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Financial Education Center
Get started on the path to financial fitness today with FNB University. Our education center provides valuable tips and insights into managing your money, borrowing and saving, protecting your finances, and planning for the future.
Check back for new articles each month.
Tips to Avoid Coronavirus Scams and Protect Your Money
Unfortunately, fraudsters are finding ways to take advantage of fears related to the coronavirus. Learn about the common scams and what you can do to protect yourself.
- Phishing and supply scams. Scammers impersonate health organizations and businesses to gather personal and financial information or sell fake test kits, supplies, vaccines or cures for COVID-19.
- Stimulus check or economic relief scams. There are reports that the government will help to ease the economic impact of the virus by sending money by check or direct deposit. However, the government will NOT ask for a fee to receive the funds, nor will they ask for your personal or account information.
- Charity scams. Fraudsters seek donations for illegitimate or non-existent organizations.
- Delivery of malware through “virus-tracking apps” or sensationalized news reports.
- Provider scams. Scammers impersonate doctors and hospital staff and contact victim claiming to have treated a relative or friend for COVID-19 and demand payment for treatment.
- Bank/FDIC scams: Scammers impersonate FDIC or bank employees and falsely claim that banks are limiting access to deposits or that there are security issues with bank deposits.
- Investment scams often styled as “research reports,” claiming that products or services of publicly traded companies can prevent, detect, or cure COVID-19.
10 Tips to Avoid Becoming a Victim
Watch out for phishing scams. Phishing scams use fraudulent emails, texts, phone calls and websites to trick users into disclosing private account or login information. Do not click on links or open any attachments or pop-up screens from sources you are not familiar with, and NEVER give your password, account number or PIN to anyone.
Ignore offers for a COVID-19 vaccine, cure or treatment. If there is a medical breakthrough, it wouldn’t be reported through unsolicited emails or online ads.
Rely on official sources for the most up-to-date information on COVID-19. Visit the Centers for Disease Control and Prevention, World Health Organization and your state’s health department websites to keep track of the latest developments.
Remember that the safest place for your money is in the bank—it’s physically secure and it’s federally insured. When you deposit your money at a bank, you get the comfort of knowing that your funds are secure and insured by the government. You don’t have the same level of protection when your money is outside the banking system.
Do some research before making a donation. Be wary of any business, charity or individual requesting COVID-19-related payments or donations in cash, by wire transfer, gift card or through the mail.
Keep your computers and mobile devices up to date. Having the latest security software, web browser, and operating system are the best defenses against viruses, malware and other online threats. Turn on automatic updates so you receive the newest fixes as they become available.
Recognize and avoid bogus website links. Cybercriminals embed malicious links to download malware onto devices or route users to bogus websites. Hover over suspicious links to view the actual URL that you are being routed to. Fraudulent links are often disguised by simple changes in the URL. For example: www.ABC-Bank.com vs ABC_Bank.com.
Change your security settings to enable multi-factor authentication for accounts that support it. Multi-factor authentication—or MFA—is a second step to verify who you are, like a text with a code.
Before you make any investments, remember that there is a high potential for fraud right now. You should be wary of any company claiming the ability to prevent, detect or cure coronavirus. For information on how to avoid investment fraud, visit the U.S. Securities and Exchange Commission website.
Help others by reporting coronavirus scams. Visit the FBI's Internet Crime Complaint Center at www.ic3.gov to report suspected or confirmed scams. You can also stay up-to-date on the latest scams by visiting the FTC’s coronavirus page at ftc.gov/coronavirus.
Housing 101: Terms to Know Before Buying or Renting
Whether you’re preparing to rent or buy, FNB encourages you to be familiar with the following housing terms:
APR: Short for annual percentage rate, APR is how much your loan will cost over the course of a year. This figure is almost always higher than the interest rate, because it takes into account the interest charged as well as fees or additional costs associated with the loan. Since all lenders use the same formula, it can be a more effective way of comparing mortgages rather than just the interest rate.
Closing costs/settlement fees: The costs, in addition to the price of the property, that buyers and sellers are charged to complete a real estate transaction. Costs include loan origination fees, discount points, appraisal fees, title searches, title insurance, surveys, taxes, deed-recording fees and credit report charges.
Escrow: An account held by a neutral third party (called an escrow agent) who works for both the lender and the borrower. Escrow accounts are usually required by lenders to cover property taxes and mortgage insurance. After an initial deposit, borrowers pay into the escrow monthly – usually as part of the mortgage payment.
Good Faith Estimate (GFE): An accurate estimate of fees associated with a loan provided to the customer by a mortgage lender or broker. A GFE is required by law under the Real Estate Settlement Procedures Act (RESPA). The estimate must be provided within 3 business days of applying for a loan.
Mortgage broker: An individual or company who connects borrowers and lenders for the purpose of facilitating a mortgage loan. Unlike a mortgage lender, a broker does not make the loan or service the mortgage. A mortgage broker may represent various lenders or may offer loans from one single source.
Points: Borrowers can pay a lender points to reduce the interest rate on the loan, resulting in a lower monthly payment. The cost of one point is equal to 1 percent of the loan amount. Depending on the borrower, each point lowers your interest rate by one-eighth to one one-quarter of a percent.
Lease: A legal document detailing the terms under which the lessee (the renter) agrees to rent property from the lessor (the property owner). A lease guarantees use of an asset and guarantees regular payments from the lessee for a specified number of months or years.
Notice to vacate: Notification from the landlord to the tenant ordering the tenant of vacate the property. In most cases, the notification is given because the tenant either broke one of the terms of the lease or is not following through with payment of rent. The tenant is typically given 30 days to vacate the premises. Similarly, a notice to intend to vacate may be required under the lease for the tenant to notify the landlord before vacating the property.
Rental application: Filled out by a prospective tenant, which typically authorizes the landlord to conduct a credit check to determine the suitably of the individual. Often, there can be a non-refundable fee associated with the rental application.
Security deposit: Funds, in addition to rent, that a landlord requires a tenant to pay to be kept separately in a fund for use should the tenant cause damage to the premises or otherwise violate terms of the lease.
Ready to take that next step towards home ownership?
Get Financially Fit
The new year is an ideal time to set new goals, as many vow to become more physically fit or get organized. The new year is also a great time to assess your finances, gain control and stick to a new budget or saving plan. Taking control of your personal finances will allow you to save and prepare for unexpected expenses.
Get financially fit this January. Follow the tips below to get started.
Consider treating yourself to a post-holiday gift of a financial organization system. Alphabetized file folders, or filing systems specifically for financial organization are available in January as people begin to prepare for tax season. Take advantage and start the new year with an organizational system. While you're getting organized, consider buying a shredder to keep your personal information safe from identity theft.
Create a Budget
Track your income and expenses to see how much money you have coming in and how much you spend. If you have debt, establishing a budget will help you to pay down your debt while saving. Use computer software programs or basic budgeting worksheets to help create your budget. Include as much information as you can and review your budget regularly. Print several copies of this budgeting worksheet to help you get started.
- Identify how you spend your money.
- Set realistic goals, especially if you plan to cut some of your expenses.
- Track your spending and review your budget often.
Lower Your Debt
Debt from student loans, mortgages and credit cards is nearly unavoidable. Most families carry about $10,000 in credit card debt. Spending more money than you bring in can lead to financial stress. Establish a budget to pay down debts while you save.
Points to consider when cutting debt:
- Pay more than the minimum due and pay on time.
- Pay off debt with higher interest rates first.
- Transfer high rate debt to credit cards with a lower interest rate.
- Use credit cards and loans for purchases that will appreciate in value like a home.
Save for the Unexpected and Beyond
Pay yourself first. Saving is important; it ensures a comfortable future that can endure financial surprises. No matter how old you are, it's never too late to begin saving.
- Save at least 10 percent of your income for retirement. Enroll in a retirement plan or consider optimizing an established retirement plan. Contribute at least the maximum amount that your employer will match. Contributions made to these types of plans are tax deductible. If your employer does not offer a retirement savings plan, many banks offer Individual Retirement Accounts. IRAs offer tax-deferred growth, meaning you pay taxes on your investment gains when you make withdrawals.
- Financial advisors often recommend keeping about three months salary in a savings account in case of financial emergencies like hospital bills or loss of job.
- Increase your contribution as your income increases.
- If you receive direct deposit at work, ask your employer to send a specific amount to your savings account. Because the money is put into an account before you have a chance to spend it, automatic savings plans are an easy and convenient way to save. If your employer doesn't offer direct deposit, many banks allow for automatic transfers from checking to savings accounts.
Tips to Avoid a Financial Frostbite this Holiday Season
Consumers spent more than $700 billion on holiday shopping in 2018. With this year’s holiday shopping season launching in full force, FNB is highlighting tips to help consumers keep their holiday spending under control. Below are five habits Americans should consider to help relieve the financial stress of the holidays:
- Create a budget and stick to it. Set a dollar amount based on what you can afford this holiday season. Avoid shopping sprees and impulse purchases. Be sure to include a cushion for additional expenses beyond gifts, like decorations, wrapping paper, greeting cards and postage. Keep in mind the end of the year is a time when large annual or semi-annual costs like car insurance, life insurance and property taxes arise.
- Make a “nice” list. Jot down a list of everyone you plan to give gifts to this year and denote how much you can spend on each person. Consider making homemade presents, like photos for grandparents or cookies for your kids’ teachers. This list is also good place to factor in the total amount you plan to donate to charities and how much each charity will receive.
- Shop early (and shop around). Avoid putting a major strain on your wallet and your sanity by taking advantage of other big holiday sales that happen earlier in the year. This also gives you more time to compare prices and identify the best deals. As a bonus, you also get to avoid holiday shopping crowds.
- Save your receipts and monitor your account. Keep track of your expenses and add them up weekly to be sure you’re sticking to your budget. You can also use online and mobile banking features to easily monitor your accounts and pay your bills. Be sure to keep receipts or acknowledgement letters for any charitable donations you have made if you want to receive tax deductions in the spring.
- Plan ahead for next year. Review how much you spent in this past year and start a dedicated fund for next year’s holiday season. Setting money aside throughout the year will make budgeting for gifts and other holiday expenses easier.
8 Ways to Avoid Online Fraud
Cyber-attacks are becoming more and more sophisticated and common. According to the 2018 Norton Cyber Security Insights Report, 152 million U.S. consumers were victims of cybercrime – more than half of the country’s adult online population – with losses totaling nearly $11.3 billion. In recognition of National Cybersecurity Awareness Month, FNB is highlighting seven tips to help consumers protect themselves against online fraud.
- Keep your computers and mobile devices up to date. Having the latest security software, web browser, and operating system are the best defenses against viruses, malware, and other online threats. Turn on automatic updates so you receive the newest fixes as they become available.
- Establish strong passwords. A strong password is at least 8 to 12 characters and includes a mix of upper and lowercase letters, numbers and special characters. Avoid using passwords based on personal or easily accessible information, such as names, birthdays and common phrases (such as “1234” or “Password”) and never share passwords with coworkers, family or friends. Use different passwords for each account and change them regularly.
- Watch out for phishing scams. Phishing scams use fraudulent emails and websites to trick users into disclosing private account or login information. Do not click on links or open any attachments or pop-up screens from sources you are not familiar with. Also, look for common red flags such as misspellings, grammatical errors, requests marked as “Urgent!” or “sensitive”, and/or emails from personal email addresses rather than a business email account.
- Recognize and avoid bogus website links. Cybercriminals embed malicious links to download malware onto devices and/or route users to bogus websites. Hover over suspicious links to view the actual URL that you are being routed to. Fraudulent links are often disguised by simple changes in the URL. For example: www.ABC-Bank.com vs. ABC_Bank.com.
- Keep personal information personal. Hackers can use social media profiles to figure out your passwords and answer those security questions in the password reset tools. Lock down your privacy settings and avoid posting things like birthdays, addresses, mother’s maiden name, etc. Be wary of requests to connect from people you do not know.
- Secure your internet connection. Always protect your home wireless network with a password. When connecting to public Wi-Fi networks, be cautious about what information you are sending over it.
- Shop safely. Before shopping online, make sure the website uses secure technology. When you are at the checkout screen, verify that the web address begins with https. Also, check to see if a tiny locked padlock symbol appears on the page.
8 Financial Tips for College Freshmen
For many young adults, college is the first time they are in control of the majority of their finances. As freshmen across the country embark on their first semester, we’ve highlighted eight tips to help ease their transition to financial independence.
- Create a budget. Take some time to figure out your income and set your goals, factoring in recurring expenses that must be paid (like tuition, books, and car insurance), some of your “wants” (like concert tickets and other recreational activities), and savings for emergencies. Click here to learn more about online & our mobile banking app that will help you keep track of your money – and stay on track of your goals.
- Track your spending. Create a spreadsheet or download an app to see where your money is going each month. Mapping out your spending habits can help you identify where you might want to make adjustments.
- Save a little each month. Save your spare change and deposit it into your bank account at the end of each month. Increase the amount by $5 each month or quarter. This is an easy and manageable way to establish good financial habits that “Future You” will appreciate.
- Open an interest-bearing account. Stash some of your high school graduation money in an account that earns interest for doing nothing. When you open a certificate of deposit (CD), for example, you will earn interest in exchange for agreeing to leave your money alone for a specific period of time. Plan it right, and you can have CDs mature right as you need them each semester to help pay for tuition and expenses.
- Utilize campus resources. Universities today offer plenty of amenities to students for little-to-no cost. Take advantage of benefits such as free access to the campus rec center and shuttles that take you to off-campus locations.
- Take advantage of student discounts. When you want to take a break from the campus dining halls, or feel the urge to treat yourself, try looking for places that offer student discounts. Most discounts typically range from 10 to 15 percent and will accept your campus ID as verification.
- Build credit wisely. Look into applying for a student credit card that you can use for small purchases that you are able to pay off in full each month, like a music streaming subscription. If you don’t have your own source of income or are not comfortable handling the responsibility of credit alone, ask your parents to add you as an authorized user for one of their credit cards to establish a history of credit.
- Ask questions. Just like in the classroom, this is a learning experience. If you need help or are curious about a financial issue, ask trusted resources like your parents or your bank.
Saving for a Down Payment
When considering buying a home, the down payment you put upfront plays a major role in your future housing expenses. The amount you save can greatly influence your interest rate, monthly housing payment, and also your need for mortgage insurance. As you prepare for the home buying process, we’d like to highlight tips to help you cut the extra costs and save a substantial amount for your down payment.
Develop a budget & timeline. Start by determining how much you’ll need for a down payment. Create a budget and calculate how much you can realistically save each month – that will help you gauge when you’ll be ready to transition from renter to homeowner.
Establish a separate savings account. Set up a separate savings account exclusively for your down payment and make your monthly contributions automatic. By keeping this money separate, you’ll be less likely to tap into it when you’re tight on cash. Click to learn more about FNB Savings Accounts.
Shop around to reduce major monthly expenses. It’s a good idea to check rates for your car insurance, renter’s insurance, health insurance, cable, Internet or cell phone plan. There may be deals or promotions available that allow you to save hundreds of dollars by adjusting your contracts.
Monitor your spending. With online banking, keeping an eye on your spending is easier than ever. Track where most of your discretionary income is going. Identify areas where you could cut back (e.g. nice meals out, vacations, etc.) and instead put that money into savings.
Look into state and local home-buying programs. Many states, counties and local governments operate programs for first-time homebuyers. Some programs offer housing discounts, while others provide down payment loans or grants.
Celebrate savings milestones. Saving enough for a down payment can be daunting. To avoid getting discouraged, break it up into smaller goals and reward yourself when you reach each one. If you need to save $30,000 total, consider treating yourself to a nice meal every $5,000 saved. This will help you stay motivated throughout the process.
Improving Your Credit Score
When looking for a home, we'd like to remind customers about the importance of a good credit score. We suggest the following tips to improve your score:
- Request a copy of your credit score report – and make sure it is correct.
Your credit report illustrates your credit performance, and it needs to be accurate so that you can apply for other loans – such as a mortgage. Everyone is entitled to receive a free copy of his or her credit report annually from each of the three credit reporting agencies, but you must go through the Federal Trade Commission’s website at www.annualcreditreport.com, or call 1-877-322-8228. Note that you may have to pay for the numerical credit score itself.
- Set up automatic bill pay.
Payment history makes up 32 percent of your VantageScore credit score and 35 percent of your FICO credit score. The longer you pay your bills on time, the better your score. Avoid missed payments by setting as many of your bills to automatic pay as possible. Click to learn more about FNB Online Bill Pay.
- Build credit through renting.
VantageScore’s scoring model, created by the three major credit bureaus, will now weigh rent and utility payment records. This will allow it to score as many as 35 million people who previously couldn’t get a credit score.
- Keep balances low on credit cards and ‘revolving credit.’
Racking up big balances can hurt your scores, regardless of whether you pay your bills in full each month. You often can increase your scores by limiting your charges to 30 percent or less of a card's limit.
- Apply for and open new credit accounts only as needed.
Keep this in mind the next time a retailer offers you 10 percent off if you open an account. However, if you need a new line of credit, don’t jump at the first appealing offer; compare rates and fees offered through mail solicitation, on the Internet or at your local bank.
- Don’t close old, paid off accounts.
According to FICO, closing accounts can never help your score and can in fact damage it.
- Talk to credit counselors if you’re in trouble.
Using legitimate, non-profit credit counseling can help you manage your debt and won’t hurt your credit score
For more information on debt management, contact the National Foundation for Consumer Credit (www.nfcc.org).
To Buy or Not to Buy: Questions to Consider Before Purchasing Your First Home
In recognition of American Housing Month, FNB is highlighting five questions first-time buyers should consider before purchasing a home. We encourage consumers to consider these questions before beginning their housing quest:
- How much money do you have saved up?
Start with an evaluation of your financial health. Figure out how much money you have for a down payment or deposit on a rental. Down payments are typically 5 to 20 percent of the price of the home. Security deposits on rentals are usually about one month of rent and more if you have a pet. But be sure to keep enough in savings for an emergency fund. It’s a good idea to have three to six months of living expenses to cover unexpected costs.
- How much debt do you have?
Consider all of your current and expected financial obligations like your car payment and insurance, credit card debt and student loans. Make sure you will be able to make all the payments in addition to the cost of your new home. Aim to keep total rent or mortgage payments plus utilities to less than 25 to 30 percent of your gross monthly income. Recent regulatory changes limit debt to income (DTI) ratio on most loans to 43 percent.
- What is your credit score?
A high credit score indicates strong creditworthiness. Both renters and homebuyers can expect to have their credit history examined. A low credit score can keep you from qualifying for the rental you want or a low interest rate on your mortgage loan. If your credit score is low, you may want to delay moving into a new home and take steps to raise your score. For tips on improving your credit score, visit aba.com/consumers.
- Have you factored in all the costs?
Create a hypothetical budget for your new home. Find the average cost of utilities in your area, factor in gas, electricity, water and cable. Find out if you will have to pay for parking or trash pickup. Consider the cost of yard maintenance and other basic maintenance costs like replacing the air filter every three months. If you are planning to buy a home, factor in real estate taxes, mortgage insurance and possibly a home owner association fee. Renters should consider the cost of rental insurance.
- How long will you stay?
Generally, the longer you plan to live someplace, the more it makes sense to buy. Over time, you can build equity in your home. On the other hand, renters have greater flexibility to move and fewer maintenance costs. Carefully consider your current life and work situation and think about how long you want to stay in your new home.
Financial Tips for Recent College Graduates
As nearly 2 million U.S. college students graduate this spring, First National Bank of Bastrop is stressing the importance of a sound financial lifestyle. We highlighted six financial tips recent college graduates should consider to position themselves for financial success as they embark on their next phase of life.
- Set a budget and stick to it. Supporting yourself can be expensive, and you can quickly find yourself struggling financially if you don’t take time to create a budget. Calculate the amount of money you’re taking home after taxes, then figure out how much money you can afford to spend each month while contributing to your savings. Be sure to factor in recurring expenses such as student loans, monthly rent, utilities, groceries, transportation expenses and car loans.
- Pay bills on time. Missed payments can hurt your credit history for up to seven years and can affect your ability to get loans, the interest rates you pay and your ability to get a job or rent an apartment.Consider setting up automatic payments for regular expenses like student loans, car payments and phone bills. Take advantage of any reminders or notification features. You can also contact creditors and lenders to request a different monthly due date from the one provided by default (e.g., switching from the 1st of the month to the 15th).
- Avoid racking up too much debt. Understand the responsibilities and benefits of credit. Shop around for a card that best suits your needs, and spend only what you can afford to pay back. Credit is a great tool, but only if you use it responsibly. Plan for retirement. It may seem odd since you’re just beginning your career, but now is the best time to start planning for your retirement.
- Contribute to retirement accounts like a Roth IRA or your employer’s 401(k), especially if there is a company match. Invest enough to qualify for your company’s full match – it’s free money that adds up to a significant chunk of change over the years. Automatic retirement contributions quickly become part of your financial lifestyle without having to think about it. Prepare for emergencies. Hardships can happen in a split second.
- Start an emergency fund and do your best to set aside the equivalent of three to six months’ worth of living expenses. Start saving immediately, no matter how small the amount. Make saving a part of your lifestyle with automatic payroll deductions or automatic transfers from checking to savings. Put your tax refund toward saving instead of an impulse buy. Click to learn more about FNB Savings Accounts.
- Get free help from your bank. Many banks offer personalized financial checkups to help you identify and meet your financial goals. You can also take advantage of their free digital banking tools that let you check balances, pay bills, deposit checks, monitor transaction history and track your budget.
Spring Clean Your Finances
With the arrival of spring, FNB is encouraging consumers to add a very important item to their spring cleaning to-do list: organizing their finances. To help, we've highlighted six tips for rearranging your financial house.
- Review your budget. A lot can change in a year. If you’ve been promoted, had a child, or become a new homeowner or renter, be sure to update your budget. Determine what expenses demand the most money and identify areas where you can realistically cut back. Develop a strategy for spending and saving – and stick to it.
- Evaluate and pay down debt. Take a look at how much you owe and what you are paying in interest. Begin paying off existing debt, whether that’s by chipping away at loans with the highest interest rates or eliminating smaller debt first.
- Set up automatic bill pay. By paying recurring bills automatically on the same day each month, you’ll never have to worry about a missed payment impacting your credit score. Plan out your automatic payments to ensure your checking account has an adequate amount of funds when the payments are scheduled to be withdrawn.
- Save for emergencies. About 40 percent of Americans are positioned to cover a $400 emergency expense. You can prepare by opening or adding to a savings account that serves as an “emergency fund.” Ideally, it should hold about three to six months of living expenses in case of sudden financial hardships like losing your job or having to replace your car. Click to learn more about FNB Savings Accounts.
- Go digital. Converting to paperless billing will help keep your house—physical and financial—more clean and organized, and will help protect you from fraud. Utilize your bank's mobile app to check your balance, pay your bills, transfer funds, deposit a check and send money to friends from wherever you are.
- Check your credit report. Every year, you are guaranteed one free credit report from each of the three credit bureaus. Take advantage of these free reports and check them for any possible errors. Mistakes can drag down your score and prevent you from getting a loan, or cause you to pay a higher than necessary interest rate.