card? If the latter, be sure to factor in the costs and advantages you may have by using the card, including rewards points.
Now that you’ve finished your back-to-school shopping homework, you can make the experience a positive one for you and your family! 

Links marked with * go to a third-party site not operated or endorsed by Arvest Bank, an FDIC-insured institution.
 
Tags: Budgeting, Cash Management, College, Financial Education, Savings
 

Consumers Find Convenience, Security in Digital Wallets

Thursday, July 13 at 10:00 AM
Category: Personal Finance

It’s no secret mobile phones serve consumers as more than just a communication device these days.

Smartphones alternate as cameras, navigation tools, encyclopedias and other resources on a daily basis. And as digital devices offer more and more, the more irreplaceable they become to those same consumers.

Enter the digital wallet of the 21st century. Payment options like Apple Pay™, Android Pay™ and Samsung Pay are increasing in popularity among the digital consumer. This means more and more smartphones also are alternating as wallets for many consumers.

This is especially true among Millennials. According to an August 2016 study published in The Financial Brand, 21 percent of these digital natives don’t carry or use cash for purchases, and 53 percent choose to pay only by debit or credit card. The shift in payment preferences is also growing among consumers of other age groups, as they become more familiar with the benefits of using a digital wallet.

Arvest Bank believes mobile payments are an easier and safer form of payment than most consumers realize, and digital wallets have the potential to be the dominant form of payment in the future, although cash and credit will always be options.

The biggest advantage of the digital wallet is convenience. Consumers can leave their traditional wallets at home and use a mobile payment option for everything from ordering coffee to shopping to ride sharing.

The potential for identity theft gives wary consumers pause when it comes to trusting technology with their money, but financial experts say contactless payments are more secure than using cash or a debit or credit card. Whereas cash can be lost or stolen, and debit or credit cards can be compromised, digital wallets offer multiple layers of protection against identity theft.

A customer’s account number that is stored in a digital wallet is never shared with the merchant. Instead, the technology in the phone produces a different code for every transaction, greatly lowering the chance for identity theft. Many digital wallets also require a password or fingerprint to authorize and finalize payment, which is added security in the event a phone is lost or stolen.

Integration with pre-existing loyalty and coupon programs is another driver of mobile payment adoption, and web-based data and statistics company Statista projected mobile payments to rise from less than $10 billion in 2015 to more than $300 billion in 2020 in a recent report.

Similar to mobile phones, digital wallets are becoming more comprehensive in what they offer. As consumers increase their adoption and fuel broader integration among retailers, the future of the digital wallet could expand well beyond users’ expectations.

Tags: Financial Education, Mobile Banking, Technology
 

6 Financial Tips for Service Members and Their Families

Monday, June 26 at 09:15 AM
Category: Personal Finance
Finances are often identified by service members and their families as one of their most significant stressors – even more than deployments and personal relationships. Financial concerns at home make it extremely difficult for service members to focus on the mission at hand. Planning ahead as much as possible is key for the millions of military families who face unique financial challenges like deployments and relocations.

These financial tips can help lessen the financial burden on military families:
  • Contribute automatically to a Thrift Savings Plan. Military members have access to the Federal Thrift Savings Program, which offers the lowest-cost retirement savings plan available. Have automatic contributions withdrawn from your paycheck. 
  • Plan for deployment. Before deployment, have a family conversation about managing the household budget. Military personnel also receive additional funds while deployed. Decide on the best use for that extra cash, whether it is paying off debt or increasing Thrift Savings Plan contributions. 
  • Meet with your banker before active duty. The Servicemembers Civil Relief Act offers all military personnel entering active duty a variety of financial protections. The SCRA covers issues ranging from interest rate reductions to limits on debt accrual. Ask your banker about the key provisions of this law and how they can help you.  
  • Set up automatic bill pay. Whether you’re stationed stateside or overseas, automatic bill pay will give you and your family one less thing to worry about each month. It can be particularly helpful during deployments in regions where internet access is unreliable and mobile banking isn’t an option.
  • Consider housing options. With mortgage rates at notably low levels, homeownership may seem like a no-brainer. However, service members should consider their options. Frequent relocations and deployments can make owning a home challenging and expensive. Renting may be a smart option for short-term assignments. Decide what’s best for your family and your finances. 
  • Consult a financial advisor. Schedule a visit at a Personal Financial Management Program (PFMP) office, located in your military and family support centers. They offer free one-on-one counseling, as well as other financial education resources. 
Service members juggle a lot of stresses, and we hope to reduce the financial stresses with these tips.
 
Information courtesy of American Bankers Association. 

Tags: Financial Education, Home Loans, Mortgage, Retirement, Savings
 

Trim Your Monthly Expenses

Monday, June 19 at 10:20 AM
Category: Personal Finance
It comes as no surprise summer is a great time to get in shape. But, do you realize there's an easy way to get in great shape without having to put on workout clothes or sneakers or even breaking a sweat? It's called getting into financial shape. And you can accomplish that fairly easily by doing one simple activity — trimming your monthly expenses.
 
Here are some suggestions for losing that extra financial baggage this summer:
  • Get rid of higher-interest debt. If you have credit card debt, you may be wasting a significant part of your monthly budget on interest fees. Try to pay off any debt you can or at the very least, to consolidate higher-interest debt to lower-interest credit cards. To avoid credit card debt in the future, pay for purchases in cash.
  • Lower your cellphone bill. Most of us can't live without our cellphones. We can, however, do without those expensive monthly bills, which can be budget busters. Take some time to review your bill to determine your usage and to see if you can move to a less expensive plan. Or if that's not possible, shop around with other carriers.
  • Share the ride. Gasoline and car maintenance can take a big portion out of your budget. One way to reduce your automobile expense is to carpool with others. Or, if you live close to work, consider walking or riding your bike.
  • Dine in. There is a lot to love about dining out. You don't have to worry about what to cook or spend your valuable time cleaning up. But, dining out frequently can be very expensive. By preparing and eating your meals at home, you may be able to save hundreds of dollars each month. Also, if you work outside your home, pack a lunch and be sure to brew your own coffee.
  • Save energy at home. Put some energy into reducing your utility costs by using energy-efficient light bulbs, turning off lights, and conserving water.
  • Reduce your cable bill. Spending too much on cable? Examine your bill and see if you can get rid of premium channels. Or consider, eliminating cable altogether and using subscription services.
  • Get rid of your gym/club memberships. If you belong to a gym and don't get there often, cancel your membership. It's only worth it if you use it.
The best method for determining ways to save is to record and review your monthly expenses. Then, once you cut your expenses, take that extra money and put it in a savings account. In no time at all, you'll see that you look a whole lot better with trimmer expenses. 

Tags: Credit Cards, Debt, Financial Education, Savings
 

Tom Clancy’s Widow Wins Her Court Battle

Wednesday, June 14 at 02:05 PM
Category: Personal Finance
The estate plan of noted author Tom Clancy had three equal trusts, one for the children of his first marriage, a marital trust for his surviving second wife, and a family trust for the second wife and the daughter they had together. The trusts were funded from the residuary estate (whatever is left after paying expenses and any specific bequests), and Clancy’s will also called for estate and/or inheritance taxes to be paid from that same remaining fund. The personal representative of the estate (who also had drafted the will) proposed to pay half of the federal estate taxes due on Clancy’s $83 million estate from the trust for the adult children, the other half from the family trust. The taxes came to roughly $15 million. 

Mrs. Clancy objected. Before his death, Clancy had executed a codicil to his will, to clarify that he intended both the family trust and the marital trust to qualify for the federal estate tax marital deduction. That suggests that the trusts for Mrs. Clancy should not be tapped to pay taxes, because assets that don’t share in the creation of the estate tax burden should not have to pay those estate taxes. To the extent that the widow’s share is used to pay the estate tax, the marital deduction must be reduced, which means still more estate tax, and a further reduction in deduction, and yet more taxes, in an extended circular computation. In fact, if Mrs. Clancy’s share is free from the tax burden, the actual estate tax due will drop by nearly a third, to roughly $11 million. 
 
That’s what the probate court decided was proper, it’s what Clancy apparently intended with his codicil to the will. In a 4-3 decision, the Maryland Court of Appeals agreed with that conclusion in August. A savings clause in the codicil “explicitly directs that the personal representative not act to adversely impact the benefit of the marital deduction of the marital trust and the family trust.” Three dissenters believed that Clancy probably did not appreciate just how much that seemingly minor savings clause would upend the overall result of his estate plan. 
 
The result is decidedly unequal for the five children. The child from the second marriage will get roughly one-third of the estate, undiminished by taxes. The share for the other four will be reduced roughly 40% for taxes, and then split four ways among them. Whether Mr. Clancy expected an outcome for his estate plan to have as many twists and turns as the plots of the books that he wrote remains an open question. 
 
(December 2016) © 2016 M.A. Co. All rights reserved. 

Tags: Financial Education, Retirement
 

The Retirement “Tryout”

Tuesday, June 13 at 01:40 PM
Category: Personal Finance
Retirement is sometimes defined in terms of what one is leaving behind — a career, difficult clients, job stress, the daily commute, the grind. But for retirement to be fully satisfying, according to many experts, one needs to retire to something, not just from something. Defining that “to” and giving it a tryout is what we mean by “pretesting” your retirement. Here are some examples. 
 
Donate your time and expertise. An attorney acquaintance of ours spent most of his career as in-house counsel for a major oil company. As he approached his retirement years, he arranged to be allowed to do pro bono legal work for immigrants. He found the experience so rewarding that after he started drawing his oil company pension, he founded a law firm specializing in such pro bono work. 
 
The “soft launch” of a retirement consultancy. Another acquaintance thought his years of experience in the banking business might be valuable in creating a marketing consultancy for financial services firms. Before he retired, this person tried out some of his ideas with the advertising agency that his bank used. Both sides found the experience valuable, and a basis was created for the individual’s new marketing firm. He was able to have a clear financial path to follow once his regular full-time employment ended. 
 
Try a month’s vacation. It would be a shame to retire to a quiet, secluded lifestyle, only to find it boring after a few months. Many retirees report that they miss the camaraderie of their working lives after they retire. Before deciding upon retirement relocation, it can be helpful to spend an extended period of time in the possible new location, to see what day-to-day life would be like there. 
 
As you conduct these tryouts, you should monitor your finances, noting any adjustments that may be required. You may find that your spending needs change or vary from your expectations, and that may influence your choice of a retirement start date. 
 
Testing the water early can head off unpleasant surprises after one enters retirement. By then, many decisions have become irreversible. If you’d like a professional review of your financial readiness for retirement, we’d be pleased to give you our evaluation. 
 
(January 2017) © 2017 M.A. Co. All rights reserved. 

Tags: Financial Education, Retirement

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